Inducing Disorientation in Larval Economists

For the first query, maybe Sahlins’ “Stone Age Economics,” although I think his claim that reciprocity can’t be properly explained by rational choice is far too strong I think. Or Polanyi’s essay, “The Economy as Instituted Process” (conveniently reprinted in Granovetter and Swedberg’s economic sociology reader). Or maybe best of all the early bits of Tawney.

For the second, I really like Jean Ensminger’s “Making a Market: The Institutional Transformation of an African Society” which is a really nice and smart application of institutional economics to the process of market creation and institutional change among Kenyan pastoralists. Avner Greif’s new book too is very good.

Dune by Frank Herbert would be a worthwhile addition to the list. I think the most useful scenarios and imaginings of possible futures (i.e. other ways to organize society) would come not out of history but out of “science fiction.”

And to answer DeLong’s question “…would that be a teaching idea of extraordinary brilliance or of total insane lunacy?”

In the abstract it would be neither. It might well be a useful didactic technique but it could also degenerate into a bunch of wish-lists about how things “oughta be.” As with almost everything in life, manifestation trumps intention i.e. a good idea is nothing if poorly executed.

The educational goal itself — “…getting at the idea that there are non-market societies that work very differently from our own today…” — seems weirdly naive for grad students at one of the best universities in the world. Maybe I am missing something but don’t they teach history any more?

Moreover, to the extent that novelty is an important factor, teaching about our society by comparing it to others (either real past or imaginary future) has been done many times before.

I am curious to know more about your characterization of the market system as a “delicate historical anomaly.” (Of course I guess the same could be said about representative democracy — it’s new to our species and there is no guarantee it will last in the face of repressive forces world-wide.)

It’s the large scale society, more than any single other thing, that is the distinctive feature of our time; we have more in common, in some ways, with Rome or China at one of its peaks than with William Marshall’s Europe. I don’t think there are that many forms of large-scale economies, really; Marx identified industrial capitalism and agrarian feudalism, and we’ve begun to theorize about what might be called information socialism. Perhaps bronze-age or iron-age empire is a fourth. Small scale, now…everything and all over the map. Hunh… Pacific Northwest Amerind gift economies?

John: Is there such a book?

Well Walt/John: In the SF vein, Harry Turtledove’s Videssos novels (several series’ to date) includes a sojourn in the steppes, with slightly disguised Mongols, Romans and Scandinavians. Can’t recall which one features the Celt and the Greek hanging out in the yurt – neither Amazon nor Del Rey have that detail and the library is closed tonight

Not really. Barfield is great, as is Di Cosmo. Denis Sinor has done a lot of great articles.

In my feeble, procrastinating way, I’m working on something like this.

John Keegan’s A History of Warfare introduces those of us to who may think of war as nothing more than Clausewitz’s “policy by other means” to some of the spectrum of historical societies who conducted war in ways, and for reasons, that we and Clausewitz would scarcely be able to recognise as “war-like” at all. Among the examples he describes are Easter Island warriors, Zulus, Mamelukes, and Samurai.

I second Hill’s “The world Turned Upside down” – in spite of its intrusions of Marxist orthodoxy, a profound and imaginative book.

The market, from a certain perspective, has to be delicate and unstable. Otherwise, there’s no excuse for tinkering with it, and some people just love to tinker with it.

Isn’t the obvious choice to read a book about the economics of the Inca Empire? My understanding (which could be wrong) is that the Inca Empire was run entirely via a ‘command economy’ and contained no markets of any sort. Thus, apparently, studies of Incan economics became strangely popular amongst third world Marxists who wanted to prove that Hayek’s critique of socialism was false.

‘ Like all civilized peoples, the Incas faced the problem of population
expansion against a limited food supply. They solved the problem well enough
to support large military, bureaucratic, and priestly establishments by
developing what economists call a “command economy.” They used no money, no
credit, and very little trade beyond the barter conducted locally by
government agents. The state planned all economic operations and kept all
accounts, assigning the land to be worked, supervising the worker who produced
the crops, and collecting the harvests in warehouses. A similar approach was
used in manufacturing. From its storehouses, the government distributed goods
to individuals, to the military, and to government projects. In the process,
it built roads, operated hospitals, and maintained schools. Private property
was limited to the simplest personal possessions, including the luxuries of
the privileged classes.

This economy functioned through four levels of precisely defined social
gradations. At the top were the Incas, all related directly or indirectly to
the reigning emperor. They held the highest positions in government, the army,
and the priesthood. A notch lower were lesser aristocrats and nobles among
conquered peoples, who held local offices, up to subgovernors in the
provinces. The two upper classes made up a privileged elite. Trained in
special schools, their members were identified by luxuries in food, dress, and
housing. They were also exempted from taxes and cruel punishments. At the
third level were common workers. They were generally confined to their
villages, their work was prescribed, their dress and food were restricted, and
the government even checked the cleanliness of their houses. Commoners were
thus little better off than the lowest class of slaves, who were taken as war
captives and assigned as servants to the upper classes.’

http://history-world.org/emerging_civilizations.htm

Hasn’t DeLong assigned Avner Greif in the past for this purpose?

Also, I wish DeLong would update his knowledge of how the Roman economy worked. He’s still teaching M.I. Finley, and Kevin Greene has pretty much demolished him.

For an excellent insight on how market economy is not a natural state but something that has to be delicately tuned to function properly read “the Mysteries of Capital” by Hernando de Soto

The relevant sections of Hume’s History of England would probably do a good job of it, since he takes us from Anglo-Saxon England, through feudalism, all the way to commercial civilization during the Glorious Revolution.

You might like to consider using Plutarch’s On Sparta for a picture of a cashless, militaristic, slave economy, that held property in common. Not very lovable, but it persisted for 400 years.

Tracy W: We know that markets will appear in POW camps and ghettos.

French swede: I think you can argue that’s it’s because those people have culturally internalised market behaviour; it’s not a real tabula rasa situation.

Perhaps, perhaps not. But if people who have grown up in the market situation keep recreating markets then this continual recreation is an argument that the market system is not that delicate. If people dumped markets whenever the opportunity arose then you’d have some evidence for delicacy, as it is markets seem more robust than speaking a particular language.

Plus, we’re humans. Inherently social animals. When do we ever have a tabula rasa situation? So what relevance would our responses under a tabla rasa be?

One example of reframing/reusing markets (“eco-economics”/gift economy) is sprinkled throughout Kim Stanley Robinson’s Mars trilogy, more in the second novel than the others, if I remember correctly.

There is an important distinction in types of markets, that I think was made in Polanyi’s “The Great Transformation” and probably in his classic paper mentioned in the first comment, on “the economy as an instituted process” which is whether the market is socially embedded, i.e., subservient to social goals, or not. But, of course, he also makes the case that the so called “free market” is hardly neutral. For more elaboration on the Polanyi framework, I also recommend “Cultural Economies Past and Present” by Rhoda H. Halperin, and “The Prisoners’ Dilemma and Coase’s Theorem: A case for democracy in less developed countries?” by Michael Lipton (a chapter in “Economy and Democracy” by R.C.O. Mathews).

I also have some discussion of this topic at http://www.postnormaltimes.net in context of the idea of creating markets for ecosystem services.

Fair enough, Tracy, but how do you explain the Incan Empire example I mentioned earlier? (please note I am not an expert in South American history…the Incans may actually have used SOME form of market mechanism I am not aware of, in which case my point fails).

I would recommend Janos Kornai’s _The Socialist System_. It’s not going to convince anyone that a non-market system is desirable, but if the goal is to demonstrate the contingency of familiar economic arrangements, it is unrivaled.

If I wanted students to grasp the idea of change, I’d explain that William Marshall didn’t say “I still have the hammer and the anvil with which to forge still more and better sons!”. Whatever he said, he said in Norman French, not English.

David, you have a lot of homework to do.

One example of a non-market economy is one in which wealth and property are monopolized, first, by a military elite which does, by our standards, no productive work at all, and second, by a clerical establishment which actually does do some productive work, but whose disposition of wealth and property is mostly not on a quid-pro-quo exchange basis.

IE, the European Middle Ages.

Within this economy there was lots of exchange, but exchange was not the dominant form of organization. Those who specialized in exchange (Jews and bourgeois) did not have political rights and had limited legal rights, and the non-economic elites’ habits of extortion limited their power and the growth of the economy too.

Tribal societies and band societies are other examples. The family is still another.

It looks to me as if you are a Type B economic absolutist, and that you would be likely to transform non-market exchanges into market exchanges by alleging fictitious intangible values — e.g., that Christians sent money to the Church and to Rome in exchange for “salvation utilities”.

Again: “Utilitarian Materialism or Deontological Idealism?”

When I said above that there is no one system I was referring to the present not the past. DeLong’s basic unit of measurement is the individual. Sorry for quoting myself so much but he has no interest in the struggle between “Economic Liberalism and Individualism and the Anarcho-Conservativism of working class Catholic communities.” Social cohesion- and social coercion- are moral failing to him. He imagines himself a free-thinking individual unencumbered by history. Then why does he go apoplectic over Chomsky- whose purblind rationalism is so similar to his own? Why does he have the same reaction anytime anyone brings up social anthropology? Remember the debacle over Jared Diamond? He has no interest in Sahlins; and he’s not going to read Sahlins’ student, Graeber. He’s no going to be interested in the anti-modern system of social coercion -in Brooklyn NY!- that produced the landlady who charged me 1/4 market rate for 14 years and never raised the rent! [It started at 1/2]
You want vulgar determinsim? DeLong is more the product of his environment than I am. His reactions to most things are utterly predictable.

Individualism is not a fact, it is an ideology.

Brendan – I’m not arguing that all societies are predominantly market systems, or even that all societies with cities are predominantly market systems.

I’m arguing against the idea that market systems are a delicate historical anamoly. Anything that’s been around for thousands of years and doesn’t get voted out by democracies doesn’t strike me as that much of an anamoly or that delicate.

John – One example of a non-market economy is one in which wealth and property are monopolized, first, by a military elite which does, by our standards, no productive work at all, and second, by a clerical establishment which actually does do some productive work, but whose disposition of wealth and property is mostly not on a quid-pro-quo exchange basis.

Well, how big is this military elite, and the clerical establishment before you say that the system is not ‘predominantly a market system’.

Many European countries have sizable portions of the population living on welfare benefits – does that make them not a market system?

How much effort can your military elites put into running their households and farms before they start counting as doing productive work by our (your) standards?

How much wealth and property must be monopolised before a society stops being pre-dominantly a market system?

Within this economy there was lots of exchange, but exchange was not the dominant form of organization. Those who specialized in exchange (Jews and bourgeois) did not have political rights and had limited legal rights,

Peasants and merchants and tradesmen may not have had much in the way of political rights or legal rights, but that doesn’t mean that the people didn’t exist. The peasants and merchants and tradesmen may not have counted for much in the minds of the military elites and clergy, but we surely can take a wider view of society and count them as much as the William Marshalls of the time.

This does come down to a definitional thing. If we’re really going to have an argument about whether a society is predominantly a market system we need some definition of predominantly. You look at medieval Europe and see ruling lords and monastries and say it isn’t predominantly a market system. I look at medieval Europe and see coins and market fairs and labour exchanges and cities claiming charters from royalty and say it is predominantly a market system, with the sword-fighting elite kind of stuck on.

I guess what this post/thread illustrates is that an enormous generalization — “…the market system is not natural at all, but a delicate historical anomaly.” — might best be offered not as an aside but squarely as a question for debate or if asserted should be backed up with a bit more rationale, explanation, facts etc.

I am particularly not convinced by a tag-on explanation distinguishing the existence of “markets” from a “market system.”

As to the example offered of the European middle ages (and which one: early? or late) is there anyone here who could even comment with any authority on whether that assertion is true? It’s my understanding that the flowering of aristocratic chivalry in the late middle ages was in response to the dynamism of markets and the decreasing political importance of those armed & titled thugs. Chivalry was a response (as were the Crusades) to the fact that the knights had nothing to do because the were prevented by their own egos from being in trade. But of course that is distant recollection and “the late middle ages” covers at least three centuries and a large continent.

(And btw, thank you John Emerson for your concern about my intellectual development.)

“It’s my understanding that the flowering of aristocratic chivalry in the late middle ages was in response to the dynamism of markets and the decreasing political importance of those armed & titled thugs.”

Toward the end of the middle ages, markets increased in importance, compared to the earlier period. Do you regard this as a killing criticism of what I said? In other words, society was starting to move in the direction of a market society. They were moving away from a society which was not a market society. All societies have markets, but market societies are dominated by them.

I understand that you are not convinced, but I am not yet sure whether you have any analytic vocabulary or historical data at your disposal. It’s hard to argue with people who are starting from zero and use their zero as an argument.

And you were right in concluding that my concern for your intellectual development is not entirely sincere.

The existence of powerful non-market institutions such as aristocracies, property-owning religious establishments, autonomous military units, tribal groups, and large politicized property-owning clans, together with the political exclusion and relatively lesser importance of groups devoted to trade, finance, manufacturing.

Large parts of the economy dedicated to tribute, gifts, and offerings of various sorts, rsther than quid pro quo payments.

The market is always present in non-market economies, and always exerts pressure on the other forms of organization, but after about 1700 in the West the market groups grew increasingly powerful and dominant, and the others increasingly marginal and powerless.

“Not having political rights” includes, for example, not being able to testify in court, or not being able to defend yourself against the expropriation of your property. It was a real suppression. Slavery is an extreme case of loss of political rights, since it included loss of the right to contract marriages, and the right of the owner to kill you.

Just having some markets doesn’t make a market society if the large decisions are made off-market. For example, serfs did not sell their product to the highest bidder; they gave negotiated amounts to the same man every time.

Athens is not a good example of a non-market society. It was probably more a market society than any society of its time, and more than most societies during the next 20 centuries or more. The early middle ages are a better example, or perhaps Mongol Persia or Ottoman Turkey. And markets were a factor in all of these societies, but big decisions (especially land-ownership and most of agricultural production) were non-market. Even much of XIXc Russia was non-market, with an unfree work force, and a mix of subsistence farming, landowner expropriation, and government expropriation.

Cosma, Frederick Lane’s “Venice and History” includes several articles developing the idea of “protection rent”. Steensgaard’s “The Asian trade revolution of the seventeenth century” develops this idea and compares the different ways the Portuguese, the Dutch, and others dealt with the protection cost of trade. Charles Tilly’s “Coercion, Capital, and European States” 900-1992 uses similiar analysis to W. European history.

I think that the military factor in history and society is systematically always there, but tends to be treated as an ingression from the outside or a breakdown since right-thinking people don’t want to recognize it as normal.

Walt – I’m now arguing over what the definition of a market-dominated society should be. I’m saying that I think that definitions that merely concern the political elites are not relevant for countries where the political elites are a very small portion of the whole population.

I’m trying to persuade you to change the definition you are using as I think it is more valid to incorporate all of a population when deciding what a place’s society is like.

I am sorry I did not make this more explicit. I am trying openly to persuade people to change the definition, I am not attempting to do so secretively. I disagree with John’s definition and I am deliberately trying to change it. Is this explicit enough?

Incidentally, what’s the argument for ignoring the vast majority of the population in determing whether a society is market-dominated or not?

And by the way, I am not arguing that all societies are predominantly market-orientated. I am just arguing that there is a long history of societies predominantly orientated around the market. And this is part of my reason why I doubt the statement that “the market system is … but a delicate historical anomaly.”
Citing counter-examples in Afghanistan or Russia is not enough to disprove my case, someone has to disprove the examples I have cited.

Based on what John has so far said, the statement that “the political elites regarding money earned by markets as respectable is a historical anomaly” is much more supportable. It was not what was originally said though. (I don’t think we have enough data to judge whether such a situation is “delicate” – ask me again in 500 years :) ).

Let’s step back a second.

Asserting that there are tribal, subsistence, hunter-gatherer societies which don’t do much trading is a trivial assertion. Of course there are. And I for one had no intention of suggesting otherwise.

The interesting issue is not whether there are “alternate modes of social organization.”

(If a grad student at Berkeley much less a commenter on this blog is not aware of such ” “alternate modes of social organization”….well…whatever.)

The interesting and non-trivial issue is whether you can have a complex, populous, presumably urban and technological society with values similar to ours (pluralist, tolerant, non-misogynous etc etc) without heavy reliance on markets to organize itself. It does not appear so but that is only an empirical observation.

Markets are information-processing devices and the need for information processing is low in hunter-gather-herding societies — so they don’t develop markets.

But as societies grow their needs for social coordination grow and the question is whether there is an alternative to markets as a way of successfully organizing an economy which has passed poverty. (I reject the term “market system” as it is not a recognized term of art.)

That’s why I asked the question about Constantinople. That’s why I sugggested Dune because it shows a weird mix of inherited feudal “aristocratic” power ruling parts of a very capitalist economy in which drugs are a critical element of social stability.

The interesting question is not about hunters and herders using vast landscapes. The interesting question is about complex urban cultures which value individual freedom and whether there is an alternative in them to markets.

Glad to see you agree that a society is not just about the elite.

Firstly, even when an elite can extract wealth from their serfs, they still would interact with markets. Eg http://www.history.ac.uk/eseminars/sem24.html describes the history of cities and markets, and the significant role of supply of food to cities, and how that would change in times of crisis. Consequently someone was selling food in response to markets, that these someones may have been mostly noblemen and monasteries rather than individual peasants does not mean that production was not being determined by markets. To borrow an example from PETA, farmers treat animals as property, but we would say that a NZ farmer is still part of a market-dominated society because their decisions about how to farm.

http://assets.cambridge.org/052149/5814/sample/0521495814ws.pdf

http://66.102.7.104/search?q=cache:q3K5YQWAHisJ:orion.oac.uci.edu/~garyr/papers/LSMM_20june2003_EEH_final_submission_formatted.doc+markets+medieval+europe&hl=en&ct=clnk&cd=28

So again we come to the definitional problem of what is a society with a market system.

Secondly serfdom died away in Western Europe during the medieval period. The institution lasted much longer in Eastern Europe, and was only introduced in Russia in the 16tn century. See http://www.answers.com/topic/serf or the Wikipedia articles. This is again societies managing to go for centuries with market-systems, implying that a market-system is not a historical anamoly.

Interestingly, the Wikipedia article states that a serf could decide what to raise and sell the produce of their own land at markets, but it doesn’t give a citation for this, and it doesn’t state where such rules applied (given the diversity of medieval Europe, I doubt it was universal), and I have never heard elsewhere that serfs had such rights over the produce produced on their own land, so I don’t know what probability to assign to the likely-truth of that statement.