Economic evolution has been a very slow and steady affair. Human society has passed through several well-marked stages in its economic development.
Economic organisation was very simple at first but it has become very complex today.
The main stages through which the countries in general have passed are: hunting and fishing stage, pastoral stage, agricultural stage, handicraft stage and industrial stage. In the hunting and fishing stage, mail lived on hunting or fishing using simple tools and weapons; he had no fixed abode but led the life of a nomadic and owned very little property.
Life was very precarious. In the pastoral stage, man had learnt to domesticate animals which he used for his food and as beasts of burden. Life was less uncertain and private property in the form of cattle arose. Men lived in tribes which still wandered from place to place. The next stage was agricultural stage when man learnt the art of cultivation and led more or less settled life by growing a number of crops for his food and clothing. Private property in the form of land also arose. Simple division of labour was introduced. Life became more assured. Each family was self- sufficient.
In the handicraft stage, some sections of the people took to the making of tools and implements in small workshops. The craftsmen organised themselves into small guilds which looked after their interest and also ensured proper quality of their products. There was further extension of division of labour and private property. The handicraft stage yielded place to what has been called the domestic stage which was marked by the appearance of middlemen who supplied the raw materials to artisans in their homes and collected the finished products for sale. Thus, the workman became differentiated from the capitalist employer.
Then comes the final stage, viz., the Industrial Stage with an era of machinery, large-scale production, and world-wide markets. The worker shifted from home to the factories. Division of labour became more complex. Cheap and efficient means of transport were developed. The villages lost their self-sufficiency, Credit and banking also developed. Barter economy was replaced by money economy and then by credit economy. Custom gave place to competition, and so on.