1.  Production vs. harm. The basic idea and activity in productive societies is helping to produce goods—things that are useful to someone—food, light bulbs, cars—and then exchanging the income received for goods that are desirable to you.

The fundamental economic mechanism exists in “harmful” economic societies as well. But these goods (or the resources that produce them) can be reallocated through force, as well as law backed by force. Simply put you can produce goods, or take them away from others, which is why we describe these societies as harmful. The highest stratum—the ruling class—obtains goods through means which may be described as unproductive or extractive.

2. Conquest and conflict historical overview. Armed conflict, the fight by groups for control of the government or territory (frequently  possessing  natural resources), has been throughout history the principal way in which harmful economic societies have been established. Its importance continues today.  The results of conflict have been the domination of the winning side over the losing and the establishment of a pattern of income and resource allocation favoring the winners.

Examples would be the Hittite empire (Wikipedia 2013), the Assyrian empire (Wikipedia 2013), the Roman empire (Wikipedia 2013), the Norman conquest of England (Wikipedia 2013), the conquest of the territory that became the United States by various European powers and then the government of the United States, the British empire (Wikipedia 2013) and the Japanese Greater East Asia Co-prosperity Sphere (Wikipedia 2013).

Control over labor power is also an important way of using power to obtain income, with serfdom (Wikipedia 2013), slavery (Wikipedia 2013), and debt bondage (Wikipedia 2013) as important examples. Forced labor (ILO 2013)  is the general modern term. Also see Unfree labor (Wikipedia 2013). Caste systems (Wikipedia 2013)  can also confine people in certain types of work, with the Dalits (Wikipedia 2013)  in India being an example.

3. Basic overview. The central idea is that there are winners and losers. To have a simple model of history and harmful economic societies, we would say that conquest establishes control by a small group over a large group. Once the conquest is completed, much fewer ‘domination’ resources are needed, and, in addition to arms, other resources/methods of control are used, such as domination of the political and judicial system. Moreover, transfer of ownership of resources such as land, labor and natural resources takes place, and more subtle forms of control are employed. The small group can of course be the elite of another country which has happened frequently in the past, as the examples above illustrate.

Economists have developed some models that incorporate both production and conflict.¹  When game theory is employed in models that incorporate both conflict and production those that obtain resources through conflict are known as the “winning coalition,” terminology that will also be used here.

4. Other structures of harm.  Harm as a means of obtaining income can exist in other ways as well.  These include theft, robbery, and larger scale organized crime (Wikipedia 2013), such as the Mafia (Wikipedia 2013)  or drug cartels (Wikipedia 2013).

Caption for the photo above: The great pyramid of Egypt. It is estimated that the pyramid took 10-14 years to build and  required an average workforce of 14,500 people and a peak workforce of roughly 40,000. ©©