Technology Creativity as the Lever of Economic Progress
by Joel Mokyr
Synopsis
Joel Mokyr uses an economic perspective to look at how technological creativity, when encouraged by society, or at least not resisted by ruling classes, has been the way prosperity has been created in the Western world and how this has allowed the Western world to influence all other societies. [1].
Setting the scene.
Economic growth can occur in four ways: investment or increases in capital stock, commerce growth or increase in trade, an increase in the scale of an economy, and increase in the stock of human knowledge. Mokyr focuses on the last of these.
The questions he poses are 'What causes a rapid growth in the stock of human knowledge'? Why do some societies have proportionally many more creative individuals in them than others. That is, what kind of stimuli, incentives and institutions create a society that encourages technical creativity. He also considers the other side of the coin: why does technological change peter out?
Mokyr cautions that micro-economics alone will not explain these and when looking at factors outside of economic considerations there are many explanations which make sense but the hard work is to show that the evidence supports a particular theory rather than just arguing cause and effect by logic alone. Nor is it sufficient to identify differences between creative and uncreative societies and draw causal relationships because correlation does not prove causation.
He proposes four conditions for a society to be technically inventive: a cadre of ingenious and resourceful inventors, social and economic institutions which provide an incentive framework, tolerance from the status quo to not kill off change in order to protect self interest, and diversity of places so that if one society does restrict innovation it can continue to flourish in another.
Mokyr cautions that we have to be realistic in our views. We should not view technological progress as just a Whiggish tale about an irresistible advance to a better and richer age. And we certainly ought not to take technological progress as a given because it is highly sensitive to the social and political environment and can be arrested by relatively small external changes.
The history of technological change
Mokyr traces technological change through five periods: the first is classical antiquity of Greek, Hellenistic and Roman societies where technogical progress generally served the public rather than the private sector (e.g. paved streets, sewerage disposal, water supply, fire protection for example). This was an era of mechanisms as well - two examples being devices to measure astronomical events and the water-wheel.
The second era was the Middle Ages, which could be divided up in to an early period (500 - 1150 ME) which had the first signs of technological creativity in agriculture and water power, and a more productive later period (1150 - 1500 ME) in which ship construction and metallurgy were but two examples.
The third period ran from 1500 to 1740 and included the Renaissance. Technological progress continued unabated but this can be characterised as an era of micro-inventions and refinements of existing technology with relatively few macro-inventions. It was better known for its scientific discoveries than technological break-throughs. It was during this time that technology was reframed as inherently virtuous, and that knowledge of nature should be converted into control over nature in order to increase material production.
Mokyr categories the Industrial Revolution (1750 to 1830) as the 'years of miracles' which had a cluster of macro-inventions followed by a complimentary flow of micro-inventions, which taken together, created a rich diversity of progress. A typical inventor was a dexterous and mechanically inclined person who became aware of a technical problem and guess approximately how to go about solving it. Major advances were made in harnessing power (the steam engine for example), metallurgy (production of cheap iron and steel), mechanised textile production, and a range of small but significant technology advances (high precision tool making, ceramics, chemicals, ceramics and mining). Mokyr poses the question 'why did these breakthroughs not occur say 150 years earlier?' He notes that even if the underlying technology had been available earlier the problems to be solved were simply hard in that the effort required by the inventor was considerable and invention required people of unusual ability, energy and daring along with a measure of luck. Having said this the story of the Industrial Revolution was more than a tale of a handful of major inventors because underneath them was a pyramid of engineers, technicians, entrepreneurs and gifted amateurs who also made contributions.
The fifth historical period was from 1830 to 1914. It is characterised by large scale industrialisation of technology and where the factory system and mass production and economies of scale emerged. Mokyr describes a wide range of industries; steel, chemicals, electricity, transportation, agriculture and food processing, as well as the rise of production engineering itself. He surmises that the greatest invention of the nineteenth century may have been the theory of how to invent: the use of theory, careful measurement and accurate instruments.
Understanding the mechanisms underlying technological progress
Mokyr throws this sequence of technological progress into relief by asking 'why does technological change occur in some societies but not others?'. In answering this question he works through a wide range of possibilities.
He notes that demand alone will not determine whether a society will be creative technologically. He assesses geographical environment and demographic factors, life-expectancy, labour costs and the supply of scientific ideas and base technology. Others are appetite for risk, openess to new ideas, societal values, religious environment, legal framework, economic resistance to innovation, political and State influences, and the demand wars create on technology. None of these by themselves is determinative.
He also looks at technology in specific regions and eras to examine what influence technology actually had on society. In classical and early medieval times there was an inability to generate new technologies and to find new or imaginative economic applications for the ideas that were generated. China developed a wide range of technologies before 1400, well surpassing Europe, but progress in China slowed down and came to a halt just as the Renaissance was beginning in Europe. Mokyr works through the reasons for this decline. In Britain and Europe, the question there is 'what were the reasons for the Industrial Revolution happening in the West, rather than elsewhere or in another era?'. Mokyr sets out a wide set of factors as to 'why Britain manage for a century to generate an diffuse superior production techniques at a faster rate than the Continent'. Apart from technological and economic aspects, one contributing factor was the pro-technological attitude of the educated and literate elite. The reversal of this was one of the factors in the slow down of technological innovation after 1830.
Understanding the dynamics of technological progress
Mokyr says that the normal tools of economic analysis rely on equilibrium states and these are clearly not suitable to describe rapid changes in technological progress. He poses the question "are there other analogies or models which may describe this better?". He uses economic parallels to answering this question.
In the history of technology there were long periods of stasis where no innovation or only small scale refinements occurred. Then at infrequent intervals along would came macro-inventions These were revolutionary in impact - inventions without a clear parentage and a clean break from previous techniques. These macro-inventions would then be followed by a flurry of adaptive micro-inventions. Without invention, innovation would eventually exhaust itself, and without macro-inventions, micro-inventions would end up producing ever diminishing returns. Mokyr lists the windmill, spectacles, the mechanical clock, moveable type and casting of iron as macro-inventions in the Middle Ages. Gas lighting, the breast wheel, the Jacquard loom, chorine bleaching and ballooning were macro inventions of the late 18th century.
Mokyr notes that micro-inventions and macro-inventions are fundamentally complimentary in the economic history of technological change. However these are governed by different laws. Micro-inventions are a product of an intentional search for improvement. Macro-inventions are governed more by individual genius and luck as much as economic forces and this makes the timing of such inventions hard to explain. 'So economic literature which deals with the generation of technological progress through market mechanisms and incentive devices, explains only a part of the story.
Finishing up, he notes that what made societies poor was not that they had too few resources, but that they did not know how to produce more wealth with the resources they had. While ideas were not enough, these were nevertheless indispensable. A second factor, which can either enable or restrict technological progress, is the social environment. This will determine whether ideas will grow.
References
[1] Joel Mokyr
The Lever of Riches:
Technological Creativity and Economic Progress
Oxford University Press, 1990.
ISBN 0-19-506113-6