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▶ economy

introduction
An economy requires that people cooperate in deciding what
they value in their society. In a subsistence economy deter-
mining what is valuable may be easy: Everyone is focused on
fi nding or creating the barest essential of life, food. In such
an economy people have litt le time for creating lu xuries or for
recreation. Even so, their relationships may still be complex,
because they may need to cooperate to create enough food
that nobody starves, and they may need to create a hierar-
chy of who gets fed fi rst and, in case of a shortage of food,
who does not get fed at all. Th us, at its base, economics can be
about who lives and who dies.
An agricultural economy is one that is focused almost
entirely on raising crops. Such an economy can be a subsis-
tence economy in which everything that is harvested is used
each year, without a surplus. Th e ancient peoples of Mesopo-
tamia, the Yellow River region in China, and Mesoamerica
found ways to create surpluses of by using irrigation canals
and by learning to plant two crops and have two harvests
per year for such staples as wheat. Still, advanced agricul-
tural practices brought with them new problems, especially
overpopulation. Occasionally, crops would fail, and there
would be a famine. Famines have killed millions of people
over thousands of years along the Yellow River, and much
of Mesopotamia may have succumbed to food shortages in
ancient times.
One way to protect against shortages was by having a
controlled economy. In a controlled economy a central au-
thority, usually the government, dictated what was grown

and what was manufactured. Ancient Egypt had a controlled

economy and the Harappan civilization of the Indus river

valley probably did too. Th e government could save surplus

grain for distribution during periods in which crops failed.

Another way to save crops against bad times was through

taxes. For instance, in Mesopotamia and China farmers

were usually required to give some of their harvests to the

government. In Mesopotamia farmers sometimes donated

part of their land to the government or to the temple of their

city, buying favors for themselves and providing the govern-

ment and temple with direct control over some agricultural

resources. Th is created an early form of a mixed economy,

partly free market for independent farmers and partly cen-

tral controlled.

An advantage of a free market economy is that it can en-

courage even the poorest members of society to try to create

surpluses of goods, because they can use those surpluses to

trade for other goods. Th is was oft en threatening to ancient

governments, whose social elites viewed the generation of

wealth for those outside the elites as disrupting their tradi-

tional privileges. In China almost everyone was a peasant.

Although broad-minded emperors occasionally tried to give

peasants civil rights and ownership of land, most of the time

peasants were slaves to the land. Th ey could not leave the

land unless they were conscripted into a warlord’s army; if

the land was destroyed, the peasants on it were destroyed as

well. When Confucianism became the dominant philosophy

of government in the late 200s b.c.e., peasants and craft speo-

ple were allowed to benefi t directly from their work, which

disturbed the social elite so much that it was made against the

law for an ordinary person to dress well.

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