The paleoeconomic case for free trade

What Doha could have learned from the Neanderthals


Andrew Leonard
July 31, 2006 9:47PM (UTC)

If only the Neanderthals were still around -- they could have offered some useful advice for the culprits behind the collapse of the Doha trade talks last week. Beware, lest you follow our fate, and be exterminated from the face of the earth! Because, according to perhaps the most fundamental argument for free trade I've yet to run across, the Neanderthals lost out to Homo sapiens because they weren't traders.

While browsing through the first chapter of a new book on complexity theory and economics, Eric Beinhocker's "The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics," I ran across a startling assertion, "it was the unique ability of Homo sapiens to trade that gave them the critical advantage in their competition with rival homonid species..."

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Bienhocker sourced this revelation with Richard Horan, a professor of environmental and natural resource economics at Michigan State University. So I immediately went straight to the source, "How Trade Saved Humanity from Biological Exclusion: An Economic Theory of Neanderthal Extinction," co-authored in 2005 by Horan, Erwin Bulte, and Jason Shogren.

If you're like me, you might have a hard time understanding how economic theory, which is imprecise enough when applied to living, breathing human beings today, can hold up when employed to explain events that occured 30-40,000 years ago. Even more ludicrous-seeming are pages after pages of equations purporting to demonstrate how the productivity of skilled paleolithic hunters enhanced the meat consumption of unskilled hunters in early homo sapien societies. But this is how some economists get their kicks, and far be it from me to deny them their fun. Plus, I get all hot and bothered whenever anything has the prefix paleo- attached to it.

We don't really know why the Neanderthals disappeared. We do know that they lived for hundreds of thousands of years in an apparently stable relationship with their environment, and then vanished from the scene after humans arrived. We also know that the Neanderthals weren't traders. They lived in small isolated groups that didn't interact with others.

Meanwhile, humans had a clear yen for "complex living arrangements" and were busy exchanging goods with all and sundry. According to Horan, "these intra- and inter-group interations help explain why early humans were able to increase significantly their non-subsistence activities like art, while simultaneously out-competing Neanderthals on their joint hunting grounds."

Because that's what it all comes down -- in the competition for limited resources, the most efficient organization wins. Humans, having hit upon the principle of the division of labor, were able to specialize in certain tasks, trade the surplus value of their productivity (extra meat!) and ensure their own prosperity.

The question of why humans were such inveterate traders from the get-go isn't satisfactorly explained. It could just be the catch-all excuse: humans had bigger brains, so they were able to figure out more complicated ways to organize themselves. [UPDATE: Homo sapiens actually had smaller brains than Neanderthals, so let's just say that "humans may have had a greater capacity for rational thought."]

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But that raises a question that Horan and his co-authors do not consider. The Neanderthals managed to live for hundreds of thousands of years in a state of equilibrium with their environment, before leaving the scene (or being pushed.) Humans, meanwhile, those super-efficient, busy trading beavers, are well on their way to radically denuding the earth of resources and other life forms and may even make much of the planet uninhabitable within just a couple of centuries. Perhaps we're too smart for our own good, just as we might have been for the poor Neanderthals.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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