Galor, Oded; Moav, Omer
Working Paper
Natural selection and the origin of economic growth
Working Paper, No. 2000-18
Provided in Cooperation with:
Department of Economics, Brown University
Suggested Citation: Galor, Oded; Moav, Omer (2000) : Natural selection and the origin of
economic growth, Working Paper, No. 2000-18, Brown University, Department of Economics,
Providence, RI
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Galor, Oded & Omer Moav
Natural Selection and
the Origin of Economic
Growth.
Paper presented at the conference ”Population Dynamics and the Macro Economy” organized
by Harvard Center for Population and Development Studies and IFS. September 2000.
Arbetsrapport/Institutet för Framtidsstudier; 2000:5
ISSN 1652-120X
ISBN 91-89655-12-5
Natural Selection and the Origin of Economic Growth
Oded Galor and Omer Moa v
¤
August 15 2000,
Revised No vem ber 15, 2000
Abstract
This research develops an evolutionary growth theory that captures the interpla y be-
t ween the evolution of mankind and economic growth since the emergence of the human
species. This uni…ed theory encompasses the observ ed evolution of population, technology
and income per capita in the long transition from an epoch of Malthusian stagnation to
sustained economic gro wth. The theory suggests that prolonged economic stagnation prior
to the transition to sustained growth stimulated natural selection that shaped the evolu-
tion of the human species, whereas the ev olution of the human species w as the origin of the
take-o¤ from an epoc h of stagnation to sustained growth.
Keywor ds:
Growth, Technological Progress, Fertility, Human Capital, Evolution, Natural
Selection, Malthusian Stagnation.
JEL classi…cation Numbers:
O11, O14, O33, O40, J11, J13.
¤
Galor: Brown University, Heb rew University and CE P R. Moav: Hebrew University. The authors have
bene…ted from discussions with Philippe Aghion, Abhijit Banerjee, Sam Bowles, Partha Dasgupta, Eric Gould,
John Hassler, Michael Kremer, Jim M irr lees, Ariel R ub instei n, Natha n Sussman , and conference participants in
the E E A m eetin g, Bo lza no, Au gu st 2000, X Ith EE A Sum m er School, Barcelona September 2000, Dem ography
and Growth Conf erence, Harvard University, Septe mb er 2000, and the MacArther M eeting on Inequal ity a nd
Econo mic Performance, M IT , Oc to ber 2000. G alo r’s research is sup ported by an
NSF Grant SES-000 4304.
0
\
It is not the strongest of the species that survive, nor the most intelligent, but the
one most responsive to change.”
Charles Darwin
1Introduction
This researc h dev elops a uni…ed evolutionary growth theory that captures the interplay between
the evolution of mankind and economic growth since the emergence of the human species.
The theory suggests that prolonged economic stagnation prior to the transition to sustained
growth stimulated natural selection that shaped the ev olution of the human species, whereas the
evolutionofthehumanspecieshadbeentheoriginofthetake-o¤fromanepochofstagnation
to sustained growth.
This uni…ed theory encompasses the observ ed intricate evolution of population, tec hnol-
ogy and output in the long transition from a Malthusian epoc h of stagnation to sustained eco-
nomic growth. Consistent with existing evidence, the theory suggests that during the Malthu-
sian era technology evolved rather slowly and population growth prevented a sustained rise
in income per capita. Human beings, like other species, have confronted the basic trade-o¤
bet ween o¤spring’s qualit y and quantity in their implicit Darwinian survival strategies.
1
Al-
though quan tity-biased preferences had a positive direct e¤ect on fertility rates, it adv ersely
a¤ected the quality of o¤spring, their …tness, and hence their fertility rates. The inheren t evo-
lutionary pressure in the Malth usian era generated an evolutionary advantage to quality-biased
preferences.
2
Natural selection therefore increased the quality of the population inducing faster
technological progress that brought about the take-o¤ from the era of stagnation and thereafter
a demographic transition that paved the way to sustained economic growth.
For the major part of human existence economies appear to be in a Malthusian stag-
nation. Diminishing returns to labor along with a positive e¤ect of the standard of living on
the growth rate of population provided a self equilibrating role for the size of the population
in a stationary economic environment.
3
Changes in the technological environment or in the
1
In other sp ecies this trade-o¤ is implicit in their biological mechanism.
2
In th is era “the perpetual strugg le for room and food” [Thom as R . Ma lthus ( 17 98, chap. iii. p. 48)] l eft
limited resources for child rearing.
3
According to Thomas R. Malthus (1798), if the standard of living is above the subsistence level, p opulation
grows as a natural result of passion between the sex es, w he reas if th e standard o f living is lower than su bsisten ce
1
a vailability of land lead to larger but not richer population. The growth rate of output per
capita had been negligible o ver time and the standard of living had not di¤ered greatly across
countries.
4
For instance, the average growth rate of GDP per capita in Europe between 500 and
1500 w a s nearly zero (Angus Maddison ,1982).
5
Similarly, the pattern of population growth
over this era follo ws the Malth usian pattern. The average annual rate of population growth in
Europe betw een 500 and 1500 w as 0.1 percent, and world population grew at an average pace
of less than 0.1 percent per year from the year 1 to 1750 (Massimo Livi-Bacci, 1997), re‡ecting
the slow pace of resource expansion and technological progress. Fluctuations in population and
w ages also bear out the structure of the Malthusian regime. For instance, negative shocks to
population, such as the Black Death, were re‡ected in higher real wages and faster population
growth.
6
Finally, di¤erences in technology were re‡ected in p opulation density but not in stan-
dards of living. Prior to 1800 di¤erences in standard of living between countries w ere relatively
small despite the existence of wide di¤erences in technology (Richard Easterlin, 1981, Lucas,
1999, and Pritc hett, 1997).
7
The emergence from Malthusian stagnation was initially very slow. As observed by
Maddison (1982, 1995), the average growth rate of income per capita in Europe was only 0.1
percen t per year between 1500 and 1700, and 0.2 percen t between 1700 and 1820.
8
As income
per capita grew, population growth increased as w ell to a rate of 0.2 percent in the former period
and 0.4 percent in the later period. During this slow transition, the Malthusian mechanism
linking higher income to higher population growth continued to function, but the e¤ect of
p op u lation declines by either the “preventive check” (i.e., intentional reduction of fertility) or by the “po sitive
check” (i.e., malnutrition, dis e a se, an d famine).
4
As argu ed by Joel Mokyr (1990), Robert E . and L u cas Jr. (1999), the phenomenon o f sustained growth in
living stand ard s is onl y a few ce nturies old even in the richest countries.
5
Similarly, real wages in China were lower at the end of the 18th century than they had b een at the b eginning
of the …rst century (Kang Cha o, 1986).
6
Furtherom re, Lee (1997) reports p ositive i ncome el asti cities of fertility an d n ega tive income elasticities of
mortality fro m s tudies examining a w ide ra ng e o f pre -ind us trial co untries. Similarly, Edward A. Wrigley a nd
Roger S. Scho…eld (19 81) …nd a strong posi tive correla tion be tween real wages and marriage rates in Engla nd
over the period 1551-18 01.
7
China ’s sophisticat ed agricultura l technologies , for exam ple, allowed high per-acre yi eld s, but f ail ed to rai se
the standard of living ab ove subsistence. Similarly, the introduction of the potato in Ireland in the middle of
the 17th ce ntury had gen erated a large increase i n popu lation over th e century w ithout a n improve m e nt in the
standard of liv ing. The destruction of this producti ve technology by insects has generated a m assive decli ne in
populatio n due to the Great Famine and m ass migration (L ivi-Bacc i, 19 97).
8
In the United K in gd om, outp ut p er capita grew at an annual rate of 0.4 percent in t h e 120 years after 1700 ,
while population grew at an annual rate of 0.7 p ercent.
2
