Explore how the economy has evolved from the agricultural era into a postindustrial society during

the second agricultural revolution and the industrial revolution; how changes in technology and
settlements impacted the workforce and economic power; and the primary, secondary, and tertiary
economic sectors.

Economy and Society

Economy, in this lesson, refers to the ways people use and interact with their environment to meet
their needs. Economy includes how goods are produced, exchanged, distributed, and consumed.
The economy is an important aspect of society, and as the economy has evolved over time, societies
have, too.
This lesson will walk you through the evolution of economy from the agricultural revolution through
the postindustrial era. We will look specifically at how technology and settlement changes have
impacted the economy. We will also discuss the three sectors of a modern economy: primary,
secondary, and tertiary.

The First Agricultural Revolution

The First Agricultural Revolution, also known as the Neolithic Revolution, is the transformation of
human societies from hunting and gathering to farming. This transition occurred worldwide between
10,000 BC and 2000 BC, with the earliest known developments taking place in the Middle East.
Farming and the raising of livestock tied people to land for cultivation and grazing grounds, and this
transition gave rise to permanent settlements. For tens of thousands of years, the dominant
structure of human life had been small nomadic bands. From this point on, most humans would live
in fixed locations that ranged from villages to cities. This settlement, in turn, led to the development
of job specialization, complex political structures, non-portable possessions, architecture, and the
rise of industry and commerce.

Agricultural Revolution
The second agricultural revolution initiated the beginning of the evolution of economy. This
period, between the 18th century and end of the 19th century, experienced rapid improvements in
agricultural production and farm technology.
During this time, inventions like the plow, the wheel, and the number system, allowed humans to
perform tasks more efficiently. These changes had both positive and negative effects on society.
Farmers learned more practical and efficient farming practices, like rotating crops and using
fertilizer, which led to better and bigger surpluses of food.
Tools were crafted out of longer lasting materials, and new agricultural technologies made human
work more efficient. During this agricultural age, towns and cities grew, and certain regions became
commerce and trade centers.
The benefits of these inventions included a greater surplus of food due to efficient processes (for
example, a plow pulled by animals could cover far greater areas of land than one operated by a
human).
Another benefit included more time for people to pursue and engage in other activities that were not
directly related to the survival of the people. More time could be spent on activities like music and
philosophy, which led people to discover different means of supporting themselves.
However, during this period we also saw some negative impacts, including a greater division of labor
and status in which the wealthy gained control of the surplus resources and power became more
centralized. Those that were wealthy were able to gain control over surplus resources and could
afford a better living quality. Differences in social classes by ethnicity and gender increased.

Industrial Revolution
The Industrial Revolution brought about a rapid and significant change in the economy due to
the introduction of power-driven machinery and other energy sources. Societies developed from
agricultural to industrial rapidly. Work that was previously done by individuals was now being
performed in centralized settings in cities with large factories and on equipment capable of
producing massive amounts of products quickly. The steam engines, textile mills, and other large-
scale equipment are products of this era.
The Industrial Revolution allowed for faster and larger production of goods and more diverse
populations, but also led to negative factors, including:

 Overcrowding in cities due to the large number of people moving to urban settings to be
closer to factories.
 Skilled workers were replaced with low-skilled workers who left agricultural work. The low-
skilled workers were underpaid and overworked.
 The inequality gap between the rich and the poor established in the Agricultural Age
persisted and widened in the Industrial Age as the rich continued to stockpile and control
resources while the poor faced overcrowded and poverty-ridden situations.