“THE propensity to truck, barter and exchange one thing for another… is common to all men, and to be found in no other race of animals,” 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’s 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. “What 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.”
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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’t make much sense in the context of Darwin’s theory of evolution by natural selection. If ruthless self-interest is the rule, why cooperate?
When Ronald Noë began watching baboons in Kenya in the early 1980s, there were two answers to that question, both with flaws. The first was “kin selection”, 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’t easily account for cases in which unrelated species help each other.
The other argument was “reciprocal altruism”, 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’s dilemma to figure out how it worked in nature. But there was a problem. “They were building card-houses of one model on top of another and never bothering about empirical evidence,” says Noë, 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’t always stick with the same collaborator after the dethroning, as the theorists had assumed in their models. Quite the opposite. “These males switched partners and played their friends off against each other” to make sure they got more mating time than their collaborators, says Noë. Big baboons like Stu, the first challenger that Noe studied, knew that a collaborator would accept less rather than risk losing his support.
“In a nutshell, this showed that the essence of cooperative relationships was partner choice,” says Noë. 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. “Partner choice is what drives the market,” says Noë.
In 1994, together with Peter Hammerstein, now at Humboldt University in Berlin, Noë , 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’t catch on immediately, the new theory captured the imagination of several young biologists, including Redouan Bshary, then one of Noë’s PhD students.
FIshy business
At that point it had only been applied to animal behaviour already recorded in the literature. “I thought it would be nice to go out and explicitly test it in the wild in a new system,” 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’s protective mucus layers more than they do the parasites, so they are liable to cheat. “That means [to get good service] clients have to get cleaners to go against their preference, and cleaners have to choose when to cheat,” 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 “visitors”, such as parrotfish, which can grow 40 cm long and can travel easily between several cleaning stations. And there are “residents”, 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. “Clients can switch partners to enforce a good service,” he says.
The canny adjustments to the coral reef free market don’t 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 Niño climate oscillation killed off 80 per cent of its cleaner wrasse. It has suddenly become a restricted market and the cleaners know it. There’s nothing to stop them from making visitors wait.
“In one recently unearthed biological market, the traders have no brains at all”
“I was optimistic that the market paradigm would work in this system,” says Bshary. “But the sophistication continues to surprise me. These fish are constantly adjusting to market conditions and updating their strategies accordingly.”
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. “One of the lessons here is that we are probably going to have to rethink that,” says Bshary. “We now see that, at least within ecologically relevant contexts, pretty much any animal can show high levels of sophistication in terms of their behaviour.”
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’t 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. “The fungi are avoiding bad trading partners,” she says. But that is far from the fungi’s most cunning ploy. Kiers has also caught them hoarding resources, storing their phosphorus in a form that is inaccessible to the plants. “In doing so, they can artificially inflate the price, getting more carbon in return from the plants,” she says. “It’s a brilliant strategy.”
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 “less flexible, but have been tested and fine-tuned by natural selection”, says Noë. “This means that when they are used in situations in which the species at hand find themselves frequently, these strategies can yield better results.” Even the simplest organisms operating in markets can give the impression of rational self-interest.
Still, animals, plants and fungi can’t match the complexity of humans’ economic behaviour. As far as we know, they don’t employ a common currency, for instance.
But that can make them all the more revealing. “While primates are undoubtedly more interesting to watch, fungal-plant systems can be precisely manipulated and trades can be tracked,” says Kiers. “We can watch trade strategies evolve, study tipping points for when and how trade relationships break down.”
Kiers’ 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 “flash-trading” 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. “These are pure economic decisions, nothing to do with resentment or hope or anything like that,” she says. “Here we can witness economic behaviour in its most pure and ancestral form.”
This article appeared in print under the headline “Rogue traders”
