The Hunter-Gatherer Theory of Markets and Shopping

The idea that men hate shopping while women love it is probably the most defensible among all gender stereotypes. Economics would be very different if Adam Smith had been Eve Smith. Male-driven economics is largely about the stuff the seller wants, money. This is by definition as featureless and abstract as possible. On the buying side though, there is a great deal of complexity, variety, and delight in leisurely and nuanced selection. Let me offer a speculative evolutionary origin myth: all economic activity derives from the original two: hunting and gathering. Men did most of the former, women did most of the latter.  That gives us the starting point for telling the tale of this evolution of real, physical markets. The ones where we actually shop.

Hunter-Gatherer Economics

Today’s economics is “hunter economics.” We need to move to a more holistic “hunter-gatherer economics.” That means providing an account of all the discernment and selection women bring to shopping, dating back to their training, millenia ago, in the art of telling one tiny poisonous red berry from another tiny, slightly less red, but non-poisonous berry.

The first order of business in our exploration of diversity is to think about the diversity in types of markets. Within a mile of my apartment, in Arlington, VA, there are at least six different types of market: a mall, a discount wholesaler, a “commons” style open market overlooking a plaza/square, a huge underground “shopping street” (Crystal City), a farmer’s market and a grocery store. And there are odds and ends like pushcarts, stand-alone stores, street vendors and the like. And yes, the shoppers are mostly women.

Once you account for market forms, you then have to account for the increasing diversity within them and link that to the psychology of “gathering,” I believe, especially from a female point of view. I think, in recent years, the case for the number of choices being “overwhelming” has been overstated. The modern grocery store is no more diverse than the typical sub-tropical rainforest in terms of the diversity it presents. This whole analysis is more than I can attempt in one post, so let’s start just by looking at the variety of market forms. I suspect there are as many of these as there are types of forests/terrains in gatherer territories.

The Varieties of Market Forms

Markets, obviously, are as much about buying as they are about selling, and only the shopping-hating male mind could come up with the abstraction of ‘rational agent’ and spend two centuries worrying about markets with just two commodities: guns and butter (even the choice of those two prototypical commodities is revealing: spears and lard/blubber?). That’s the sign of a non-discriminating mind. Like most men, I cannot really tell why one pair of blue jeans is absolutely “in,” while another, nearly indistinguishable pair, is fashion suicide. Hunting, I suspect, fosters thinking based on much coarser distinctions than gathering, but I don’t have a full theory yet. It wasn’t till the late eighties that the complexity theory folks at Santa Fe started thinking about economic webs the way we do about food chains and ecosystems: systems where variety and diversity are the central feature, rather than a footnote.

So, within the hunter-gatherer/Adam-Eve origin myth we are making up, the evolution of market forms looks something like this (keep scrolling… this is mainly a visual post, but there are some points I want to make after this longish graphic). Note that most forms persist today. Evolution is not about reaching towards an ideal state, so though e-tailing is on the fringe of this tree, that does not mean it is some sort of logical “end” state of evolution. I’ve added examples in blue where the abstract form-descriptor might not suffice.

marketevol

Let’s see how this picture, with its bewildering complexity, squares with the guns-and-butter approach to economics. What does traditional economics have to say about this? Pretty much nothing. Markets are collections of rational agents operating to maximize their utilities under conditions of imperfect information. Add some caveats about bounded rationality, predictable irrationality in the sense of behavioral economics, and some weak ideas about consumption as social signaling, and you’ve got the best model traditional economics can offer. You get nothing about why malls and grocery stores co-exist, why there are fewer “mobile” market forms than static ones, or why farmer’s markets have been reinvented in a postmodern form. There is a lot guns-and-butter economics does not comment on.

Here are some questions and ideas that interest me:

  • The evolution of real markets has been shaped by at least two significant divides that I can think of. The red one is the great division between the actual transactional environment (markets), the ancillary tasks of transport of goods to and from the market, (a “hunter” activity) and manufacturing (curiously, this was likely a “gatherer”/female activity originally: think basket weaving). Men (hunters, fishermen) created economic value through motion, sometimes across vast distances, staring at long-range stuff. Women created economic value mainly by hanging around in restricted areas, staring at close-up stuff. The “male” forms of markets, based on mobility, pretty much went extinct (pizza delivery and the odd hot-dog stand are the only leftover forms). The second significant divide was the large-scale separation of work and home around the 1950s. Not only did this lead to a huge speciation event in market forms, it also led to the forking off of entertainment and food services (eating out) as distinct proto-service industries. The service markets landscape is not shown in the diagram above. This is all about physical goods.
  • I noted in a previous piece (bargaining with your right brain) that the basic model of transactions, bargaining, is not driven by economic rationality, but by narrative rationality. Extending this idea, I think each market form manifests a grand narrative. Malls, for example, manifest the shared, yuppie grand narrative, while postmodern farmer’s markets embody the neo-hippie clean/green/local/vegan grand narrative. These narratives aren’t purely psycho-social/cultural constructs; they are information structures. Markets contain more information than traditional economists think, but it appears in disguised forms, embedded within the grand narrative that provides context. Each market form manifests a particular cloaked information structure underneath the overtly visible economic information.It is not actually easy to judge the information structures involved in buying a book at Barnes and Noble, versus Amazon versus at an independent bookstore. It is naive to believe that Amazon always has the most transparent information structure.
  • Of the three forces that shape modern landscapes: housing, industry/work environments and market environments, the first two have been studied to death, but surprisingly little has been said about how markets shape the landscape. The only significant work I know of is that of Paco Underhill (Why We Buy: The Science of Shopping and Call of the Mall: The Geography of Shopping).

I suppose there’s a lot more that can be said here, but I’ll stop here for now, and yield the floor to commenters.

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About Venkatesh Rao

Venkat is the founder and editor-in-chief of ribbonfarm. Follow him on Twitter

Comments

  1. otoburb says:

    I am intrigued by the second question the most. What type of information is hidden from sight? Can you give an example of what an information structure would consist of between Amazon and Barnes & Noble (in your example)?

    The items that come to mind for me are price, availability, popularity and possibly a little history (either in the form of recommendations or a conversation with the staff on a particular book). Barnes & Noble may have additional pieces of subtle information manifesting themselves in the form of the physical books, bookshelves and close-up book covers, which lend themselves to the grand(er) narrative that you referred to.

    Perhaps this was what you were referring to. If I may expand into one tiny example: on Amazon, you may get instant recommendations on what other people bought, but you will never be able to physically touch/visualize a hard-cover book with beautiful artwork and embossed lettering (common with fantasy and sci-fi books, of which I’m an avid reader).

    For your third question regarding the effect that markets have had on landscapes, I propose that this effect is not as pronounced as the the other two, and that physical markets more often than not come about as a consequence of the other two (residential + work/industry). I haven’t read Underhill, but I would venture a guess and suggest that (from what I just googled), he might agree with the idea that malls should be placed in convenient areas relative to residences first, given that his research shows that most (mall) shoppers are women. This seems to align at least (at least on the surface) with your hunter-gatherer origin myth.

    Where would you classify tradeshows and conferences? These seem to tend more towards the hunter (male) model due to their seeming single-mindedness and (sometimes) great distances that companies travel to display and demo their wares or products within a specialized industry.

  2. I am actually thinking more broadly of what actually is being bought. At Amazon, you are a) buying a book, b) trading social capital in a fairly anonymous group of online buyers. In B&N, you are participating more richly in the rituals of yuppie-land (coffee, browsing ‘politics’ say, but perhaps avoiding lingering near ‘self-help’ for too long…)., meetups, children’s storytime…

    That means the hidden information could concern any of the things being traded, including the book itself. In a way you are buying chips into the story. I am not sure the tactile elements of the book itself count though. The experience is predictable enough that you can delay gratification till it arrives in the mail. It is probably the community stuff (meeting someone who is looking at the same shelf, or spotting a book someone is reading in the cafe area) that will take longer to fully recreate online.

    It may not be enough to save the bookstore when the Kindle really hits though. But that has to do with the specifics of the books example. For vegetables, things are stacked the other way.

    Tradeshows and conferences… hmm, yes. Am thinking they belong with ‘fair’ way up in my evolutionary tree. The larger seasonal affairs that supplemented the weekly markets before permanent market towns evolved. The traditional camel festival in Pushkar, in India, is really a tradeshow of sorts.

  3. Damn you! Another interesting blog and concept to divert and entertain! I started with the What Got You Here entry and couldn’t tear away at the slightly less red but poisonous phrase.