LECTURE: Roots of How Ownership & Trade Have Made Us Truly Weird: "Property" & "Exchange" as a Coördination Mechanism at Societal Scale

My “roots of property, exchange, and the division of labor” lecture. It tries to make novel and strange the idea people think that they "own" things: to impress students with how just plain weird...

My “roots of property, exchange, and the division of labor” lecture. It tries to make novel and strange the idea people think that they "own" things: to impress students with how just plain weird that is. And then there are the next steps: That people enter into reciprocal gift-exchange relationships with or using things they "own" is really weird. That reciprocal gift-exchange transforms into cash-on-the-barrelhead one-shot economic “trade” is perhaps the weirdest of all. Where do these things come from? And what are the chances that any Turing-Class intelligent social creature would ever develop them? And how much less efficient and functional as an action-taking anthology-intelligence could the East African Plains Ape possibly be without these social-institutional things that underpin the global-scale societal coördination mechanism we call the “market economy”?…

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What if we see the idea of “owning” something is one of humanity’s strangest inventions? Before markets, before money, there was a peculiar leap: the belief that things could be “mine” even when I’m not looking. Explore how property and exchange, far from being “natural”, are peculiar to the East African Plains Ape, are societal-scale technologies that turned us into a market-making species, and how that leap—property and exchange—became the foundation of our economic world and of a great deal of our success as an action-taking anthology-intelligence.

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That we believe in property and exchange is absolutely key to the “market” institutional mode of organizing the practical-action coördination side of humanity as a successful anthology intelligence. And that is not all that property is key to, for spheres of ownership, action, and control that can be readjusted are very important parts of our conceptual map for a great deal of our additional collective modes and mechanisms of societal organization. And these ideas—not just “I will growl and bite you if you try to drag this zebra carcasse I am eating right now away from me”, but that this is mine and it stays mine even if I am not right here growling—is really weird.

Where and how does it originate?

And why did it make sense for the first of the homines erecti who added this to their shared conceptual maps?

Doug Jones puts forward a not-unreasonable guess:

Doug Jones: My Handaxe <https://logarithmichistory.wordpress.com/2021/06/19/my-handaxe-6/>: ‘1,043 – 986 thousand years ago….. Acheulean tools… in Africa, and… India too…. The Acheulean hand axe probably tell[s] us something not just about cognition… [and] tool making, but… social cognition. You wouldn’t make a hand axe, use it, and abandon it. Nor would you… if the biggest, baddest guy… was immediately going to grab it…. Probably some notion of artifacts-as-personal-possessions… a social relationship….

Linguists have noted something interesting about the language of possession…. Expressions… are often similar to expressions for… locations…. “The Crampden estate went to Reginald.”… [It] didn’t go anywhere in physical space, but it still traveled in the abstract social space of possession….

What may be going on here: people (and many other creatures) have some mental machinery for thinking about physical space. That machinery gets retooled/borrowed/exapted for thinking about more abstract relationships…. Barbara Tversky’s recent Mind in Motion: How Action Shapes Thought…. For a while most of the evidence of repurposing spatial cognition for more abstract relationships came from linguistics, but there’s now some corroboration from neurology…

Adam Smith, in seeking to understand the foundations of economic life, looked for a principle that could serve as a secure starting point—something so basic and universal that the rest of his analysis could be constructed upon it.

He settled on what he called a “certain propensity in human nature,” namely, the propensity to “truck, barter, and exchange one thing for another.” This, for Smith, was not merely an incidental quirk of certain societies or a byproduct of particular historical circumstances, but a fundamental feature of the species. It is the drive to exchange, to seek out advantage through mutual agreement, that underpins the entire edifice of economic cooperation and, in his view, makes possible the complex web of specialization and interdependence that characterizes advanced civilization. Smith’s insight was to see that exchange is not simply a matter of swapping goods, but a social process that enables the division of labor and, through it, the astonishing productive powers of modern economies.

This “propensity to exchange,” Smith argued, is the root from which the division of labor grows. The division of labor—the process by which different people specialize in different tasks, each becoming more skilled and efficient at their chosen work—unleashes a cascade of benefits. It allows for the proliferation of skills, the invention of new tools and techniques, and the emergence of entire industries that would be unimaginable in a world where each person had to provide for all their own needs. But the division of labor does not arise in a vacuum; it is the necessary, though gradual, consequence of our willingness to engage in exchange. Only when people can reliably trade the fruits of their labor for the things they need from others does it make sense for anyone to specialize. Thus, the market, in Smith’s telling, is not an artificial construct imposed from above, but the organic outgrowth of a deep-seated human tendency.

What is especially striking in Smith’s account is his insistence that this propensity to exchange is rooted in human nature, and not found in the animal kingdom. Other animals may cooperate, they may even share resources within a group, but they do not—so far as we can tell—engage in the kind of deliberate, negotiated, reciprocal exchange that is the hallmark of human economic life:

Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal, by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that…

The human capacity for exchange, for not just seeing the world in terms of “mine” and “yours” but for then negotiating the transfer of goods and services, is, for Smith, a defining characteristic of the species. It is this, above all, that distinguishes us from the rest of the animal world and makes possible the extraordinary complexity and wealth of human societies.

Yet, even as Smith’s formulation has become canonical, it is not entirely satisfying—at least not to us, looking back with the benefit of subsequent inquiry. To say that humans exchange because it is in their nature is to offer a description rather than an explanation; it risks devolving into a kind of evolutionary just-so story, as indeed all EvoPsycho stories are at best just one fine hair removed from.

Why did this propensity emerge? How did it become so central to our way of life? What cognitive, social, and historical developments made it possible for humans, and only humans, to build societies organized around property, exchange, and markets?

Smith’s insight remains profound, but it leaves open the deeper questions—questions that continue to animate research in anthropology, psychology, and the history of institutions. The challenge is to move beyond Smith’s starting point and to excavate the layers of contingency, invention, and adaptation that have shaped the idea of property and the practice of exchange into what they are today.

And even once one grants the propensity, there are still enormous leaps. Property is itself light-years away from the idea that, having acquired property, one might then give it away in some reciprocal gift-exchange mutual-obligation process to establish or reinforce societal bonds. Reciprocal gift-exchange is light-years away from one-shot arms-length exchange in some kind of market. And even exchange in a market at some kind of fixed fair “just price” is light-years away from a market economy, in which fluctuating prices are not regarded as prima facie evidences of evil exploitation but part of the luck of the game.

Plus all these leaps need to be backed-up, as they are not natural inevitabilities but contingent socially constructed arrangements, requiring constant upkeep by legal, political, and cultural institutions. Thirty years before Adam Smith wrote the Wealth of Nations and only one-hundred miles north of Adam Smith’s Kircaldy, after all, we have Diana Gabaldon’s Highlander, which is not a world of truck-and-barter in response to a natural propensity, but rather a world in which there are clan hierarchies to be respected, clan members and allies to be aided, clan enemies to be killed, and strangers to be robbed at pleasure.

However, once we have constructed this jenga tower on top of its foundations of reciprocity and ownership, one of very key pieces of humanity’s glory and power as an action-taking coördinated anthology-intelligence has fallen into place.

The true genius of the market system lies in its capacity to decentralize decision-making, to push choices and authority out to the periphery—out to the individuals and enterprises who are closest to the ground, who possess the granular, local knowledge that no distant central planner or bureaucratic committee could ever hope to match. In this way, the market harnesses and aggregates the dispersed intelligence of society, transforming millions of individual judgments, preferences, and bits of information into a coherent pattern of production and allocation.

The result is an astonishingly adaptive and responsive system, one that can, at its best, direct resources toward their most valued uses with a minimum of wasted effort. But, and this is crucial, this remarkable coördination is only truly effective for rival and excludible commodities—goods and services for which one person’s consumption precludes another’s, and for which access can be limited to those who pay. In these domains, the market’s invisible hand is real and powerful, allocating goods through the interplay of supply, demand, and price.

When markets are functioning well—when property rights are secure, when contracts are enforced, when information is sufficiently available—they become the central nervous system of a vast, intricate organism. They coordinate sprawling networks of production and exchange, linking together farmers, manufacturers, merchants, workers, and consumers in a web of mutual interdependence. It is the division of labor, enabled and deepened by the existence of wide and deep markets, that serves as the engine of productivity and prosperity. As Adam Smith observed, the specialization of tasks allows individuals to become more skilled and efficient, unleashing a flood of innovation and output that no autarkic household or command economy could hope to rival.

Yet—and this is a point too often ignored—the benefits of this productivity are not distributed evenly or automatically. Who gets what, and how much, is determined by the prevailing structure of bargaining power and the existing arrangements of property. The market does not guarantee justice, only efficiency; it delivers abundance, but it apportions that abundance according to the rules of the game, rules that are themselves the product of history, law, and politics. Thus, while the market is a marvel of coordination, it is never a substitute for vigilance about the distributional consequences it generates. into place.

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Of course, there are views of this held and debated by moral philosophers that are very different from the economist’s praise of the market economy as a societal-scale action-coördination mechanism that I have set out here.

The origins and meaning of property—why we think things can be “owned,” how property shapes society, and whether it is natural or constructed—have been central questions for moral philosophers for millennia.

Consider:

There is Aristoteles of Stagire: Property as natural and necessary, but ought to be used for the common good: Politics, Book II contains Aristoteles’s critique of Platon’s idea of total communal ownership, for:

• “Property ought to be common in a sense but private speaking absolutely. For the superintendence of properties being divided among the owners will not cause these mutual complaints, and will improve the more because each will apply himself to it as to private business of his own; while on the other hand virtue will be exercised to make ‘friends’ goods common goods,’ as the proverb goes, for the purpose of use…”

There is John Locke: Property as a fundamental natural right, rooted in labor and self-ownership: In the Second Treatise of Government: Locke argues that property arises from labor:

• “Though the earth, and all inferior creatures be common to all men, yet every man has a property in his own person…. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property…”

There is Jean-Jacques Rousseau: Property is a group societal hallucination, or perhaps invention, at the root of inequality and the functioning of human societies-of-domination: The Discourse on the Origin of Inequality:

• “The first man who, having enclosed a piece of ground, bethought himself of saying ‘This is mine,’ and found people simple enough to believe him, was the real founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody…”

And there is Friedrich Engels: Property is a historical development, tied to class, patriarchy, and the state: a historical development tied to the rise of the unequal and oppressive class-based societies we know: The Origin of the Family, Private Property and the State:

• “The first division of labor is that between man and woman for child breeding. And today I might add: The position of the mother of the family under the original communistic household was, as we have seen, a very honorable one…. The overthrow of mother-right was the world-historic defeat of the female sex. The man took command in the home also; the woman was degraded and reduced to servitude; she became the slave of his lust and a mere instrument for the production of children. This degraded form of the family, which is based on the supremacy of the man, was linked with the enslavement of women and the emergence of private property...”

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References:

• Aristoteles of Stagire. 1998 [ca. -330]. Politics. Translated by C.D.C. Reeve. Indianapolis: Hackett Publishing Company. https://archive.org/details/aristotlepolitic00aris_0

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the Twentieth Century. New York: Basic Books. https://www.hachettebookgroup.com/titles/j-bradford-delong/slouching-towards-utopia/9780465019595/

• Engels, Friedrich. 1884. The Origin of the Family, Private Property and the State. Zurich: Hottingen. https://archive.org/details/originoffamilypr00enge

• Gabaldon, Diana. 1991. Outlander. New York: Delacorte Press. https://archive.org/details/outlander00gaba

• Henrich, Joseph. 2020. The WEIRDest People in the World: How the West Became Psychologically Peculiar & Particularly Prosperous. New York: Farrar, Straus and Giroux. https://us.macmillan.com/books/9780374173227/theweirdestpeopleintheworld

• Henrich, Joseph, Steven J. Heine, & Ara Norenzayan. 2010. “The Weirdest People in the World?” Behavioral and Brain Sciences 33(2-3): 61-83. https://henrich.fas.harvard.edu/publications/weirdest-people-world​

• Jones, Doug. 2021. “My Handaxe.” Logarithmic History (blog), June 19. https://logarithmichistory.wordpress.com/2021/06/19/my-handaxe-6/

• Locke, John. 1980 [1689]. Second Treatise of Government. Edited by C.B. Macpherson. Indianapolis: Hackett Publishing Company. https://archive.org/details/lockessecondtrea00lock

• North, Douglass C. 1990. Institutions, Institutional Change & Economic Performance. Cambridge: Cambridge University Press. https://archive.org/details/institutionsinst00nort

• Parkinson, Carolyn, & Thalia Wheatley. 2013. “Old Cortex, New Contexts: Re-purposing Spatial Perception for Social Cognition.” Frontiers in Human Neuroscience 7:645. https://www.frontiersin.org/articles/10.3389/fnhum.2013.00645/full

• Rousseau, Jean-Jacques. 1992 [1755]. Discourse on the Origin and Foundations of Inequality Among Men. Translated by Maurice Cranston. New York: Penguin Books. https://archive.org/details/discourseonorigi00rous

• Smith, Adam. 1976 [1776]. An Inquiry into the Nature and Causes of the Wealth of Nations. Chicago: University of Chicago Press. https://archive.org/details/wealthofnationsa00smituoft

• Tversky, Barbara. 2019. Mind in Motion: How Action Shapes Thought. New York: Basic Books. https://www.amazon.com/Mind-Motion-Action-Shapes-Thought/dp/046509306X/

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#where-does-the-idea-of-property-come-from

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