[ Editor's Note: 8.6.09:- I have only just got around to answering questions by Eithin, posed below, about where my source data and civilisation models come from. I have replied in two parts below, but want to include the basic details here.
The Emergence of Civilisation, Charles Maisels 1990
Mesopotamia and the Ancient Near East, Michael Roaf, 1990 ]
One can tell that the Great Machine series were not planned that way because this would probably have been post one, if they had been. However, I should be able to fix that by offering a different reading order on the Series page.
As an illustration of a point I was making about ideology, I discussed in detail why both ‘capital’ and ‘capitalism’ do not necessarily mean what you think they mean. The functional definition of ‘capital’ that I arrived at is “accumulations of unused wealth”; implying that capitalism is any social system in which it is possible to accumulate and defend unexploited wealth. In the same article I also posed the question “What is it that statist/hierarchical systems are good for?”
The earliest record of unused wealth being accumulated under one controlling will is the evolution of cities. Anywhere archeology finds a city, there you have found proto-capitalism, because one of the things that’s true about cities is you can’t have one unless someone outside the city is feeding you. Anyone living in the city has to get fed; they can’t grow it themselves, so they have to get it from someone else who grows it. The earliest model for this process went like this.
Feller who’s really good with a spear rounds up some lads, and goes out to all the local farms saying “If you give me some of your food I won’t burn your farm down”. Some of them refuse, so he burns their farms. This provides him with a nice source of displaced people he can suggest immigrate to his city, where he will feed them.
He stores and protects this resource of food; it is now unused wealth, or capital. He employs it to feed immigrants to his city. He now has a base of lads who can provide him with an army: supported by craftsmen (like smiths) who can upgrade the weaponry. He only has any of this for as long as he keeps feeding the people in his city: but that’s okay, because he has hit upon the method for accumulating capital.
All he needs to do now to be successful is keep expanding. The more capital he can concentrate, the more expansion he can afford. The more people out in the hinterland look to him for protection and pay him their tithes, the more people he can support in his city and the higher the level of civic and technological development he can afford. And by the law of large numbers, the higher the level of skim he can keep to raise his personal lifestyle with. That’s commonly known as “the profit motive“.
He started out as a nomad (because we’re only just inventing cities) so he’s good with horses. He sends some lads out in each direction to repeat the process a bit further away and bring back more food, which accumulates (more unused wealth) and is then used to finance more lads, who go a bit further. Eventually, his lads meet some lads coming the other way from the next city over, and thus is competition introduced to the proto-capitalist’s world. What happens then is either blood or gold. More typically it’s both in that order.
In a low-bandwidth society it takes a while to get taxation systems properly sorted out and operating effectively. In fact, to get them working well it takes writing. So roll on through several millennia of trial and (mostly!) error until the Sumerians and the Egyptians (and, a bit later, the Chinese) get involved. They streamline the process because they fix some of the comms issues and, most importantly, systematise the record-keeping function at new levels. But still, what you see happening is the same as the Anatolian city-muggers. Wealth that is being produced at the edge of society is concentrated towards the middle until there is so damn much of it that you end up building pyramids with it. That is the origin of capital accumulation: early taxation models. They permitted for the first time the accumulation of unused wealth, which is a concept pretty much alien to any pre-urban civilisation . So the first controversial conclusion is this: taxation is the origin of capital accumulation, and therefore of capitalism.
The first thing you’ll want to notice here is the reciprocal nature of this process. In order for our proto-capitalist, or ‘king’, to accumulate capital, lots of other people each need to have less than they had before he came along.  There is no other way for a first-time capitalist to accumulate capital. He can only do so by taking it from a large number of other people. If he’s a long-term thinker, he does this in sufficiently small amounts each that they can still be alive to farm next season; but from sufficiently large numbers of people that he is able to usefully store wealth he does not need to survive the winter (or dry season, or whatever).
Our proto-capitalist has created relative wealth for the first time.
 Observe how our assumptions are embedded in our language. Our very word for ‘appropriately behaving humans’ actually means ‘people who live in cities’: therefore, people whose system of organisation involves the accumulation of capital reserves by definition. Isn’t that interesting? It’s like the words ‘policeman’ and ‘politician’ …
 The second thing you’ll want to notice is that our proto-capitalists, by developing the ability to accumulate and maintain unused wealth, have also created the need for inheritance law. Relative wealth, indeed…