Thursday, September 28, 2017

A Culture of Growth The Origins of the Modern Economy Joel Mokyr Editions Hardcover 2017

During the late eighteenth century, innovations in Europe triggered the Industrial Revolution and the sustained economic progress that spread across the globe. While much has been made of the details of the Industrial Revolution, what remains a mystery is why it took place at all. Why did this revolution begin in the West and not elsewhere, and why did it continue, leading to today's unprecedented prosperity? In this groundbreaking book, celebrated economic historian Joel Mokyr argues that a culture of growth specific to early modern Europe and the European Enlightenment laid the foundations for the scientific advances and pioneering inventions that would instigate explosive technological and economic development. Bringing together economics, the history of science and technology, and models of cultural evolution, Mokyr demonstrates that culture—the beliefs, values, and preferences in society that are capable of changing behavior—was a deciding factor in societal transformations.

Mokyr looks at the period 1500–1700 to show that a politically fragmented Europe fostered a competitive "market for ideas" and a willingness to investigate the secrets of nature. At the same time, a transnational community of brilliant thinkers known as the “Republic of Letters” freely circulated and distributed ideas and writings. This political fragmentation and the supportive intellectual environment explain how the Industrial Revolution happened in Europe but not China, despite similar levels of technology and intellectual activity. In Europe, heterodox and creative thinkers could find sanctuary in other countries and spread their thinking across borders. In contrast, China’s version of the Enlightenment remained controlled by the ruling elite.
Image result for The construction of an iron bridge over the Wear, as depicted in a 1796 engraving by an unknown artist
The construction of an iron bridge over the Wear, as depicted in a 1796 engraving by an unknown artist

What caused the Industrial Revolution? Why did a handful of countries, starting with Britain, manage from the end of the 18th century to escape the Malthusian treadmill of producing just enough to reproduce? Economists and historians have offered various answers, among them the role of cheap energy and high wages in stimulating technological innovation; colonial resource extraction; and a framework of social and political institutions favouring entrepreneurship. More recently, the importance of ideas has come into focus. In a monumental trilogy, the economic historian Deirdre McCloskey has emphasised the immaterial causes, and particularly the importance of “bourgeois equality” — the idea that ordinary folk could try new ways of doing things. A Culture of Growth, by the equally distinguished historian Joel Mokyr, also sees economic growth as the result of ideas rather than material conditions or political and economic institutions. He has long explored the role of technology — how innovations come about, and how they are adopted and translated into everyday improvements in living standards. Making inventions commercially viable can be the harder part. The discoveries underlying our ability to use electricity in our homes date back to at least the late 19th century. 

One famous study (by Paul David) traced the parallel innovations and social changes needed to enable the electrification of homes and factories, estimating that it took half a century for any resulting improvement in national productivity figures. The necessary economic and social conditions are so difficult to achieve that many places still cannot provide reliable, universal electric power. Mokyr’s new book seeks to identify the conditions that turned the inventions of the late 18th and early 19th centuries into sustained, modern economic growth. There had been earlier significant waves of invention in China and the Islamic world, for example, but none snowballed into a world-changing industrial revolution. Mokyr argues that in western Europe at the time of the Enlightenment, a set of conditions happened to coincide to create a “Republic of Letters”, a ferment of public debate and innovation we might now label as “open science”. Knowledge, from deep scientific insight to more practical technological know-how and tinkering, became a common resource.

 Leading scientists and thinkers corresponded with counterparts around the continent, and were helped by the political fragmentation of Europe, which led to rulers competing to attract the most prominent intellectual stars to their own territories. Much of A Culture of Growth sets out the processes driving the market for ideas, which Mokyr argues are evolutionary: “Cultural transmission [occurs] through socialization and learning in cultural processes . . . When there is a change in the environment, cultural traits tend to change through the retention of some and the elimination of other elements.” He adds: “For the economic historian, the great advantage of evolutionary thinking is that it tries to explain why the present is the way it is and not some other way.” He lists the forces driving the cultural environment in which people make choices — authority, imitation, persuasion, rhetorical framing, conformism, and the cost of not conforming — and gives many examples of the appearance of new cultural “variants” in the pre-Enlightenment era and during the Enlightenment. The book singles out as key individuals, too, Francis Bacon and Isaac Newton, tracing the channels of their lasting influence on subsequent culture. As a metaphor, the idea of cultural evolution has great appeal, although there is no precise equivalent to biological units such as genes or processes like mitosis. What stands out from Mokyr’s approach is the highly contingent character of the Enlightenment and Industrial Revolution. They happened because a lot of different things happened to fall into place; small deviations in the course of events could have given us an entirely different world of technological and economic power. 

The evolutionary framework is in any case unnecessary when it comes to the big question raised by this book. As Mokyr puts it: “We actually know remarkably little about the kind of institutions that foster and stimulate technological progress and more widely, intellectual innovation.” His answer is that these institutions have to embody useful knowledge as a public sphere. This is what occurred in Enlightenment Europe. Competition among states to attract the best craftsmen, engineers and scientists spread knowledge, as did publishers vying for new markets. This culture of public science, which had great prestige, paved the way for entrepreneurs to begin turning ideas into industrialisation and growth. Mokyr writes: 

“Technological advance in the period of the Industrial Revolution was a minority affair; most entrepreneurs and industrialists of the time were not like Matthew Boulton or Josiah Wedgwood and had little knowledge of or interest in science or even innovation . . . But the dynamics of competition in a market economy are such that in the long run, the few drag along the many.” 

The debate about the causes of the Industrial Revolution has been revived by contemporary anxieties over stagnation. Given the flatlining of productivity in OECD countries for nearly a decade, has the west gone ex-growth? There is no shortage of brilliant new science, so technologists find it hard to understand why many economists are gloomy about the prospects for rising living standards. In this book Mokyr points us towards wider cultural questions. What are the forces sending the idea of progress into retreat? Is the ultimate source of secular stagnation the deterioration of the public sphere? If so, given how hard it is to change the cultural environment, the pessimists may be right.

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