We focus on exogenous and unanticipated shocks, negative or positive, to the supply of any of the four main crucial factors of production: land, labor, physical capital, and human capital. Among the causes of such shocks are plagues, wars, migrations, and new technologies. Supply shocks matter politically because they threaten a sudden change in factors’ relative returns: a loss of labor, absent intervention, raises wages but lowers returns to land and capital; an infusion of human capital lowers skill premia but raises wages and the rents of land and physical capital. Owners of adversely affected factors will attempt to adjust, usually in one of three (increasingly costly) ways: through factor substitution, exit to another sector or region, or adoption of a factor-saving technology. (Hence innovation is usually endogenous but sometimes, by overshooting, can itself occasion a supply shock.) Only where none of these options avail will they resort to the (usually) costliest option of coercion: enslaving labor, seizing land, conscripting capital. What determines how a society adapts, or whether it does so at all, are such objective factors as soil, climate, and proximity to markets.