A gift could be repaid in many ways. If it was given from a superior to a
subordinate, the return was usually in the form of service since a subordinate
could not be expected to return an equivalent or more valuable item to a
superior. Gift-giving usually involved delayed reciprocity: counter-gifts were
not required immediately. Nevertheless, some reciprocity was expected
sooner or later, and failure to repay within a reasonable time was taken as a
sign of hostility. Among equals, a counter-gift that was worth less was a sign
of weakness deserving of contempt. Far from being motivated by disin-
terested magnanimity, gift-giving could be as calculated and self-serving as
profit-based trade.
The development of commercial trade based on market principles out of
earlier forms of exchange was a cumulative process, not an accidental dis-
covery or calculated invention that can be traced to a specific series of events.
Like gift-giving, commercial trade was a consensual act. The object of com-
mercial trade was to create wealth by generating profit. Trade operated
through the“market,”a process, which should be distinguished from the
“marketplace,”a location. The market was driven by profits or value max-
imization and controlled by a supply and demand mechanism in which
commodities moved according to price. Trade required entrepreneurial
behavior and was characterized by investment and risk-taking. Since the
purpose of trade was to maximize returns in order to enrich oneself, eco-
nomic considerations dominated social and political considerations. In gift-
giving the social relationship was the crucial factor whereas in commercial
trade the desire for the commodity itself motivated the transaction. No social
bond was created as a result of the exchange. Trade was negotiated and
funneled through intermediaries, who could be strangers, and the return was
immediate rather than delayed. Furthermore, trade was a discrete transaction
separate from any previous or subsequent acts between the parties and terminable
at the end of the transaction. It was not part of a continuing process unless
the parties agreed for it to be, and then it continued only as a“business
relationship.”
Gift-giving and trade were never exclusive to each other. Societies bound
together through ceremonial exchange could simultaneously engage in com-
mercial trade. And if gift-giving evolved earlier than trading for profit, the
competition between the two did not remain steady over the centuries. In
the modern world a residue of gift-giving can still be seen in such practices
as birthday and holiday presents, but long ago exchange became dominated
by commercial trade as gifts gave way to commodities.
In long-distance trade a society, at least in classical economic theory, con-
centrated on goods it could produce more efficiently than other societies
either because it had better access to raw materials, superior technology,
cheaper labor, or some other advantage. Trade was based on the cost of pro-
duction in one place versus the cost of production in another with transpor-
tation expense added. In many instances the presence or absence of specific
2 Some introductory musings