Monday, May 02, 2005

The Beginning of Interconnected Economies

Not too long ago, a group of explorers from another village came to the particular village we are studying. During their visit, something particulary interesting took place, barter. Normally one gets paid by working. That was all, and it was simple. Everyone in the village had the same things so there was not need to exchange materials. But now these people just came, the two villages want to establish good relations with each other. The logical thing to do to start things out would be to exchange gifts.

You could say that the time and effort one put into the work can be called a comodity. In exchange for these things you get food and a house. But time and effort are not solid things that you can actually hold. It's hard to explain. The time and effort produce the crop, and the crop is shared. Time and effort do not circulate in the economy, they are best described as tools, not comodities. They are used to get the comodities, in this case the crop.

Before the barter the comodities were mainly expirable things, food, animals, maybe some wood but not much. The amount of these goods in circulation may grow, but that would only be in response to population growth.

Now let us say the gifts the explorers gave were things common in their village. Maybe some precious stones, or seashells, or other inexpirable goods. They accepted goods that they thought were of equal value. Pretty soon, the people get interested in these exotic new objects. Because they are rare, have some practical use, and simply look valuable, their value skyrockets. People realise this of course, if they had enough of this they would be able to get other people to work on their farms, build new and bigger houses, and so forth. They realise that this could gain great wealth and a good life with this.

What they don't know, is that the modern econo-political system is just starting to emerge.

1 comment:

Predator said...

Yes you are right history repeats itself.
Came here through your comment on my buddies blog Extreme Sodt Stuff.You got a cool blog.