Why human living standards remained stagnant for two million years
In short: For nearly the entire history of our species, life stayed roughly the same. From the first use of fire to the dawn of agriculture, average living standards barely budged. It took a radical shift around 1800 to break a multi-million-year economic stalemate.
Professor Mark Schaffer identifies a profound divide in human history: the Malthusian Era versus the Post-Malthusian Era. For approximately two million years—from the emergence of our species in Africa to roughly 1600–1800—humanity existed in an economic state where population growth and total income growth moved at essentially the same rate.
Because production could not outpace the number of people, average living standards (income per capita) remained basically constant. This long period was defined by milestones like fire, trade, private property, agriculture, towns, writing, accounting, and finance. Despite these technological and social developments, they did not provide enough surplus to lift the average person's quality of life significantly for two million years.
The turning point arrived with the Industrial Revolution, which Schaffer uses as a shorthand around 1800. This marked the beginning of modern economic growth, where income began to grow much faster than population. While the lecture title suggests an endpoint of 'finance,' Schaffer clarifies that finance is thousands of years too early to be the defining conclusion; rather, the true shift is the decoupling of production from mere biological limits.
This perspective challenges the idea that progress has always been linear. It suggests that for 99% of our history, human innovation was merely sufficient to sustain existence, not to expand it. Only in the last two centuries have we entered a unique era where economic output accelerates independently of population size.
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Sources
- Summary by Intellect · source: The Economics of the Very Long Run - Professor Mark Schaffer
- Also: The Economics of the Very Long Run: From Fire to Finance in Two Million Years
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