The consideration of the economic stages through which society has progressed in arriving at its present development will contribute to a clearer understanding of our present economic system. These stages have been variously classified. For our present purpose the classification of economic stages into first, the stage of independent household economy, second, the stage of town economy, and third, the stage of national economy will be useful.

9. Independent Household Economy

No matter how far back in economic history we go we shall always find that the production of wealth is a social rather than an individual phenomenon. In the first stage production was by the family or the clan. The family group produced directly for itself the things which its members needed. This independent household economy was self-sufficing; no goods needed to be brought in from outside the family organization. Goods were produced and consumed within the family. There was no exchange of goods. As a general thing the men carried on one class of occupations and the women another, but among the members of each sex there was little or no differentiation of occupation. The essential feature of this stage was production by the household for the household, without exchange. As a result of a long process of development during which the household learned to produce a surplus, wants were developed which had to be supplied from outside the household, and the second economic stage appears.