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Hereditary economic inequality is unknown among mobile foragers, but hereditary class distinctions between elites and commoners exist in some sedentary foraging societies. With agriculture, such stratification tends to become more pronounced. We develop a model to explain the associations among productivity, population, property rights, and inequality. Using Malthusian dynamics, we show that regional productivity growth leads to enclosure of the best sites first, creating inequality between insiders and outsiders. Hereditary elite and commoner classes subsequently arise at the best sites. Food consumption becomes more unequal and commoners become poorer. These predictions are consistent with a wide range of archaeological evidence.