How Human Activity Affects the Development of Economic Systems

Instructor: Trunnis Goggins
This lesson will present the impact of various human activities on the development of economic systems, such as human settlement, human migration, the collection of raw materials, and the manufacturing of finished products.

Brief History of Human Activity and Economic Development

Do you remember when you were a child, playing Marco Polo at the public pool? Though it seems like a fun child's game, many of us fail to realize the impact the real Marco Polo had on the economic future of the world.

Human activities have a major impact on economic systems. Human activity includes human settlement and migration, the gathering of raw materials, and the manufacturing of finished products.

Human Settlement and Migration

Human settlements are the physical components of shelter and infrastructure, and community services such as education, health, culture, welfare, recreation, and nutrition. Human migration is the movement of people from one place in the world to another, for the purpose of taking up permanent or semi-permanent residence. Our world history books are full of human settlement and migration stories. The most famous of which is the history of the European settlement of North and South America. These settlements had a profound effect on the economic system of that time, which is still felt today.

In more modern times, the effects of human settlement and migration can be found in North and South Dakota. Back in the middle part of the last decade, these two states experienced an oil boom. It coincided with the economic crisis and housing collapse that occurred in the United States. As a result of these two occurrences, North and South Dakota witnessed an increase in human migration, resulting in increased population and human settlement. This was largely due to the fact that many people were in search for jobs, and North and South Dakota both had the lowest unemployment rate in the country, while the other states were experiencing unemployment rates well above 10%. This increase in human settlement and migration has since subsided, due to the fact that recent low oil prices have resulted in oil companies decreasing oil production and laying off oil workers.

Gathering of Raw Materials

Another human activity that has an impact on economic systems is the gathering of raw materials. Raw material is the basic material that can be used to make or create something. For example, wood is a raw material that is used to make things such as building material, furniture, baseball bats, and notebook paper. Wood is gathered by the act of chopping down trees.

The gathering of raw materials has a major impact on economic systems. To go back to the prior example of the oil boom of North and South Dakota, the gathering of oil in those areas created a need for oil companies to hire more workers. These workers earned wages which were then spent in their communities. The communities then spent those dollars on more schools, better roads, more housing, and more healthcare facilities. In addition, other businesses in that area expanded due to the increase of disposable income available in the communities affected by the oil boom. This increase in revenue in the communities in North and South Dakota was a direct result of the increased gathering of raw material, which in this case was oil.

Manufacturing of Finished Products

Finished products are materials or products which have received the final increments of value through manufacturing or processing operations, and are held in inventory for delivery sale or use. There are instances where finished goods are not manufactured in the same place where the raw materials used to make those finished goods are collected. In cases like these, the economic impact due to human activity will be felt in a different region.

Let's go back to the North and South Dakota oil boom. While the oil (which is the raw material) was drilled and collected in the Dakotas, it is likely that the majority of that oil was refined into its finished product elsewhere. Most likely the oil was transported to and refined in the United States Gulf Coast region. This transportation can be done by rail, or over the road. In some cases, the oil is transported via pipeline. This provides job opportunities for the railway, trucking companies, or construction companies that are building the pipeline. The jobs ultimately result in increased consumer spending and an increase in revenue generated by communities.

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