The Long Arc
When you look at economic history, what strikes you is how recently anything changed. Throughout the entire Paleolithic era, from roughly 500,000 BC to 10,000 BC, humans lived in small bands, trading stories and tools and animal skins with neighboring groups. Economists have estimated that for all of prehistory, average GDP per capita was about $158 per year, adjusted for inflation. And here’s what’s remarkable: it didn’t rise much until the Industrial Revolution. For hundreds of thousands of years, the human economic condition was essentially static.The Innovations
Then things began to move. By the third millennium BC, the Sumerians had developed a market economy based on the shekel, originally a weight measure of barley. The Babylonians created the first system of prices fixed in legal code. Temples became history’s first creditors, charging interest as early as 3000 BC. Around 650 BC, the Lydians introduced gold and silver coins. These were profound innovations. But they were all variations on the same theme: managing scarcity.The Empires
For the next several thousand years, that’s what economy was. India and China dominated global GDP for over 1,500 years. The Achaemenid Empire at its height around 480 BC connected over 40% of the world’s population. Rome at its peak in 117 AD held 50 to 90 million people. The Mughal Empire in the 17th century represented a quarter of world GDP. But through all of this, the fundamental logic remained unchanged: resources are limited, and economy is how we distribute them.The Revolution
Even the Industrial Revolution, which finally broke the static line of human prosperity, was still about managing scarcity—just managing it better. The Watt steam engine. The expansion of wheat production after 1860. The shipping container revolution of the mid-20th century. All of these made goods cheaper and more abundant. But none of them eliminated scarcity itself.I believe artificial intelligence will.