Settled habitation is a relatively recent phenomenon in human history. For countless millennia before the discovery of agriculture, societies moved constantly in pursuit of their sources of food and fuel. When the local supply of wild fruits and cereals was exhausted or when game migrated to other regions, our ancestors would pack up and find a new, more productive home. Even today there are a few cultures that rely on regular migration; because of their ancient pedigree they are sometimes called “primitive,” but it is important to remember that they are the ones who have continued to survive. The really primitive cultures never made it: presumably they remained stuck to a familiar spot in the forest or a drying oasis, unwilling to venture into the unknown even as supplies grew increasingly scarce.

If the preceding chapter is correct, economics is at risk of meeting a similar fate. Its well-crafted models of rational choice in a world of free, enforceable contracts have become unproductive, and continued growth depends on the flexibility to strike out in new directions. Fortunately, the theoretical environments that can prove hospitable to migrating economists already exist, and the journey is not too far. This chapter will discuss alternative approaches to the analysis of risk, the structure of labor markets, and the nature of the employment relationship. In the end, I will try to show that, together, they can largely explain the broad historical and institutional facts of risk, reward, and conflict.