Thursday, August 16, 2012

Alternative Economies In History

Continuing on the theme of central planning, earlier in the year we looked at the book Why Nations Fail by economists Daron Acemoglu and James Robinson, in particular the comments about the book's premise in a review by Jared Diamond. On their blog, A and R are doing an interesting series on centrally planned economies in history (yes they existed). Their first two examples are Bronze Age Greece and the Inca empire:
Around 3200 BCE there was the start of the Bronze Age in the Eastern Mediterranean. Though this terminology refers to the use of bronze (an alloy of copper and tin) which replaced stone for tools and weapons, there was a whole series of correlated technological, social and political changes. In particular the Bronze Age was associated with increased political centralization and the formation of states throughout the Mediterranean basin.

How did the economy of the Greek Bronze Age states work? These states were based on a city where the political elite lived. We have a unique record of the activities of these polities because many clay ‘Linear B’ tablets written by state administrators have survived. Fascinatingly, these tablets have only survived from the period right before these states were destroyed in conflicts (think Troy…). The palaces were burned down, we don’t really know by who (the Sea People?), and the fire baked and preserved the clay. The tablets basically are state records of taxation and industrial production. There was no money and apparently no markets.
In the Inca Empire, all the land was the Inca’s and large parts were allocated to the Temple of the Sun and other religious cults, others to the army, and yet others to the Crown. The rest which the state did not claim was granted to local communities for their subsistence production. The state lands, distributed throughout the empire, were then worked for free by the local people using various forms of corvée labor. Local people also had to weave llama wool given to them for this purpose by the state.

There seems to have been little or no market exchange but instead the state moved people into different areas where different crops could be grown, the so-called archipelago economy, and then distributed the goods by fiat. For example, Inca administrators who supervised the farming of crown lands would arrange for some of the goods to be moved to Cuzco or other regional capitals, while another part would be stored locally in warehouses. This system, vividly described by the anthropologist John Murra in his book The Economic Organization of the Inka State was a vast system of central planning developed without the aid of Das Kapital or indeed Eurasian role models.

It seems that like farming or democracy, central planning was independently invented many times over in world history. As Murra put it (page 121):

    The Inca state functioned like a market: it absorbed the surplus production of a self-sufficient population and “exchanged” it by feeding the royals, the army and those on corvée as well as by issuing a lot of it as grants or benefactions.

On that last entry, see this from Charles Mann's book 1491:
In 1491 the Inka ruled the greatest empire on earth. Bigger than Ming Dynasty China, bigger than Ivan the Great's expanding Russia, bigger than Songhay in the Sahel or powerful Great Zimbabwe in the West Africa table-lands, bigger than the cresting Ottoman Empire, bigger than the Triple Alliance (as the Aztec empire is more precisely known), bigger by far than any European state, the Inka dominion extended over a staggering thirty-two degrees of latitude--as if a single power held sway from St. Petrusburg to Cairo. The empire encompassed every imaginable type of terrain, from the rainforest of upper Amazonia to the deserts of the Peruvian coast and the twenty-thousand-foot peaks of the Andes between. "If imperial potential is judges in terms of environmental adaptability," wrote the Oxford historian Felipe Fernandez-Armesto, "the Inka were the most impressive empire builders of their day."

The Inka goal was to knit the scores of different groups in western South America--some as rich as the Inka themselves, some poor and disorganized, all speaking different languages--into a single bureaucratic framework under the direct rule of the emperor. The unity was not merely political: the Inka wanted to meld together the area's religion, economics, and arts. Their methods were audacious, brutal, and efficient: they removed entire populations from their homelands; shuttled them around the biggest road system on the planet, a mesh of stone-paved thoroughfares totalling as much as 25,000 miles; and forced them to work with other groups, using only Runa Sumi, the Inka language, on massive faraway state farms and construction projects. To monitor this cyclopean enterprise, the Inka developed a form of writing unlike any other, sequences of knots on strings that formed a binary code reminiscent of today's computer languages. So successful were the Inka at remolding their domain, according to the late John H. Rowe, an eminent archaeologist at the University of California at Berkeley, that Andean history "begins, not with the Wars of [South American] Independence or with the Spanish Conquest, but with the organizing genius if [empire founder] Pachacuti in the fifteenth century."

Not only did Pachakuti reconfigure the capital, he laid out the institutions that characterized Tawantinsuyu itself. For centuries, villagers had spent part of their time working in teams on community projects. Alternately bullying and cajoling, Pachakuti expanded the service obligation unrecognizably. In Tawantinsuyu, he decreed, all land and property belonged to to the state (indeed, to the Inka himself). Peasants thus had to work periodically for the empire as farmers, herders, weavers, masons, artisans, miners, or soldiers. Often crews spent months away from home. While they were on the road, the state fed, clothed, and housed them--all from goods supplied by other work crews. conscripts built dams, terraces, and irrigation canals; they grew crops on state land and raised herds on state pastures and made pots in state factories and stocked hundreds of state warehouses; they paved the highways and supplied the runners and llamas carrying the messages and goods along them. Dictatorially extending Andean verticality, the imperium shuttled people and materiel in and out of every Andean crevice.

Not the least surprising feature of this economic system was that it functioned without money. True, the lack of currency did not surprise the Spanish invaders--much of Europe did without money until the eighteenth century. But the Inka did not even have markets. Economists would predict that this nonmarket economy--vertical socialism, it has been called--should produce gross inefficencies. These surely occurred, but the errors were of surplus, not want. The Spanish invaders were stunned to find warehouses overflowing with untouched cloth and supplies. But to the Inka the brimming coffers signified prestige and plenty; it was all part of the plan. Most important, Tawantinsuyu "managed to eradicate hunger," the Peruvian novelist Mario Vargas Llosa noted. though no fan of the Inka, he conceded that "only a very small number of empires throughout the whole world have succeeded in achieving this feat."
Note that Inca farmers had to work only 65 days a year to feed their family. And see this: Sumerian Economics by Peter Lamborn Wilson:
About 3100 writing was invented at Uruk. Apparently you can witness the moment in the strata: one layer no writing, next layer writing. Of course writing has a prehistory (like the State). From ancient times a system of accounting had grown up based on little clay counters in the shapes of commodities (hides, jars of oil, bars of metal, etc.) Also glyptic seals had been invented with images used heraldically to designate the seals' owners. Counters and seals were pressed into slabs of wet clay and the records were held in Temple archives-probably records of debts owed to the Temple. (In the Neolithic Age the temples no doubt served as redistribution centers. In the Bronze Age they began to function as banks.)

As I picture the invention of real writing took place within a singly brilliant family of temple archivists over three or four generations, say a century. The counters were discarded and a reed stylus was used to impress signs in clay, based on the shapes of the old counters, and with further pictograms imitated from the seals. Numbering was easily compacted from rows of counters to number-signs. The real break-through came with the flash that certain pictographs could be used for their sound divorced from their meaning and recombined to "spell" other words (especially abstractions). Integrating the two systems proved cumbersome, but maybe the sly scribes considered this an advantage. Writing needed to be difficult because it was a mystery revealed by gods and a monopoly of the New Class of scribes. Aristocrats rarely learned to read and write -- a matter for mere bureaucrats. But writing provided the key to state expansion by separating sound from meaning, speaker from hearer, and sight from other senses. Writing as separation both mirrors and reinforces separation as "written," as fate. Action-at-a-distance (including distance of time) constitutes the magic of the state, the nervous system of control. Writing both is and represents the new "Creation" ideology. It wipes out the oral tradition of the Stone Age and erases the collective memory of a time before hierarchy. In the text we have always been slaves.

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