Sure thing! Essentially, one of the issues of any community is redistribution of goods. Obviously, some people are better at, say, farming, and others are better at carpentry. You can try to force everyone to provide for their own needs, but that tends to be terribly inefficient. Like, sub-Hunter-Gatherer level stuff. So, you have to find a way to get different goods around from one person to another. One common form of economy before the rise of complex states is the ‘gift economy’.
In a gift economy, goods are given without any explicit expectation of return. In other words, I don’t give you ten apples for five oranges; I give you ten apples because you’re part of the community, and you need ten apples. This is a very appealing thought to many who are (rightly) disillusioned with capitalism, but there are very good reasons why gift economies largely did not survive as a primary form of economic redistribution. They are very reliant on personal relationships between the gift-givers, and on long-term residence in the community.
When you’re 50 people in a small tribe where your grandparents, parents, children, and grandchildren will live all their life, then this is somewhat viable. Everyone knows everyone, everyone knows what everyone has, and what everyone needs. If someone isn’t generous enough, they can be shunned, shamed, or even beaten or exiled in extreme cases. It is a method of redistribution that is heavily reliant on social interaction and trust. As one might expect, it does not have a great track record as a primary method of moving necessary goods in larger communities, where many people are strangers and very physically distant from one another.
As communities grow, typically they move away from gift economies to redistributive economies. In a redistributive/contractual economy, goods are given to a central (or several central) authorities, who spend a great deal of time discerning the needs of individuals in the community and getting the goods where they need to go. In its most primitive form, this is a tribal chieftain, or a council of village elders, who take what people give them and then try to address everyone’s needs as fairly as possible. In more complex forms, it ends up with very elaborate legal contracts with clearly-laid-out rights and duties, as in feudal societies - “I will give the council/chieftain/lord 10 apples every harvest, and in exchange, the council/chieftain/lord will give me 5 oranges, 1 chair, 1 new suit of clothing, etc etc etc.” In its most complex form, one could argue, planned economies, like the old Soviet system or hypothetical AI-run redistributive economies fall into this category.
The thing about redistributive/contractual economies is that there is necessarily some form of hierarchy, because someone, or many someones, have higher-than-average decision-making-power about how to redistribute goods, and that raises a number of problems of its own. Redistributive economies like this are very common before the modern day because of this hierarchy - it reduces moral hazard when everyone is subject to the same authority - the Pharaoh, for example, might be a stingy, favorites-playing bastard, but you don’t have to worry about your neighbors not giving him (and his officials) enough and cheating everyone else in the process - the Pharaoh takes care of that. That’s literally his job, the same way you work at growing apples, he works to redistribute the goods.
The third major form is a market economy, which are not inherently capitalist, but definitely have a certain… synergy with capitalism. In a market economy, it’s, well, what we all recognize as economics in the modern day. “I will give you 10 apples in exchange for 5 oranges, but we can negotiate the price.” Prices are not set, they fluxuate from person-to-person, exchange-to-exchange. In its most primitive form, it’s barter, like that, goods in exchange for goods; as it grows in complexity, money (or other units of exchange) get involved, like coins or dollar bills - or metal ingots!
The thing about market economies is that, in order to connect this kind of deal-making over large areas, large periods of time, or large shipments of goods, you need some form of regulation - some manner of ensuring that deals are honored, that exchanges agreed-upon are completed, goods aren’t shortchanged or subpar quality - moral hazard. For this reason, market economies usually emerge from redistributive economies, which develop the means of enforcing contracts, and then shift to the more decentralized and efficient model of a market as the primary means of moving goods. Now the Pharaoh isn’t involved in actually giving you oranges in exchange for other goods; he’s just there to make sure that whoever you make an agreement with lives up to their end of the bargain.
Now, markets have their own weaknesses - for one, they’re notoriously hard to control. Price gouging, goods shortages, booms and busts, extreme prioritization of profit motive, concentration of power without even the chance for democratic input - these are all very real problems, even in socialist market economies, where workers control their own output. But in general, market economies are robust and widely used because they have very minimal ‘costs’ involved for what they offer - every purchase you or anyone else makes enters in new information to the market in the form of prices and supply/demand going up and down. That information contribution takes the place of the chieftain or village elders, and is a kind of cold, calculated process where emotions and personal relationships don’t enter in so much. Money/goods don’t remember who held them last, only who holds them now. It’s decentralized, everyone puts in a kind of passive labor into it, and because of that, goods… generally get where they need to go. As we see in modern societies.
I’ll write more on small communities in general later if you’re still interested.
Thank you so much for that response! It really layed out what I was curious about in an accessible way. Also just wanna say you’re super active on here so I see you a lot, and I’m always interested in your takes. I definitely don’t agree with you on some things but I respect your viewpoints a ton because of how you back them up with good faith arguments. I don’t need to hear more about small communities because I feel like you’ve outlined the things I was curious about and my general focus is more on how we can address larger societal issues, which I feel is best accessed through larger communities. But I definitely wouldn’t turn down anything you have to say about small communities if you wanna get your thoughts out there!
Yeah I’m not usually one to be like “oh civility is of utmost importance” and I recognize how necessary unpleasantness and sometimes outright force is necessary to enact serious change. At the same time I really respect people who recognize situations where everyone involved can gain from a mutual discussion. Thank you again for helping me out! It genuinely makes me want to talk more on this site haha
Sure thing! Essentially, one of the issues of any community is redistribution of goods. Obviously, some people are better at, say, farming, and others are better at carpentry. You can try to force everyone to provide for their own needs, but that tends to be terribly inefficient. Like, sub-Hunter-Gatherer level stuff. So, you have to find a way to get different goods around from one person to another. One common form of economy before the rise of complex states is the ‘gift economy’.
In a gift economy, goods are given without any explicit expectation of return. In other words, I don’t give you ten apples for five oranges; I give you ten apples because you’re part of the community, and you need ten apples. This is a very appealing thought to many who are (rightly) disillusioned with capitalism, but there are very good reasons why gift economies largely did not survive as a primary form of economic redistribution. They are very reliant on personal relationships between the gift-givers, and on long-term residence in the community.
When you’re 50 people in a small tribe where your grandparents, parents, children, and grandchildren will live all their life, then this is somewhat viable. Everyone knows everyone, everyone knows what everyone has, and what everyone needs. If someone isn’t generous enough, they can be shunned, shamed, or even beaten or exiled in extreme cases. It is a method of redistribution that is heavily reliant on social interaction and trust. As one might expect, it does not have a great track record as a primary method of moving necessary goods in larger communities, where many people are strangers and very physically distant from one another.
As communities grow, typically they move away from gift economies to redistributive economies. In a redistributive/contractual economy, goods are given to a central (or several central) authorities, who spend a great deal of time discerning the needs of individuals in the community and getting the goods where they need to go. In its most primitive form, this is a tribal chieftain, or a council of village elders, who take what people give them and then try to address everyone’s needs as fairly as possible. In more complex forms, it ends up with very elaborate legal contracts with clearly-laid-out rights and duties, as in feudal societies - “I will give the council/chieftain/lord 10 apples every harvest, and in exchange, the council/chieftain/lord will give me 5 oranges, 1 chair, 1 new suit of clothing, etc etc etc.” In its most complex form, one could argue, planned economies, like the old Soviet system or hypothetical AI-run redistributive economies fall into this category.
The thing about redistributive/contractual economies is that there is necessarily some form of hierarchy, because someone, or many someones, have higher-than-average decision-making-power about how to redistribute goods, and that raises a number of problems of its own. Redistributive economies like this are very common before the modern day because of this hierarchy - it reduces moral hazard when everyone is subject to the same authority - the Pharaoh, for example, might be a stingy, favorites-playing bastard, but you don’t have to worry about your neighbors not giving him (and his officials) enough and cheating everyone else in the process - the Pharaoh takes care of that. That’s literally his job, the same way you work at growing apples, he works to redistribute the goods.
The third major form is a market economy, which are not inherently capitalist, but definitely have a certain… synergy with capitalism. In a market economy, it’s, well, what we all recognize as economics in the modern day. “I will give you 10 apples in exchange for 5 oranges, but we can negotiate the price.” Prices are not set, they fluxuate from person-to-person, exchange-to-exchange. In its most primitive form, it’s barter, like that, goods in exchange for goods; as it grows in complexity, money (or other units of exchange) get involved, like coins or dollar bills - or metal ingots!
The thing about market economies is that, in order to connect this kind of deal-making over large areas, large periods of time, or large shipments of goods, you need some form of regulation - some manner of ensuring that deals are honored, that exchanges agreed-upon are completed, goods aren’t shortchanged or subpar quality - moral hazard. For this reason, market economies usually emerge from redistributive economies, which develop the means of enforcing contracts, and then shift to the more decentralized and efficient model of a market as the primary means of moving goods. Now the Pharaoh isn’t involved in actually giving you oranges in exchange for other goods; he’s just there to make sure that whoever you make an agreement with lives up to their end of the bargain.
Now, markets have their own weaknesses - for one, they’re notoriously hard to control. Price gouging, goods shortages, booms and busts, extreme prioritization of profit motive, concentration of power without even the chance for democratic input - these are all very real problems, even in socialist market economies, where workers control their own output. But in general, market economies are robust and widely used because they have very minimal ‘costs’ involved for what they offer - every purchase you or anyone else makes enters in new information to the market in the form of prices and supply/demand going up and down. That information contribution takes the place of the chieftain or village elders, and is a kind of cold, calculated process where emotions and personal relationships don’t enter in so much. Money/goods don’t remember who held them last, only who holds them now. It’s decentralized, everyone puts in a kind of passive labor into it, and because of that, goods… generally get where they need to go. As we see in modern societies.
I’ll write more on small communities in general later if you’re still interested.
Thank you so much for that response! It really layed out what I was curious about in an accessible way. Also just wanna say you’re super active on here so I see you a lot, and I’m always interested in your takes. I definitely don’t agree with you on some things but I respect your viewpoints a ton because of how you back them up with good faith arguments. I don’t need to hear more about small communities because I feel like you’ve outlined the things I was curious about and my general focus is more on how we can address larger societal issues, which I feel is best accessed through larger communities. But I definitely wouldn’t turn down anything you have to say about small communities if you wanna get your thoughts out there!
I’m happy to be of service! People acting in good faith can have productive discussions even when there are large disagreements!
Yeah I’m not usually one to be like “oh civility is of utmost importance” and I recognize how necessary unpleasantness and sometimes outright force is necessary to enact serious change. At the same time I really respect people who recognize situations where everyone involved can gain from a mutual discussion. Thank you again for helping me out! It genuinely makes me want to talk more on this site haha