Chapter 1
Some introductory musings
On the business of business
Exchange is a form of interchange between individuals or groups. It is the
act of giving and taking one thing for another: goods, services, or some intangible
item must change hands. Exchange is the engine that drives the circulation
of commodities, items thatflow through the economic system until they are
consumed. And exchange involves reciprocity. Although goods circulate as
the result of predatory activities such as brigandage, plundering, robbery,
and piracy, these cannot be considered as exchange. Throughout history
humans have engaged in a variety of consensual exchanges, two of the most
important forms being gift-giving and trade. Whatever is being exchanged
must have some utility, functional or social, in order to have a value assigned
to it. That said, exchange can involve useful products such as metals and
grains or products having only ceremonial, symbolic, or prestige value.
One of the oldest and most universal forms of consensual exchange is gift-
giving, which originated as an aspect of intra-family and clan relations. In
this, exchange was motivated more by social than economic factors: the goal
was to maximize social contacts rather than reap material benefits. The giver
of a gift gained esteem according to the perceived value of the gift. Thus it
was not the possession of wealth that conferred prestige and power but the
giving of wealth; it was truly better to give than receive. In tribal societies a
common venue for ceremonial gift-giving was the feast where guests ate
theirfill and went home with presents as well. However, gift-giving was not
simply a matter of gaining prestige through generosity, and usually the item
was not a present in the sense that the giver expected nothing in return.
Gift-giving established an obligation that led to counter gift-giving or the
fulfillment of some duty, which in turn required a new round of transactions
that theoretically was never-ending. Gift exchange often was used to forge
links between groups or states. Among states in the ancient world, rulers
often exchanged gifts and referred to each other as“brother,”symbolizing
their friendly relations. For centuries this served as the most important
mechanism for transferring goods among certain states.