The beginnings of economic interaction.

**~~AdityaMookerjee~~** · 01 Jul 12,, 16:21

Why, and how, did economic interaction begin to happen? I am honestly, assuming, that I refer also to the barter system.
If there is something material, and three people want it. And, if among the three people, there is no reason, for one to want it more or less than the other. Who should have the material? When I ask the question, I assume, that there is no sensible reason, like inequality of income, etc., like we may give today. Now, it appears to me, that this may have been the case, among a group of people, sometime, and the group did not find the need to fight for the material. So, to have the best reason to address the others, as to why each should have the material, each person found reasons, as to why they should do so. The want was totally material, and the need was seen as such. In such a case, how did they come to any decision? I have no queries, as to whether I may be wrong or right, but the last question cannot be answered.
Today, the question of demand and supply, addresses the question. I mean, if I have something, and it is limited, and there are many people who want that something, the person who can give me more, for my something, gets it. I find this extremely, I don't know exactly. Perhaps, I don't need to express what I find, because the feeling is not important, as I cannot identify it in words, but it leads to further introspection.
In the first example, if among a group of people, one wanted the material more than the others, how would this manifest? Obviously, the others would get to know, somehow, and the person, who wanted it the most, would agree with them. This would make the person obliged, in some way, to the others.
The question is, how did one want it more than the other? I am assuming, that there was no reason, keeping in mind, that there was nothing to give, among the people, for the material. I am sure, that if one person felt strongly that he should have it more than the others, then, the others would have not wanted it at all. Why?

**TopHatter** · 01 Jul 12,, 17:13

You're starting to discover paragraphs...that's impressive.

Coherent thought still eludes you.

**snapper** · 01 Jul 12,, 23:57

I think that's a little a rude. The reason the third person wants it more is easy to divine; it profits them more.

**DOR** · 02 Jul 12,, 05:07

Originally Posted by snapper

I think that's a little a rude.

Agreed.

Assume perfect demand among customers. None of them wants the item more than any other one, but all are willing to pay the same amount to have it. The result is first come, first served.

Assume imperfect demand, where some want it more than others. The best way to find out who wants it the most is an auction.

Assume perfect supply, where any amount of the item is available. The price will fall until customers decide it is worth buying. That's the "market clearing" price.

Assume imperfect supply, where some products are available, but on an uncertain basis. Those who want it will pay more for the right to buy than those who can live without it.

**Doktor** · 02 Jul 12,, 05:28

You forgot subsided products.

**DOR** · 02 Jul 12,, 12:23

Originally Posted by Doktor

You forgot subsided products.

Subsidized barter trade . . . at this level of discussion? The original question was more like pre-currency trade, not wheat for oil.

**FJV** · 03 Jul 12,, 18:13

Originally Posted by DOR

Subsidized barter trade . . . at this level of discussion? The original question was more like pre-currency trade, not wheat for oil.

I once saw footage of a bonobo apes exchanging food for sex. (a branch of leaves)

So economic transactions might predate human development.

**Monash** · 04 Jul 12,, 13:58

I am reminded of an example I heard about involving from anthropological studies of Northern Australian Aboriginal tribes. In that study three tribes were examined. One tribe lived on the coast where they had access to certain types of sea shells that were considered valuable for decorative purposes. Another tribe lived much further inland in the hill county and had access to deposits of ochre which were valued for tribal religious ceremonies/corroborees. However both tribes were separated by distance and had no direct contact. The key was that a third tribe lived on the plain country separating the two. This tribe had access to no trade goods of its own but never the less did have a valuable "asset" which they could exploit i.e. their geographic position between both other tribes. Trade in seas shells and ochre was able to flow across country because the third tribe provided a service - they exchanged seas shells for ochre with the other two groups, deriving a "profit" (part of each trade) in the process. Everyone benefited, even though on face value the middle tribe had nothing of value to offer.

In other words humans could plan ahead and conceptualise potential future reward based on immediate/current effort. Other primates can "trade" but only for immediate benefit, not distant, long term rewards – they just don’t think in the long term, only the "now". Add complex language skills and hey presto.

**Officer of Engineers** · 04 Jul 12,, 14:23

Originally Posted by Monash

In other words humans could plan ahead and conceptualise potential future reward based on immediate/current effort. Other primates can "trade" but only for immediate benefit, not distant, long term rewards – they just don’t think in the long term, only the "now". Add complex language skills and hey presto.

Yes, then we got a motherfuck who figures out that he could clobber the other two tribes to get what he wants.

**Chunder** · 04 Jul 12,, 15:20

Originally Posted by TopHatter

You're starting to discover paragraphs...that's impressive.

Coherent thought still eludes you.

Remote control Mentoring. TopHatter's way

**Monash** · 05 Jul 12,, 10:13

Originally Posted by Officer of Engineers

Yes, then we got a motherfuck who figures out that he could clobber the other two tribes to get what he wants.

True, but while humans are quite capable of using force to obtain scarce resources in this context violence is not necessarily the only or even the most effective way of obtaining them. Firstly by definition war is "dangerous", even in situations where one group thinks it has a clear advantage, a fight imposes risks on the individual's involved so there is a definate risk/return tradeoff that groups can calculate. Secondly except in situations of extreme hardship/social disruption violence is not even the preferred means of obtaining resources. Trade is easier, it takes less effort and can ensure the ongoing supply of necessary items where war may not (killing the cow as opposed to drinking the milk). Looking back though history even hostile Kings and Empires have recognized the value of trade, even trade with with enemy states so that commerce would often continue even during periods of hostility. Humans can be "warlike" and suspicious of the outsiders but equally (if not more so) we can see the advantages of "making a deal".