Talking to My Daughter About the Economy: A Brief History of Capitalism

Imagine a world where all humans lived by gathering wild fruits and hunting animals, relying solely on nature's bounty. Life was precarious, and surplus was unknown. Then came a profound transformation: the discovery of agriculture. This breakthrough was not born from choice but necessity; humans had hunted many prey to near extinction and multiplied so fast that natural food sources could no longer sustain them. They began cultivating land, producing more food than immediately needed — the first surplus. This surplus was the seed from which the complex economic and social structures of human civilization sprouted.

With surplus came the need to store and manage it. Communities built granaries to hold the extra grain, but how to keep track of who owned what? This practical challenge led to an extraordinary invention: writing. The earliest scripts were not poetic or historical but simple records of quantities of grain deposited by each farmer. These accounting tablets were the first step in the journey from barter to money and from villages to states.

The accumulation of surplus also supported people who did not farm: soldiers to protect the granaries, priests to maintain order, and bureaucrats to manage resources. Without surplus, societies could not sustain these roles, so surplus was the foundation for the rise of states and social hierarchies. Yet this concentration of wealth created inequality, as those who controlled the surplus gained power over others.

Geography played a silent but decisive role in this story. The vast Eurasian landmass, with its relatively uniform climate, allowed crops like wheat to spread widely, enabling the growth of large surplus economies and powerful states. In contrast, Africa's diverse climates and Australia's abundant natural food meant fewer pressures to adopt farming and generate surplus, which affected their historical trajectories. Thus, inequality between peoples was shaped less by inherent differences and more by geography and history.

This early inequality was not merely economic but deeply ideological. To maintain their power, rulers and priests fostered beliefs that their authority was divinely ordained and that social order was natural and just. These ideologies convinced both rulers and subjects to accept unequal distributions of wealth and power.

Understanding these roots helps us see that inequality is not inevitable or natural but a product of historical processes. It reminds us to maintain our outrage at injustice, but to channel it wisely toward building a fairer society.

As we reflect on these origins, we prepare to explore how human societies transformed further with the rise of market economies and commodification, setting the stage for the next chapter of our story.