II. The Problem: Theory

About 35,000 years ago, i.e., 15,000 years after the initial exodus from Africa, practically all of Europe, Asia, Australia and, of course, Africa itself had been occupied by our ancestors, the modern humans, and archaic humans: homo neanderthalensis and homo erectus, were on the verge of extinction. About 12,000 years ago, humans had also spread all across the Americas. Apart from the Polynesian islands, then, all land and all of the naturally given supply of earthly (economic) goods: of plants and animals had been taken into human possession; and, given the parasitic lifestyle of hunter-gatherers, humans did not add anything to this land and the nature-given supply of goods but merely reacted to natural changes.

These changes were at times quite drastic. Changes in global climate, for instance, could and did significantly affect how much inhabitable land was available and the natural vegetation and animal population. In the time period under consideration, in the 20,000 plus years between 35,000 and 11,000 years ago, drastic changes in such natural conditions occurred. 20,000 years ago, for instance, during the period known as the Last Glacial Maximum, temperatures fell sharply and most of Northern Europe and Siberia became uninhabitable. Britain and all of Scandinavia was covered by glaciers, most of Siberia turned into polar desert and steppe-tundra extended as far south as the Mediterranean, the Black Sea, and the Caspian Sea. After 5,000 years, about 15,000 years ago, the glaciers began to retreat, allowing people, animals, and plants to re-occupy previously deserted regions. Twenty-five hundred years later, however, within merely a decade, temperatures again plummeted back to almost the previous frigid conditions; and only another 1,000 years later, about 11,500 years ago, and again quite suddenly, did temperatures then experience a long-sustained increase and the earth entered the so-called Holocene, the latest and still lasting interglacial warming period.26 (The Sahara began to turn into the present, extremely hot desert only less than 3,000 years ago. In pre-Roman times, the Sahara—and similarly the central Asian deserts—was still a green savanna with an abundant supply of wildlife. The power and the attraction of Carthage, for instance, was based largely on the fertility of its hinterland as a center of wheat production; this fact was an important reason for Rome’s desire to destroy Carthage and gain control of its North African territories.27 )

In any case and regardless of all complicating details and all changes that future empirical researches will no doubt bring about concerning the foregoing historical narrative, at some point in time the landmass available to help satisfy human needs could no longer be enlarged. In economic jargon, the supply of the production factor “land” became fixed, and every increase in the size of the human population had to be sustained by the same, unchanged quantity of land. Of the formerly three available options in response to an increasing population pressure: to move, to fight, or to invent, only the latter two remained open. What to do when faced with this challenge? To bring the problem faced into even sharper relief it is useful to first take another, more detailed look at the admittedly rather limited extent of the division of labor within a hunter-gatherer society.

So far the antagonism between the members of different bands or clans has been explained while it has been taken for granted that within a given band or clan collaboration—peaceful cooperation—exists. But why should this be so? Intra-group cooperation is almost universally assumed as a matter-of-course. Nonetheless, it too requires an explanation, because a world without even this limited degree of cooperation is certainly conceivable. To be sure, there exists a biological basis for some forms of human cooperation. “The mutual sexual attraction of male and female,” writes Mises, “is inherent in man’s animal nature and independent of any thinking and theorizing. It is permissible to call it original, vegetative, instinctive, or mysterious.”28 The same can be said about the relationship between mother and child. If mothers would not take care of their offspring for an extended period of time, their children would instantly die and mankind would be doomed. However, this necessary, biologically determined degree of cooperation is a far cry from that actually observed in hunter-gatherer societies. Thus, Mises continues,

neither cohabitation, nor what precedes it or follows, generates social cooperation and societal modes of life. The animals too join together in mating, but they have not developed social relations. Family life is not merely a product of sexual intercourse. It is by no means natural and necessary that parents and children live together in the way they do in the family. The mating relation need not result in a family organization. The human family is an outcome of thinking, planning, and acting. It is this fact which distinguishes it radically from those animal groups which we call per analogiam animal families.29

Why, for instance, did not each man and each woman, after they had left infancy, hunt or gather alone only to meet for occasional sex? Why did it not occur what has been described as having occurred for groups of humans already on the level of individuals: one person, faced with a strictly limited supply of nature-given goods, breaking away from another in order to avoid conflict until all land was taken into possession and then a war of everyone against everyone else (rather than merely a war of the members of one group against the members of all other groups) breaking out? The answer to this is: because of the recognition that cooperation was more productive than isolated, self-sufficient action. Division of labor and cooperation based on such division of labor increased the productivity of human labor.

There are three reasons for this: First, there exist tasks which exceed the powers of any single man and require instead the combined efforts of several men in order to be successfully executed. Certain animals, for instance, might be too large or too dangerous to be hunted by single individuals but require the cooperative engagement of many. Or there exist tasks which could, in principle, be executed by a single individual but that would take up so much time for an isolated actor that the final result does not appear worth the effort. Only concerted action can accomplish these tasks in a time span sufficiently short in order to deem the task worthwhile. Searching for edible plants or animals, for instance, is fraught with uncertainties. On one day one might stumble across suitable plants or animals quickly, but at another time one might search for them in vain seemingly without end. But if one pools this risk, i.e., if a large number of gatherers or hunters begin their search separately only to call upon each other once anyone of them has turned out to be lucky in his search, then gathering and hunting might be turned into routinely successful endeavors for each participant.

Second: Even though the natural environment faced by each person might be more or less the same, each individual (even identical twins) is different from any other. Men, for instance, are significantly different in their abilities than women. By their very nature, men are typically better hunters and women better gatherers. Adults are significantly different in their abilities than kids. Some people are physically strong and others show great dexterity. Some are tall and others are quick. Some have great vision and others a good sense of smell. Given such differences it is obviously advantageous to partition the various tasks necessary to perform in order to secure a comfortable life in such a way that each person specializes in those activities in which he has an advantage over others. Women gather and men hunt. Tall individuals pick fruits from trees and short ones specialize in hunting mushrooms. Quick runners relay messages. Individuals with good eyesight will spot distant events. Kids are used for the exploration of small and narrow holes. People with great dexterity produce tools. The strong will specialize in going in for the kill, etc.

Third: Moreover, even if the members of one tribe are so distinguished from one another that one person is more efficient in every conceivable task than another, division of labor is still all-around more productive than isolated labor. An adult might be better at any task than a kid, for instance. Given the inescapable fact of the scarcity of time, however, even in this conceivably worst-case scenario it makes economic sense—that is, it leads to a greater physical output of goods produced per unit of labor—if the adult specializes in those tasks in which his greater efficiency (as compared to that of the kid) is particularly pronounced and leaves those tasks for the kid to perform in which the latter’s all-around lower efficiency is comparatively smaller. Even though the adult might be more efficient than the child in collecting small firewood, for instance, the adult’s far greater superiority in hunting large game would make it a waste of his time to gather wood. Instead, he would want the child to collect fire wood and use all of his own precious time to perform that task in which his greater efficiency is especially marked, namely large game hunting.

Nonetheless: While these advantages offered by the division of labor can explain intratribal cooperation (rather than fight) and, based on such initially maybe purely “selfishly-motivated” collaboration, the gradual development of feelings of sympathy (good will) toward one’s fellowmen, which go above and beyond whatever biological basis there may exist for the special, more-than-normally-friendly relationship between close kin, this explanation still only goes so far. Given the peculiar, parasitic nature of hunter-gatherer societies and assuming land to be fixed, invariably the moment must arise when the number of people exceeds the optimal group size and average living standards will fall, threatening whatever degree of intragroup solidarity previously might have existed.30

This situation is captured and explained by the economic law of returns.

The law of returns, popularly but somewhat misleadingly also called the law of diminishing returns, states that for any combination of two or more production factors an optimum combination exists (such that any deviation from it involves material waste, or “efficiency losses”).31 Applied to the two original factors of production, labor and land (nature-given goods), the law implies that if one were to increase the quantity of labor (population) while the quantity of land and the available technology (hunting and gathering) remained fixed, eventually a point will be reached where the physical output per labor-unit input is maximized. This point marks the optimal population size. If there is no additional land available and technology remains fixed at a ‘given’ level, any population increase beyond the optimal size will lead to a progressive decline in per capita income. Living standards, on the average, will fall. A point of (absolute) overpopulation has been reached. This is, as Mises has termed it, the Malthusian law of population.

Because of the fundamental importance of this Malthusian law of population and in order to avoid any possible misunderstanding, it is advisable to make also explicit what the law does not state. The law does not assert where exactly this optimal combination point lies—at so-and-so many people per square mile, for instance—but only that such a point exists. Otherwise, if every quantity of output could be produced by increasing only one factor (labor) while leaving the other (land) unchanged, the latter (land) would cease to be scarce—and hence an economic good—at all; one could increase without limit the return of any piece of land by simply increasing the input of labor applied to this piece without ever having to consider expanding the size of one’s land). The law also does not state that every increase of one factor (labor) applied to a fixed quantity of another (land) must lead to a less than proportional increase of the output produced. In fact, as one approaches the optimum combination point an increase of labor applied to a given piece of land might lead to a more than proportional increase of output (increasing returns). One additional man, for instance, might make it possible that an animal species can be hunted that cannot be hunted at all without this one extra hunter. The law of returns merely states that this cannot occur without definite limits. Nor does the law assert that the optimum combination point cannot be shifted upward and outward. In fact, as will be explained in the following, owing to technological advances the optimum combination point can be so moved, allowing a larger population to enjoy a higher average living standard on the same quantity of land. What the law of returns does say is only that given a state of technological development (mode of production) and a corresponding degree of specialization, an optimum combination point exists beyond which an increase in the supply of labor must necessarily lead to a less than proportional increase of the output produced or no increase at all.

Indeed, for hunter-gatherer societies the difficulties of escaping the Malthusian trap of absolute overpopulation are even more severe than these qualifications regarding the law of returns might indicate. For while these qualifications might leave the impression that it is “only” a technological innovation that is needed to escape the trap, this is not the full truth. Not just any technological innovation will do. Because hunter-gatherer societies are, as explained, “parasitic” societies, which do not add anything to the supply of goods but merely appropriate and consume what nature provides, any productivity increase within the framework of this mode of production does not (or only insignificantly so) result in a greater output of goods produced (of plants gathered or animals hunted) but rather merely (or mostly) in a reduction of the time necessary to produce an essentially unchanged quantity of output. The invention of bow and arrow that appears to have been made some 20,000 years ago, for instance, will not so much lead to a greater quantity of available animal meat to consume, thus allowing a larger number of people to reach or exceed a given level of consumption, but rather only to the same number of people enjoying more leisure with an unchanged standard of living in terms of meat consumption (or else, if the population increases, the gain of more leisure time will have to be paid for by a reduction in meat consumption per capita). In fact, for hunter-gatherers the productivity gains achieved by technological advances such as the invention of bow and arrow may well turn out to be no blessing at all or only a very short-term blessing. Because the greater ease of hunting that is thus brought about, for instance, may lead to overhunting, increasing the supply of meat per capita in the short-run, but diminishing or possibly eliminating the meat supply in the long-run by reducing the natural rate of animal reproduction or hunting animals to extinction and thus magnifying the Malthusian problem, even without any increase in population size.32

• 26During the present Holocene period temperatures continued to show significant variations, however. About 10,000 years ago, after a warming period of thousands of years, temperatures reached the present level. Several times thereafter, temperatures rose significantly above this level (by up to 2 degrees Celsius): 8,000 to 6,800 years ago, 6,000 to 5,500 years ago, 5,000 to 4,000 years ago, 2,500 to 2000 years ago, and again from the tenth to the fourteenth century, during the so-called medieval warming period. As well, several periods with significantly lower than present temperatures existed: 9,000 to 8,000 years ago, 6,800 to 6,000 years ago, 4,000 to 2,500 years ago, from the second to the eighth century and again from the fourteenth until the mid-nineteenth century, the so-called Little Ice Age. See Reichholf, Eine kurze Naturgeschichte des letzten Jahrtausends, p. 27.
• 27 Ibid., pp. 23f.
• 28Ludwig von Mises, Human Action, p. 167.
• 29Ibid.
• 30Empirically, it appears that the “magic number,” i.e., the optimum population size for a hunter-gatherer society, was somewhere between 50 to 100 people for a territory of about 50 to 100 square miles (one person per square mile). At around this combination point, all advantages offered by the division of labor were exhausted. If the population size increased beyond this “magic” number, average living standards became increasingly endangered and this threat grew still more if neighboring tribes, due to their own internal population growth, increased their territorial incursions thus further diminishing the nature-given supply of goods available to the members of the first tribe. Internal as well as external population pressure then called for a solution to an increasingly urgent problem: namely sheer survival.
• 31See Mises, Human Action, pp. 127–131; idem, Socialism: An Economic and Sociological Analysis (Indianapolis: Liberty Classics, 1981), pp. 174–75; also Hans-Hermann Hoppe, Kritik dersozialwissenschaftlichen Sozialforschung, Untersuchungen zur Grundlegung von Soziologie und Oekonomie (Opladen: Westdeutscher Verlag, 1985), pp. 59–64.
• 32In fact, overhunting and animal extinction played a fateful role especially in the Americas, which were only occupied after the invention of bow and arrow. While the Americas originally exhibited pretty much the same fauna as the Eurasian continent—after all, for thousands of years animals could move from one continent to another across the Beringian land bridge—by the time of the European rediscovery of America some 500 years ago all large domesticable mammals (except for the llama in South America) had been hunted to extinction. Likewise, it appears now that the entire mega-fauna that once inhabited Australia was hunted to extinction (except for the red kangaroo). It seems that this event occurred around 40,000 years ago, only a few thousand years after man had first arrived in Australia, and even without the help of bow and arrow, only with very primitive weapons and the help of fires used for the trapping of animals. See on this Diamond, Guns, Germs, and Steel, pp. 42ff.