The Origin of Private Property Institutional innovation and endogenous technical change
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1 The Origin of Private Property Institutional innovation and endogenous technical change Samuel Bowles (joint work with Jung-Kyoo Choi) Santa Fe Institute, University of Massachusetts, University of Siena
2 Technology and institutions A standard view (Demsetz, North, Marx, Childe): institutions such as property rights systems or forms of governance change in response to exogenous changes (in technology, increased population, climate change, and epidemics). A common variant of this view is that new technologies are adopted because they are efficient, inducing institutional change as a result Marx: forces of production social relations of production This works in many cases: the horse on the U.S. Great Plains, the sweet potato in PNG highlands. This view has been proposed, too, for the Holocene revolution: climate amelioration agriculture private property Agriculture was impossible prior to the Holocene and mandatory during the Holocene (Bettinger, Richerson and Boyd, 2001) Also: Bowles and Choi 2002, Bowles 2004 etc. But the data?
3 The Holocene revolution happened: a dramatic shift in both technology and institutions A collectivist and egalitarian social structure typical of mobile hunter-gatherers (e.g. resource-sharing; coinsurance) was probably sustained for 95% of the history of biologically modern humans (190 kybp to 11 kypb) in a wide variety of ecologies without the aid of centralized enforcement of social rules. NB: possession based property rights were not absent among hunter gatherers (tools, ornaments as early as 120 kybp and perhaps earlier) Archaeological traces of political hierarchy and economic inequality are entirely absent until 24 kypb and very rare thereafter until.... beginning around 11 kybp the collectivist and egalitarian social order of foragers was replaced in many, eventually most societies by one based on farming & possession-based property rights (The first property rights revolution).
4 Fertile crescent 11 The Holocene Yangzi and Yellow River Basins 9 agricultural and property New Guinea highlands 9-6 rights revolution: a rare Sub Saharan Africa 5-4? Central Mexico 9-10 event Northern South America 9-10 Eastern USA 4-3 Origin of agriculture ( 000 of yrs b4 present) From Peter Bellwood, First Farmers 2005
5 The climate part of the story works Warmer and less variable climates during the Holocene (NB: ice core data (Ditlevsen et al, 1996, Bettinger et al 2002) from 90ka to the present) But Domestication of plants and animals
6 Puzzles: When it emerged, farming (white bars) was not more (labor) productive than exploiting wild species (black bars) Kcalories produced (net of storage and processing losses) per hour of direct and indirect labor for wild and cultivated species based on ethnographic and archaeological data (Bowles 2010)
7 Puzzles for the standard view (continued) Population pressure? Where farming and private property emerged, this occurred following long periods of population decline. Mandatory? The independent emergence of farming mostly did not happen. Were it not for the military and demograhic advantages of those farming populations that did emerge, the world today would look more like the image on the left, than the one on the right.
8 Clues to the dynamics of the Holocene Revolution: The dog that did not bark: Holocene revolution did not occur in California, S.Africa, Australia Soil and climate suitable for some of the first farmer s cultivars (FAO data).
9 Captain Cook s surprise: another clue Captain James Cook sailing near Cape York at the northern tip of Australia in 1770 : In this Extensive Country it can never be doubted that most sorts of Grain, Fruits, Roots &c of every kind would flourish were they once brought hither When one considers the Proximity of the Country with New-Guiney, New Britain and several other islands which produce Cocoa-Nutts and many other fruits proper for the Support of Man it seems strange that they should not long ago have been transplanted here. A century later, another sea captain, John Moresby: these people [the Aboriginal Australians of Cape York] have never learnt to cultivate the earth whilst their Papuan neighbors in the near Torres Strait islands supply themselves with constant vegetable goods. NB Australia did not lack cultivatable plants (contra Jared Diamond, in Guns, Germs & Steel). H: farming, being delayed production, required use that those who produced the crop could exclude others from its use, and the Australians lacked these property rights
10 Clues: Institutional barriers to technical change: The traditional Batek [Malaysian forager] notions that all natural resources are unowned until collected and that any food obtained in excess of the needs of the procurer's family must be shared with other families seem well suited to a nomadic foraging life, but wholly unsuited to... peasant farming... giving up that set of ideas and practices would be psychologically very difficult for them to do as the obligation to share food is one of the fundamental components of Batek self-identity and one of the main bonds that link Batek families together as a society. (Endicott:127) For storage to develop [among California Native Americans] there must first be a shared tenet that stored food -- and more generally all harvested food -- is restricted (private or family) property. (Bettinger 2000) The result was a chicken and egg problem: for farming to be individually advantageous one had to be able to exlude others from the fruits of ones labor; but Ownership of dispersed and mobile wild species was difficult to delimit and defend.
11 How could the chicken and egg problem be overcome? The appearance of private property (storage, dwellings, fishing gear) early in the Neolithic transition and in some cases well before. Huaca Prieta (Coastal Peru): Sedentary off shore fishers from 13kya later developed irrigated farming Storage among California Native Americans (pinyon, acorn), mammoth hunters on the Russian Plain (20kya), wild grain collectors and hunters at Abu Hureyra (Iraq.11kya) In many cases we can identify a shift from public to private storage
12 Communal storagewilox 2012
13 Private storage (Bogaard, personal communication)
14 An alternative: the coevolution of technology and institutions A land saving technology(farming) proliferated in a land abundant economy because by making small parcels of land, stores, and groups of animals valuable enough to demarcate and defend it facilitated the spread of private property rights, which in turn facilitated the spread of farming. Modeling this co-evolutionary process, beginning with the Hawk- Dove game..
15 The evolution of private property rights: the Hawk Dove-Bourgeois Game. Hawk Dove Bourgeois Hawk ½(V-C) V ½V +¼(V-C) Dove 0 ½V ¼V Bourgeois ¼(V-C) ½V + ¼V ½V Bourgeois: if possessor play a Hawk, if intruder play Dove. Evolutionary stable strategy: a population all playing an ESS cannot be invaded by a new strategy ( e.g. mutant or a migrant) B an evolutionarily stable strategy it exploits the asymmetry of possession to avert fighting as long as possession is unambiguous. But what if property rights are ambiguous or contestable?
16 Contested bourgeois: ill defined property rights Suppose that with probability µ, the intruding Bourgeois believes (or acts as if ) he is the possessor. Thus µ =1, Bourgeois acts like or Hawk. Note: µ may be interpreted as a measure of the noisiness of the information about possession, or about the degree of contestability of possession Then for sufficiently great µ < 1: (B( ), B( )) = ½(v- c) < 0 < (D, B( ))) Thus, for large µ < 1, B is not a best resposne to itself and hence not an ESS (D can invade). Take home message: If possession is unclear, sharing rules unrelated to possession may proliferate because they avoid the fights that occur when the Bourgeois types contest possession of goods.
17 Modeling the coevolution of technologies and institutions: Technology Groups in a multi group population in which group contests occasionally take place and are won by groups with higher than average payoffs. Individuals adopt one of 2 technologies (farming, foraging) Farming: Delayed production More climate sensitive (much less productive under volatile condions) Increased productivity of land and animals i.e. making defense cost effective and so reducing μ the probability of mistaken claims of possession.
18 Social behavior: A modified Hawk-Dove-Bourgeois game -- Sharer-Civic-Bourgeois In addition to adopting farming or foraging..one of 3 behaviors: Share (unconditionally, like Dove); Bourgeois: claim and seek to defend ownership of possessions (if μ = 1, then B is identical to Hawk always contest ) Civic: Share with those who share, and collectively (with other Civics present in the population) contest those who do not share Strategic complementarities among Civics (economies of scale in enforcement): situations with either few or many Civics are stationary.
19 Cultural evolution: Individual updating Each is paired with a cultural model drawn from their group. If the model and the subject have the same strategy, no updating takes place. But if they differ, the subject compares her payoffs with the model s and copies the model if he has a higher payoff. This process gives a payoff monotonic dynamic with the usual (discrete time) replicator equations: β= β(π b - π ) So..the change in the faction Bourgeois depends on whether the payoff to bourgeois exceeds the mean payoff in the population, and σ= σ(π s -π), (1-β-σ)=(1-β-σ)(π c - π ) Thus strategies with higher than average payoffs become more common, and for every distribution of types in the population we can calculate the expected payoffs of each type and hence the expected change in the frequency of each.
20 Within group behavior dynamics Key point: the Bourgeios-Sharer state is asymptotically stable (self correcting) but the all Civic state is not. Puzzle: How can the Civics (or Civic Sharer) state survive given that it is not asymptotically stable? Key point: When property rights are ambiguous and easily contested, the Bourgeois engage in many costly contests and so the stationary state with many Bs has lower average payoffs. leading to their elimination Share (unconditionally); Bourgeois: claim and seek to defend ownership of possessions Civic: Share with those who share, and collectively contest those who do not share (Civic)
21 Between group dynamics Key point: Groups without many Bourgeois were advantaged (in between group contests) as long as property rights were ambiguous and contestable. H: The Holocene Revolution occurred because farming by raising the productivity of land and animals, made the means of production worth defending and demarkating. This reduced the disadvantage of Bourgeois populations in between group contests.
22 Take home: Farming erases the between group advantage of the forager economy (which had compensated for its lack of asymptotic stability prior to farming)
23 Parameter Space for Simulations V=2, C=3 Group Size=20, The Number of Groups=30 Idiosyncratic Play Rate=0.2 or 0.15, Migration Rate=0.2 η=2 (level of conformism) Post-conflict resource transfer from loser to winner group=3 Investment in agric: a=v/2 Ambiguity of possession in agric and foraging: µ a =0; µ h =1
24 Artificial prehistory We simulated a large population made up of groups the size of small villages or foraging bands with the relative productivity of farming influenced by the 40ky record of temperature variations.?
25 NB. Most of the thousand populations simulated did not ever develop private property and agriculture Natufian proto-domestication Prediction?
26 Did institutional change lead the Holocene revolution (rather than technical change): archaeological evidence Alternative variants of the view that innovation in culture (and institutions) lead the process: Cognitive advances associated with larger groups (Watkins 2010) Forced sedentism (Acemoglu and Robinson 2012) Neither is plausible Evidence form Abu Hureyra (Iraq) suggests a private property rights first evolution. Technical change in hunting and gathering may have contributed to the institutional changes leading to the introduction of farmiing Mass capture of antelopes at Abu Huryera (allowed sedentism, storage) Bow and arrow in California (allowed smaller groups, favoring private property) Off shore fishing technologies in Huaca Preita and Baltic (sedentism & probable private ownership of fishing gear)
27 Did institutional change lead the Holocene revolution (rather than technical change): simulation evidence The property rights first trajectory In every one of the few (31) cases (out of a thousand) in which the Holocene revolution occurred, it was initiated by a property rights change followed by a technical change, not the other way around.
28 The secret of agriculture s success: its facilitation of the emergence and spread of private property. Agriculture allowed an asymptotically stable technologyinstitution equilibrium that out-competed the (only neutrally stable) forager equilibrium The take home message: It was not its labor productivity properties that accounts for its early success, but instead the dynamic (stability) properties deriving from its land and animal productivity attributes (allowing the demarcation and defense of private ownership) Analogy to Marglin s what do bosses do?
29 Only the first property rights revolution: Kudus, cows, and copyrights and a second property rights revolution? Applications to the current trend towards an knowledge intensive economy Is a new software app or a hit song like a cow (private ownership is evolutionary stable and efficient) or like a kudu?
30 History may repeat itself. But may it reverse itself? Fraction of population Bourgeois Fraction Civics and Sharers Property rights ambiguity Each point is the average of 20 runs of 10,000 generations each (Bowles and Choi, 2002).
31 Kudunomics: Utopian speculation? the culture s big men and tribal elders are required to talk softly and humorously deprecate themselves at every turn in order to maintain their status it consciously distrusts and despises egotism and ego-based motivations; self-promotion tends to be mercilessly criticized The Lamalera whale hunters? The Koi-San of the Kalahari? No: it s the culture of the open source software community
32 Thanks to the Behavioral Sciences Program at the Santa Fe Institute, the University of Siena, the U.S. National Science Foundation and the European Science Foundation for their support, and especially Jung Kyoo Choi U of Siena, Yale, Oxford, LSE, Cape Town, Umass CMU at SFI Related papers at
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