TLDR;
- This post gives some further texture to what I define as each Economic Chapter
The Chapters in Detail
Applying a bit of artistic flair (in my very roundabout wannabe-a-humanities-student kind of way) to illustrate each chapter, I attempt to convey:
- Representative personas of success (e.g. the archetype of success at that time, with the exception of the ruling class)
- Rough timestamps to help anchor each chapter in a time period of human history*.
- Rough idea of what the key differentiating factor was in that age.
*These mental flagposts are not intended to be scientifically accurate and assume a period where the chapter’s predominant activity becomes widespread across the world. I concede that there are some natural discrepancies here, as economies developed at different rates.
Chapter 1: Consumption
Achieved Critical mass: Antiquity
Since the beginning of mankind - consumption of food and services were the primary socio-economic activity. Think foraging; Chimps picking parasites off one-another; drinking river water; so on and so forth. In this chapter, there was not much specialisation. Aside from implicit social-hierachies, individuals and communities sought out efficient ways to consume, roaming across the land across the seasons
What differentiated individuals, communities and societies was their physical strength and endurance.
“Strong arm” Sam would probably have done well living in this era, as an emphasis would have been placed on physical attributes, primal survival instincts and a band of merry warriors.*
Chapter 2: Resource Development
Achieved Critical mass: Antiquity - early human history
Several thousand (or maybe more) years ago, nomadic humans decided to settle down and invest in fixed assets. This “rootedness” gave rise to economic activities related to farming, construction, livestock management, material extraction (e.g. mining, wood cutting) and much more became new, important economic roles at that time. Essentially, improving and further developing raw resources found in nature.
What differentiated individuals, communities and societies was their ability to exploit their environment to their benefit.
“Green Thumbs” George, living in a place rich in natural resources, fertile soil, etc would probably have done pretty well living in this chapter. Hopefully he wasn’t taxed too many bushels of grain. He would probably have been the client/ co-habitant with “Strong arm” Sam to defend his farm from pesky invaders.
Chapter 3: Manufacturing and Craftsmanship
Achieved Critical Mass: Bronze age, but again transformed during the industrial revolution. See also the history of industrial revolutions.
Artisans of the bronze age converted raw products and goods into useful tools. Pottery, metallurgy and woodworking are examples of this (I attribute my hundreds of hours spent playing age of empires/ civilization V for this history lesson). A society in this chapter could have had its respected artisans, sculptors, carpenters, etc who transformed raw resources into far higher value products.
What differentiated individuals, companies and societies was their ability to increase the value of raw goods.
Carpenter “Magic Hands” Michael would probably have worked as an apprentice first, before making a name for himself as a renowned craftsman for the highest echelons of society (Kings, Priests, etc).
Afternote: This chapter was later revolutionised to evolve into mass production as well. This sector has its own track of evolution, captured well in the prevailing Industrie 1.0 to Industrie 4.0 theory. This could well have been enabled by the availability of cheaper raw goods (often from out-of-town), as mass production gave huge returns to capital where production became more of a science than an art. Systems and processes were heavily optimised to maximise productivity, profitability, while at the same time minimising costs.
What differentiated individuals, companies and societies at this stage was their ability to maximise profits from efficient production using economies of scale.
Chapter 4: Global Trade
Achieved Critical Mass: The Age of Exploration (1400s to 1600s) - See also the phases of globalisation.
As humans became able to travel widely, there was added value in finding goods and services from other locations where it is cheaper to make, and to be sold on where there is greater value. In a space of a few centuries, economic activity was no longer premised on efficiency of society’s capacity, but rather based on its location, access and connectivity to other productive civilisations and communities as well. These produced cities who could thrive as trading hubs. The merchant class emerged as another social strata that was been well represented in some ancient social structures, pointing to their importance.
What differentiated individuals, companies and societies at this stage was their capacity to profit off global trade flows.
Merchant “Midas Man” Marcus would have thrived on cross-border trade, and made a tidy profit off the trade routes plied between the new world and the old. He would have bought goods from “Magic Hands” Michael from a port in a far off land and sold them at triple the value in another. Key technologies includes international travel (ships, caravans), as well as development of the modern financing and trade systems (beyond informal bartering).
Afternote: This very same principle represents much of how global trade is (in theory) organised today. Proponents espouse its merits in efficiency, which while theoretically correct - faces numerous challenges today.
Chapter 5: Modern Services - The transition towards a knowledge based economy
Achieved Critical Mass: Post-World War Golden age (1900s)*Enabled by an incredible increase in manufacturing productivity, a new era of “corporatisation” emerged after a turbulent period in the 1900s. Advertising, accounting as well as the professionalisation of corporate functions (HR, Finance, etc) became a core focus of economic activity for many companies. This correlates with a new class of jobs - what we now call “White Collar types”- who took on non-manual work in offices.
What differentiated individuals, companies and societies at this stage was their ability to optimise organisational efficiency.
“Mad Men” Matthew would probably have been well respected during this era. He markets and advertises the mass produced goods made by factories-owners, such as Ford. Key technological developments of this phase includes…nothing actually - this was a man-made phenomena. I will touch on this aspect more in subsequent posts.
Chapter 6: Digital
First observed: (Dot com Boom) ~2000s to now
This brings us to trends we see rather recently - where digital and more broadly “tech” is the core driver of the modern economy. It is unthinkable for many modern businesses to not have a digital aspect to it (be it hardware or software). This stage could be split into some subchapters around Computing (Industrie 3.0, probably around 1990s) and the current stage we are in where AI, and Big Data (Industrie 4.0) and all the jazz.
What differentiated individuals, companies and societies at this stage was their ability exploit computational power for economically productive means.
Silicon Valley” Shelly would do well in this world. She does UI/UX for a Software-as-a-Service company, helping people like “Mad Men” Matthew optimize their Customer Relationship Management (CRM) systems.
Chapter 7: platforms
Originally, I was hesitant to include this as the next platform, but looking at very recent trends - I’m a little more inclined to include it as a chapter in itself. This will be a little less baked as an idea. If i had to place a marker, I would say this has emerged from 2010 onwards.
Platforms are evident in many advanced countries - many having a localised “superapp” that wields incredible power to match the supply of services and goods to demand. These often form a monopoly or monopsony by nature.
Historically, if defined as a model that creates value by facilitating exchange, then infrastructure and utility owners are a much “softer” form of the platform model. If say - a railway structure - did not exist, a huge swathe of users and consumers would not be connected to one another. These include train operators, freight operators as well as the ancillary services found at each trains station. What may have changed is the accessibility to enter such platforms (Cost to entry) in the non-physical realm. The Digital Chapter has re-enabled this pre-existing model in a different way, and has become a significant business model in most companies.
What differentiated individuals, companies and societies at this stage was their ability optimise the matching of supply and demand to one another.