Human beings tell stories about things they don't understand. Mainstream economists have made up and widespread the following myth.
Two "cavemen" return from hunting; one, Ugg, didn't get anything (and he's wearing glasses!), and the other one, Glugg, got what it looks like a wild boar. Although Ugg didn't get anything, his friend Glugg tells him that he makes better spears than him and that with one of his spears he could kill even more animals. Ugg doesn't want to go home empty handed and he has an idea: bartering one of his spears for one of Glugg's wild boars. "And thus the first economy was born" tell us the narrator.
This scene can be watched in "Cave-o-nomics" (1), the first episode of the series We the Economy. In each of the short 20 episodes dealing with vital economic topics, a renowned filmmaker makes use of his or her "creative vision" backed by "top economic experts" and "economic advisors."
The goal of the series is "to drive awareness and establish a better understanding of the US economy," attempting to "demystify a complicated topic," i.e., "the Economy." It calls for the public to be engaged citizens, to be informed in order to take control of their own financial lives (2).
One needs to praise such activism and choice of medium, as learning through new technologies about such topics humorously is indeed a good idea, especially after the 2008 financial meltdown. But is it an accurate account?
In this short article I break some of the major myths narrated in this episode on "prehistoric economics" and the supposed evolution of "the Economy," of how it all began.
The episode takes us around 40,000 years ago, which places us in the Upper Palaeolithic. Actually, "cavemen," or more accurately, Homo sapiens sapiens, didn't live in caves; they lived mainly at the entrance to caves or under overhanging rocks shaped by erosion which were also fitted with skin tents or huts.
An "economy" is essentially made up of social relations.
Myth: Modern capitalism evolved from barter
It is quite common the assumption that modern capitalism evolved from barter. But this is but a myth.
There doesn't seem to have been a society in time operating only by barter, and ethnography corroborates it. There is neither evidence of this supposed natural evolution of barter to money. This account, propagated by mainstream economics, is actually upside-down—it was not departing from barter that it took us to money and then credit systems.
Indeed historically there is evidence of departing from credit systems, debt, and virtual money, as Egyptian hieroglyphs and Mesopotamian cuneiform show, with coinage appearing thousands of years later, and then, for many different reasons, barter.
Myth: Specialised skills and crafts lead to the creation of businesses in the Upper Palaeolithic
Upper Palaeolithic human groups were skilled craftsmen who invented many tools (the bone needle included) and hunting weapons. And already often in this epoch, some communities practised a specialised and selective hunting.
Hunters focused only in one or two species of game, and mainly went after young males and old animals, sparing females for species reproduction. In other communities, women practiced a selective gathering of roots, fruits and plants, careful not to pick up all seeds. Hunters thus demonstrated knowledge about species, physiology, biology and behavior, and women knowledge about plants biological cycle.
The same goes for projectile weapons, showing empirical knowledge of basic laws of mechanics. The division of labor was probably based on gender and age, as is the case in hunter-gatherer societies.
The improvement in techniques didn't lead to the creation of markets or businesses; in this epoch, by getting food more easily, nonproductive activities flourished and hence this lead to the spiritual and aesthetic aspects of life. Funeral rites became more complex and their symbolic art left us rupestrian paintings and statuettes, some of which were even colored. In this epoch there was one specialist in the metaphysical: the sorcerer-shaman.
Myth: "An economy is essentially made up of markets"
The title of the series (We the economy) appears to tell us that we humans are part of "the Economy." However, if one should not speak of "the Economy" as a field operating by itself, deifying or reifying it, and isolating it from humans, from our relations among us and also with the nonhuman world, one shouldn't either assume that people essentially through market relations make up an "economy."
It is strange that speaking about "economy" one relates it immediately with markets. The roots of the word derive from Greek oikonomia, oikos meaning house, and nomos meaning managing, which gives us household management—a field in ancient Greece not separated from family or politics. Furthermore, etymologically, the term market economy is quite recent and it actually dates from around mid 20th century.
Upper Palaeolithic Cro-Magnon were hunter-gatherers, as we see in "cave-o-nomics," but changes throughout time didn't lead straight to price-creating markets where people maximise their profits, as a "cavewoman" in a "cave-market" tell us in the episode.
Social and economic organisation of hunter-gatherers from the Upper Palaeolithic has been described as "primitive communalism." Markets were not born in this epoch. The birth of price-creating markets is controversial (7th century BCE China? 6th century BCE Greece? Mesopotamia?).
But apparently no sign of it in the Stone Age. Price-creating markets may have existed long ago in Mesopotamia, but they were not the main institution regulating daily life or exchanges, as Temples and Palaces planned and administered trade. The domination of self-regulated markets has been, throughout history, more an exception than a rule.
Changes in human social organisations throughout time since the Upper Palaeolithic, differing regionally worldwide and following different paces, include, e.g., Neolithic food production and stock raising, the spread of villages, social stratification, city-states, planned and market-less trade, and even war and imperialism. Social relations and their materialisation in production and exchange imply politics, morals, institutions, values, kinship, religion, stratification, symbolism and even ideology.
Different systems of production and spheres of exchange exist and interact, although one may dominate – commodity production and exchange in our case.
For example, one may well buy a commodity at a store, plant some food for self-consumption at home, gather, say, mushrooms in a forest (typical in some regions in Portugal for example), offer a drink or some of the homegrown food to a relative or friend, redistribute resources within the household, barter something for something else, and be a favour indebted to a relative or friend.
Moreover, hunter-gatherers still exist nowadays, "neolithic" kind of lifestyles also, and gift-exchange is part of our lives too – and here reciprocity, solidarity and kinship matter most. Thus, an "economy" is essentially made up of social relations.
Unfortunately, the demystification in "Cave-o-nomics" and its vision of "how the economy get started" made it way too simple an account on prehistory. By relying mostly in strict utilitarian economics, it ended up embedded in market ideology and fundamentalism, with its mythological conceptions.
General insights from archaeology, history and anthropology would have given a better account on the Stone Age period and of changes in human societal organisation throughout time concerning production, exchange and so on. "Cave-o-nomics" fell into an anachronistic protohistorical trap.