The Canada Economic Games kicked off Saturday in Sherbrooke, Quebec. The Games give thousands of young traders from every corner of Canada the chance to gather together and showcase their trading skills. Each is endowed by his or her home province with a limited supply of trading assets such as pins and sports apparel, which they use during the Games as seed capital for their attempt to amass the largest and most valuable portfolio.
In parallel to the Economic Games, the traders also compete in a series of sporting events called the Canada Summer Games.
Yukon competitors suffered a few lopsided scores on the sporting fields on the first weekend, but quickly established themselves as serious contenders on the trading floor.
One Yukon competitor, who asked that her name not be used so as to not disclose her trading strategies, quickly demonstrated an instinctive understanding of the “dangle.” Artfully allowing a few girls from Team Ontario to spot her ID badge, covered in Yukon pins, she allowed them to examine the merchandise. Ontario eyes darted quickly to the Yukon husky bobble-head, but our savvy Yukon trader coyly informed them that it was too early to part with such a treasured possession.
Canadian governments have carefully structured the trading to make the exercise as realistic as possible. Instead of just trading tokens, like some economic exercises, the Games give each trader a range of starting assets. Some are valuable, like your team jacket, while others are minor commodities like basic provincial team pins. Each province carefully creates a sought-after “premium” pin, such as Nunavut’s five-piece narwhal pin.
The principles of supply and demand quickly make themselves apparent. Everyone wants a pin from the small Nunavut delegation, while it only takes minutes before young traders are rolling their eyes at the glut of Team Ontario trinkets.
The Games feature more than just the typical spot markets. In Sherbrooke, a forward market quickly came into existence because players can’t give away the uniforms they compete in until after their final match. But, just like at the Chicago Mercantile Exchange, that doesn’t stop forward trading: “Hey, you can have my Yukon shirt after my last game, but you have to give me the Manitoba bobble-head plus a Team B.C. arm warmer.”
Once one of the traders owns a forward like this, they can then forward trade their future Yukon shirt for something even more valuable.
Yukonomist has three young traders participating in the Games. To prepare, we carefully reviewed that classic of markets education: the 1983 movie Trading Places, in which Eddie Murphy and Dan Aykroyd try to corner the pork belly and orange juice markets. NPR’s Planet Money radio show recently declared Trading Places to be as good as any university course as a primer for understanding the markets.
The frenzy of Trading Places’ final floor trading scene, where the villains’ OJ representative disappears under a scrum of traders, was good preparation for Team Yukon when they arrived in the lobby of the athletes’ village.
The Games provide young participants with an insight into the fundamental power of markets: the mutually beneficial trade. Many Team Manitoba athletes are embarrassed by their official hat: a fedora with a yellow band. They can’t get rid of it fast enough. Yet I spoke to a style-conscious Yukon teen on the other side of the trading floor who says fedoras are “always in.” She just has to get one, without letting her Manitoba counterparties know how badly she wants it.
Participants practise their sports several times a week before going to the Games. Other than watching Trading Places, most have minimal training in the markets from school or at home. Yet they clearly have the right instincts. It raises the question of whether trading is hard-wired into our species.
Popular wisdom holds that trading is a “modern” phenomenon, associated with the rise of capitalism over the last century or two. But the evidence shows that trading has been going on for millennia. The ancient Chinese coin exhibit at the MacBride Museum last year showed evidence of Tutchone, Tlingit and other trade routes reaching all the way to Asia and going back hundreds if not thousands of years.
The Economist magazine reported research on the topic by Jason Shogren of the University of Wyoming and his colleagues. According to Shogren, there is evidence of long distance trade among Homo sapiens going back 40,000 years. It is possible to know this thanks to evidence of stone tools found hundreds or thousands of kilometres away from the rock they were made from, or sea-shell jewelry found far from the sea.
Shogren also studied Neanderthals, who were already living in Europe when humans arrived there. Interestingly, there is no evidence of trade among Neanderthals. Looking to investigate the impact trading might have had on competition between our ancestors and the Neanderthals, Shogren’s team created a computer simulation.
The stronger Neanderthals were given superior hunting skills, while human bands were able to trade among themselves and specialize. For example, the best hunters could focus on hunting while the best tool and clothing artisans could specialize in those crafts. Humans could also trade between bands when food was short in a certain band’s area.
A computer model is not reality, but it is instructive that the model showed the human population displacing Neanderthal bands across Europe over several thousand years.
Week Two of the Canada Games is coming up. If Team Yukon traders keep up their current pace, they may even have a stylish hat to spare for the team economist.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Twitter@hallidaykeith