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- Last modified 10/07/08
- Copyright © by Nila Gaede 2008
- 1.0 The economic history of Man to the present
Hunter/Gathering. Most people seem to forget that hunter/gathering is by far the longest period in Man’s
history. It lasted over 100,000 years. Our forefathers were savages before they invented and developed
civilization. Even the most fanatic Christian has to admit that Man has experienced a non-cyclical
technological and behavioral revolution since the days of Moses. Esau was a hunter and Jacob dwelled
in tents [Gen 25:27]. Where are you going to find subsistence hunters and shepherds today?
During this lengthy early period, our entire economy, our carrying capacity consisted of food – primarily
meat – and we were vulnerable to fluctuations in animal populations just like any other predator. In our
hunter-gathering days, food was more or less at the same level of air and water, practically inexhaustible.
If one of our forefathers was hungry, he would just have to go to the plains and catch whatever was
moving. Of course, it wasn’t as simple as that, but the point is that there was more food available than a
hunter could eat. The wild world of animals is a wasteful, inefficient system. Much primary production is
never consumed. Most herbivores die for reasons other than predation. Again, in the wild, only about 10%
of the total food that is available ends up in the stomach of someone at the next trophic level.
Agriculture/Husbandry. Roughly 10,000 years ago, we invented subsistence farming and domestication.
During the initial phase, man still lives in a primitive state. For all practical purposes, food continues to be
100 % of Man’s economy. There is no meaningful division of labor (except perhaps between men and
women), and hunter/gathering supplements the diet. However, farming is a strategic turning point in our
economic history. It enables Man for the first time to plan ahead and gain a little bit of control over his
carrying capacity. The discovery of farming enables Man to sustain a higher population level than in his
hunter-gathering days, and it doesn’t take our ancestors long to discover that they can exchange their
surpluses for goods and services. Commercial farming and division of labor are born. Potters, smiths,
masons, carpenters, etc., comprise the initial phase of manufacturing. Politicians, soldiers, priests, actors,
gladiators, artists, courtiers, and courtesans comprise the initial phase of services. The great majority of
people work in agriculture. Specialization frees Man to manage resources more efficiently, which in turn
enables Man to attain a higher population level.
Manufacturing. Then, about 200 years ago, a few nations spearhead the Industrial Revolution. Radical
improvements to labor-intensive agricultural activities – plowing, sowing, harvesting, threshing –
drastically reduce the need for laborers in nations which are at forefront of this movement. Yields multiply
under better land management (four field crop rotation, improvements in the use of fertilizers and
pesticides, reclamation of idle land, selection of hardy strains of grain, etc.). Much of the world still does
subsistence farming and ranching, and hunter/gathering is still thriving in a few remote regions. Sparsely
populated, underdeveloped nations are mostly undergoing an agrarian phase. In the more developed
nations, however, agricultural efficiency is displacing people to urban centers as machine replaces Man in
the fields. These laborers become urban proletarians as demand grows for manufacturing products.
Manufacturing was and necessarily had to be labor intensive in this initial phase because the first
inventions were crude and had to go through an exponential refining curve. Better living conditions and
improvements in health enable the urban and semi-urban population to increase exponentially. The effect
of this demographic explosion is to further fuel the manufacturing expansion. Services are also
developing, but they are still a luxury in this initial phase. Only the rich can afford the few services that are
sprouting.
More recently, certainly not much more than 100 years ago, manufacturing finally overtook agriculture as
the primary mode of production in a handful of countries. For instance, in 1900, 41% of the labor force in
the U.S. was allocated to agriculture. [1] This segment of the economy perhaps contributed to just over
20% of Gross Domestic Product (GDP). Thanks in great measure to technology, the role of agriculture has
consistently dwindled to the point where less than 3% of the labor force currently works in farming and
agriculture contributes to less than 1% of GDP (Fig. 1). The raw statistics show that agricultural
monopolization is a reality:
“ In the U.S., four companies produce 81 percent of cows, 73 percent of sheep,
57 percent of pigs and 50 percent of chickens. In 1967, there were one million
pig farms in America; as of 2002, there were 114,000” [2]
- Politicians of developing nations love success stories and are in the habit of imitating, if not exactly the
policies, at least the standard of living of developed nations. Although no country has been as successful
as the United States at shifting from agriculture to manufacturing and then to services, all nations have
the same goal in mind and are striving to make ‘progress’ in the same direction.
The idiotic relativistic economist has been brainwashed to believe that everything is cyclical. There is a
downturn in the market which is followed by an upturn and that’s just a fact of life. They have passed this
nonsense on to all business managers and financial wizards and university students in the world. Here I
have just presented evidence of the contrary. We will never go back to agriculture. We will never go back
to manufacturing.
" The primary and secondary sectors are increasingly dominated by automisation,
and the demand for workforce numbers falls in these sectors. It is replaced by
the growing demands of the tertiary sector. The situation now corresponds to
modern-day industrial societies and the society of the future, the service or
post-industrial society. Today the tertiary sector has grown to such an enormous
size that it is sometimes further divided into an information-based quaternary
sector (see above), and even a quinary sector based on non-profit services." [3]
- Once we get past these unavoidable economic hurdles, we have no chance of reliving the cycle. There
are unavoidable, structural trends in our artificial economy. Long term economic history does NOT repeat
itself.
- 2.0 Contemporary economics: the outsourcing phase
The global economy didn’t stay long in the manufacturing stage and soon moved into services. Realizing
that local markets have begun to dry up, the big manufacturers of developed nations have relatively
recently begun to peddle their products abroad. Major producers are either outsourcing their work or
relocating their plants. The populated underdeveloped world offers cheaper labor and higher demand.
Big service firms – banking, insurance, IT, transportation – follow the manufacturers because many of
them cater to big business. The strategy is to conquer virgin markets before local upstarts have a chance
to flourish. Governments of developing nations proactively woo investment and open the doors to big
firms in a bid to generate jobs for their people. This phenomenon has two effects. The standard of living
rises in the boom towns and local industry is killed in its infancy. The process also works at a much faster
speed than if the locals developed the industry from scratch.
The facts are that from 1996 to 2005, manufacturing employment in the U.S. fell from 17 to 14 million, a ten-
year snapshot in a much longer, irreversible, negative trend. [4] This work has gone abroad. Europe is
undergoing a similar process. However, whereas manufacturing is disappearing in the developed world, it
is flourishing in major developing countries such as China and India. Yet even in these countries the
service sector is outpacing manufacturing (Table I).
Module main page: How the last human died
This page: The economic history of Man
Pages in this module:
Fig. 1 Trends in U.S. Agriculture |
Agriculture in the U.S. has
steadily fallen as a percentage
of GDP and as a source of labor.
Although not as spectacular,
the entire planet has undergone
a similar transformation. Today,
the contribution of Agriculture
to global GDP is a paltry 4%.
steadily fallen as a percentage
of GDP and as a source of labor.
Although not as spectacular,
the entire planet has undergone
a similar transformation. Today,
the contribution of Agriculture
to global GDP is a paltry 4%.
Table I
2006 1% 21% 78%
2006 45% 24% 31%
GDP 1997 25% 30% 45%. |
- The numbers objectively show that both China and India are swiftly becoming service economies. Indeed,
the entire Third World is trimming agriculture and moving into manufacturing. Every country realizes that
industrialization provides jobs and takes people out of the backwardness we identify with an agrarian
society. [5] Manufacturing means urbanization, and urbanization brings about services. It is merely a
matter of time before the service sector overtakes manufacturing. Today, services dominate the
economies of the most backward of nations. Global GDP consists of Agriculture (4%), Manufacturing
(32%), and Services (64%). [6] These proportions show that the global economy is currently operating in
a service mode. From a geological point of view, the transition from agriculture to manufacturing and then
again to services will have happened in a blink of an eye.
3.0 The economic picture of the future
What can we expect next? How will global economics develop in the coming years? Assuming we reach a
demographic plateau, will our carrying capacity remain constant for the next million years or so?
For the near future we can expect more of the same. These trends will not change. What will happen next
is entirely predictable and a foregone conclusion. The developing nations will continue to emulate the
developed nations and gradually shift their economies away from agriculture first and then away from
manufacturing.
We have already seen this movie many times. Agri-corporations buy land and farmers relocate their
families to urban areas or convert local villages into towns. Manufacturers take advantage of the boom in
demand for ‘necessary’ products caused by the new arrivals and hire more people. The economy
experiences a spurt until the wave of immigrants settles down. In the next phase, industrial demand
declines and manufacturing firms begin to trim labor. The unemployed are either absorbed by the service
industry or supported by the State. Manufacturing enters a period of decline as innovation, competition,
and cost cutting bring pressures to bear on the industrialists. Indeed, it is interesting to note that
computer and car companies are no longer really in the manufacturing business. Companies like IBM, HP,
and Acer prefer to advertise that they are in the ‘business solutions’ business. They don’t sell hardware.
They sell service contracts. Likewise, car companies are not in the business of selling automobiles
anymore. They are in the financing and insurance business. The tangible goods are becoming an ever
smaller component of day to day transactions. Blue collar workers are dying by the millions.
The big picture is that agriculture and manufacturing will continue to shrink at the expense of services.
Man will become an urban species. The new generation will be unable to find work in manufacturing
because manufacturing is dying. The more urbanized the world becomes, the fewer the number of
children we spit out, and the greater the decline in demand. There is no mystery about any of this. We
have no way of reversing any of these mega-trends, partly because the shift towards services is in the
self-interests of the politicians and partly because we cannot go back to economies based on agriculture
or manufacturing.
- 4.0 Is there something broken that we need to fix?
So is there a problem? Should we be worried about these trends and developments?
A relativistic economist (a follower of Julian Simon and Milton Friedman) will probably reply that these
trends simply show that we are becoming more efficient. Man is gradually streamlining his production
processes. We are inching closer to an ideal world, and this is not something we should lose any sleep
over. We are talking heaven, not hell. Humans are guaranteed to live an eternity under such conditions.
A pessimistic catastrophist, on the other hand, will find solace only with the decline in fertility. Imagine the
alternative, he will say. What if humans continued to multiply until they overflowed into space? Certainly,
the volume of the Earth does not grow in proportion to the human population. Therefore, we should
rejoice. When we reach ZPG, we will have finally attained the best of both worlds: an efficient service
economy run on a constant population.
A techno-utopianist may not agree that a reduction in population is necessarily a good thing, but then
again women can always rediscover fertility some time in the future. Or we do it artificially! Meanwhile,
current technology already enables us to feed the world for as long as we can imagine, and runaway
inventions are guaranteed to create jobs for as far as the mind can think:
- “ We have in our hands now—actually in our libraries—the technology to feed,
clothe, and supply energy to an ever-growing population for the next 7 billion
years.” [7]
“ 2045: The Singularity occurs as artificial intelligences surpass human beings
as the smartest and most capable life forms on the Earth. Technological
development is taken over by the machines, who can think, act and communicate
so quickly that normal humans cannot even comprehend what is going on. The
machines enter into a ‘runaway reaction’ of self-improvement cycles, with each
new generation of A.I.'s appearing faster and faster. From this point onwards,
technological advancement is explosive and cannot be accurately predicted.” [8]
[According to the members of Heaven's Gate... I'm sorry, I meant of the relativistic
establishment, the singularity is a crucial point in the development of Man after
which technology develops exponentially.]
“ The future will be fueled by technology and the aging of the Baby Boomers, and
one big change will be an increase in entrepreneurships and start-up businesses.” [9]
“ technological growth will lead to the end of economic scarcity” [10]
- Therefore, almost everyone is betting that a mixture of economics and technology will solve any future
problems, specifically those related to unemployment.
My interpretation of the implications of leaving behind our agricultural life is not nearly as rosy. I have
already argued that manufacturing has no muscle to lift the economy from the quicksand it is immersed
in. Nevertheless, the gradual shift first to manufacturing and then to services is more than just a problem.
It irrevocably dooms our species. The interplay between food, jobs, and fertility guarantees that our
beloved race will not come out of this process alive. I have a couple of objections against the defenses
raised by fanatic free marketeers, Malthusian catastrophists, and their lunatic techno-utopianist and post-
humanist allies:
1. Man’s artificial economy cannot be run on a constant population.
2. The service sector has no ability to increase population (i.e., demand) or to put
- people to work.
3. Our current demographic and economic trends will necessarily result in a
- catastrophic collapse of the economy within this century and almost certainly
before mid century. Actually, we can go at any moment now. Globalization has
rendered our species ripe for extinction.
| The economic history of Man |
| Adapted for the Internet from: Why God Doesn't Exist |