It amazes me just how academics in the economics field can get things wrong. I recently same across a book published this year which tried to show how trade and money first came about. This was written by a professor of cultural anthropology. He obviously hasn’t read widely enough. In an introductory essay he wrote the following:
“As people became more adept at cultivation, populations grew. And people found that they could not always grow or procure from nature the things they needed in order to survive. Trade was born.”
Man’s needs — that is, physical needs — were not the first things traded. Tribes of early man were all completely independent and self-supporting. They didn’t need anything — except perhaps water and food during long droughts. If they wer not independent they simply died out.
The very first goods known so far that were traded were pierced cowrie shells (for necklaces — found in sites in north Africa) and hand-sized coloured rock (for drawing with and body painting — in the Blombos caves in South Africa).
Enough of these types of ornamental goods found so far — going back to about 100,000BC — suggest that there weren’t other types of goods. It’s possible to imagine that really good qualitty flint would have been traded by early man. This would have been invaluable to any tribe that only had poor quality flint in its own territory. But there’s no evidence that flint was ever traded until comparitively modern times such as about 3,000BC when sea merchants from the Mediterranean would trade with this country. For at least almost 100,000 years of our existence trade was always ornamental goods.
How could any tribe that didn’t have coloured rocks or necklaces ever suppose that they needed them? They got by well enough without them. But if a tribal chief wore a shell necklace or had covered his body in coloured stripes to show his status then you could be certain that if a neighbouring tribal chief — wearing perhaps eagle’s feathers to denote his status — saw this he would want these additional signs of being a chieftain. He would want to trade if the other was willing to sell any surpjus shells and if he had something that the other chief wanted — say, some of those eagle’s feathers.
It would be these orhamental goods — easily carried on one’s person without hindering his normal activities — that would be traded first. There’s be no travelling merchants in the times of early man. The savannah was too dangerous and, besides, they couldn’t rely on safe passage by successive tribes they came across. No, goods that some tribal member happened to be carrying would be exchanged with goods that someone from another tribe happened to be carrying. In this way, by means of infrequent accidental meetings of neigbouring tribes — always wary of one another in case of either invading the other’s territory for food — a series of informal trading sites would develop over centuries and millennia.
In due course, ornamental items such as cowrie shells could then easily be treated as money to be used in all sorts of other trade transactions. In fact, cowrie shells became the most populat forms of money ever (until silver in the 17th century and gold in the 19th century), being traded from sea shores to deep into the interior in Africa and large parts of Asia for many thousands of years. It was even in use as money late as the 17th century between some African countries and Europe. Banks in Amsterdam (before London took over as the predominant trading port of Europe in teh 1i8th century) had vaults full of cowrie shells that were used for trading with non-European countries.
The motivation to buy status goods by ordinary workers not only drove the industrial revolution but it appeared as a powerful motivator right at the very beginnings of man’s economic activities 100,000 years ago. (As more evidence accumulates in due course, it may be that man was trading right at the beginning of our species 200,000 hyears ago.)