Summary and Analysis by Chapter

Chapter 2: The Economic Revolution

From the beginning of civilization, human beings have faced the challenge of survival, which depends upon two factors — work and cooperation with others. Since individuals are notably self-centered, the possibility that humans will not remain faithful to work has threatened society's existence. If there are not enough miners to work the mines or if most miners should decide to follow another line of work; if farmers should decide to fish instead of plow and reap; or if an insufficient number of students studied medicine or engineering, the economy would break down. In summary, if the interdependence of human workers should fail at any vital point in the economy, the world would suffer. During the early portion of civilized life, only two methods safeguarded against such an outcome — tradition and command.

Tradition

The passage of tasks, or jobs, from generation to generation through custom — a carpenter's child becomes a carpenter or a farmer's offspring take charge of the family farm. This reliance on tradition for the selection of a life's work was especially true of the Middle Ages and is still true in many underdeveloped areas of the world.

Command, or Central Authoritarian Rule

The enforcement of economic survival by absolute rule or dictatorship. An example of this principle is the building of the pyramids in ancient Egypt and the carrying out of the Soviet Union's Five-Year Plans in the post-World War II era.

Throughout most of history, one or the other of these two methods has solved the problem of survival. Because the methods are simple and need no economic explanation, there has been no need for economists. Since the Economic Revolution, however, the evolution of a third method — the market system — has presented a more challenging economic puzzle.


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