In his magnum opus on the power of free minds and free markets, Human Action, the Austrian economist Ludwig von Mises observed: “The truth is that capitalism has not only multiplied population figures but at the same time improved the people’s standard of living in an unprecedented way. Neither economic thinking nor historical experience suggest that any other social system could be as beneficial to the masses as capitalism. The results speak for themselves. The market economy needs no apologists and propagandists. It can apply to itself the words of Sir Christopher Wren’s epitaph in St. Paul’s: Si monumentum requires, circumspice.” If you seek his monument, look around.
Capitalism may not need apologists and propagandists, but it does need a scientific foundation grounded in psychology and evolution, which I have attempted to give it in this book. Now I would also like to look into the future.
For many years, I have been involved in a Seattle-based organization called Foundation for the Future, created by the aerospace entrepreneur and philanthropist Walter Kistler, in which a group of scientists and scholars from various fields meet once a year to discuss what life will be like in the year 3000, among other lofty topics.1 It is a delightfully stimulating way to spend a weekend, but I do not for a moment think that any of us has any idea what we are talking about when we consider life a thousand years from now. If most experts on the Soviet Union in the mid-1980s had no idea that the empire would collapse by the end of the decade, and if most computer scientists in the early 1980s were largely clueless to the forthcoming rise of the World Wide Web, how on earth can anyone possibly fathom what changes will be wrought a hundred decades from now?2
The problem with envisioning long-term economic and political change is that we have been entrenched in political states with top-down-directed economies for so many millennia that it is nigh impossible to imagine how human relations could peacefully prosper in any social system other than the one to which we have grown accustomed. By the logic of the status-quo bias, nature has endowed us to hold dear what is ours and leads us to opt for whatever it is we are used to having. Still, history’s long clock and evolution’s deep time afford us the opportunity to pull back and see the bigger picture of what all this research on markets, minds, and morals means for the eventual liberation of humanity.
We began this book with the really hard problem of explaining the great leap forward from a hunter-gathering economy to a consumer-trading economy. Employing scientific tools and data from complexity theory, evolutionary biology, behavioral psychology, and neuroscience, we saw that the economy is a complex adaptive system that changed and adapted to circumstances as it evolved out of a much simpler system, and that the first ninety thousand years of our tenure as hunter-gatherers created a psychology that has often led us to behave irrationally in the last ten thousand years of the great leap forward.
No one has stimulated me to further understand the dynamics of this economic shift more than Jared Diamond, who is just about the most interesting interdisciplinary polymath I have ever had the pleasure to know. A slightly built man with a resonant baritone voice and seamless delivery style that leaves audiences in anticipation of the next insight, in informal settings Jared’s modest demeanor belies the depth of insight and breadth of knowledge needed to answer one of history’s grandest mysteries, which I believe has direct bearing on the overall goal of this book of explaining how hunter-gatherers became consumer-traders. Here is the mystery:
Sometime between about thirty-five thousand and thirteen thousand years ago, the tool kits of early humans became much more complex and varied than they had ever been before. Suddenly, sewing led to clothing to cover our now nearly hairless and naked bodies. The first homes were built of bones and wood and animal skins to shelter us from the climate. Sophisticated representational art was being created deep inside caves, and symbolic communication led to the development of complex spoken languages. With these and many other changes, anatomically modern humans began to wrap themselves in a blanket of technology, forever altering natural selection and taking evolution into their own hands. These prehistoric humans soon spread to nearly every region of the globe, and everyone everywhere lived in a condition of hunting, fishing, and gathering. Some were nomadic, while others stayed in one place. As small bands grew into larger tribes, possessions became valuable, rules of conduct grew more complex, and population numbers crept steadily upward.3
Then, at the end of the last Ice Age, roughly thirteen thousand years ago, population numbers in several places around the globe exploded in size. Hunting, fishing, and gathering did not produce enough calories to support these larger populations, and the need for sustenance led inexorably to farming and the Neolithic Revolution. There is considerable debate among archaeologists and anthropologists about how and why this revolution in food production came about, how long it took to make the transition, and whether it was a continuous (evolutionary) or discontinuous (revolutionary) change. For our purposes here, the domestication of large mammals and edible grains generated the necessary calories to support ever-increasing populations, which led to additional physical and social technologies that facilitated even larger populations, and so on in the now familiar autocatalytic feedback loop that drives such self-organized emergent systems.4
Then something odd happened. Between thirteen thousand years ago and today, there was a noticeable difference in the rates of development between civilizations around the globe, with some accelerating dramatically toward modernity while others remained mired in the Paleolithic mud. To put it in the form of a question: why is it during the last five hundred of those thirteen thousand years that Europeans conquered and colonized the Americas and Australia, rather than Native Americans and Australian Aborigines conquering and colonizing Europe? Rejecting antiquated explanations rooted in inherited racial differences that facilitated some races (white) and impeded other races (black), Diamond posits that the differences in rates of development between civilizations around the world over those thirteen millennia were primarily the result of geographical differences in the availability of domesticable grains and animals, which in some areas (but not others) enabled the development of farming, large populations, division of labor, non-food-producing specialists, metallurgy, writing, military, government bureaucracies, and the other necessary components that ultimately gave rise to modern civilization.5
The indigenous wild grains that could be domesticated, for example, were few in number and located only in certain regions of the globe—those regions that saw the rise of the first civilizations. Australian Aborigines, to cite another example, could not strap a plow to or mount the back of a kangaroo, as Europeans did the ox and horse. Additional factors include the east-west-oriented axis of the Eurasian continent, which lent itself to the diffusion of domesticated grains and animals as well as of knowledge and ideas, so that Europe was able to benefit much earlier from the domestication process. The north-south-oriented axis of the Americas, Africa, and the Asia-Malaysia-Australia corridor, by contrast, did not lend itself to such fluid transportation, and thus those areas not already well suited biogeographically for farming could not even benefit from trade and diffusion of such foods and farming technologies. Finally, through constant interactions with domesticated animals and other peoples, Eurasians developed immunities to numerous diseases that, when brought by them in the form of germs (along with their guns and steel) to Australia, Oceania, and the Americas, produced genocides on a hitherto unseen scale.
How and when we made the transition from small bands and tribes to large chiefdoms and states was determined in part by the carrying capacity of the environment and the population size of the groups that in turn determined the structure of societies and the forms of exchange, trade, and coexistence with other groups.6 The concomitant leap in food production and population was accompanied by a shift from bands and tribes to chiefdoms and states, and the development of appropriate social organizations and technologies. People began to live in semipermanent and then permanent settlements, which led to land ownership and private property, and to surplus foods, tools, and other products that formed the basis of nascent trading economies. This led naturally to a division of labor in both economic and social spheres. Full-time artisans, craftsmen, and scribes worked within a social structure organized and run by full-time politicians, statesmen, and bureaucrats. Organized religion came of age to fill many roles, not the least of which was the justification of power for the ruling elite. The intertwining of politics and religion has been found in nearly every chiefdom and state society around the world, including the Middle East, Near East, Far East, North and South America, and the Polynesian Pacific islands, in which the chief, pharaoh, king, queen, monarch, emperor, sovereign, or ruler of whatever title claimed a relationship to God or the gods, who purportedly invested them with the power to act on behalf of the deity. States developed into bona fide civilizations, small sects evolved into world religions, and barter markets emerged into full-fledged economies.
With the rise of chiefdoms, states, and empires, it was no longer possible to separate politics from economics. Although the natural condition of hunter-gatherer bands and tribes is one of egalitarianism, the equal redistribution of economic wealth has never been realized in larger societies. Moreover, without the proper social institutions to enable and enforce fair and free exchange between groups, violence and war often erupt. Here too we find an evolutionary economic explanation. One of the prime triggers of between-group violence is competition for scarce resources. There are rarely enough means to support all individuals in all groups. Even if, at some given time, there were, such a condition could only be a temporary one, because populations naturally tend to increase to the carrying capacity of the environment. Once that capacity is exceeded, the demand for those resources will exceed the supply. Such was the condition throughout most of history for most peoples in most places. The formula is straightforward: population abundance plus resource scarcity equals conflict. Thus, one way to attenuate between-group violence is to increase the supply of resources to meet the demands of those in need of them.
The psychology behind defusing intergroup aggression involves turning potentially dangerous total strangers into prospectively helpful honorary friends. This process is enabled through the creation of social institutions that encourage, enable, and enforce positive social interactions that lead to trust. One of the most powerful of these forms of interactions is trade, the effects of which I want to elevate into a principle based on an observation by the nineteenth-century French economist Frédéric Bastiat: “Where goods do not cross frontiers, armies will.”7
Bastiat’s Principle not only helps us understand how hunter-gatherers made the transition to consumer-traders, it also illuminates one of the primary causes of conflict; its corollary elucidates one of the principal steps toward conflict reduction. If Bastiat’s Principle holds that where goods do not cross frontiers, armies will, then its corollary dictates that where goods do cross frontiers, armies will not. This is a principle, not a law, since there are exceptions both historically and today. Trade will not prevent war, but it attenuates its likelihood. Thinking in terms of probabilities instead of absolutes—fuzzy logic’s range of fractional possibilities versus Aristotelian logic’s A or non-A categories—trade between groups increases the probability that peaceful and stable relations will continue and decreases the probability that instabilities and conflicts will erupt.
Let’s return to where we began this book with the Yanomamö hunter-gatherers and how they evolved into the Manhattan consumer-traders. When missionaries first began working with the Yanomamö, they discovered that if they provided the native peoples with tools for the procurement and production of food and other resources, the amount of Yanomamö intervillage fighting was greatly reduced. The great Yanomamö ethnographer Napoleon Chagnon—who originally gave the Yanomamö their “fierce people” moniker—discovered that the Yanomamö are sophisticated traders as well as ferocious warriors, because trade creates political alliances. Following the political dictum “The enemy of my enemy is my friend,” Yanomamö intervillage trade and reciprocal food exchanges serve as a powerful social glue in the creation of political alliances. Village A cannot go to Village B and announce that they are worried about being conquered by the more powerful Village C, since that would reveal their own weakness. Instead, Village A forms an alliance with Village B through trade and reciprocal feasting, and as a result they not only gain military protection, but also encourage intervillage peace. As a by-product of this politically motivated economic exchange, even though each Yanomamö band could produce all the SKUs it needs for survival, they often set up a division of labor and a system of trade. The unintended consequence is an increase in both wealth and SKUs. The Yanomamö trade not because they are innate altruists or nascent capitalists, but because they want to form political alliances. “Without these frequent contacts with neighbors,” Chagnon explains, “alliances would be much slower in formation and would be even more unstable once formed. A prerequisite to stable alliance is repetitive visiting and feasting, and the trading mechanism serves to bring about these visits.”8 Where goods cross Yanomamö frontiers, Yanomamö armies do not.
To make the point with a second example, in his study of two Australian Aboriginal “bush” people from the Western Australian desert, the Walmadjeri and Gugadja, the anthropologist Ronald Berndt notes that desert economics begins with the close ties between kin, who depend on knowing what to expect from others and what is expected of them. “The horde or band is not just a group made up of nucleated family units. . . . It is a cooperative unit, with each member caught up in an intimate network of responsibilities and obligations, depending on others as others depend on him.” Because the Western Australian desert is such a brutally harsh environment, many of their religious and magical rituals are steeped in the physical necessities of life—most notably water—and trade lines established between groups are typically oriented along paths in which such commodities can be found. With such limited resources, the potential for conflict is high, but the consequences of engaging in conflict are also grave, and so the desert Australian aborigines have developed a system of trade intimately tied to their religion and the environment in order to foster goodwill between groups. “When large ceremonies and rituals are held, some of the participants come from places a great distance apart; they provide, therefore, an ideal opportunity for bartering,” Berndt explains. “Trade takes place within the context of ritual and often is not seen as being something separate.”9 Where goods cross the frontiers between Australian aboriginal groups, their armies do not.
In a third example, Jared Diamond notes how caution and distrust is the norm between strangers among the hunter-gatherers of New Guinea he has lived among and studied for some three decades. Diamond’s experiences there afforded him the opportunity to see firsthand how deeply dependent is trust on personal and social relations. Social obligations, Jared notes, depend on human relationships. “Because a band or tribe contains only a few dozen or a few hundred individuals respectively, everyone in the band or tribe knows everyone else and their relationships. One owes different obligations to different blood relatives, to relatives by marriage, to members of one’s own clan, and to fellow villagers belonging to a different clan.” Lacking the social institutions consumer-traders employ for conflict resolution, disputes among hunter-gatherers are directly resolved because within these small bands everyone is related to one another or knows one another, and members of the band are distinctly different from nonmembers on all levels, generating within-group amity and between-group enmity. Tribalism rules the day. “Should you happen to meet an unfamiliar person in the forest, of course you try to kill him or else to run away,” Diamond explained. “Our modern custom of just saying hello and starting a friendly chat would be suicidal.”10 And yet something happened in the 1960s to bring about more peaceful interactions. Initially, peace was imposed upon the native New Guineans by fiat from the Western colonial government that ruled over the territory, but officials then ensured continued peace by providing goods that the people needed, as well as the technologies to enable them to continue producing more resources on their own. In less than one generation, New Guinean hunter-gatherers who were fighting each other with stone tools were suddenly New Guinean consumer-traders operating computers, flying planes, and running their own small businesses.11 Where goods crossed New Guinea frontiers, New Guinea armies did not.
To reiterate, although trade is not a surefire prophylactic for between-group conflict, it is an integral component to establishing trust between strangers that lessens the potential volatility that naturally exists whenever groups come into contact with one another, especially over the allocation of scarce resources.12 Moreover, since I have tightly linked market capitalism with liberal democracy in this book, I should note that there is a well-documented correlation between liberal democracy and peace—the more a nation embraces liberal democracy, the less likely it is to go to war, especially against another liberal democracy. The political scientist Rudolf J. Rummel has researched this relationship thoroughly, showing in one study, for example, that of the 371 international wars that occurred between 1816 and 2005 in which at least a thousand people were killed, there were 205 wars between nondemocratic nations, 166 wars between democratic and nondemocratic nations, and no wars between democratic nations. From this and many other historical data sets, Rummel draws five conclusions: “First, well established democracies do not make war on and rarely commit lesser violence against each other. Second, the more two nations are democratic, the less likely is war or lesser violence between them. Third, the more a nation is democratic, the less severe its overall foreign violence. Fourth, in general the more democratic a nation, the less likely it will have domestic collective violence. Finally, in general the more democratic a nation, the less its democide [the murder of its own citizens].”13
Conclusion: Power kills; democracy saves. Solution: Spread democracy. From the economic data and theory presented in this book, I would add the following. Conclusion: Trade leads to peace and prosperity. Solution: Spread trade.
This is oversimplified, of course, and an epilogue is no place to launch a discussion of the massive literature on the history, politics, and economics of war.14 My larger point here is this: just as I have argued that morality in the form of moral emotions evolved long before religion and politics developed historically,15 I am claiming that trade evolved long before the state developed economic institutions of trade, and thus we evolved moral emotions linking trade and trust, and this link is directly related to intergroup war and peace. It appears, for example, that trade between human groups dates back at least two hundred thousand years, as archaeologists have found stone tools and other artifacts such as seashells, flint, mammoth ivory, and beads hundreds of miles from where they were manufactured.16 A more recent example can be found in Native Americans, who were active traders when European explorers and colonists arrived—the archaeologist Shepard Krech makes the point that the reason Europeans were so readily able to trade with the American natives (swapping beads for pelts, for example) was that the indigenous Americans were already well accustomed to trading among themselves.17
Trade breaks down the natural animosities between strangers while simultaneously elevating trust. Recall the research reviewed in chapter 9 on what happens when strangers trade. Dopamine (the lust liquor that is also related to addictive behaviors) is released, which generates positive emotions and encourages repetition of the exchange behaviors. Oxytocin is released, which reinforces a sense of bonding and attachment to one’s trading partner, thereby enhancing trust and setting off a positive feedback loop of additional trade and trust. Brain scans on subjects playing Prisoner’s Dilemma—where cooperation and defection result in differing payoffs depending on what the other participants do—revealed that when subjects were cooperating, the brain areas that lit up were the same regions activated in response to such stimuli as desserts, money, cocaine, and beautiful faces. The neurons most responsive were those rich in dopamine located in the anteroventral striatum in the middle of the brain—the so-called pleasure center. Tellingly, cooperative subjects reported increased feelings of trust toward and camaraderie with like-minded partners.18 In research with subjects playing a version of the ultimatum game that includes numerous exchanges, when trust is established and the cooperative mode is fully engaged by both trading partners, levels of oxytocin in the blood increase. You can even reverse the causal link—giving subjects a nose spray that includes a dose of oxytocin induces them to cooperate twice as much as they normally would. Trust is good for business and is among the most powerful factors affecting economic growth in a country.19
The psychology of trade probably has as much to do with forming alliances between individuals and groups as the economics of trade does in generating an increase in the supply of resources. Nevertheless, the end result of initial exchange activities is an increase in cooperation, mutual aid, and trust, which drives further trade and trust into a positive feedback loop that accentuates amity between people and attenuates enmity between groups, leading to greater peace and prosperity for more people, in more places, more of the time.
Bastiat’s Principle holds not only for hunter-gatherers but for consumer-traders as well. Note, for example, that in the modern world of consumer-trading nation-states, economic sanctions are among the first steps taken by a nation against another when diplomatic conflict resolution attempts break down. Often such sanctions are imposed for purely economic reasons in a mercantilist mode, as when the United States imposed import tariffs on steel purchased from China and Russia in 2002, which the World Trade Organization declared to be illegal. Economic sanctions are also imposed for political reasons, as when the United States enforced them on Japan after its invasion of China in the 1930s, and these became a prelude (among other factors) to Japan’s retaliatory bombing of Pearl Harbor in 1941 and our involvement in the greatest war in history. Or more recently, economic sanctions were imposed by the United States and Japan on India following its 1998 nuclear tests, by the United States on Iran because of the latter’s state sponsorship of terrorism, and by the United Nations on Iraq as a tool to force the Iraqi government to comply with U.N. weapons inspectors’ search for weapons of mass destruction. Economic sanctions send this message: if you do not change your behavior, we will no longer trade with you. And, by Bastiat’s Principle, where our goods do not cross your frontiers, our armies will. Not inevitably, of course, but often enough in history that the principle retains its veracity. Economic sanctions are not a necessary or even sufficient cause of war, but they are often a prelude to war.
In his books on globalization, the New York Times foreign correspondent Thomas Friedman has proposed what he calls the McDonald’s Theory of War and the Dell Theory of Conflict Prevention. In the former, Friedman holds, “No two countries that both had McDonald’s had fought a war against each other since each got its McDonald’s.” In the latter, Friedman claims, “No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain.”20 This was more of a literary device to make a point about the power of international trade on human relations than it was a law of social science, since exceptions abound: the 1989 invasion of Panama by the United States, the 1999 bombing of the Federal Republic of Yugoslavia by NATO forces, the constant conflicts between India and Pakistan, and the on-again, off-again clashes between Lebanon and Israel over the past quarter century. All of these countries sell Big Macs. But Friedman’s point was that nations that share strong economic ties are less likely to go to war with one another because it raises the stakes even higher than they would otherwise be, and that is my point here in treating this as a probability condition rather than an absolute law.
I made a similar observation on a 2000 trip to Beijing for a scientific conference, during which I toured the ancient Forbidden City complex only to encounter there a brand-new Starbucks café. My Scientific American column on the experience, entitled “Starbucks in the Forbidden City,” was about the power of science and economics jointly to bring together such disparate Eastern and Western cultures over a scientific discussion or cup of coffee.21 I call this the Starbucks corollary to Bastiat’s Principle: where Starbucks crosses frontiers, armies will not. That is, the free trade of products between peoples, and open access to services across geographic borders, obviates the necessity of political borders and thereby decreases the probability that armies will cross them. To the Starbucks corollary I add the Google theory of peace: where information and knowledge cross frontiers, armies will not. That is, the free trade of information between peoples, and open access to knowledge across geographic borders, obviates the necessity of political borders and thereby decreases the probability that armies will cross them. A stirring example can be seen in Europe. Since the Treaty of Rome and the formation of the European Union—which integrated disparate and historically divided European nations under one economic umbrella—where once invasions and wars were commonplace throughout a thousand years of European history, they are now unthinkable. Try it. Imagine Germany invading France and waging war upon her, or picture France motoring its armies through the Chunnel and marching them into London to declare the country French. What once made for dramatic literature now sounds like pulp fiction.22
The Wikification of the economy—Wikinomics, as it is becoming known23—adds to the Google theory of peace the entire world economy as practiced by and participated in by billions of people. Wikipedia is the right analogue for this emerging economic phenomenon. It is the collaboratively created encyclopedia that runs on wiki (Hawaiian for “quick”) software that allows real-time and constant editing of documents by anyone, anywhere, anytime. It is an open-sourced, peer-produced, mass-collaborated, bottom-up, self-organized, emergent property of millions of people choosing to build the modern equivalent of the Alexandrian library whose purpose was to make the sum of the world’s knowledge available to everyone in one location. Granted, the ancient Alexandrian Greeks had far less knowledge to store than we do today—by many orders of magnitude—but we have the World Wide Web. In the long run, no dictator, demagogue, priest, president, or any other pretender to power will be able to control the Googlification, Wikification, eBayification, MapQuestification, YouTubification, MySpacification of information, knowledge, geography, personal relationships, markets, and the economy.24 Chinese bureaucrats can attempt to put all the firewalls and controls they want on a billion potential Chinese Web surfers, but they will never be able to prevent knowledge, products, and people from finding their way to those who seek them. Freedom finds a way.
There is nothing natural about a free economy, and there is nothing inevitable about human groups evolving toward a free market. For thousands of years, chiefdoms, states, and empires practiced slavery and justified it. Ever since the Enlightenment, however, there has been a concerted effort on the part of many states and empires to abolish slavery and promulgate freedom. Several bloody centuries later, slavery has nearly disappeared from the first world, and is rapidly vanishing from the second and third worlds as they transition toward becoming first-world nations.
Despite our natural inclination toward tribalism and xenophobia, we have seen considerable progress with the spread of Enlightenment values, with more rights granted to more people in more places, and with people being protected through both education and legislation from being discriminated against based on such characteristics as race, ethnicity, religion, and gender. Nevertheless, far too many people around the globe still live in political tyranny and economic poverty to the point where they cannot even reach the level of having their primary survival needs met, the sort of needs that allow one to reach a base level of happiness on which to build a meaningful life.
Yet it is not enough simply to oppose slavery, poverty, war, violence, racism, tribalism, and the like. We also have to be for something. As Ludwig von Mises warned his fellow anti-Communists at the height of that movement in the 1950s: “An anti-something movement displays a purely negative attitude. It has no chance whatever to succeed. Its passionate diatribes virtually advertise the program they attack. People must fight for something that they want to achieve, not simply reject an evil, however bad it may be.”25 What is it we are fighting for? Freedom. But as we have seen, freedom will not come about on its own, so we must pay a price for it. What is that price?
In the long history of humanity’s struggle against the bonds restricting freedom, it would be difficult to find a more eloquent spokesperson than Thomas Jefferson, who understood in the most personal and public sense the toll to open liberty’s gate: “The price of freedom is eternal vigilance.”26 It is not inevitable that one day we shall all thrive in an environment of peace, prosperity, and freedom. Given our dual disposition to be both good and evil, and the power of the environment to elicit one or the other, we must choose freedom, then create the circumstances in which it can be realized, and then defend it once it is achieved. So freedom begins with an idea, and a conscious choice to attain it. To that end, this entire book is an exercise in consciousness-raising for freedom.
Can the mere raising of people’s consciousness work to trigger social change that leads to an increase in freedom? Of course it can. If it couldn’t, there would have been no civil rights movement, we’d still be practicing slavery, and women could not vote. How do we get from here to there? Through the slow but steady spread of liberal democracy and free market capitalism, the establishment of environments that spawn interpersonal and international trust, the transparency of political power and economic hegemony, the availability and accessibility of all knowledge for everyone everywhere, and the opening up of political and economic borders, in order—in the words on a plaque posted at the Suez Canal27—
Aperire Terram Gentibus
To Open the World to All People