How People TradeWe take the view that the ability to trade is an evolutionary adaptation to social environments. Using language, theory of mind, and reciprocity, people succeed in forming trading partners with little institutional support. Following Douglass North's definitions we call these adapted behaviors personal exchange.
People also trade by using social tools, such as auctions or voting. In turn the use of such tools involve the definiton of rules of order that define, enforce, allow access to, and modify the rights given to members. A social tool is instantiated when its general form is modifed to work in a specific environment and a corresponsing system of rules of order has emerged. At this point it becomes an institution allowing for behaviors which are called impersonal exchange.
At the same time impersonal exchange coexists with personal exchange. Thus organizations develop both formal rules of order and informal exchange networks. This creates a conflict in how to exchange while at the same time, the environmental fit, rules of order, and membership in an instituion are constatly changing. |