Red-Blooded Risk: The Secret History of Wall Street

Paleonomics

This brings us up to early humans. We have to guess here based on modern studies of primate behavior, plus observation of surviving hunter-gatherer tribes and studies of very young children. All three kinds of evidence are indirect and possibly misleading. Modern primates and hunter-gatherers may differ from those of a million years ago, and the development of modern children may not reflect the evolution of human social conventions.

Nevertheless, there is one strong principle that stands out from all three studies, and is a plausible basis for the next advance in exchange: if it's worth fighting about, share it. This is familiar to every parent who has settled a squabble among children by dividing something in half. Judges at least as far back as Solomon have used the same procedure. It's still the basis on which wars, strikes, and lawsuits are settled. Sometimes you have to fight until enough claimants are eliminated or the resource under contention is depleted enough, but at the end the individuals remaining in the fight divide up the spoils. Hunter-gatherer tribes respect private property of low-value goods, like nuts and berries, but enforce sharing of high-value goods, like meat and honey.

Like property, sharing has its basis in risk. Things not worth the risk of a fight are owned; things worth the risk of a fight are shared. Although this rule is simple to state, in practice it gives rise to a complex set of overlapping social requirements. Not all of these are ...