Economy, Society, and History

In this lecture,1  I want to talk about the spread of humans around the world and the extension and the intensification of the division of lecture. The subject will be continued to a certain extent into the next lecture. Homo sapiens, mankind as we know it, with about the cranial volume that we have now, is estimated to be about 500,000 years old, and takes on the current appearance roughly about 100,000 years ago. And as I mentioned in the previous lecture, the point when the language capability developed, is dated somehow from between 150,000 to 50,000 years ago. There is general agreement, not complete agreement, but pretty much unanimous agreement, that mankind spread out from Africa, and if you take a look at Figure 1, which is taken from the Cavalli-Sforza book, he gives you some rough dates about this process. So, his estimation is that people began to leave Africa 60,000–70,000 years ago, maybe up to 100,000 years ago, and that the first spreading was to Asia. We have the oldest findings of human skeletons, in China, dated at 67,000 years old.  

And then, from China, they traveled to Australia, which he dates roughly at 55,000 years ago. And this travel time—I will have more to say about that—took about 10,000 years from Africa to Australia. One will have to say here something about the possibilities of this traveling. You have to keep in mind a few glacial periods, actually four glacial periods in the last 900,000 years and each of those lasted about 75,000 years. The last one of these glacial periods lasted from 25,000 years to about 13,000 years ago. During these glacial periods the level of the oceans dropped considerably because snow accumulated on the mountains and less water melted, so that the gaps between Southeast Asia and what is now Indonesia and Borneo and Australia became rather small. They did not disappear completely, but they were small enough that they could be traversed by very small boats. The Sahara Desert, for instance, is only 3,000 years old. Before that, it was not exactly the most fruitful of areas but, nonetheless, a region that could be used for hunting and gathering activities and also for agricultural purposes.  

The next break of the population is the breakoff to Europe, which Cavalli-Sforza dates around 40,000–43,000 years ago, and the latest split-off is the one to America, across the Bering Strait, for which again, only very rough estimates exist; they range from 15,000 years to 50,000 years ago. And the spreading of the population on the American continent is estimated to have lasted about 1,000 years, from the North, all the way down to Patagonia, which would be something like eight miles per year, so not a large distance per year.

The spreading, at this time, is either by foot or, when that was significantly faster, by boat. Boat travel remained the fastest way of traveling until the domestication of horses, which occurs only some 6,000 years ago. Until that time, nothing but walking was possible, and as a matter of fact, as you probably know from your history lessons, that was pretty much the only way of transportation that existed on the American continent until the arrival of the Europeans. We always picture these Indians on horses, but of course, there existed no horses whatsoever and there existed actually, on the American continent, not even wheels. That is to say, people transported things by schlepping some wooden planks behind them, on which they had whatever they had to transport.

During these early times, until about 10,000 to 12,000 years ago, all of these populations, all of these people were hunters and gatherers, moving around at low speeds, mostly in small bands of 50–60 people, but several bands usually had some sort of connection. There exist biological reasons why minimal group sizes have to be about 500 people in order to prevent some sort of genetic degeneration, so one can expect that even if they were in small bands, that there was some sort of communication and intermarriage and so forth, with people of this group size.

The density of population was, as you can imagine, extremely low. The estimation is that in hunter-gatherer societies, you can have only one person per square mile. For more, for a larger population, the Earth did not produce enough foodstuff to support it. The population growth was extremely slow, partly because of birth control techniques used by people, by long breastfeeding, and things of that nature, and of course, because of high mortality rates. The estimation is that 100,000 years ago, at the beginning of this process that I’m talking about, the population size was about 50,000 in the world; 50,000 on the entire globe.
And 10,000 years ago, that is a period I will talk about a little bit later, the so-called Neolithic Revolution, when people began to settle down and begin agricultural existence, the numbers there are between 1 and 15 million and the estimation that most people accept is about 5 million. So, from 100,000 years to 10,000 years ago, 90,000 years of time, the population increases only from 50,000 to 5 million, and that is roughly a doubling of the population every 13,000–14,000 years.

To give you some sort of ballpark figure what the speed of population doubling is now, from the 1950s on, populations doubled every 35 years. So, you can see, based on this figure, what extremely small growth of population took place during this period. The groups, basically, simply broke away from each other, as I said, many times by boat, frequently also by foot. There existed then, for a considerable amount of time, 90,000 years or so, very little communication and intermingling between these breakaway groups, which explains the fact that quite different genetic stocks of people developed, because very limited interbreeding took place. In addition, there were the glacial periods, which cut off, sometimes for 10,000 or so years, communication between groups that were not far apart from each other distance-wise. The Alps, for instance, became essentially impassable, so people who were in the north lost all contact with people who were in the south.

Then there is the weather: the rains in Eurasia come mostly from the west, going eastward, so most of the snow accumulated in the west and the drier climates were in the east. People moved from the west to the east and then partially after the glacial periods were over returned back to more western regions. So, practically no contact between these groups. Of course, this is particularly pronounced in cases such as Australia and Borneo, which then became separated by large bodies of water, as compared to the periods when you could easily cross these straits. And there exists a general law, which is easy to grasp, that genetic distance increases in correlation with physical distance and with the separation in time.

I provided you with two charts that give you some rough indication of this. I have no intention of going into that in great detail, but Figure 2 is a tree diagram, which indicates roughly the distance in the genetic material of the populations living in these major areas and reflects in a way the breaking, the periods when populations broke away from each other. It indicates, for instance, that the first split occurred between Africa and Asia and then the second split occurred between Asia and Europe and the third one was Asia and America, and it indicates also the wide genetic distance, so to speak, between Africa, on the one hand, and the Oceanic population, on the other.

Figure 3 is more detailed, as you see: it has on the left side the genetic relationships, how far or close some of the major ethnic groups are genetically, and on the right side, how close or distant they are in terms of their languages. There’s obviously some sort of correlation between the genetic groups and the linguistic groups, but by no means a perfect one, which can be explained mostly by invasions by various people, who then spread their own language also in regions that were originally genetically different. Or sometimes you have regions that are genetically quite close, but they have brought languages from far away distances. An example would be, for instance, in the European scenery, the Finns and the Hungarians and the Turks, which have somewhat closely related languages, even though they are physically quite far removed from each other. I’ll come back to this type of topic about different ethnicities and related subjects in a later lecture. For the current purpose, this is entirely sufficient, just to get some sort of feeling for how the separation and the movement of hunter-gatherers, with very little contact with each other, automatically brings these results about.

This separation and very limited cooperation between different groups, brings also about, a tendency to create a large variety of languages. You will see, later on, there exists, of course, also a tendency for languages to be reduced in number, when the contact between various groups becomes intensified. That is, when the division of labor is no longer restricted to these small groups, but becomes more extensive and more intensive, including ever larger regions of the population, then there is a countervailing tendency because then there exists, of course, a need for people to communicate with each other, and one can recognize that it is an advantage to speak languages that are spoken by very many people. If you are living more or less enclosed in small groups and the division of labor is restricted to these small groups, then there is no disadvantage to just having a different language for each one of these groups.

Currently, there exist about 5,000 to 6,000 languages. To give you an extreme example, 1,000 of these 5,000–6,000 languages are spoken in Guinea, and half of these 1,000 languages have no more than 500 speakers. That is pretty close to the number that I gave you for what the minimum size of a group has to be in order to avoid negative genetic effects. There are only a few languages in Guinea that are spoken by more than 100,000 people. This also tells us something about the state of development of this place that obviously, that is not a place in which the division of labor is very extensive and intensive. They are still living rather isolated and have only a division of labor within their little tribes, without much need to learn other languages, or for one language to take over other languages and become the dominant one. The division of labor, at this stage, is of a very, very limited kind—obviously, women tend to be more the gatherers; men tend to be more the hunters. There are some people who make tools, but the number of tools and instruments is also very limited. So, by and large, very small numbers of different professions, if we can talk about that at all; there is probably no one who is really specializing full time in certain types of activities.

The division of labor even shrinks at times during this period, which leads to a situation where people unlearn things that were already part of the accumulated knowledge of mankind. Those things took place, in particular, in the cases of New Guinea and Australia and Tasmania, places that for tens of thousands of years were completely isolated from anybody else and could not even occasionally adopt techniques or knowledge that had been accumulated in other parts of the world. For instance, the Australian Aborigines still used stone tools around the year 1800 in Tasmania, which was cut off for some 10,000 years from any other place; these people must obviously have known, at some point in time, the technique for constructing boats, but when they were rediscovered, they were not able to make boats. They must, at some time, have had the capability of using bows and arrows, but when they were rediscovered, they were not able to use arrows and bows because the population had become too small and no influx of innovation came in, so these people with the smaller populations simply became less informed and less knowledgeable than they must have been at the beginning. The same is also true, by the way, for Eskimos and Polynesians. The Polynesians also had partially unlearned the ability to make boats, even though they must have had this ability at some point in the past—unless they were very good swimmers.

As a little side remark, there is an explanation for why Polynesians tend to be a very fat people, namely that fat people had a survival advantage on long boat trips where they didn’t know where they would end up. So, people who had accumulated a lot of body fat had a higher chance of finally finding the Fiji Islands or wherever they landed, which is an explanation why we still find massive, massive people in these places, far more massive than you find in other regions of the world.

We now arrive at one of the great revolutions in human development and that is a so-called Neolithic Revolution, which took place about 10,000–12,000 years ago. The main explanatory factor for this was that land became gradually scarcer and scarcer and more valuable, and pressure arose to find a solution to the problem of how to feed the people who could not walk around and break away and find new hunting and gathering places. They had to make it possible for people to live in larger numbers on smaller territories. Before, land was more or less treated as a free good, and if it is treated as a free good, there exists of course no incentive to appropriate it, to establish property in the land.

In the previous lecture, I explained that it was perfectly natural that people considered their bow and arrow to be their bow and arrow and the axe they carried to be their axe and so forth, and when they hunted buffalo, if I had hunted one down, then, of course, that became my buffalo. But property in land is a relatively new invention, so to speak, and the explanation is that land, all of a sudden, is perceived to be scarce. And as soon as it comes to be perceived as scarce, there will be attempts made by people to fence pieces off from other pieces, to mark places off from other places and claim them as mine or yours. The places where agriculture starts are naturally those places that have, by nature, an abundance of suitable plants; that is, where you have wild corn and wild wheat and wild rye, etc., people settle there and then begin to cultivate existing plants so as to breed better products. These are the places that we describe as the Fertile Crescent, what is today the Middle East around Iraq and Syria, on the one hand, and on the other hand, China, that is, places that are located close to rivers, and then later on, of course, also Egypt.

Figure 4 deals with examples of domesticated plants and animals by the date of earliest domestication and by region. This begins at about 8,000 BC. The only animal that had been domesticated before then was the dog, which you find on the opposite page. Dogs, of course, had been already of some use for hunters and gatherers. All the other animals are typical animals that are useful only in agricultural societies and not so much useful if you lead a hunter and gatherer lifestyle.

The thing that I would like to make you aware of here is, the remarkable observation that there existed, basically, no large-scale domesticated animals on the American continent, except for the llama, which is not exactly comparable in its versatility to horses and cows. There exists some explanations that Jared Diamond in Guns, Germs, and Steel, proposes, which don’t sound too plausible to me. He is some sort of environmentalist. He explains, for instance, the fact that there are no large-scale domesticated animals on the American continent, by claiming that initially, there existed all the animals on the American continent that existed in Asia and Europe also, but on the American continent, overhunting took place. And then you ask, of course, “Why did overhunting take place, why did they wipe out all of these animals and did not recognize in time the value of some of them, the potential to be domesticated, as compared to what people did in Eurasia?” And his explanation is that people arrived in America at a later date than in Asia and in Europe and at that date, the weapons technology was already further developed, so the killing potential was greater for those people active on the American continent, such that the extinction of animals resulted there and did not result in Eurasia. There exist, of course, also other explanations for this, to which I will come back in some future lecture. It might have also something to do, of course, with the lack of foresight, that there was more foresight among some people in Eurasia and less foresight in America, to prevent this sort of environmental catastrophe, as we might call it, from occurring.

Now, agricultural life allows a far greater density of population than a hunter-gatherer existence. As a matter of fact, it is estimated that 10 to 100 times as many people can live on the same piece of land if they engage in agriculture rather than in hunting and gathering activities. And we also recognize that as soon as you have settled down and built agricultural communities, then for the first time it becomes possible for capital to be accumulated. Imagine hunters and gatherers who just schlep around from place to place, there is only so many things that you can take with you. After all, you have to carry everything and most of the stuff becomes excess baggage. Now that you settle, of course, you can establish storage and you can accumulate things for bad seasons, and you can feed not only larger numbers, you can also turn your activity from one type of farming to other types of farming, from growing one type of cereal to growing other types of cereal and so forth.

Anthropologists compare the way of life of the hunters and gatherers to the way of life of the settlers; the agricultural people settled and, they point out, the life of hunters and gatherers was, in a way, easier, nicer. They spent only a few hours a day just hunting away and then they were lazing around, whereas the agricultural people worked for long periods of time, especially since this whole thing started in the Middle East, with comparatively nice weather all year around, and you could work also all year around, whereas hunters and gatherers had entire seasons off. So, anthropologists report, for instance, that the hunters and gatherers frequently laughed at the stupid agricultural settlers there, that they worked so hard and they themselves had such a nice and lazy life. 

What is not true, however, which you find reported in some books, is that these hunter-gatherer societies turned out to be militarily superior over agricultural societies and regularly raided them. And if you think about it, while this is, of course, possible, there are compelling reasons why that should not be the case. That is why agricultural societies should have been, even in this area, that is, defending themselves, superior over hunter-gatherer societies, simply because they engage in capital accumulation, they have denser populations, they have far more men and more conflicts. Typically, it was not the hunter-gatherer societies that beat the agricultural societies, but vice versa.

Because of this, then, let me just say something about the population size again. With the Neolithic Revolution, so, from 10,000 to 12,000 years ago, the population doubles every 1,300 years, roughly, as compared with every 13,000 years prior to that. Again, these are all ballpark figures. In a later lecture, I will give you a table with some sort of population estimates. So, the estimation is that maybe 10,000 years ago, we had 5 million people at the beginning of the Neolithic Revolution, and in the year 1 AD, the numbers that are given, go from 170 million to 400 million. So, if you take the average of those estimates, then you come up with this rough idea of 1,300 years per doubling of the population. Now, this superiority of agricultural societies over hunter-gatherer societies is then responsible for the gradual spreading of these societies. This did not start at every place; it started at a few places, as I said, for the Fertile Crescent and some places in China, and gradually, the farmers take over more and more land.

The hunter-gatherers are first transformed into herders, because they don’t roam around anymore; they have to deal with tamed animals, but the tamed animals, of course, are on the outskirts and even the herders gradually lose more and more land to the ever-expanding farming population. Again, if you just look at the current world, hunters and gatherers practically exist no more at all, except at the very fringes of the globe. And even herders exist only in very small places, again, far removed, in Siberia and Lapland and places of that kind. The superior civilization, if we want to use this term, the agricultural civilization, gradually expands outward. The time, for instance, when various plants and so forth appear in various regions, it takes about 5,000 years for agriculture to spread from the Fertile Crescent and to reach a place like England. So, that would be an expansion of something like slightly more than one kilometer per year, which is added to agriculturally used territory and taken away from hunter-gatherer territories.

The division of labor now intensifies, of course, quite a bit. There are not just three or four different types of occupations that you can do; with small villages coming into existence, craftsmen who are specialized in these tasks evolve far more specialization. There is also a certain amount of interregional trade now developing, whereas between the hunter-gatherer societies, as I said, there was practically no trading going on whatsoever, and of course innovations now spread in some sort of regular and permanent way. Again, hunter-gatherer societies are living side by side. It happens, but it happens more or less by accident that one group picks up a new technique that has been developed by another one. Now, in agricultural societies, people live next door to each other, being integrated, to a certain extent. And, through the division of labor, the diffusion of knowledge also takes place. That is, something that is developed in one place, will arrive eventually at some other place and will be imitated there, if it happens to be useful at those places. And of course the direction is always from the centers of civilization, i.e. the Fertile Crescent and the river valleys in China, to the periphery, where the wild people still live. And no longer does it take place that the division of labor breaks down as easily, that something is simply forgotten. As long as there is contact and the population size increases, the specialization progresses and innovations are transported from place to place.

And what I pointed out before: now, with agriculture, we see also that this previous tendency of languages to break up into larger and larger numbers of different languages does come to a certain halt. There is now more communication between them; there is a greater advantage to speaking languages that are spoken by many people and also, for the first time, a tendency to learn the languages of neighboring regions, because you trade and associate with them, to a certain extent, which you did not do during the previous phase of mankind.

Let me end this lecture by providing you with two quotes from Mises, the first one a quote the full implication of which will only become clear in the next lecture. Mises tries to explain why there is an inherent tendency in human development of extending the division of labor, of having more and more people participate in the division of labor and to intensify the division of labor, that is, to specialize more and more and dedicate your entire time to specific tasks, rather than to one hour this and another hour that, etc. And the second quote, which, again, leads over to the next lecture, is a quote where he describes the inherent limitations that purely agricultural societies have, which lets us expect that a new invention has to be made; again, just as we invented agriculture to solve the problem of increasing scarcity of land, mankind has to solve another challenge that is inherent in purely agricultural societies—that is, to develop industrial societies with cities in order to deal with the fact that, even in agricultural societies, we will again eventually reach the point when the land cannot support a steadily growing population—and a new institution allowing us to live on far denser, far smaller territories comes into being.

The first quote, as I said, deals with the cause of social evolution. Mises says,

The simplest way to depict the evolution of society, is to show the distinction between two evolutionary tendencies, which are related to each other in the same way as intention and extension. Society develops subjectively and objectively. Subjectively, by enlarging its membership.2

We have seen how that takes place, reaching several million people at the beginning of the Neolithic Revolution and then shooting up from there at a more rapid rate.

[S]ubjectively, by enlarging its membership and objectively, by enlarging the aims of its activities. Far more activities become possible in an agricultural society. We build huts; we build tools for which there was no need before; we build storage facilities, and so forth, enlarging the aims of human activities. Originally confined to the narrowest circles of people, to immediate neighbors, the division of labor gradually becomes more general until eventually, it includes all mankind. This process, still far from complete and never, at any point in history, completed, is finite. We can, of course, imagine a point when this process has reached an end, when all men on Earth form a unitary system of division of labor, it will have reached its goal. Side-by-side with this extension of the social bonds, goes a process of intensification. Social action embraces more and more aims and the area in which the individual provides for his own consumption becomes constantly narrower. We need not pause at this stage to ask, whether this process will eventually result in the specialization of all productive activity, but again, the tendency is clearly in this direction.3

And now, an interesting quote on what I might call, the limitations of purely agricultural societies. Mises says,

We may depict conditions of a society of agriculturalists, in which every member tills a piece of land large enough to provide himself and his family with the indispensable necessities of life. We may include, in such a picture, the existence of a few specialists, artisans like smiths and professional men like doctors. We might even go further and assume that some men do not own a farm, but work as laborers on other people’s farms. The employer remunerates them for their help and takes care of them when sickness or old age disables him.

This scheme of an ideal society, was at the bottom of many utopian plans. It was by and large, realized for some time in some communities. The nearest approach to its realization was probably the commonwealth which the Jesuit padres established in the country which is today Paraguay. There is, however, no need to examine the merits of such a system of social organization. Historical evolution burst it asunder. Its frame was too narrow for the number of people who are living today on the Earth’s surface.

The inherent weakness of such a society is, that the increase in population must result in progressive poverty. If the estate of a deceased farmer is divided among its children, the holdings finally become so small that they can no longer provide sufficient sustenance for a family. Everybody is a land owner, but everybody is extremely poor. Conditions, as they prevailed in large areas of China, provide a sad illustration of the misery of the tillers of small parcels. The alternative to this outcome is the emergence of the huge mass of landless proletariats. Then, a wide gap separates the disinherited paupers from the fortunate farmers. They are a class of pariahs whose very existence presents society with an insoluble problem. They searched in vain for a livelihood; society has no use for them. They are destitute.4

And here, then, a solution to another problem has to be developed, and that is the solution of industrial capitalism—the development of towns and money—which allows another push in the growth of mankind and in the specialization of tasks, and I will talk about that in the next lecture.

• 1[This lecture began with two personal notes from Hoppe. While not directly related to the lecture, they are of historical value and interest. —Ed.]<br>&nbsp;&nbsp;&nbsp;&nbsp; First, let me make a few personal remarks. One is, since some of you have seen the videotape with Murray Rothbard, I should mention that for the last ten years of his life, I was his closest colleague. In a way, I was his intellectual bodyguard. I came to the United States in 1985 and worked with Murray for a year in New York City, and when he was out of town I taught his classes. And then in 1986, he received an offer for an endowed chair at the University of Nevada, Las Vegas, which was the first big position that he ever held. At that time, there was another opening as well, and he asked me to come with him. And by accident, I got that job too. It was, I think, the only year at that university where it was possible for both of us to be hired. From that moment on, the composition of the department changed in such a way that we never again would have received the jobs. Then I stayed there until he died in 1995, and now I’m the only lonely holdout there, one they can no longer get rid of.<br>&nbsp;&nbsp;&nbsp;&nbsp; The other remark concerns the lectures. The structure of the lectures is supposed to be the structure of my next book project. Because of that, in a way, I put more work into it than you normally tend to do. And on top of that, it is Lew Rockwell who, by inviting me, always forces me to overcome my natural laziness and put all my energy together and then prepare myself for these occasions.
• 2Ludwig von Mises,<em> Socialism: An Economic and Sociological Analysis</em> (1951; Auburn, Ala.: Ludwig von Mises Institute, 2009), p. 314.
• 3Ibid.
• 4Ludwig von Mises, <em>Human Action: A Treatise on Economics</em>, scholar’s edition (1949; Auburn, Ala.: Ludwig von Mises Institute, 1998), p. 831.