Harin Gupta

ANT 120
Professor Milan
November 23, 2016

Economic Development in Pre-Historic Times

The Merriam Webster defines economics as a social science concerned chiefly with
description and analysis of the production, distribution, and consumption of goods and
services. However, in the context of archeology and pre-historic societies, economics can be
simply defined as a study of how people used scarce resources and how that scarcity affected
and shaped the course of human evolution.
For example, given that todays bipedal humans evolved from the arboreal apes of
Africa millions of years ago, it raises the question: what factors necessitated the adaptation of
bipedalism in our ancestors? One plausible explanation provided by the economics of
scarcity is that roughly 5-10 millions years ago as earths climate was warming up, the dense
jungles that sustained the arboreal lifestyle were transformed into grasslands and savannahs
(Smith 157). The decrease in the forested area might have put pressure on the ecological
system, causing many animals to adapt living in the grasslands. Additionally, this could have
further exacerbated the food chain for our ancestors, who must have been dependent on these
animals. Hunting and gathering for food in the new grassland environment must have
necessitated them to adapt to a more efficient way of moving compared to the arboreal
lifestyle in the forest. Hence, we observe the basic economics principles at play: scarcity of
food, scarcity-induced incentive to move to grasslands, and adaptation to more efficient
means (bipedalism) of addressing the problem of scarcity. The aim of this paper is to explain

Harin Gupta
ANT 120
Professor Milan
November 23, 2016

though examples how economic principles can be used to explain important developments in
human evolution and economic exchanges between pre-historic societies.
In general, the pre-historical times can be divided into two distinct periods: 1)
Paleolithic Age and 2) Neolithic Age. Paleolithic age started 3-5 million years ago when our
ancestors started making new stone tools and ends at the beginning of Neolithic Age around
10,000 years ago. The distinguishing aspect between these two periods is that at the
beginning of the Neolithic Age, humans started adapting to an agrarian lifestyle, giving rise
to permanent or seasonal settlements (Pluta 27). This is one of the most important
developments in human history that truly exemplifies economic principles at work in
prehistoric times, which is the effect of technology and increase in productivity.
Firstly, lets address the problem of scarcity. The Cro-Magnon men, along with the
Neanderthals were perhaps the latest iteration of hominids towards the end of Paleolithic
Age, giving rise to the modern humans. They did not just hunt in the grasslands and the
savannahs, but had elaborate hunting strategies like battue (bating underbrush to drive
game), the drive line, the stampede, and the pit trap (Smith 162). These methods allowed
them to kill prey en masse, perhaps in numbers unimaginable to their ancestors. This
technological advance must have enabled them to achieve a surplus. Achieving surplus
helped early humans to think beyond sustenance. Hence, during these time we also observe
archeological evidence of carvings of horses and deer in cave dwellings, further pointing
towards development of aesthetic and artistic sensibilities in early-humans (Smith 162).
However, this must have further exacerbated the prey-predator systems beyond the tipping

Harin Gupta
ANT 120
Professor Milan
November 23, 2016

point of recovery for prey populations and in turn causing food scarcity due to depletion of
their traditional foods stock. The initial economical response to this problem must have been
an outward exodus to different lands.
Smith argues that the advances in technology and productivity in hunting were
perhaps so profound that many species of animals were driven to extinction during these
times. He goes to give examples of how native populations of mammoths, horses, and bison
were hunted to extinction in North America. Hence, it can be said that efficiencies achieved
in hunting and gathering led to the first affluent human society, but at the same time it led to
the emergence of development of agriculture in order to diversify food sources (Smith 165).
Just like the climatic change led to the development of bipedalism in the humans, the
advance in human knowledge and skills caused humans to turn to agriculture. This is also a
paradigm shift in the role humans played in earths ecology. For the first time, human beings
had the capacity to greatly impact their surroundings (sometimes to their own misfortune).
Humans are one of the species whose offspring needs constant attention, care, and
nurturing for a sizeable span of their lives. This in principle requires the passing down of
essential knowledge from adult caretakers to the offspring. This also guaranteed that despite
the highs and lows of wars, diseases, population booms, etc. the knowledge passed down
through generations ensured civilizations progress to trend upwards (barring the Middle
Ages). However, the major economic thought from this phenomenon is investment in human
capital. Investment in human capital requires preservation and transfer of knowledge to the
next generation. Smith describes our hunter and gather ancestors as the first humans who

Harin Gupta
ANT 120
Professor Milan
November 23, 2016

learned to teach (Smith 166). This is also a time we experience development of incentive
structures to reward the most successful with more wives and resources (Smith 167). This led
to genetic implication of selective breeding the most desirable traits in human.
In addition to knowledge, human being pass on another important aspect of their life,
which is rituals and culture. Which raises the question: what is culture and what role do
rituals play? In the modern age, we knowingly understand the value of culture and make
conscious efforts to preserve them. Culture and identity are fused together. However, I
believe that in pre-historic times culture and rituals played the role of formalizing
knowledge, in the absence of scientific understanding, reading, and writing. To showcase this
idea Smith gives the example of Naskapi Indians of Labrador, who, when the caribous were
scarce and the tribe hungry, resorted to scapulimacy, a divination in which the shoulder blade
bone of a caribou was heated by fire until it cracked (Smith 167). These cracks were
interpreted as divinely provided leads to trails or paths to caribou or hunting. It turned out in
Smiths study that 17 of the 20 divinations were successful and attributed to gods, whereas
the three unsuccessful ones were counted as errors on the part of the reader. However, the
success attributed to scapulimacy on closer look can be attributed to riding of the selection
bias and achieving randomization in selection of hunting trails. Randomizing selection of
trails for hunting caribou would be more successful when the caribous are sensitized to
hunting patterns and habits of the Indians. But, to the Naskapi, as Smith puts it, scapulimacy
has survival value and importance to be passed down the generation (Smith 167). One can

Harin Gupta
ANT 120
Professor Milan
November 23, 2016

understand, how and why many of the cultural rituals might have had some practical value in
the past and were passed on from generation to generations.
Next phase in pre-historic economic development is the concept of personal property.
During the era of hunting and gathering we see evidence of possession of material objects
like rocks, sea shells, stone tools, etc. These objects would have been the first form of
personal property. However, an abstract form of property that must have naturally preceded
the concept of material property is labor. Food and clothing must be the most important asset
for hunter-gatherers and they can only be achieved by the means of directly employing ones
skills and labor. The decline in the populations of game animals further tilted human activity
towards gathering and early forms of agriculture. As a result, we find an increase in personal
property in the late-Paleolithic age which included bows and arrows, atlatls, seed grinding
stones, boiling and storage vessels, kilns for firing clay, boats, houses, villages, animal drawn
sledges, and the domesticated wolf (Smith 169). Agricultural development leads to scarcity
or water and arable land resources, which in turn must have led to settlements on on fertile
plains and river banks. Thus, the advent of agrarian and a more sedentary lifestyle must have
introduced the concept and importance of real estate, further developing the idea of property
rights and contracts.
The ability to convert ones labor into preservable surplus gave birth to the idea of
property rights to protect ones production beyond the need for sustenance. The surplus must
have enabled early humans to accumulate a diverse range of property apart from their own
production. This is another major shift in pre-historic economic development as now

Harin Gupta
ANT 120
Professor Milan
November 23, 2016

individual efforts were more focused on accumulating material objects and realizing their
utility as opposed to sustenance focused hunter-gatherer life-style. Perhaps this pre-historic
development could be analogous to Adams Smith famous articulation of the invisible hand
guided by self-interest of individuals.
From a societal point of view, the advent of agriculture and ability to produce
surpluses fostered peace by harnessing mutual-dependence through trade and diplomacy.
Smith explains that agrarian surpluses made it possible for the societies to purchase political
stability by paying tributes and by kinship exchange and gift-exchange, as opposed to the
limited resources of hunter-gatherers. Thus, laying foundation of states and governments
whose sole job was to minimize negative externalities and maximize positive externalities
for the society at large, when individual self-interest fails to achieve societally desirable
outcomes.
As we have explored through this paper, many of the big problems and developments
encountered by our species can be boiled down to the same economic principles. It is no
surprise that even today our lives are dictated and organized according to the economic
problems of scarcity, capital, knowledge, and technology and how the collective self-interest
of individuals helps address them.

Harin Gupta
ANT 120
Professor Milan
November 23, 2016

Bibliography
1. "Full Definition of Economics." <i>Merriam-Webster</i>. Merriam-Webster, n.d.
Web. 22 Nov. 2015.
2. Vernon L. Smith. "Humankind in Prehistory: Economy, Ecology and Institutions" The
Political Economy of Customs and Culture. Ed. T. Anderson and R. Simmons.
Rowman and Littlefield Press, 1993. 157-184.
3. Pluta, Joseph E. <i>Human Progress amid Resistance to Change</i>. Victoria, BC,
Canada: Friesen, 2011. Print.