Economics and the Neolithic Revolution


I came upon a very exciting article headline, On the Economics of the Neolithic Revolution written by Kevin Bryan. The Neolithic Revolution was the time about 12,000 years ago when humans transitioned from nomadic hunters and gatherers into stationary farmers. I find it fascinating. What’s more, I have my own idiosyncratic ideas about it. For example, it is usually claimed that the invention of farming led to settlements. But as I’ve discussed before, there are settlements that started before farming. I tend to think that people settled down first. But most likely, it was a muddle with people hunting and gathering while they were also playing around with agriculture.

Bryan’s article on the economics of the Neolithic Revolution, is actually a review of a couple of recent papers. So my problem with his article is not exactly his fault. But he noted that the lives of people in settlements were not at first as good as those in nomadic tribes. But the reason for thinking that is so “economist stupid” that I want to scream: nomadic people were taller. Phrases like “man does not live by bread alone” are apparently drummed out of economics students. And Bryan even noted that those living in settlements showed fewer signs of “food availability shocks.” Humans, you may have noticed, are risk adverse. Most people would choose to have a dependable but lower quality diet than to have a higher quality diet that went along with significant risk of starvation.

The broader issue is that there are lots of other reasons that people settle down. And I don’t buy this whole idea that farming is this back-breaking work. Farming is back-breaking during certain times of the year. For most of the year, it’s actually quite a relaxed lifestyle. Hunting and gathering, on the other hand, is something that you have to do constantly. Plus, you are far more threatened by the vagaries of life. In a settlement, you can always escape inclement weather. And you are much less likely to be attacked by a leopard.

Bryan does bring up some good questions, however. He noted that inequality was worse in settlements. He doesn’t mention it, but rats were a huge problem too — which is why the invention of pottery was so important. But there are no doubts that settlements were not a complete improvement. Again, however, I think it all comes down to risk aversion. The rise in inequality probably happened because settlements tended to attract raiders. This caused the formation of governments for collective protection. But it is probably better to think of the mafia than a representative democracy.

Above all, what bugged me about the article was the two reasons offered for why people in settlements would create statues and such, which had no material value. Again: this is “economist stupid” thinking. Why did people create cave paintings? But okay, let’s look at what the economists come up with. First is the idea that it was the social equivalent of braying: to show off the strength of the society, “See, we are so strong, we can do useless things!” Even Bryan thinks that’s pretty lame.

The second idea is building totems acted as a kind of social branding — a way of establishing norms in the settlement. But doesn’t that beg the question? Isn’t the fact that people are willing to build these totems an indication that the norms have already been well established? To me, it is all about social bonding and shared meaning. The totems were something that the people believed in. In most cases, they were of a religious nature, which means — Listen up, economists! — that building them wasn’t rational.

No one makes individual choices based upon what is most rational for the collective. No one thinks, “I’ll be nomadic because statistically speaking, my children will be two inches taller!” That’s the kind of thinking of people playing Dungeons & Dragons. People live their lives primarily to minimize discomfort. It really has surprisingly little to do with economics — as powerful a way as it is for understanding the way the world works.


Just to be clear, since economists do occasionally come by here: I am not saying that any of the economists involved in this are stupid. Far from it! I assume they are all brilliant. But people get caught in certain ways of looking at the world and lose their grip on reality. Models become reality. And since people are rational in the models, they must be rational in reality. It’s totally understandable, and I have done it myself.

4 thoughts on “Economics and the Neolithic Revolution

    • My take is that just because some highly intelligent people were into phrenology or the study of race superiority, it didn’t make those fields real. I feel the same way about economics. As a sociological realm of inquiry, it’s important. When it pretends to be a hard science, it’s worse than a joke.

      • That’s certainly true. People think that if they can create rigorous mathematical models of something then they are doing hard science. That’s just not true. And economics suffers from this delusion more than any other endeavor I can think of. It also seems to me that economics — because of its power in policy circles — has a very dangerous postmodern aspect to it of being able to construct its own reality. We are still living in the economic policy world of the 1970s with stagflation, but the real world we are living in looks a whole lot more like the 1930s. In physics, you would never see people applying quantum mechanics — a special case of classical mechanics — in a situation that was clearly classical. But you see it all the time in economics. “There were oil shocks in the 1970s, let’s continue to assume that’s the case now!” (Actually, that analogy is not good because quantum mechanics reduces to classical mechanics on the macro-scale. It is more about the assumptions. And again, that’s what makes economics so dangerous. People assume what is convenient for their ideologies.)

    • That’s harsh! I didn’t think it was that bad. But economists do have a tendency to be more insulated than other social sciences.

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