Sunday, June 10, 2007

Our ancestors were economists!

According to Jared Diamond in his seminal Guns, Germs and Steel (1997), history of human civilization, hence economic development, began when our ancestors started producing food and create food surplus. That is, to grow crops instead of gathering wild berries, or domesticate animals instead of hunting them. The most interesting question is, as always, why.

Formerly, all people on earth were hunter-gatheres. Why did any of them adopt food production at all? ... From our modern perspective, all these questions at first seem silly, because the drawbacks of being a hunter-gatherer appear so obvious. ... In reality ... most peasant farmers and herders ... aren't necessarily better off than hunter-gatherers ... they may spend more rather than few hours per day at work ... less well nourished, suffered from more serious disease, and died on the average at a younger age than the hunter-gatherers they replaced. (pp.104-5).

But why did the switch take place, nevertheless? Here is my favourite part of the book:

... food production and hunting-gathering [are] alternative strategies competing with each other. ... Hence, we must ask: what were the factors that tipped the competitive advantage away from the former and toward the latter?

According to Diamond, there are some possible factors (pp110-11):
  1. Declining availability of wild foods, making hunter-gatherers lifetyle less rewarding.
  2. Conversely, domesticable wild plants were getting more available (due to both accidental discovery and genetic mutation), making steps leading to plant domestication more rewarding.
  3. Cumulative development of technologies for collecting, processing, and storing wild food, on which food production would eventually depend.
  4. The two-way causal link between human population density and food production, creating greater needs for food production.
If you are an econ student, and you are nerdy enough, you would think of a two-axis diagram with food producing on one axis, and hunting-gathering on the other. The you can think of a standard, convex isoquant curve that represents the choice over the two production mode. The other curve is an 'isocost' which slope represents the relative price of those two modes. The four factors describe by Diamond can be illustrated by changing the slope of the isocost (cheaper relative cost of producing food over hunting-gathering). As the result, the equilibrium also moved along the isoquant. (Note that it took thousand of years for the slope to change).

Well, before there were philosophers, politicians, lawyers or priests, apparently our ancestors were... economists!

If you'd like to discuss more about the book, please do tell Rara!


  1. Propensity of economic thinking maybe distributed normally in the early times of proto-human.

    But those with better economic sense survive better and have more offsprings than those with lower economics sense. Thus dominate the population.

    Where Adam Smith meet Charles Darwin :-D

  2. Very nice improvements, guys. Now I can subscribe. :)