Often when we talk about markets, we treat them like technology.
A history of the economy is often told like this: first, hunter-gatherers took food from nature and shared it among their tribes. Then, tribes began to trade with each other through barter systems. Agriculture brought stockpiling of resources and trade of those stocks. Then eventually cultures developed currencies, easing trade and creating markets like what we see today.
But what if there is something older than this? What if there are “deep markets” that go beyond not just history and prehistory, but beyond mankind? What if economics is not just a human phenomenon, but a biological phenomenon?
In this week’s Planet Money newsletter, economics journalist Alex Mayyasi covered research by Evolutionary Biologist Toby Kiers, who studies “markets” in sugar and nitrogen between soybeans and microbes.
Her theory: that the two were not leeching off each other, but rather were engaging in a free exchange. That meant they could withhold their side of the bargain if the other side was not held up.
So she put the theory to the test. She surrounded the microbes with air that did not include the nitrogen they provided to the soybeans. Kiers observed that when the soybeans were not provided the nitrogen, they did not provide sugars to the microbes. No payment, no product.
She found this played out in trades between plants and fungi, too. Plants in full sun were able to produce more sugars to trade than plants in full shade. The fungi gave more of their phosphorus and nitrogen to plants that provided them with more fats and sugars. The relationship was not parasitic–it was voluntary and reacted to shocks in supply.
With tools developed to track “nanoparticles,” Kiers teamed up with chemist Matthew Whiteside and biophysicist Tom Shimizu to follow these trading patterns. With these tools, they found that fungi save their phosphorus and nitrogen for times when sugars and fats from plants are more plentiful. This implies a “price” for trading that changes based on supply of resources.
According to Mayyasi, primatologist Ronald Noë has been documenting a phenomenon he calls “biological market theory,” that he first developed by observing monkeys trade food and grooming sessions like commodities. He notes changes in the “price” of mating as dictated by food offered during times with more or less balanced sex availability, cleaner fish who take advantage of larger fish when competition decreases, and comparative advantage developing between plant species in evolution as examples of markets developing in biological settings.
But how could this be? Don’t we know that human beings make decisions based on rational thought, weighing their strength of desire for a product against their personal resources?
Wait, do they do that?
Or do we make purchases on autopilot? Do we think through every single purchase we make or do we sometimes buy things bounded by general large bounds for reasonability. If I go to a food stand at a soccer game, I want to buy a hot dog. I will pretty much pay what they ask me for it unless it is extremely expensive. But really I’m just going to go up and give them my money and take what they give me. Their price is constrained not by my choice, but by the hundreds of people all making hunch decisions about what would be too much and walking away if it is too much to pay.
In Mayyasi’s words, “brains are overrated.” We’re not that far off from fungi: we want things and we have resources to trade for them. The mechanism by which fungi and plants make these decisions to trade is mysterious, but so is the neurological process that governs our economic decision making. From an objective, behavioralist standpoint, the two do not seem that different from one another.
This matters to me as a public policy analyst. When conducting cost-benefit analysis, our goal is to estimate how a public policy will change the economy, including how much resources will grow overall and how they will be distributed throughout the economy. When the welfare of non-human animals is raised, the first thought that comes to mind is this: non-human animals don’t take part in markets! How could you value the impacts of a public policy on their markets if they don’t exist?
But they do, and this market behavior stretches beyond non-human animals into plant and even fungal populations. We observe it happening, with populations exhibiting economic behavior that conforms to models eerily similar to that we see among human populations in markets much more familiar to us.
What does this mean for the public policy analyst?
First, it means that we are likely missing key stakeholders when we are conducting cost-benefit analyses. If changes to air quality can disrupt markets in trade between plants and fungi, what other changes to ecosystems come about from changes in public policy?
Second, this means analysts have a tall task ahead of them when it comes to monetizing these impacts. If fungi reproduce at lower rates when nitrogen content in the air reduces in quantity, what does this translate into in dollar terms? Our traditional approach to valuing an impact like this would be to find out how much this impacts human welfare, which is one way to value this. But is it worth valuing fungi in and of themselves? Surely the fungi are valuing their own reproduction since they are optimizing toward reproduction. How do we measure this against other goods in society like health and consumer goods that human beings establish a willingness to pay for through market activities?
I do not have all the answers to these questions. I do know, though, that there is work to be done. The more research uncovers truths about how life interacts with each other, the more certain I become that the line we draw between man and other life on earth is arbitrary and convenient more than scientific and indisputable. Science will keep pushing us to consider the larger impacts of our public policies. It is up to us to listen and to do the hard work of incorporating these broader impacts into our models.