The Malthusian theory of evolution disregards a pervasive fact about human societies: they expand through conflict. When this is taken account of the long-run favors not a large population at the level of subsistence, nor yet institutions that maximize welfare or per capita output, but rather institutions that maximize free resources. These free resources are the output available to society after deducting the payments necessary for subsistence and for the incentives needed to induce pro-duction, and the other claims to production such as transfer payments and resources absorbed by elites. We develop the evolutionary underpinnings of this model, and examine the implications of free resource maximization for the evolution of societies in several applications. Since free resources are increasing both in per capita income and population, evolution will favor large rich societies. We will show how technological improvement is likely to increase per capita output as well as increase population, and how economically inefficient institutions such as bureaucracy arise.
https://doi.org/10.20955/wp.2012.032
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