‘Silent Trade’ and the Supposed Continuum between OIE and NIE

Abstract

Original institutional economics (OIE) and new institutional economics (NIE) have differing positions on a number of issues. There is an ongoing discussion about the question of whether these categorically different positions (Hodgson 1988) are part of the same continuum (Rutherford 1994, 1995) or may even be reconciled (Groenewegen et al. 1995; Schmid 2004). These discussions tend to focus on methodological points of contention, and often draw heavily on the history of economic thought. I take a slightly different approach by analysing the phenomenon of ‘silent trade’ (ST).

The Carthaginians say also this that there is a place in Libya, and People living in it, beyond the Pillars of Heracles. When they, the Carthaginians, come there and disembark their cargo, they range it along the seashore and go back again to their boats and light a smoke signal. The natives, as soon as they see the smoke, come down to the shore and then deposit gold to pay for the merchandise and retreat again, away from the goods. The Carthaginians disembark and look; if they think that the price deposited is fair for the merchandise, they take it up and go home again. If not, they go back to their boats and sit there. The natives approach and bring gold in addition to what they have put there already, until such time as the Carthaginians are per-suaded to accept what is offered. They say that thus neither party is ill-used; for the Carthaginians do not take the gold until they have the worth of their merchandise, nor do the natives touch the merchandise until the Carthaginians have taken the gold.

(Herodotus 440 BC, book IV, §196)

[In] the social No-Man’s Land between societies, trade in [these] scarcities will often be embedded in ritual and familisticlike institutions.

(Heider 1969, p. 469)

With Antoon Spithoven.