Hidden Exchange

In one of my classes, we read about how various stateless societies functioned economically without money or prices as we are familiar with. There were various methods of exchanged discussed, but this one I found to be the most interesting.

Herodotus discussed the trade relations between the Carthaginians and African tribes several hundred BCE. It went as follows:

The visiting traders (or perhaps better, would-be traders) appeared at some point in the vicinity of the area occupied by their hoped-for trading “partners,” with the goods they wished to exchange, and signaled their presence. The visitors placed their goods on the ground and went into hiding. In due time those with whom they wished to trade brought their goods, which in turn were placed on the ground, after which they disappeared. The visitors then returned to the place where the goods were displayed and if they were satisfied with the offerings of the “host” group, took them and returned home, leaving their own in exchange. If not satisfied, they left the host’s offering and their own goods untouched and disappeared again, thus indicating rejection of the initial offer. The hosts were then expected to adjust their offerings, or withdraw them and depart. In this technique the visitors would normally not be adjusting the amounts that they offered; they merely accepted or rejected the host’s offerings. Further, the visitors, in refusing the host’s first offering, were courting failure of their expedition and even impairment of continued relations with those who had goods that they needed.

F. A. Hayek called the pricing system a “marvel.” After reading about societies without an explicit pricing system, I agree with him that much more.