Can Macromarketing Learn from 40,000 Years of History?

The observations and the questions raised subsequently by Professor Robert Lusch (2015) at the Chicago Macromarketing meetings go to the heart of our thinking about marketing generally and macromarketing in particular. I agree with the importance of all four and then raise the possibility of a fifth – the need to understand much better the historical and contemporary impacts of changing system complexity in networks of value exchange. While issues relating to exchange in social relationships have been widely canvassed in the social sciences, the specifics of mostly voluntary exchange between strangers where economic and social value is created and shared, have largely been ignored, as being, perhaps, mundane or uninteresting, in favour of deeper, more socially complex acts of exchange. It is however these acts of voluntary exchange of economic and social value that have, over 40,000 years, generated increasingly complex networks of trade and institutional structures found today wherever people live, work and play together.

It is macromarketing that began to study these networks and institutional structures, found in most (but not all) human communities, venturing beyond the limits imposed by normative, managerial concerns in marketing, to consider and learn from insights into human communities in both space and time. Macromarketing now draws on empirical and theoretical studies in disciplines such as economics, history, anthropology, economic sociology, ecology, and adaptive complex systems as well as the hard-won insights into marketing practice generated from marketing science, for the development of the theories needed both for understanding and effective intervention in the ways value exchange takes place, within and between human communities, in what is now a rapidly changing world.

While 40,000 years ago seems a stretch, trade between often widely dispersed human communities had begun to form; tools, ornaments, clothing, ochre and food were exchanged, healing and health services exchanged and celebratory experiences shared when communities met in trade, and, perhaps above all, ideas began to flow shaping cultures, social life, beliefs and shared understandings. Over the years, trade between and within communities redefined life choices for many people, reflecting both the distinctive endowments of each participant and differing blends of self-interest, mutuality and altruism. The result was strengthening trust, cooperation and the (often asymmetric) information flows needed to exchange with strangers. These developments contributed to emergent patterns and structures in the networks where exchange of economic and social value took place. Specialization and division of labour led to a widening of assortments offered, economies of scale and scope shifted value and price perceptions, and the costs of search, negotiation, usage and enforcement led to the tangible and intangible infrastructures shaping marketplaces, transport and storage, and generating governance institutions. These interacting processes occurred in individual exchange, in exchange between and within communities, and in macro levels of exchange across communities generating interdependent networks linking micro, meso and macro level network behaviors.

An understanding of the complex causal dynamics underlying exchange with strangers is essential if macromarketing is to identify the evolutionary pathways involved and assess whether the changes in each community leave it better or worse off. Insights into these natural experiments, past and present, are important contributors to macromarketing theory, in turn informing the management of increasingly complex marketing systems (Layton 2015).

Bob Lusch’s second question concerns the evolution of technology and its links with value based exchange. In a classic work on the nature of technology, Brian Arthur (2009, p. 28) defines a technology three ways: first as a “means to fulfil a human purpose”, then as “an assemblage of practices and components”, and then “as the entire collection of devices and engineering practices available to a culture”. It is the first of these that I would like to highlight now, as the human purposes arising from the exchange of economic and social value within and between communities give rise to responsive technologies, small and large; and it is the opportunities created by perception of new technologies that give rise to new sets of values, benefits and needs. Not only is this evolutionary process a key driver of change in marketing systems, but is also the case that new technologies call forth new, novel complementary technologies, and the evolutionary processes start again. While the evolution of technology is not limited to human needs generated by exchange within and between communities (much depends on human curiosity, inspiration, and insight), the technologies shaping the emergence of marketing systems are crucial determinants of system success or failure. It is these technologies that are evident for example in the archaeology of markets, in the design and redesign of transport and storage facilities, in the ever-widening range of products and services on offer, in the accounting and information flows that underpin exchange transactions, and in the rise of the internet and social media.

Whether these changes lead to better or worse outcomes for each community is unclear; what is clear is that the evolutionary processes once initiated in and between communities will yield increasing complexity. Technology then is a critical driver of economic and social exchange, and the very human need for such exchange is a critical driver of technology.

I will return to Bob Lusch’s third question in a moment, and turn briefly to the fourth where he considers the role of institutions noting that they could be considered as tools essential to human decision making in complex settings. As such they constitute an evolving technology. Scholars have pointed to institutions as rules of the game (formal and informal), or to institutions as equilibria (often transitory and usually one of many possible), and then perhaps, institutions as infrastructure (tangible and intangible). Each way of looking at institutions adds insights and each has strong emergent links into the evolution of exchange networks and systems.

Viewed like this, in each of their guises, institutions are inevitable consequences of the causal dynamics underlying voluntary value exchange between strangers in human communities and as such neither necessarily efficient or effective. They are evolutionary survivors in a world of constant change that continue to serve a purpose. Their formation, growth, adaptation and in the end collapse are ever more important issues for macromarketing research (Duffy and Layton 2017).

Back now to Bob Lusch’s third question, on the unseen costs of exchange. I am not quite sure what he had in mind here but have chosen to focus not on transaction costs, mundane and otherwise, but on the unseen costs arising from the evolution of economic and social exchange networks or systems. There are many – growth is built in and, in the end, probably unsustainable; increasing diversity in products, services, experiences and ideas is inevitable and adds complexity to complexity; inequality stemming from initial heterogeneous endowments and the uncertainties of path dependence flowing from early decisions leads to increasing vulnerability and unfairness as well as growing tension between those who have and those who do not; as incumbents battle challengers for power in the strategic action fields associated with increasingly complex exchange networks, both efficiency and effectiveness at micro, meso and macro levels are threatened; and all this the growth of complexity in itself brings with it the threat of collapse as governance gives way to chaos.

Bob Lusch is right to take us back 40,000 years. The issues he raises are of critical importance in macromarketing. In each case, the historical analysis of natural experiments, focusing on process and causal dynamics has a major role to play. Managing complexity in exchange based systems is a skill that, in Peter Senge’s terms (2006), requires insight, not just into detailed complexity (and that we are quite good at doing) but into dynamic complexity – something we just beginning to explore. This suggests a fifth question – what are the causes and consequences of increasing complexity in any and all levels of value based exchange networks?