Comments on reading - "Non-Zero"
Read an interesting article called "The Invisible Brain" by Robert Wright, an extract from "Nonzero: The Logic of Human Destiny". By drawing on the example of the Northwestern Amerinds and contrasting them with the Shoshone, and with Amazonian tribes, he argues that it is the density of trading and social exchanges among people that drives wealth.
I find this an interesting thesis, and was struck by the link to transaction economics (a favorite subject of mine). Wright talks about how transport and communications costs hamper the development of trading networks, and how high population densities reduce these. It occurs to me that what he is describing is precisely components of transaction costs, and that he is describing a subcase of transaction economics.
He might be able to extend his argument by including governance costs in his assessment, since it is the relative difference between transaction and governance costs that drives the shape of political and commercial organizations. When transaction costs are very low relative to governance (roughly, administrative) costs, it is more efficient to trade, and to "loosen up" organizational boundaries. For example, being able to cost-effectivley monitor the performance of an outside vendor vs. an internal department, makes outsourcing more attractive. When governance costs are low, but transaction costs are high, then trading is less effective and organizations (and societies) tend to become more closed-in and self-sufficient. For example, in the former Eastern bloc, when transaction costs were prohibitively high (there were no markets), organizations tended to integrate heavily - car factories produced their own sausages, ran their own hospitals, etc.
I'll write more on this later and add further examples.