EH.R: Is Trade Unique to Humans?

[deirdre2.enteract at rcn.com]

Dear Morris,

You are uniquely qualified to speak on the matter.  One amendment. Your analysis, which is straightforwardly neoclassical, and with which I of course agree, applies as you say to animals.  (I'm reminded of the wonderful experiments long ago on animal preferences, showing that rats have downward sloping demand curves for cherry soda.)  But you would in turn agree, I suppose, that human exchange involves imagination and the language entailed in imagination. 

Recall Smith's talk of a deliberate bargain between dogs over their bones.  Deliberation, and the Hayekian/Kirznerian creativity that comes out of the socialized deliberation we call conversation, plays a big role in human trade.  Such a view---which I repeat is found in Smith, and then largely buried by economists after him---has all kinds of observable, quantitative consequences.  

For instance, one would expect trade to leap forward when language is perfected, as the archaeological evidence seems to suggest (I say this as an outsider to that scientific literature: perhaps I have it wrong).  People with the same culture would find more to trade about (this contrary to the other truth, that diverse people have more occasions to trade).   A radical rise in discussability such as Europe experienced 1600-1800 would make many more deals and inventions conceivable.  And so forth. Language matters, and not just as a signalling mechanism.  Language is persuasive and constructs surprising deals, or on the downside makes impossible many deals that a straightforward comparison of marginal rates of substitution would recommend.  It's an Austrian step beyond Samuelsonian economics, which I reckon we need to take.

Regards,

Deirdre