Working alone and working with others: implications for the malthusian era

Abstract

This paper presents a stylized dynamic model to study the impact of the social organization of production during the Malthusian Era (after the Neolithic Age and before the Industrial Revolution), during which there was little or no economic growth. The focus is on the division of time between working alone (individualism) and working with others (collectivism). This division of time matters because individuals have different productive abilities. A greater fraction of time spent working with others raises the income of current Low-ability individuals—but it may also lower the income of High-ability individuals and hence lower the bequests they leave for future Low-ability individuals. In the presence of congestion effects, these forces interact in a very complicated way. The paper analyzes the comparative statics implications of this division of time on economic outcomes in the (unique, non-degenerate) Malthusian steady state. It finds that a greater fraction of time spent working with others (a greater degree of collectivism) leads to a larger population, smaller per capita income, and lower income inequality. Some historical evidence is consistent with these predictions.