Man is a social animal. The 19th century sociologist and philosopher Georg Simmel argued that trade and exchange is “one of the purest and most primitive forms of human socialisation.” Last month, while travelling through remote parts of West Timor, in Indonesia, I was able to study first-hand how rural markets operate. I could not help wondering why so-called primitive markets such as these work so well when complex financial markets can be so dysfunctional?
Rural markets in East Timor are wonders of trade. Men and women in tribal costume converge on different villages on different days of the week. Everyone knows when to go to which village for these markets, which typically start at dawn when produce is fresh and often finish by 11am. Economists would surely call this scene of bustling rural commerce a “concentration of liquidity.”
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