It seems quite likely that reference first evolved as an ʻexophoricʼ relation: that is, as a means of linking ʻoutwardsʼ to some person or object in the environment. So, for example, the concept of ʻheʼ probably originated as ʻthat man over thereʼ. In other words we may postulate an imaginary stage in the evolution of language when the basic referential category of PERSON was DEICTIC in the strict sense, ʻto be interpreted by reference to the situation here and nowʼ. Thus ʻIʼ was ʻthe one speakingʼ; ʻyouʼ, ʻthe one(s) spoken toʼ; ʻhe, she, it, theyʼ were the third party, ʻthe other(s) in the situationʼ. The first and second persons ʻIʼ and ʻyouʼ naturally retain this deictic sense; their meaning is defined in the act of speaking. The third person forms 'he' 'she' 'it' 'they' can be used deictically; but more often than not, in all languages as we know them, such items are 'anaphoric': that is, they point not ʻoutwardsʼ to the environment but ʻbackwardsʼ to the preceding text.
- Halliday (1985), Pag. 290-291