By December 2020 the global official workforce lost nearly 9% of its total working hours, over 144 million jobs. This number does not include the impact on the informal workforce, which was substantial. These losses affected women more harshly than men. Global food prices rose 20% between January 2020-January 2021 with than 700 million people undernourished and 272 million suffering from acute food insecurity. The distribution of wealth, already more unequal than at any point since recording of global economics began, became even more unbalanced during 2020. As of April 2021, much less than 1% of the nearly 8 billion humans on the planet control the vast majority of wealth in the global economy. COVID19 shined a light on many problems of inequity in human societies, but its highlighting of the catastrophe of global market capitalism is devastating. The system is broken and humanity is suffering because of it.
But if the contemporary capitalist market system is so inequitable and flawed, why is it the dominant global pattern? Partially because humanity has been fed a myth that contemporary economies emerged as a necessary reality of the world. And that myth is a lie.
Much of what we think of as “economics” is really about exchange. The sociologist Marcel Mauss reminded us that the exchange of objects builds relationships between human groups. For most of human history such exchanges were not seen as ‘economic’ with values being assessed and monitored. Rather, reciprocal giving of gifts was a social act. The anthropologist David Graeber, reviewing huge amounts of ethnographic and historical evidence, shows that many (or even most) human exchanges are not seen as an economic relationships but as a way to connect, without specifically accounting the goods’ value or seeing the interaction as a transaction with costs and benefits. Sharing and the exchange of materials between individuals and groups is a central feature of human social life. In most cases of such exchange, strict reciprocity is not expected. For most of human history, exchange created relationships and enabled social trust and mutual entanglement.
But if the contemporary capitalist market system is so inequitable and flawed, why is it the dominant global pattern? Partially because humanity has been fed a myth that contemporary economies emerged as a necessary reality of the world. And that myth is a lie.
In market economic systems, by contrast, accounting is critical. Once exchanges become subject to strict valuation, and an accounting of that value is introduced into the transactions, an economy is started and obligatory reciprocity emerges. How did we go from exchanges as social relationships to exchanges as market economic ones?
The story told by many economists and historians is that once humans began to develop and trade material items, a system of barter developed. Under the standard story, trade and barter started with exchanges of items (supply) that were needed or desired by those who did not have them (demand). Once this accounted exchange gets going, those involved begin assigning value to the items so that exchanges (barter) become a negotiation over the relative value of the items being exchanged. Clearly, it is only a few steps from a barter system to a money economy. Once a system of value emerges, tokens representing specific values (money) can be used in the exchanges rather than directly exchanging the items themselves. It is easier to carry around a bag of coins than a herd of cattle.
This is a convincing story, but it is not true. Barter systems did not precede monetary systems, they co-evolved. In most cases in the world where barter is common, it exists as a by-product of the cash economy, not as its underlying cause. The archeological evidence for anything like a money or barter economy is non-existent until the last 5,000 to 7,000 years at the earliest. That means that the entire system of cash-based market economics that most people take as “what humans do” was not that at all until very recently in our evolutionary history.
That means that the entire system of cash-based market economics that most people take as “what humans do” was not that at all until very recently in our evolutionary history.
To develop a contemporary economy, one has to start with material inequality, some degree of differential access to items within and across groups. The earliest evidence for such inequality is about 30,000 years ago—but only in the context of grave goods and there is no discernable pattern in who gets the greater grave goods. This evidence of early inequality is not consistent with contemporary economic models and is more in line with Mauss’ social model of exchange.
To develop an economy, especially a market economy, there must be some consistent and predictable way of differentially acquiring and maintaining wealth. In economic terms, it means a disproportionately large possession of goods or the power to obtain, produce and control them. Being wealthy generally means having a lot of goods or money relative to others—a state not possible without a degree of material and social inequality, and therefore a way of being that was not even available to humanity until very recently.
By 8,000 to 12,000 years ago (maybe a little earlier), humans began routinely storing goods and developing surpluses of material items at larger scales in villages, towns and eventually cities. By 5,000 years ago we see clear evidence of accounting systems, substantial exchanges of material goods and increasingly large-scale trade between groups. Differential material wealth, the disproportionate possession of goods or the power to obtain, produce and control them, becomes common across human populations over the past 4-5 millennia. This institutionalization of economic inequality as typical in human societies is very recent.
Differential material wealth, the disproportionate possession of goods or the power to obtain, produce and control them, becomes common across human populations over the past 4-5 millennia. This institutionalization of economic inequality as typical in human societies is very recent.
Humanity began our success by creatively collaborating with one another and by seeing that the material world can be modified and altered to suit our needs. Creating and sharing goods is a deep part of the human experience. The dynamic patterns in humans’ early social systems offered the possibilities for expansion and the development of more hierarchical relations. The radical expansion in our abilities to make and use material items, the more recent development of domestication, sedentism, and storage, and the expansion of human groups into towns, cities and nations brought societies into novel economic ways of interacting. These factors eventually led to contemporary economic systems: markets, money and barter. Humans changed their own environments in ways that made materially egalitarian societies less and less common, and the contemporary reality of market economies became the context in which most humans develop.
Growing up in a market economy dramatically influences the way we perceive the world and each other. As wealth inequality became part of everyday life for most of humanity, people began to see, experience and believe it to be the ‘natural’ state of affairs. But there is a difference between basic economic processes—the creation, movement and management of goods in a system that has some inequality—and contemporary market (capitalist) economies.
Growing up in a market economy dramatically influences the way we perceive the world and each other. As wealth inequality became part of everyday life for most of humanity, people began to see, experience and believe it to be the ‘natural’ state of affairs.
The economic systems we live in today are human creations based on assumptions, ideologies and beliefs that have developed over the past five to ten centuries. More than 150 years ago Karl Marx reminded us, “these categories [economic systems] are as little eternal as the relations they express. They are historical and transitory products.” Humans made contemporary economies, and we can change them. The human economic world continues to evolve, but that evolution is directly connected to the processes, events and actions of the present. That means we can look to our human histories and capacities and draw insight and possibilities in order to reshape/restructure economic processes with an aim towards increased social cohesion and reciprocal exchange. More equitable compensation, taxation and re-distribution systems are possible. A focus on shared investment in community infrastructures and collaborative support for equitable health, education, housing and food access, across age/sex/gender/racial/ethnic lines can re-structure what an economy looks like.
There is no return to egalitarian existence, nor should we want one, that ship has sailed. But capitalist market economies are neither natural nor inevitable, and so we need not be stuck with their failed and damaging processes. Contemporary societies need to know what humans have done and can do economically and socially in order to change beliefs, and practices, about the production, consumption, exchange, and distribution of goods and services. Humanity can change economies and improve lives, but only if we try.
There is no return to egalitarian existence, nor should we want one, that ship has sailed. But capitalist market economies are neither natural nor inevitable, and so we need not be stuck with their failed and damaging processes… Humanity can change economies and improve lives, but only if we try.
Trained in Zoology and Anthropology, is a Professor of Anthropology at Princeton University. His research delves into the how and why of being human. He is an active public scientist, a well-known blogger, lecturer, tweeter and a writer and explorer for National Geographic. His current projects include exploring cooperation, creativity, and belief in human evolution, multispecies anthropologies, evolutionary theory and processes, and engaging race and racism.
