The technological invention, then, that solved (at least temporarily33 ) the problem of a steadily emerging and re-emerging “excess” of population and the attendant fall of average living standards was a revolutionary change in the entire mode of production. It involved the change from a parasitic lifestyle to a genuinely productive life. Instead of merely appropriating and consuming what nature had provided, consumer goods were now actively produced and nature was augmented and improved upon.

This revolutionary change in the human mode of production is generally referred to as the “Neolithic Revolution”: the transition from food production by hunting and gathering to food production by the raising of plants and animals.34 It began about 11,000 years ago in the Middle East, in the region typically referred to as the “Fertile Crescent.” The same invention was made again, seemingly independently, less than 2,000 years later in central China, and again a few thousand years later (about 5,000 years ago) also in the Western hemisphere: in Mesoamerica, in South America, and in the eastern part of today’s United States. From these centers of innovation the new technology then spread to conquer practically the entire earth.

The new technology represented a fundamental cognitive achievement and was reflected and expressed in two interrelated institutional innovations, which from then on until today have become the dominant feature of human life: the appropriation and employment of ground land as private property, and the establishment of the family and the family household.

To understand these institutional innovations and the cognitive achievement underlying them one must first take a look at the treatment of the production factor “land” by hunter-gatherer societies.

It can be safely assumed that private property existed within the framework of a tribal household. Private property certainly existed with regard to things such as personal clothing, tools, implements, and ornaments. To the extent that such items were produced by particular, identifiable individuals or acquired by others from their original makers through either gift or exchange they were considered individual property. On the other hand, to the extent that goods were the results of some concerted or joint effort they were considered collective household goods. This applied most definitely to the means of sustenance: to the berries gathered and the game hunted as the result of some intratribal division of labor. Without doubt, then, collective property played a highly prominent role in hunter-gatherer societies, and it is because of this that the term “primitive communism” has been often employed to describe primitive, tribal economies: each individual contributed to the household income “according to his abilities,” and each received from the collective income “according to his needs” (as determined by the existing hierarchies within the group)—not quite unlike the “communism” in “modern” households.

Yet what about the ground land on which all group activities took place? One may safely rule out that ground land was considered private property in hunter-gatherer societies. But was it collective property? This has been typically assumed to be the case, almost as a matter-of-course. However, the question is in fact more complicated, because a third alternative exists: that ground land was neither private nor collective property but instead constituted part of the environment or more specifically the general conditions of action or what has also been called “common property” or in short “the commons.”[35]

In order to decide this question standard anthropological research is of little or no help. Instead, some elementary as well as fundamental economic theory, including a few precise definitions, is required. The external world in which man’s actions take place can be divided into two categorically distinct parts. One the one hand, there are those things that are considered means—or economic goods; and on the other hand, there are those things that are considered environment—or also referred to sometimes, if somewhat misleadingly, as free goods. The requirements for an element of the external world to be classified as a means or an economic good have been first identified with all due precision by Carl Menger.[36] They are threefold. First, in order for something to become an economic good (henceforth simply: a good), there must be a human need (an unachieved end or an unfulfilled human desire or want). Second, there must be the human perception of a thing believed to be equipped or endowed with properties or characteristics causally connected (standing in a causal connection) with, and hence capable of bringing about, the satisfaction of this need. Third, and most important in the present context, an element of the external world so perceived must be under human control such that it can be employed (actively, deliberately used) to satisfy the given need (reach the end sought). Writes Mises: “A thing becomes a means when human reason plans to employ it for the attainment of some end and human action really employs it for this purpose.”[37] Only if a thing is thus brought into a causal connection with a human need and this thing is under human control can one say that this entity is appropriated—has become a good—and hence, is someone’s (private or collective) property. If, on the other hand, an element of the external world stands in a causal connection to a human need but no one can (or believes that he can) control and interfere with this element (but must leave it unchanged instead, left to its own natural devices and effects) then such an element must be considered part of the unappropriated environment and hence is no one’s property. Thus, for instance, sunshine or rainfall, atmospheric pressure or gravitational forces may have a causal effect on certain wanted or unwanted ends, but insofar as man thinks himself incapable of interfering with such elements they are mere conditions of acting, not the part of any action. E.g., rainwater may be causally connected to the sprouting of some edible mushrooms and this causal connection may well be known. However, if nothing is done about the rainwater, then this water is also not owned by anyone; it might be a factor contributing to production, but it is not strictly speaking a production factor. Only if there is an actual interference with the natural rainfall, if the rainwater is collected in a bucket or in a cistern, for instance, can it be considered someone’s property and does it become a factor of production.

Before the backdrop of these considerations one can now proceed to address the question regarding the status of ground land in a hunter-gatherer society.[38] Certainly, the berries picked off a bush were property; but what about the bush, which was causally associated with the picked berries? The bush was only lifted from its original status as an environmental condition of action and a mere contributing factor to the satisfaction of human needs to the status of property and a genuine production factor once it had been appropriated: that is, once man had purposefully interfered with the natural causal process connecting bush and berries by, for instance, watering the bush or trimming its branches in order to produce a certain outcome (an increase of the berry harvest above the level otherwise, naturally attained). Further, once the bush had thus become property by grooming it or tending to it also future berry harvests became property, whereas previously only the berries actually harvested were someone’s property; moreover, once the bush had been lifted out of its natural, unowned state by watering it so as to increase the future berry harvest, for instance, also the ground land supporting the bush had become property.

Similarly, there is also no question that a hunted animal was property; but what about the herd, the pack or the flock of which this animal was a part? Based on our previous considerations, the herd must be regarded as unowned nature as long as man had done nothing that could be interpreted (and that was in his own mind) causally connected with the satisfaction of a perceived need. The herd became property only once the requirement of interfering with the natural chain of events in order to produce some desired result had been fulfilled. This would have been the case, for instance, as soon as man engaged in the herding of animals, i.e., as soon as he actively tried to control the movements of the herd. The herder then did not only own the herd, he thus became also the owner of all future offspring naturally generated by the herd.

What, however, about the ground land on which the controlled movement of the herd took place? According to our definitions, the herdsmen could not be considered the owner of the ground land, at least not automatically so, without the fulfillment of a further requirement. Because herders as conventionally defined merely followed the natural movements of the herd and their interference with nature was restricted to keeping the flock together so as to gain easier access to any one of its members should the need for the supply of animal meat arise. Herdsmen did not interfere with the land itself, however. They did not interfere with the land in order to control the movements of the herd; they only interfered with the movements of the members of the herd. Land only became property once herders gave up herding and turned to animal husbandry instead, i.e., once they treated land as a (scarce) means in order to control the movement of animals by controlling land. This only occurred when land was somehow en-bordered, by fencing it in or constructing some other obstacles (such as trenches) which restricted the free, natural flow of animals. Rather than being merely a contributing factor in the production of animal herds, land thus became a genuine production factor.

What these considerations demonstrate is that it is erroneous to think of land as the collectively owned property of hunter-gatherer societies. Hunters were not herdsmen and still less were they engaged in animal husbandry; and gatherers were not gardeners or agriculturalists. They did not exercise control over the nature-given fauna and flora by tending to it or grooming it. They merely picked pieces from nature for the taking. Land to them was no more than a condition of their activities, not their property.

At best, very small sections of land had been appropriated (and were thus turned into collective property) by hunters and gatherers, to be used as permanent storage places for surplus goods for use at future points in time and as shelters, all the while the surrounding territories continued to be treated and used as unowned conditions of their existence.

What can be said, then, to have been the decisive step toward a (temporary) solution of the Malthusian trap faced by growing hunter-gatherer societies was the establishment of property in land going above and beyond the establishment of mere storage places and sheltering facilities. Pressured by falling standards of living as a result of absolute overpopulation, members of the tribe (separately or collectively) successively appropriated more and more of the previously unowned surrounding nature (land). And underlying and motivating this appropriation of surrounding ground land—and turning former places of storage and shelter into residential centers of agriculture and animal husbandry—was an eminent intellectual achievement. As Michael Hart has noted, “the idea of planting crops, protecting them, and eventually harvesting them is not obvious or trivial, and it requires a considerable degree of intelligence to conceive of that notion. No apes ever conceived of that idea, nor did Australopithecus, Homo habilis, Homo erectus, nor even archaic Homo sapiens.”[39] Nor did any of them conceive of the even more difficult idea of the tending, taming, and breeding of animals.

Formerly, all consumer goods had been appropriated in the most direct and quickest way possible: through foraging, i.e., by “picking” such goods wherever they happened to be or go. In contrast, with agriculture and animal husbandry consumer goods were attained in an indirect and roundabout way: by producing them through the deliberate control of ground land. This was based on the discovery that consumer goods (plants and animals) were not simply ‘given’ to be picked, but that there were natural causes affecting their supply and that these natural causes could be manipulated by taking control of ground land. The new mode of production required more time in order to reach the ultimate goal of food consumption (and insofar involved a loss of leisure), but by interposing ground land as a genuine factor of production it was more productive and led to a greater total output of consumer goods (food), thus allowing for a larger population size to be sustained on the same quantity of land.[40]

More specifically with respect to plants: Seeds and fruits suitable for nutritional purposes were no longer just picked (and possibly stored), but the wild plants bearing them were actively cultivated. Besides for their taste, seeds and fruits were selected for size, durability (storability), the ease of harvesting and of seed-germination, and they were not consumed but used as inputs for the future output of consumer goods, leading in the relatively short time span of maybe twenty to thirty years to new, domesticated plant varieties with significantly improved yields per unit land. Among the first plants thus domesticated in the Near and Middle East were the einkorn wheat, emmer wheat, barley, rye, peas, and olives. In China it was rice and millet; much later, in Mesoamerica it was corn, beans, and squash; in South America potatoes and manioc; in Northeast America sunflowers and goosefoot; and in Africa sorghum, rice, yams, and oil palm.[41]

The process of animal domestication proceeded along similar lines, and in this regard it was possible to draw on the experience gained by the first domestication and breeding of dogs, which had taken place some 16,000 years ago, i.e., still under hunter-gatherer conditions, somewhere in Siberia.[42]

Dogs are the descendants of wolves. Wolves are excellent hunters. However, they are also scavengers, and it has been plausibly argued that as such wolves regularly hung around human campsites for scraps. As scavengers, those wolves who were least afraid of humans and who displayed the friendliest behavior toward them obviously enjoyed an evolutionary advantage. It was likely from these semi-tame, camp-following wolves that cubs were adopted into tribal households as pets and where it was then discovered that these could be trained for various purposes. They could be used in the hunt of other animals, they could be used to pull, they made for good bed-warmers during cold nights, and they even provided a source of meat in cases of emergency. Most importantly, however, it was discovered that some of the dogs could bark (wolves rarely bark) and be selected and bred for their ability to bark and as such perform the invaluable task of warning and guarding their owners of strangers and intruders. It was this service above all, that appears to be the reason why, once the dog had been “invented,” this invention spread like wildfire from Siberia all across the world. Everyone everywhere wanted to possess some offspring of this new, remarkable kind of animal, because in an era of constant intertribal warfare, the ownership of dogs proved to be a great advantage.[43]

Once the dog had arrived in the region of the Near East, which was to become the first center of human civilization, it must have added considerable momentum to the human “experiment” of productive living and its success. For while a dog used for sentry duty was an asset for mobile hunter-gatherers, it was an even greater asset for stationary settlers. The reason for this is straightforward: because in sedentary societies there were simply more things to be protected. In hunter-gatherer societies one had to fear for one’s life, be it from external or internal aggression. However, because no member of society owned much of anything, there was little or no reason to steal. Matters were different, though, in a society of settlers. From its very inception, sedentary life was marked by the emergence of significant differences in the property and wealth owned by different members of society; hence, insofar as envy existed in any way, shape, or form (as can be safely assumed)[44] each member (each separate household) also faced the threat of theft or destruction of his property by others, including especially also members of his own tribe. Dogs provided invaluable help in dealing with this problem, especially because dogs, as a matter of biological fact, attach themselves to individual “masters,” rather than to people in general or, like cats, for instance, to particular places.[45] As such, they themselves represented a prime example of something owned privately, rather than collectively. That is, they offered a “natural refutation” of whatever taboo might have existed in a primitive society against the private ownership of property. Moreover and more importantly, because dogs were unquestionably the property of particular individuals they proved also uniquely serviceable in guarding the private property of their natural owners from every kind of “foreign” invader.[46]

Animals, even more so than plants, were valuable for humans for a variety of reasons: as sources of meat, milk, skin, fur, and wool and also as potential means of transportation, pull, and traction, for instance. However, as a matter of biological fact, most animals turn out to be undomesticable.[47] The first and foremost selection criterion, then, in the “production” of animals as livestock or pets was an animal species’ perceived degree of tame-ability or controllability. To test one’s hypothesis, in a first step it was checked whether or not an animal was suitable to herding. If so, it was then tried if a herd of wild animals could also be penned. If so, one would subsequently select the tamer animals as parents of the next generation—but not all animals breed in captivity!—and so on and on. Finally, one would select among the tamed animal variety for other desirable properties such as size, strength, etc., thus breeding eventually a new, domesticated animal species. Among the first large mammalian animals thus domesticated in the Near and Middle East (around 10,000 years ago) were sheep, goats, and pigs (from wild boars), then cattle (from wild aurochs). Cattle were also domesticated, apparently independently, in India at about the same time (about 8,000 years ago). Roughly at about the same time as in the Near and Middle East, sheep, goats, and pigs were domesticated independently also in China, and China was also to contribute the domesticated water buffalo (about 6,000 years ago). Central Asia and Arabia contributed the domesticated Bactrian and Arabian camel respectively (around 4,500 years ago). And the Americas, or more precisely the Andes region of South America, were to contribute the guinea pig (about 7,000 years ago), the llama and alpaca (about 5,500 years ago). Finally, an “invention” of particularly momentous consequences was the domestication of the horse, which occurred about 6,000 years ago in the region of today’s Russia and Ukraine. This achievement initiated a genuine revolution in land transportation. Up until then, on land man had to walk from place to place, and the fastest way to cover distances was by boat. This changed dramatically with the arrival of the domesticated horse, which from then on until the nineteenth century with the invention of the locomotive and the motorcar, was to provide the fastest means of overland transportation. Accordingly, not quite unlike the “invention” of the dog some 16,000 years ago, the “invention” of the horse was to spread like wildfire. However, coming some 10,000 years later, the latter invention could no longer diffuse as widely as the former. While the dog had reached practically all corners of the world, the climatic changes—the global warming—that had taken place in the meantime made it impossible for the same success to be repeated in the case of the horse. In the meantime, the Eurasian land mass was separated from the Americas and from Indonesia, New Guinea, and Australia by bodies of water too wide to be bridged. Thus, it was only thousands of years later, after the European rediscovery of the Americas, for instance, that the horse was finally introduced there. (Wild horses had apparently existed on the American continent, but they had been hunted to extinction there so as to make any independent domestication impossible.)

The appropriation of land as property and basis of agriculture and animal husbandry was only half of the solution to the problem posed by an increasing population pressure, however. Through the appropriation of land a more effective use was made of land, allowing for a larger population size to be sustained. But the institution of land ownership in and of itself did not affect the other side of the problem: the continued proliferation of new and more offspring. This aspect of the problem required some solution as well. A social institution had to be invented that brought this proliferation under control. The institution designed to accomplish this task is the institution of the family, which developed not coincidentally hand in hand with that of land ownership. Indeed, as Malthus pointed out, in order to solve the problem of overpopulation, along with the institution of private property “the commerce between the sexes” had to undergo some fundamental change as well.[48]

What was the commerce between the sexes before and what was the institutional innovation brought about in this regard by the family? A precise answer to the first question is notoriously difficult, but it is possible to identify the principal structural change. In terms of economic theory, the change can be described as one from a situation where both the benefits of creating offspring—by creating an additional potential producer—and especially the costs of creating offspring—by creating an additional consumer (eater)—were socialized. That is, reaped and paid for by society at large rather than the “producers” of this offspring, to a situation where both benefits as well as costs involved in procreation were internalized by and economically imputed back to those individuals causally responsible for producing them.

Whatever the details may have been, it appears that the institution of a stable monogamous and also of a polygamous relationship between men and women that is nowadays associated with the term family is fairly new in the history of mankind and was preceded for a long time by an institution that may be broadly defined as “unrestricted” or “unregulated” sexual intercourse or as “group marriage.”[49] The commerce between the sexes during this stage of human history did not rule out the existence of temporary pair relationships between one man and one woman. However, in principle every woman was considered a potential sexual partner of every man, and vice versa. “Männer (lebten) in Vielweiberei und ihre Weiber gleichzeitig in Vielmännerei,” noted Friedrich Engels, following in the footsteps of Lewis H. Morgan’s researches in Ancient Society (1871), “und die gemeinsamen Kinder (galten) daher auch als ihnen allen gemeinsam (gehörig). .... jede Frau (gehörte) jedem Mann und jeder Mann jeder Frau gleichmässig.”[50]

What Engels and countless later socialists failed to notice in their glorifying description of the past—and supposedly again future—institution of “free love,” however, is the plain fact that this institution has a direct and clear effect on the production of offspring. As Ludwig von Mises has commented: “it is certain that even if a socialist community may bring ‘free love,’ it can in no way bring free birth.”[51] What Mises implied with this remark, and what socialists such as Engels and Bebel apparently ignored, is that, certainly in the age before the availability of effective means of contraception, free love has consequences, namely pregnancies and births, and that births involve benefits as well as costs. This does not matter as long as the benefits exceed the costs, i.e., as long as an additional member of society adds more to it as a producer of goods than it takes from it as a consumer—and this may well be the case for some time. But it follows from the law of returns that this situation cannot last forever, without limits. Inevitably, the point must arrive when the costs of additional offspring will exceed its benefits. Then, any further procreation must be stopped—moral restraint must be exercised—unless one wants to experience a progressive fall in average living standards. However, if children are considered everyone’s or no one’s children, because everyone entertains sexual relations with everyone else, then the incentive to refrain from procreation disappears or is at least significantly diminished. Instinctively, by virtue of man’s biological nature, each woman and each man is driven to spread and proliferate her or his genes into the next generation of the species. The more offspring one creates the better, because the more of one’s genes will survive. No doubt, this natural human instinct can be controlled by rational deliberation. But if no or little economic sacrifice must be made for simply following one’s animal instincts, because all children are maintained by society at large, then no or little incentive exists to employ reason in sexual matters, i.e., to exercise any moral restraint.

From a purely economic point of view, then, the solution to the problem of overpopulation should be immediately apparent. The ownership of children or more correctly the trusteeship over children must be privatized. Rather than considering children as collectively owned by or entrusted to “society” or viewing childbirths as some uncontrolled and uncontrollable natural event and accordingly considering children as owned by or entrusted to no one (as mere favorable or unfavorable “environmental changes”), children must instead be regarded as entities which are privately produced and entrusted into private care. As Thomas Malthus first perceptively noted, this, essentially, is what is accomplished with the institution of a family:

the most natural and obvious check (on population) seemed to be to make every man provide for his own children; that this would operate in some respect as a measure and guide in the increase of population, as it might be expected that no man would bring beings into the world, for whom he could not find the means of support; that where this notwithstanding was the case, it seemed necessary, for the example of others, that the disgrace and inconvenience attending such a conduct should fall upon the individual, who had thus inconsiderately plunged himself and innocent children in misery and want.—The institution of marriage, or at least, of some express or implied obligation on every man to support his own children, seems to be the natural result of these reasonings in a community under the difficulties that we have supposed.[52]

Moreover and finally: with the formation of monogamous or polygamous families came another decisive innovation. Earlier on, the members of a tribe formed a single, unified household, and the intratribal division of labor was essentially an intra-household division of labor. With the formation of families came the breakup of a unified household into several, independent households and with that also the formation of “several”—or private—ownership of land. That is, the previously described appropriation of land was not simply a transition from a situation where something that was earlier on unowned became now owned, but more precisely something previously unowned was turned into something owned by separate households (thus allowing also for the emergence of inter-household division of labor).

Consequently, then, the higher social income made possible by the ownership of land was no longer distributed as was formerly the case: to each member of society “according to his need.” Rather, each separate household’s share in the total social income came to depend on the product economically imputed to it, that is, to its labor and its property invested in production. In other words: the formerly pervasive “communism” might have still continued within each household, but communism vanished from the relation between the members of different households. The incomes of different households differed, depending on the quantity and quality of invested labor and property, and no one had a claim on the income produced by the members of a household other than one’s own. Thus, “free riding” on others’ efforts became largely if not entirely impossible. He who did not work could no longer expect to still eat.[53]

Private ownership in the means of production is the regulating principle which, within society, balances the limited means of subsistence at society’s disposal with the less limited ability of consumers to increase. By making the share in the social product which falls to each member of society depend on the product economically imputed to him, that is, to his labour and his property, the elimination of surplus human beings by the struggle for existence, as it rages in the vegetable and animal kingdom, is replaced by a reduction in the birth-rate as a result of social forces. “Moral restraint,” the limitations of offspring imposed by social positions, replaces the struggle for existence.[54]

Having first established some permanent storage and sheltering places, then, step by step, having appropriated more and more surrounding land as the basis for agricultural production and the raising of livestock and transforming erstwhile centers of storage and shelter into extended settlements composed of houses and villages occupied by separate family households, the new lifestyle of the people of the Near and Middle East as well as the other regions of original human settlement began to spread outward, slowly but inescapably.[55] In principle, two modes are conceivable by which this diffusion could have taken place. Either the original settlers gradually displaced the neighboring nomadic tribes in search of new to-be-cultivated land (demic diffusion), or else the latter imitated and adopted the new lifestyle on their own initiative (cultural diffusion). Until recently, it had been generally believed that the first mode of diffusion was the predominant one.[56] However, based on newly discovered genetic evidence this view now appears to be questionable, at least insofar as the spread of the new, sedentary lifestyle from the Near East to Europe is concerned. If present Europeans were the descendants of Near Eastern people at the time of the Neolithic Revolution, genetic traces for this should exist. In fact, however, very few such traces can be found among present-day Europeans. Thus, it appears more likely that the spread of the new sedentary lifestyle occurred largely, if not exclusively, via the latter, second-mentioned route, while the role in this process played by the original Near Eastern settlers was only a minor one. Perhaps a few such settlers pushed in a northern and western direction, where they were then absorbed by neighboring people adopting their new and successful lifestyle, with the effect that their own genetic imprint became more and more diluted with increasing distance from their Near Eastern point of origin.

In any case, with the Neolithic Revolution the formerly universal hunter-gatherer lifestyle essentially died out or was relegated to the outer fringes of human habitation. Without doubt, the newly developing farming communities were attractive targets for nomadic raiders, and owing to their greater mobility neighboring nomadic tribes for a long time posed a serious threat to agricultural settlers. But ultimately, nomads were no match for them, because of their greater numbers. More specifically, it was the organization of larger numbers of people in communities of households—the location of separate households in close physical proximity to each other—that made for military superiority. Community life did not merely lower the transaction costs as far as intratribal exchange was concerned. Community life also offered the advantage of easily and quickly coordinated joint defense in the case of external aggression. Moreover, besides the strength of greater numbers, settled agricultural communities allowed also for an intensified and expanded division of labor and for greater savings and thus facilitated the development of a weaponry superior to anything available to bands of nomads.[57]

Fifty thousand years ago the human population size has been estimated to have been as low as 5,000 or possibly 50,000 people. At the beginning of the Neolithic Revolution, some 11,000 years ago, when essentially the entire globe had been conquered by tribes of hunters and gatherers having spread out in the course of thousands of years from their original homeland somewhere in East Africa, the world population size has been estimated to have reached about four million.[58] Since then, slowly but steadily, the new mode of production: of agriculture and animal husbandry based on private (or collective) ownership of land and organized around separate family households, successively displaced the original hunter-gatherer order. Consequently, at the beginning of the Christian era, the world population had increased to 170 million, and in 1800, which marks the onset of the so-called Industrial Revolution (the topic of the following chapter) and the close of the agrarian age or as it also been termed the “old biological order,” it had reached 720 million. (Today’s world population exceeds seven billion!) During this agrarian age, the size of cities occasionally reached or even surpassed one million inhabitants, but until the very end less than 2 percent of the population lived in big cities and even in the economically most advanced countries 80–90 percent of the population was occupied in agricultural production (while this number has fallen to less than 5 percent today).

• 33While the changes brought about by the “Neolithic Revolution” allowed for a significantly higher sustainable population size, the Malthusian problem was bound to eventually arise again, and the seemingly ultimate solution to the problem was only reached with the so-called “Industrial Revolution” that began in Europe at the end of the seventeenth century. See on this the following chapter “From the Malthusian Trap To the Industrial Revolution: Reflections on Social Evolution.”
• 34See also Michael H. Hart, Understanding Human History (Augusta, Ga.: Washington Summit Publishers, 2007), pp. 139ff.