ADAM SMITH AND THE LONG HISTORY OF "TRUCK, BARTER AND EXCHANGE"

 David Warsh publishes Economic Principles HERE on  a superior weekly insider reporting on US financial journalism to the highest economics standard  (modest annual $50 subscription - try a free trial-run).

David Warsh writes on, among other topics, the still running debate on the economy and the causes of the 2008-14 crisis:

“A Fateful Year”

“And at some point, I finally I realized who it was Martin* so persistently reminded me. Not David Graeber, the prolix London anthropologist whose book Debt: The First 5000 Years helped inspire the Occupy Wall Street movement. Like him, Martin attaches inordinate significance to a chicken-and-egg theory of the primordial ancient origins of credit. The two are convinced that no barter economy ever existed, that symbolic money, or at least ledger debt, preceded trade. Whatever.”

[*Felix Martin: Money: The Unauthorized Biography, Knopf, 2014.]

Comment

This paragraph is a small extract from David Marsh’s much longer piece in his “Economic Principles” (22 February). 

Regular Lost Legacy readers will have seen my earlier pieces on David Graeber’s ideas from the modern science of anthropology.  I had a brief attempt at an “exchange” of views with David graeber in 2011-12; brief because “David” terminated the ‘his non discussion’ abruptly with my first letter leading to an indignant assault on me for addressing him as “David”, though I was only attempting to ‘cool it’ as we had not exchanged criticism of each other’s views and I wished to avoid possible ‘agro’ with an influential speaker in the “occupy movement”, of which actions I had no view at the time. 

It was David Graeber’s confident misrepresentations on Adam Smith that I was attempting to criticise, but of which he said not a word in his assessment of Adam Smith’s paragraph in “Wealth Of Nations” on “truck, barter, and exchange” in his “Debt The First 5000 years”.

Apparently “David” considered it “impolite” for me to refer him informally as “David” in my letter without me first being introduced, like in Victorian days of formal polite rectitude (Jane Austin, et al). Surely, a somewhat “bourgeois” stance for a self-proclaimed militant anarchist to be upset about! I have known many anarchists “communist”, Left and Right, and Libertarian, and I never met one so antagonistic on a personal level.

However, I tried to continue our non-discussion to no avail. Several of his colleagues responded, with doses of troll-like vitriol.   Maybe nowadays I live too sheltered a social life.

Well, I am not easily upset by ad hominen debating styles and I carried on reviewing David’s “Debt: the first 5000 years”, starting HERE 

In particular my reference to his critique of Smith’s sentence, and his interpretations of the recent anthropological evidence which David Graeber drew upon.

I suggested he had misunderstood Smith’s 18th century expressions when set against his own many multiple 20th century readings by anthropology scholars (most of it accessible on the Internet from his ipad). 

My critique summarised Smith’s views as “200 Thousand Years of Exchange” in human societies to account for distinctive inter-human behaviours over a period long before David Graeber’s “5 Thousand Years of Debt”, roughly only from human history since the invention of debt denominated coinage, ignoring c.195 thousand years before then. Yet crude examples of reciprocal co-operation among animals occurred, and still occurs today (see Robin Dunbar. 2004. “Grooming, Gossip and the Evolution of Language”, Faber & Faber, paperback).

Setting Smith’s statement in WN (1776), was made when anthropology was in its infancy with very few studies, or what passed for such, much of it shrouded in travelers’ brief visits, imaginations, myths, and theology, the latter based on the ideas of a tribe of Bronze Age nomads wandering around the deserts of Arabia from the 8th century BCE.

Adam Smith submitted one idea that has been confirmed by modern anthropology, specifically in his reference to “exchange”.  He was not referring exclusively to market bargaining.

David Graeber, like many others in his field, read Smith’s “exchange” as “trade” in markets between cognates and dismissed Smith as being absolutely wrong about what happens according to surviving examples of cultures before pre-markets and the invention of money from some 5,000 years ago. 

He also does not have time for “Truck” or “Barter” in surviving examples of what anthropologists study closely. Yet much of the behaviours they describe and analyse are “exchange” behaviours which certainly are compatible with Smiths’ use of the term!

Look more closely at anthropology's fieldwork, and notice that much of it shows the domination of cultural forms of behaviovur , such as reciprocity, gift giving, inter- and intra-tribal exchange of obligations, mutual toleration, regular exchanges in material and behavioural tributes to ‘superior’ families inter and intra  in tribal peace-offerings and much else, which are abundant examples of human exchange behaviours.   

Even truck and barter, exclude a necessity for monetary involvement, and remain a wide-spread exchange behaviour across all human societies now and throughout all of history, including that misnamed long period known incorrectly as “pre-history”. Archaeologists demonstrate that fact at every 'dig' all over the world and they are still widespread today, albeit informally in our highly monetised economies, even among children, who do not have access to their parents money. 

“Truck” was a common word used in 18-19^th centuries for where goods and services were exchanged (in both directions), commonly in the form of reward in kind exchange for labour services. You have probably heard the lines in the folk-song: “16 tons and what d’ya get,

another day older and deeper in debt.

So Peter don’t you call me ‘cos I can’t go,

I owe my soul to the Company Store”. 

Paying wages in kind i.e., Trucking, was made illegal in the 1820 in the UK because of rampant fraud by employers. Clearly it continues in parts of the world in the form of slavery and was well known in feudal times.  

The long history of truck and barter testifies to their enduring existence in largely market economies.  Have you never swapped comics with a school friend? Or  with adult friends and relatives bartering on special social occasions (examples like baby-sitting circles, car pooling, and kid's parties)?

More relevant for discussions with our anthropologist friends, can anybody demonstrate that “trucking” in the forms of the exchange of mutual behaviours by exchanging goods, private obligations and services, conforming with cultural habits, reciprocal loyalties, and obedience to tribal norms, exchange behaviours according cultural norms in return for peaceful relations, and are these not commonly found in abundance in field studies reported in the literature?

Emile Zola in his novel “Germinal” refers to the hatred of a local grocer for his use of access to females in exchange for sex to “pay” in kind (they had no money for their grocery debts during a bitter strike of their men folk against their employers. The wives rioted too against the hated grocer and castrated him.  The army intervened later and violently out down the men's violence.

Moving on to exchange in the form of Barter – the direct exploited exchange of goods for goods, such as when European visitors exchanged whisky for furs, etc., with North American natives for decades.

Similar bartered exchanges occurred in 18th century voyages to the Pacific as described by Captain Cook, Bligh, Vancouver and others in their Logs, when for example, exchanging iron for breadfruit plants, (see Bligh’s "Log of the Bounty" and my “Bligh the Man and his Mutinies”, 1987, Duckworth). A reader described to me the unofficial bartered exchanges between some of the seamen and Tahitian natives for sexual access to their wives as a “screw for a nail”, which introduced venereal disease to the island.

Modern households barter for the exchange of all kinds of goods, even forming informal barter clubs to avoid cash transactions and build personal relationships. 

Again, barter is an exchange transaction with a long history before money was invented. Evidence of exchange is abundantly available across vast distances between
human communities in such  as the Stone age ax trade in Britain, minerals such as Obsidian across the Mediterranean Sea and across Europe, other minerals in North America where inter tribal violence was common and money was unknown.

Smith was right when he used exchange terms known to his 18th Century readers, such as "Truck and Barter", and Graeber is wrong when he emphatically dismisses Smith’s use of exchange claims and so are those of his colleagues who deny exchange as a fundamental human behaviour in all societies in Smith’s now famous sentence in Wealth Of Nations.  He also presents market exchanges completely within the neo-classical economics paradigm, which he presents as the same as Smith's even though his classical economics was different from modern economists in many respects. David Graeber ignores Adam Smith’s writings on the derivation of language by exchange (see his “Lectures on Rhetoric and Belles Lettres”, 1762 and in his essay on the origin of human language, 1761, and as a supplement published in his Theory of Moral Sentiments, 3rd Edition).

I respectfully suggest that Professor David Graeber, Phd (Yale) get out more and read more widely in economics, especially in Adam Smith's Works, perhaps, and study a little closer the significance of his colleagues anthropology and field work.