ABSTRACT
For much of human history, plunder and pillage of neighboring communities has been a common method for raising one group’s economic well-being. Such one-way transfers do not require the use of money, just an army suciently large to subdue another society. However, there is ample evidence suggesting that for thousands of years separate groups and nations have also often found it convenient to engage in voluntary exchanges and other types of economic interactions. When one group is not large or strong enough, and the outcome of an invasion is in some doubt, most groups of people come to the conclusion that it is preferable to engage in voluntary interactions. Such interactions between people from dierent groups, nations, and regions are not easy to carry out, however. Misunderstandings occur, some people seek to take advantage of others, and many economic interactions involve intertemporal understandings that can be undermined by unforeseeable changes in circumstances. Some failures in international economic interactions have triggered wars and longlasting conflicts.
