The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Hunting and Gathering Economies

  • Vernon L. Smith
Reference work entry


Men and women (Homo erectus) who were culturally and biologically distinguishable from other hominoids have lived on the planet Earth for about 1.6 million years (Pilbeam 1984). It is likely that the biological changes since that time form a microevolutionary continuum: archaic H. sapiens, including the Neanderthal, appeared 125,000 years ago and anatomically modern H. sapiens appeared about 45,000 years ago. The record suggests that H. erectus fabricated and used tools, and his use of fire may have begun by 700,000 years ago. The changes identified in the prehistoric period appear only to distinguish less advanced from more advanced stone age technology. Consequently, the dominating message seems to be that over almost the whole of man’s epoch on earth he lived successfully as an exceptionally well-adapted hunter. It is only recently, in the last 8000–10,000 years (less than 1 per cent of his time on Earth), that man abandoned the nomadic life of the hunter to begin growing crops, husbanding domesticated animals, and living in villages. It is difficult to exaggerate the importance of this agricultural or first economic revolution (North and Thomas 1977) in understanding who we are, and what we have become. Once man opted for the farmer–herder way of life it was but a short step to mankind’s much more sophisticated development of specialization and exchange, greatly enlarged production surpluses, the emergence of the state, and finally the Industrial Revolution. Our direct knowledge of early man is confined to the record of the durables he left behind. Yet when combined with anthropological evidence from the study of recent hunter–gatherer economies the evidence can be interpreted as demonstrating that all the ingredients associated with the modern wealth of nations – investment in human capital, specialization and exchange, the development of property right or contracting institutions, even environmental ‘damage’ – had their development in the course of that vast prehistorical, pre-agricultural, period.


Agricultural revolution Commodity money Human capital Hunting and gathering economies Leisure Multilateral contracting 

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Vernon L. Smith
    • 1
  1. 1.