Thursday, 28 August 2014

Austrian Capital Theory and ‘Dawn of the Planet of the Apes’

Guest post by Mark Tovey

During an early scene of Dawn of the Planet of the Apes, in which the hyper-intelligent apes were depicted hunting for deer in the forest surrounding their settlement, someone behind me interjected “if those apes are so smart, how come they’re hunter-gatherers?”

This decent question received nothing but a shush from his more etiquette-conscious companion.

While there are many factors other than intelligence that are relevant to a society’s choice of an agricultural or hunter-gather economy, Austrian capital theory can go a long way in helping to explain why the apes featured in the film could be highly-intelligent while still remaining hunter-gatherers.

Austrian Capital Theory: Convoluted and Time-Consuming

The adoption of ever-more roundabout and convoluted production processes is, paradoxically, the hallmark of economic development. This is not, of course, because time-consuming methods are inherently more productive. If that were the case, we could increase output by simply working more slowly!

To solve the paradox,

we must realize that the most direct and immediate means are adopted first in the pursuit of an end. Thus the apes will attempt to satiate their hunger initially by use of the most obvious means: barehanded hunting. This process involves only labour, meaning it is truly as direct as one can get; therefore, when the apes later refine it, for example, by crafting spears and other hunting tools, they will have necessarily elongated the production process. The institution of agriculture would re-direct the apes’ efforts even further from the direct route. To see this clearly, imagine an ape hungrily chasing down a deer, and then imagine him instead collecting wood with which to eventually, one day, produce an animal enclosure. But these roundabout methods are immensely more productive than their labour-intensive counterparts, hence it is why the more complex methods have come to replace the labour-intensive ones in the developed human economies of the world.

So why don’t the apes adopt these roundabout methods? Can their failure to start farming be explained by anything other than ignorance? Yes: the “idea” is far from the whole of it. The institution of roundabout production methods requires, first and foremost, the forgoing of present consumption. And so the cinema-heckler was mistaken in assuming stupidity to be the only explanation for a hunter-gatherer lifestyle. In fact, such a society exists in the hunter-gatherer state out of choice; for a time, it is what’s best. Forced and immediate “agriculturalisation” of their little economy would likely turn out to be immensely harmful.

To understand why it would be harmful, we need to focus on the present consumption sacrificed in the process. Let us imagine that, as per the moviegoer’s advice, the apes promptly “agriculturalise.” Caesar, the ringleader, must then delegate tasks to a number of apes; for example, land must be cleared and tilled, animals must be caught and secured. In the process, he will inevitably inflict a loss of present consumption upon the community. For example, if the apes he employs now for agricultural development were previously engaged in barehanded hunting, the loss would be one told by the supply of meat; or, had they instead been gatherers of firewood, the loss would be one felt at sundown when the air turned cold.

Admittedly, Caesar will be able to minimize the severity of the sacrifices by allocating the tasks to those apes he judges as currently contributing the least valuable services. Thus, the loss in consumption will be a marginal one, i.e., concerning the periphery of the community's needs. However, because they are operating close to a subsistence level as it is, this fact will prove to be of little consolation.

Here we run into what seems, superficially at least, to be a catch-22 situation: because the apes have such little capital at present, they will find it very difficult to produce capital for the future. The ape economy simply cannot afford to divert labourers en masse from the servicing of its present consumption needs. But there is an escape. Capital investment can occur, but it must be gradual. Only small sacrifices can initially be endured, and so only simple capital goods, like traps and spears, can be produced. These traps and spears, however, must not be downplayed in their significance: they permit a productivity that frees the marginal hunters to be re-deployed into additional capital investment projects. More labourers will similarly be liberated by the fruits of these further projects. Thus momentum gathers in this way, and an inexorable, ever-quickening march to prosperity is begun. Capital-intensive, elongated production processes, like agriculture, eventually become feasible.

But this process takes time. Even under the assumption that Caesar is aware of the benefits that a system of agriculture could confer, for the foreseeable future, he is powerless to institute it. His community must resort to unproductive, labour-intensive methods; for though the rewards are miserably meagre, they are immediate.


In the process of economic growth, saving is crucial. No matter how ingenious the individuals comprising a society, if the means to forgo present consumption are unavailable, capital goods simply cannot be created. Crude, labor-intensive methods of production will then necessarily be employed, not because sophisticated, roundabout alternatives, e.g., agriculture, are beyond the community’s capacity for imagination, but because they simply could not survive through the period of deferred consumption necessary for their implementation. Thus the hunter-gatherer lifestyle is, at least in the case of our apes, the sign not of primitive minds but instead of a primitive capital structure.

Mark Tovey is an undergraduate studying economics at the University of Sussex, England.

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