Economic history of the world
- For the history of money see History of Money. For the academic discipline, see Economic history. For the history of Economics see History of economic thought. For the wider view of the economics of nature see Ecological Economics
The economic history of the world is a record of the economic activities (i.e. the production, distribution and consumption of goods and services) of all humans, spanning both recorded history and evidenced prehistory.
- 1 Stone ages
- 2 Antiquity: Bronze and Iron ages
- 3 Antiquity: Classical Era
- 4 Middle Ages
- 5 Early Modern Era
- 6 The Industrial Revolution
- 7 The twentieth century
- 8 Twenty-first century and the future
- 9 Economic theory developments in the late twentieth century
- 10 See also
- 11 References
Throughout the Paleolithic Era the primary socio-economic unit was the band (small kin group). Communication between bands occurred for the purposes of trading tools, foods, skins and other commodities, and for the exchange of mates. Economic resources were constrained by typical ecosystem factors: density and replacement rates of edible flora and fauna, competition from other consumers (organisms) and climate. Throughout the Upper Paleolithic, humans both dispersed and adapted to a greater variety of environments, and also developed their technologies and behaviors to increase productivity in existing environments taking the global population to between 1 and 15 million.
This age was from 500,000- 10,000 BC.
This period began with the end of the last glacial period over 10,000 years ago involving the gradual domestication of plants and animals and the formation of settled communities at various times and places.
Within each tribe the activity of individuals was differentiated to specific activities, and the characteristic of some of these activities were limited by the resources naturally present and available from within each tribes territory, creating specializations of skill. By the "... division of labour and evolution of new crafts ... (Cameron p.25)" tribal units became naturally isolated through time from the over-all developments in skill and technique present within their neighbouring environment. To utilize artifacts made by tribes specializing in areas of production not present to other tribes, exchange and trade became necessary.
Trading in red ochre is attested in Swaziland, shell jewellery in the form of strung beads also dates back to this period, and had the basic attributes needed of commodity money. To organize production and to distribute goods and services among their populations, before market economies existed, people relied on tradition, top-down command, or community cooperation.
Antiquity: Bronze and Iron ages
See also : Ancient economic thought
Early developments in formal money and finance
See also : History of money
The city states of Sumer developed a trade and market economy based originally on the commodity money of the shekel which was a certain weight measure of barley, while the Babylonians and their city state neighbors later developed the earliest system of prices using a metric of various commodities that was fixed in a legal code. The early law codes from Sumer could be considered the first (written) financial law, and had many attributes still in use in the current price system today; such as codified quantities of money for business deals (interest rates), fines for 'wrongdoing', inheritance rules, laws concerning how private property is to be taxed or divided, etc. For a summary of the laws, see Babylonian law.
Temples are history's first documented creditors at interest, beginning in Sumer in the third millennium. By charging interest and ground rent on their own assets and property, temples helped legitimize the idea of interest‑bearing debt and profit seeking in general. Later, while the temples no longer included the handicraft workshops which characterized third‑millennium Mesopotamia, in their embassy functions they legitimized profit‑seeking trade, as well as by being a major beneficiary.
Antiquity: Classical Era
Expedition and long distance commerce
The two major changes in commercial activity due to expedition known by historical recounting, are those led by Alexander the Great, which facilitated multi-national trade, and the conquest to empire of Caesar (a Roman) of France and Britain.
External trade with the Roman Empire
During the time of the trade of the Occident with Rome, Egypt was the wealthiest of all places within the Roman Empire. The merchants of Rome acquired produce from Persia through Egypt, by way of the port of Berenice, and subsequently the Nile.
The introduction of coinage
According to Herodotus, and most modern scholars, the Lydians were the first people to introduce the use of gold and silver coin. It is thought that these first stamped coins were minted around 650-600 BC. A stater coin was made in the stater (trite) denomination. To complement the stater, fractions were made: the trite (third), the hekte (sixth), and so forth in lower denominations.
Developments in economic awareness and thought
The first economist (at least from within opinion generated by the evidence of extant writings) is considered to be Hesiod, by the fact of his having written on the fundamental subject of the scarcity of resources, in Works and Days .
Greek and Roman thinkers made various economic observations, especially Aristotle and Xenophon. Many other Greek writings show understanding of sophisticated economic concepts. For instance, a form of Gresham’s Law is presented in Aristophanes’ Frogs.
In the Middle Ages the world economy slowly expanded with the increase of population and trade. The silk road was used for trading between Europe, Central Asia and China. During the early period of the Middle Ages, Europe was an economic backwater, however, by the later Medieval period rich trading cities in Italy emerged, creating the first modern accounting and finance systems.
The first banknotes were used in Tang dynasty China in the ninth century (with expanded use during the Song dynasty), and the first in Europe issued by Stockholms Banco in 1661.
Early Modern Era
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The Industrial Revolution
The twentieth century
Economic growth spread to all regions of the world during the twentieth century, when world GDP per capita quintupled. The highest growth occurred in the 1960s during post-war reconstruction.
Twenty-first century and the future
Global economic crisis
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The world economy was predicted to shrink by between 0.5% and 1.0% in 2009, the first global contraction in 60 years. In its forecast the International Monetary Fund (IMF) said that developed countries will suffer "deep recession".
Economic theory developments in the late twentieth century
By the twentieth century, the industrial revolution had led to an exponential increase in the human consumption of resources. The increase in health, wealth and population was perceived as a simple path of progress. However, in the 1930s economists began developing models of non-renewable resource management (see Hotelling's rule) and the sustainability of welfare in an economy that uses non-renewable resources.
Concerns about the environmental and social impacts of industry were expressed by some Enlightenment political economists and in the Romantic movement of the 1800s. Overpopulation was discussed in an essay by Thomas Malthus (see Malthusian catastrophe), while John Stuart Mill foresaw the desirability of a "stationary state" economy, thus anticipating concerns of the modern discipline of ecological economics.
Ecological economics was founded in the works of Kenneth E. Boulding, Nicholas Georgescu-Roegen, Herman Daly and others. The disciplinary field of ecological economics also bears some similarity to the topic of green economics.
According to ecological economist Malte Faber, ecological economics is defined by its focus on nature, justice, and time. Issues of intergenerational equity, irreversibility of environmental change, uncertainty of long-term outcomes, and sustainable development guide ecological economic analysis and valuation.
Energy accounting was proposed in the early 1930s as a scientific alternative to a price system, or money method of regulating society. Joseph Tainter suggests that a diminishing ratio of energy returned on energy invested is a chief cause of the collapse of complex societies. Falling EROEI due to depletion of non-renewable resources also poses a difficult challenge for industrial economies. Sustainability becomes an issue as survival is threatened due to climate change.
- International Economic History Association
- History of international trade
- Anthropometric history
- Mode of production
- List of recessions
- List of countries by past GDP (PPP) per capita
- History of the world
- Natural capital
- Energy economics
- Wealth, Virtual Wealth and Debt
- Technocracy (bureaucratic)
- Vermeer's Hat: The Seventeenth Century and the Dawn of the Global World
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- Schumacher, E.F. 1973. Small Is Beautiful: A Study of Economics as if People Mattered. Blond and Briggs, London.
- Daly, H. 1991. Steady-State Economics (2nd ed.). Island Press,Washington, D.C.
- Daly, H. E. 1999. Ecological Economics and the Ecology of Economics. E Elgar Publications, Cheltenham.
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- The Energy Certificate essay by Fezer. An article on Energy Accounting as proposed by Technocracy Inc. http://www.technocracy.org/Archives/The%20Energy%20Certificate-r.htm
- Tainter, Joseph A. (1990). The Collapse of Complex Societies (1st paperback ed.). Cambridge: Cambridge University Press. ISBN 0-521-38673-X.