Biologists theorize that it took our ancestors well over 3,000 years to straighten their posture enough to run unsupported by their arms for long distances. It follows logically that studying the development of the market from the beginning of human history (30,000-50,000 years, give or take) to today would be a long and arduous task.
However, like many human phenomena, the formation of the market did not suffer a slow progression - instead it opted for a massive explosion during the Industrial Revolution, breaking thousands of years of stagnation.
The Running Man - When Losing Resulted in More Than Just Teasing
Before any market existed, our ancestors secured their resources with their ability to run from larger animals and safely digest a varied diet. Unfortunately, our ancestors' running ability was still in the formative stages, so they were being ravaged during their nomadic travels to find food - there was no time for trade to develop new technology before something large, furry and malicious started chasing.
Our Saving Grace
Because proto-humans could not compete individually with other creatures that had been tailored by evolution to kill, our ancestors had to adapt or die. Our species, however, discovered the safety in numbers and the advantage of our unusual thumbs; we began to claim territory as a home base and defend it with vicious-looking clubs. At this point, our means for distributing resources was based on importing goods from hunting grounds and dividing these goods among the members of the tribe who were contributing to the overall strength of the group. Although no currency was traded, a market in a sense started to come into being as rewards were given for being a capable group member. (For more on the history of money, see From Barter To Banknotes.)
Agriculture - Food That Doesn't Have to Be Beaten Into Submission
As hunters found themselves having to wander farther from home to select new hunting fields, the necessity of a set base competed with the necessity of food. So humans mastered the land and began to grow crops. This advance marked what we would traditionally consider the first true economy. Scarcity became less and less of a concern, allowing for larger populations and, in rare cases, a surplus of goods to trade (between families or tribes). This is when the primitive "marketplace" was formed as a location to facilitate trade between different people.
Malthus – The Original Chicken Little
As technology advanced, so did the yield of fields, so tribes soon became villages, then cities, and then countries. But just as things were barreling ahead for humanity, we hit a huge evolutionary snag: our population growth had finally matched the sustainable food sources on earth and advances in farming technology were far and few between (the ox and the plow was, at this point, the last big one). Famines, plagues, and starvation flared up.
We were stagnating. Chief intellectuals at the time, among whom was Thomas Malthus, predicted that this stasis would become a normal part of the future cycles of humanity: every time we overpopulated the earth, droves of us would fall to famine and plague. (For more on Thomas Malthus, see Hairline Fractures: Exploring The Dismal Science.)
The Industrial Revolution
The Industrial Revolution resulted in huge leaps for science, commerce and just about everything else. Farming benefited from the simultaneous introduction of farming machines and chemical fertilizers, giving humankind enough food for a population explosion. With scarcity and stagnation cast aside, the economy could finally throw off the shackles of a crude good-for-good bartering system. We began to deal in stocks and other abstractions of ownership that could be traded on an advanced market. (For more insight, read Financial Capitalism Opens Doors To Personal Fortune.)
The break from a primitive market was not complete with the Industrial Revolution. Even though the production of goods was increased exponentially, industries still relied heavily on a healthy yield from mother earth. Consequently, the rules of scarcity still held sway over the companies upon which the stock market was based - and Thomas Malthus still remained a yet-to-be-disproved pessimist.
Theoretically, if something occurred that could take the wind out of the industrial sector's sails, the stock market would suffer proportionately. Despite its operation through abstract concepts like money and ownership, the economy of the Industrial Revolution could still be toppled by the enemies of the original system of barter: famine, plague, war or anything else that causes sudden shortages in raw materials.
The Ushers of the Future
After we began to deal in an abstract market, humanity was suddenly granted the leisure to explore the benefits of taking machines beyond the tasks of gross labor. Computers created the first new niche in the market since agriculture thirty thousand years previous. (To learn more about this change, see From Beads To Binary: The History Of Computing.)
Expanding in new and interesting ways, the technology sector has the best odds of introducing other industries that affect certain principles of economics. These industries are ones like the internet, which are information based and, unlike their progenitors, use very few raw materials, depending instead on the skills of humans. In other words, the market is shifting its emphasis from goods to services. This means computer technology isn't ruled by scarcity of physical goods so much as by popular desire. So, because the success of the technology sector is dependent on people's desire for technology, this sector, although it is not directly vulnerable to scarcity of goods, is not unsinkable.
What We Have Learned
We've followed the course of the development of the market and found that it all started with our need for physical resources. As humans discovered different ways to meet those needs, first through agriculture and then more advanced types of technology, the market evolved. We can see, then, that there is a relationship between technology and economics: in developed nations, much of the economy is based on the service sector, while in less-developed nations the focus is on the production sector. The economy is always changing and time is always the only thing that will tell how the economy will develop in the future.
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