Thursday, December 14, 2006

History in a nutshell

I've written about geographic patterns that demonstrate the importance of securing as well as producing wealth (link below). These have shaped forms of government and law. Hunter-gatherer tribes, under which our instincts evolved, had no need of large organizations, governments, or law as we know it. The dawn of agriculture was probably made possible, not by the discovery that food plants could be grown from seeds (this would have been obvious to a hunter-gatherer), but in solving the much harder problem of how to protect this capital investment over the course of a planting-growing-harvesting-storage cycle from fellow human beings. This required internal law and external security exercised much more thoroughly and over a larger area. It was securing the production, more than the production itself, that required eventually radical organizational evolution.

Once farmland became the main source of wealth, there were substantial economies of scale in protecting it. This posed a difficulty in forming organizations larger than tribes; those cultures that could coordinate larger militaries slowly displaced tribes that could not. This led to a wide variety of governmental forms, but they tended to have in common that the military consumed the bulk of the otherwise insecure agricultural surplus. The primary legal form was that of real property, usually claimed by military lords and their heirs.

The next phase appeared sporadically and temporarily among city-states that dealt most in goods (included harvested and transportable agricultural commodities) rather than farmland. As cultures became centered around trade and industry, converting from farmland to goods as the main source of wealth, they also tended to convert to from feudal monarchies to republics (or as we tend to call them now, democracies). Contract law became as or more important than real property law. Real property became much more alienable, either sold outright or pledged as security for insurance or investments.

As most wealth became mobile, taxes became centered on trade and income -- on wealth transfers that require crossing borders or crossing trust barriers -- rather than on wealth. During the same centuries as the rise of republics, cheap paper made widespread monolinguistic merchant communities more effective. The printing press gave rise to modern national languages, making large-scale organizations such as the modern corporation and nation-state possible. This led to substantial efficiency gains both in the security of production (and of the accompanying trade) as well as in the production and trade themselves.

Technology and economy have now once again leapt ahead of government and law: now in the most developed countries it's no longer goods, but services and information, which increasingly create wealth. It's still almost anybody's guess what organizational forms will be needed to produce and secure service value and information wealth, and for that matter whether such wealth will take the legal forms that have appeared with goods-centered republics (e.g. patents and copyrights) or whether new more security-efficient forms of property and contract will emerge. I expect smart contracts and related protocols to play an important role.

More about security and history here.

1 Comments:

Blogger Francis W. Porretto said...

Franz Oppenheimer would disagree with you on parts of that. His book The State is most thought-provoking on the subject.

10:03 AM  

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