Elephants engage in Mengerian indirect exchange

by on December 18, 2012 at 2:58 am in Economics, Education | Permalink

At the main Pondicherry temple, an elephant will bless you — by tapping its trunk on your head — if you hand it some money.  Of course this is a temple elephant and it is also a Mengerian elephant.  The elephant has no use for money but understands that it is a general medium of exchange.  The elephant hands the money over to the temple authority and is later rewarded with food.

The elephant is not merely trading, but it is engaged in indirect exchange and thus in monetary economics.

There is in fact a sign up forbidding such Mengerian transactions, but the elephant seems not to notice it.

And yet this is not the end of the story.  In many parts of Tamil Nadu, temple elephants have attained so much prosperity through Mengerian indirect exchange, and been able to consume so much leisure, that now elephant obesity is a more serious problem than elephant malnutrition.

So Much For Subtlety December 18, 2012 at 3:12 am

You could have entitled this “Adam Smith Was Wrong” as it seems someone has seen a dog truck and barter.

However before going that far, I would question what the elephant is doing. Is it actually trading or is this just a learned response? Have the priests taught them that if they take whatever the pilgrim has in their hand, they will be fed? That is not trading, even indirect trading.

Alan December 18, 2012 at 4:08 am

But you have to imagine how economists see the world: blind in one eye, the other fixed to a telescope which is rigidly mounted at the front of a railway carriage, which is rolling along a pair of dead straight rails. They can hear joyful laughter from the carriage behind them and they attempt to analyse the costs and benefits of laughing but they have no idea what the laughter means.

prior_approval December 18, 2012 at 5:47 am

And here I thought a figure like Skinner would be much more appropriate than Menger, but then, economics and psychology seem to be in a somewhat desperate rush to reinforce each other.

Throw in the warmed over and renamed sociobiology of ‘evo psych,’ and one has a perfect setting for creating just so stories.

Just as Kipling realized, back when his camel was humphing.

Sammler December 18, 2012 at 6:06 am

The killjoy commenters above are not getting into the spirit of the thing. Surely the next step is an experiment to determine the elephant’s implied discounting rate, by somehow obliging it to choose between food now and money for food later.

Rahul December 18, 2012 at 6:42 am

Discounting rate very low with sharp Aṅkuśa poised over your skin. Money it is. Food can wait.

http://en.wikipedia.org/wiki/A%E1%B9%85ku%C5%9Ba

Sammler December 18, 2012 at 6:08 am

I do agree, however, that this is only Mengerian if the elephant can distinguish different denominations of currency.

Tyler Cowen December 18, 2012 at 6:35 am

Funny you, expecting an elephant to have mastered Gresham’s Law.

Yana December 18, 2012 at 7:01 am

The elephant and I actually traded three times – all different denominations but it accepts both coins and bills (and waited with trunk out for me to get them out so is, in fact, quite smart)

Rahul December 18, 2012 at 7:24 am

What did he trade back?

Yana December 18, 2012 at 7:25 am

A blessing! (aka scalp massage)

Saturos December 18, 2012 at 6:35 am

The next step of course is to test for money illusion…

JasonL December 18, 2012 at 9:17 am

Elephants are cool. That is all.

chuck martel December 18, 2012 at 10:51 am

An elephant trainer once told me that the biggest problem with keeping elephants was their intelligence. He maintained that the average elephant is smarter than the average child. A child will approach an elephant with a peanut, for instance, and when the elephant reaches for it with his trunk the child pulls the peanut away. When this happens the elephant, who has gone through the process many times, doesn’t reach as far, drawing the child closer and closer, until it can knock the kid down and pick up the peanut.

So Much for Subtlety December 18, 2012 at 6:49 pm

The “winner” of a Darwin Award one year was a Malaysian guy who offered some sugar cane to an elephant. Apparently in Malaysia you have to bring your elephants to the police station to get them registered. So someone brought a whole group of them down. And this guy was offering one the sugar cane. Then he pulled it away at the last minute. Then he offered it to the elephant. And pulled it away at the last minute. You can see where this is going can’t you?

Yes, in the end the elephant stomped all over him.

Careless December 19, 2012 at 5:35 pm

People who deal with elephants have a really high death rate. If the elephant gets annoyed one day, it might just decide to squish you.

Brian Donohue December 18, 2012 at 11:36 am

Excellent post!

Douglas Knight December 18, 2012 at 1:20 pm

If it is true that the elephants consume leisure, that they stop working when satiated, then it seems clear to me that they are treating the money as a proxy for food, and not just performing a trained routine. Tyler asserts that they consume leisure, but I see nothing about it in the link.

edwardseco December 18, 2012 at 11:32 pm

Did this with my infant son at Tiruputhi Temple. Since I was carrying him on my back I was able to go everywhere, sir, he is Hindu and must see all and you are the bearer so you must carry him. There is an agency problem in that the money seems to go to the handler. But, who am I to quibble at God’s blessings.

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