鈥淭HE propensity to truck, barter and exchange one thing for another鈥� is common to all men, and to be found in no other race of animals,鈥� wrote Adam Smith in The Wealth of Nations. That was back in 1776, but the idea that humans are the only species capable of economic behaviour persisted for a long time. Intuitively, it makes sense. Responding to shifts in supply and demand, for instance, must be the preserve of species with brains hefty enough to think through decisions rationally.
Or so we thought. As we get to know Earth鈥檚 myriad other species better, it is becoming apparent that many animals and organisms make trades, and that some are surprisingly savvy wheeler-dealers capable of manipulating the market in their own selfish interests. From frisky baboons to fish offering spa treatments on the reef, pretty much everywhere we look in nature we find evidence of surprisingly sophisticated economic decision-making. Even fungi are at it, and according to the latest studies, these brainless soil dwellers give the impression of being more rational than us.
Such revelations are handing us a fresh understanding of the origins of cooperation. They also chip away at the idea that sophisticated behaviour requires a big brain. They might even teach us a thing or two about ourselves, says , an evolutionary biologist at the Free University Amsterdam. 鈥淲hat are the basic strategies organisms have evolved to cope with relentless variation in resource availability? It is naive to think an MBA will teach us everything we need to know.鈥�
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Anyone who has watched a wildlife documentary knows that cooperation is common in nature. Monkeys groom one another, hyenas hunt in packs. And it is not just animals of the same species that work together. Until recently, all this collaboration didn鈥檛 make much sense in the context of Darwin鈥檚 theory of evolution by natural selection. If ruthless self-interest is the rule, why cooperate?
When Ronald No毛 began watching baboons in Kenya in the early 1980s, there were two answers to that question, both with flaws. The first was 鈥渒in selection鈥�, the idea that an animal sometimes stands a better chance of passing on its DNA not by finding a mate itself but by helping a close relative to reproduce. But kin selection can鈥檛 easily account for cases in which unrelated species help each other.
The other argument was 鈥渞eciprocal altruism鈥�, which says that animals that help others do so because they know they will get something in return. Game theory was invoked to explain how an altruistic animal could guarantee reciprocity, with evolutionary theorists using a two-player game called the prisoner鈥檚 dilemma to figure out how it worked in nature. But there was a problem. 鈥淭hey were building card-houses of one model on top of another and never bothering about empirical evidence,鈥� says No毛, who recently retired from the University of Strasbourg, France.
Out in the field, he quickly noticed their error. When two low-ranking baboons teamed up to challenge the dominant male so that one of them could mate with a female, they didn鈥檛 always stick with the same collaborator after the dethroning, as the theorists had assumed in their models. Quite the opposite. 鈥淭hese males switched partners and played their friends off against each other鈥� to make sure they got more mating time than their collaborators, says No毛. Big baboons like Stu, the first challenger that Noe studied, knew that a collaborator would accept less rather than risk losing his support.
鈥淚n a nutshell, this showed that the essence of cooperative relationships was partner choice,鈥� says No毛. In baboon society at least, when it comes to the exchange of services in pursuit of mating, the fact that individuals like Stu could shop around for the best deal from prospective collaborators makes all the difference. 鈥淧artner choice is what drives the market,鈥� says No毛.
In 1994, together with Peter Hammerstein, now at Humboldt University in Berlin, No毛 , inspired by his observations of baboons. Then he tried applying it to all manner of other species to see if it would explain their cooperative behaviour. It worked. And although it didn鈥檛 catch on immediately, the new theory captured the imagination of several young biologists, including Redouan Bshary, then one of No毛鈥檚 PhD students.
FIshy business
At that point it had only been applied to animal behaviour already recorded in the literature. 鈥淚 thought it would be nice to go out and explicitly test it in the wild in a new system,鈥� says Bshary, who is now at the University of Neuchatel in Switzerland.
Bshary settled on a diminutive reef fish called the cleaner wrasse, which scrapes a living nibbling tiny parasites from between the scales of other fish that pass its cleaning station. He picked this wrasse because even though its behaviour is a nice example of mutualism, in that the cleaners get food and the clients get cleaned, there is a conflict of interest. The cleaners like to take nips of their client鈥檚 protective mucus layers more than they do the parasites, so they are liable to cheat. 鈥淭hat means [to get good service] clients have to get cleaners to go against their preference, and cleaners have to choose when to cheat,鈥� says Bshary.
Having learned to scuba-dive, Bshary spent countless hours observing cleaner wrasse in the Red Sea. He saw that they have two types of client. There are 鈥渧isitors鈥�, such as parrotfish, which can grow 40 cm long and can travel easily between several cleaning stations. And there are 鈥渞esidents鈥�, like the smaller melanurus wrasse, that tends to stick to one. Bshary figured that visitors had a strategic advantage because they could shop around. Sure enough, in 2002, he showed that . They were seen more quickly and treated more gently, with the cleaners less likely to sneak a bite of them than residents. 鈥淐lients can switch partners to enforce a good service,鈥� he says.
The canny adjustments to the coral reef free market don鈥檛 end there. Bshary has found that cleaners are less likely to cheat when another fish is watching, and that they never do when the client is a predator. Most recently, observing around Lizard Island in Australia, Bshary and his colleagues noticed that cleaners had . The reason, he suggests, is that several cyclones and an El Ni帽o climate oscillation killed off 80 per cent of its cleaner wrasse. It has suddenly become a restricted market and the cleaners know it. There鈥檚 nothing to stop them from making visitors wait.
鈥淚n one recently unearthed biological market, the traders have no brains at all鈥�
鈥淚 was optimistic that the market paradigm would work in this system,鈥� says Bshary. 鈥淏ut the sophistication continues to surprise me. These fish are constantly adjusting to market conditions and updating their strategies accordingly.鈥�
That they can do so with tiny brains challenges the idea that only creatures with weighty lumps of grey matter are capable of complex behaviour such as responding to shifts in supply and demand. 鈥淥ne of the lessons here is that we are probably going to have to rethink that,鈥� says Bshary. 鈥淲e now see that, at least within ecologically relevant contexts, pretty much any animal can show high levels of sophistication in terms of their behaviour.鈥�
Indeed, over the past few years, biologists have shown that scores of animals are capable of responding to market forces, including chimpanzees, macaques, mongooses, ants, wasps and small fish called cichlids.
In one of the most recently unearthed examples of a biological market, the traders don鈥檛 have brains at all. Kiers studies the underground marketplace in which mycorrhizal fungi trade phosphorus for carbon with the roots of plants. This is the perfect environment for market dynamics to emerge, she says, because a single fungal network can be connected to many plants and switch between trading partners rapidly. The plants in turn can choose from many competing fungal strains.
Sure enough, as Kiers , she discovered all kinds of economic shenanigans. She and her colleagues employed a series of choice experiments, in which a fungus is connected to several hosts at once. These showed that the fungus will avoid trading with plants growing in the shade, for example. 鈥淭he fungi are avoiding bad trading partners,鈥� she says. But that is far from the fungi鈥檚 most cunning ploy. Kiers has also caught them hoarding resources, storing their phosphorus in a form that is inaccessible to the plants. 鈥淚n doing so, they can artificially inflate the price, getting more carbon in return from the plants,鈥� she says. 鈥淚t鈥檚 a brilliant strategy.鈥�
But what is really going on here: is a fungus acting rationally in a way Adam Smith would never have thought possible?
That depends on how you define rational. We know that trading strategies can be determined by evolved mechanisms, not just cognitive means. These are 鈥渓ess flexible, but have been tested and fine-tuned by natural selection鈥�, says No毛. 鈥淭his means that when they are used in situations in which the species at hand find themselves frequently, these strategies can yield better results.鈥� Even the simplest organisms operating in markets can give the impression of rational self-interest.
Still, animals, plants and fungi can鈥檛 match the complexity of humans鈥� economic behaviour. As far as we know, they don鈥檛 employ a common currency, for instance.
But that can make them all the more revealing. 鈥淲hile primates are undoubtedly more interesting to watch, fungal-plant systems can be precisely manipulated and trades can be tracked,鈥� says Kiers. 鈥淲e can watch trade strategies evolve, study tipping points for when and how trade relationships break down.鈥�
Kiers鈥� work has recently attracted attention from Albert Menkveld, a finance researcher at the Free University of Amsterdam. Menkveld is interested in how best to police and regulate high-frequency trading, in which algorithms compete against each other to make profitable trades on split-second timescales. Since both fungi and algorithms are competing with trading partners in similarly uncomplicated ways, it might be possible to use the fungal system to better understand how so-called 鈥渇lash-trading鈥� markets will respond to certain strategies.
For Kiers, the most interesting thing about studying mycorrhizal fungi is that it reveals trading strategies uncontaminated by cognition. 鈥淭hese are pure economic decisions, nothing to do with resentment or hope or anything like that,鈥� she says. 鈥淗ere we can witness economic behaviour in its most pure and ancestral form.鈥�
This article appeared in print under the headline 鈥淩ogue traders鈥�
