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Knowledge, Technology, and the Great Miracle of Modern Economic Growth Joel Mokyr Depts. of Economics and History Northwestern University. Why should we study economic history?. Answer: to realize how incredibly fortunate we have been to be born in the twentieth century.
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Knowledge, Technology, and the Great Miracle of Modern Economic Growth Joel Mokyr Depts. of Economics and History Northwestern University Learning for Life Sept. 2013
Why should we study economic history? • Answer: to realize how incredibly fortunate we have been to be born in the twentieth century. • We are immeasurably richer, healthier, and more comfortable than people who lived in, say 1750. • It is striking how slowly things had improved between Julius Caesar and Napoleon. People were not much richer, lived no longer, ate little better, had about equal chance to perish in a famine or an epidemic. • The rate of growth of GDP per capita before 1750 was probably at most 0.15-0.2% a year. Learning for Life Sept. 2013
Then something dramatic began to change. Economists refer to this as the Industrial Revolution. It marks the beginning of “modern economic growth”. How does modern economic growth differ from the old stuff? • It was much faster (10-15 times faster 1.5-2% a year instead of 0.2%). • It was more or less steady, with many fewer major reversals. • It was driven increasingly by technological progress, as its main engine. Learning for Life Sept. 2013
This process started in Britain in the late eighteenth century. But it soon spread to the European Continent (Belgium, Switzerland, Bohemia, Saxony, the Rhineland, Alsace) AND THE United States Then to more places: Northern Italy, Japan, the rest of Germany, Russia. And (even later) to slower-to-develop nations such as the Asian Tigers, Brazil, Spain, and so on. Learning for Life Sept. 2013
What started it all? Although there are many interpretations, the consensus view is that the driving force involved the growth of useful knowledge (defined, essentially, as knowledge involving the material, that is, physical, biological, and chemical realms) in the late seventeenth and eighteenth centuries. But how and why? And why at this time? To answer this, I will set up a theoretical framework, and then try to demonstrate how it helps us understand the history. Learning for Life Sept. 2013
“From our shameless commerce division” Learning for Life Sept. 2013
I will state the model in ten propositions: • All knowledge can be partitioned into knowledge “what” (propositional knowledge) and knowledge “how” (prescriptive knowledge). The former contains “science” and other natural regularities and phenomena; the latter is a megaset of all techniques or “recipes” on how to make things and produce goods and services. • The knowledge of society consists of the union of all knowledge of all individuals. This means that it does not have to be correct or consistent. Learning for Life Sept. 2013
Some knowledge is “tight” (in the sense that propositions are widely believed to be true or techniques are widely used), while some is untight (controversial, hard to prove). (Remark: every society that accumulates knowledge must have some criteria by which it “tests” both propositional and prescriptive knowledge; one hopes that there is a correlation between tightness and Truth, but not clear). • The connection between the two kinds of knowledge is straightforward : every technique has an epistemic base in propositional knowledge in the sense that there is some knowledge (no matter how trivial or banal) that serves as its support. (Remark: in limiting cases all that is known is that the technique actually works, but not how or why). Learning for Life Sept. 2013
There is a “minimum epistemic base” in propositional knowledge without which the technique cannot be created. However, in general, once a technique exists, it tends to augment its own epistemic base by focusing research efforts on trying to understand why it works and how to make it better. [Example: “the steam engine has done more for thermodynamics than thermodynamics did for the steam engine.”] • In general, the “linear” model that science applied science technology is incorrect; there is a lot of positive feedback. [In part this is because technology creates tools that make it possible to see and hear things that nature did not mean us to see and hear]. Learning for Life Sept. 2013
In general, the wider the epistemic base, that is, the more we understand why and how a known technique works, the easier it is to debug, improve, and adapt it and therefore its productivity effects will be sooner and larger. [Remark: hence it is clear that after an initial breakthrough, as more is learned about the underlying natural processes, it becomes easier to improve and refine the technique]. [note: (5), (6), and (7) jointly imply that technological progress may be a non-linear dynamic explosive process that never converges. Learning for Life Sept. 2013
Because societies practice a division of knowledge (specialization), what counts for the effectiveness of useful knowledge to have a large effect on the economy is whether individuals have easy access to this knowledge. This variable can be termed access costs. [Remark: Access costs are determined in part by technology (printing press, encyclopedias, search engines) and in part by the culture and institutions of science (does the society practice and reward “open science”? Is there an efficient market for knowledge?)] • Access costs have four main components: 1. Does the information that I need exist? 2. Who has it and where do I find it? 3. The cost of acquiring it and making it accessible to me. 4. Verification that the knowledge is in fact reliable. Learning for Life Sept. 2013
Why do access costs matter so much? Learning for Life Sept. 2013
Basically, that’s all we need, now back to history. Before 1600 or so, there was a de facto social separation between the people concerned with propositional knowledge (“natural philosophers”) and people concerned with prescriptive knowledge (“artisans”). Such barriers were a main cause of high access costs. Another was the high cost of books, and printing press was a crucial development. In the late seventeenth century these barriers start to break down slowly and gradually in Europe. The “age of Enlightenment” is one in which people who know things (savants) talk to people who make things (fabricants), thus reducing access costs in the off-diagonal. But in fact access costs were falling all over. Learning for Life Sept. 2013
An important part of this was the top row Scientific work became more accessible because by 1600 most scientists subscribed to the ideas of “open science” and published and presented their work, hoping to establish priority. There were intensive correspondence networks between natural philosophers throughout the European scene, using a lingua franca (Latin) and a shared set of cultural premises. The most important one is one of identity: the seventeenth century scientist felt he was a member of a “Republic” a virtual community of informed and trained men who had their own rules and institutions. Learning for Life Sept. 2013
In general the century after 1660 is an age in which access costs sharply decline One form is direct face-to-face meetings between people who “know things” [natural philosophers] and those engaged in production [manufacturers, engineers] Learning for Life Sept. 2013
Examples of reductions in access costs: “Scientific Societies” where scientists talked to businessmen and engineers. The “mother of all scientific societies” was of course the Royal Society founded in 1660. Many similar institutions emerge all over Europe, mostly sponsored by the authorities. Others are privately initiated and arise spontaneously, reflecting the need felt by both sides to communicate. The most famous --- but by no means the only one --- of those was the “Lunar Society” of Birmingham. Learning for Life Sept. 2013
Lunar Society of Birmingham (J. Watt, M. Boulton, and W. Murdoch) Learning for Life Sept. 2013 17
The Lunar Society brought together the best and the brightest in the British Midlands Distinguished scientists: Erasmus Darwin, Joseph Priestley, James Keir, Engineers: James Watt, William Murdoch, John Whitehurst Entrepreneurs: Josiah Wedgwood, Matthew Boulton Learning for Life Sept. 2013
Similar Societies sprung up all over Western Europe Of course, not all of them were dedicated to advances in technology and applied science. But many of them were. Moreover, many “informal” and loose meetings in taverns and private homes, in which scientists lectured and gave demonstrations. This was the beginning of “public science.” Learning for Life Sept. 2013
A few more spontaneous organizations: • Spitalfields Mathematical Society f. 1717 • Society of Arts f. 1754 • Royal Institution f. 1799 • Smeatonian Society f. 1771 • London Chapter Coffee House active 1780s, 1790s. Learning for Life Sept. 2013
The cheapest way to access knowledge is if scientists themselveswere involved in invention and concerned with technology Like today, some were, and some were not. But more and more leaders of science show a strong interest in practical issues, and it’s easy to come up with many examples. Here is one of my favorites: Learning for Life Sept. 2013
One Example of a typical “Enlightenment Man”: RenéRéaumur, 1683-1757 Learning for Life Sept. 2013
Contributed to many technological fields: Trained as a mathematician, president of the Académie Royale, but also interested in: • Iron and Steel (first to suggest the chemical properties of steel) • Porcelain and glazing • Egg incubation • Entomology and pests (and their significance to agriculture • Meteorology and temperature measurement • Showed the feasibility of glass fibers • Suggested paper to be made from wood Learning for Life Sept. 2013
Access costs also declined through books Needless to say, this only reduced costs to “codifiable knowledge” (and thus complemented other forms of access). But clearly the publication rate of scientific and technical books and papers expanded rapidly in the eighteenth century. There was an explicit attempt by eighteenth century intellectuals to reduce access costs through “search engines.” Learning for Life Sept. 2013
But more than anything: the age of Enlightenment invented the search engine The eighteenth century version of the search engine was the encyclopedia. And indeed, the paradigmatic enlightenment document is Diderot’s Grande Encyclopédie. Learning for Life Sept. 2013
Cabinet maker Learning for Life Sept. 2013
Pinmaking Learning for Life Sept. 2013
Inside a mill Learning for Life Sept. 2013
Knitters Learning for Life Sept. 2013
The encyclopédie was the best-known but far from the only such document Here is another example, more obscure: Learning for Life Sept. 2013
Texts like this appear all over the eighteenth century with great frequency. There was obviously an audience for it, although its direct effects on productivity cannot really be estimated. Yet it indicates that access costs to useful knowledge are falling sharply. It took place not only in instruments, construction, and manufacturing but also in the largest sector at the time: agriculture. Learning for Life Sept. 2013
One measurable dimension of the agricultural enlightenment Learning for Life Sept. 2013
Here is a book by a man named David Henry (1709–1792): Learning for Life Sept. 2013
And yet, this “agricultural enlightenment” did not yield much in the eighteenth century • The consensus seems to be that in farming the impact of information flows “beyond the circle of persons who wrote, printed, and read the books,” was probably small” (Gillispie, 1980, p. 367). • Most important: most modern scholars looking for large and dramatic improvements in British agricultural productivity at the time cannot find it. Learning for Life Sept. 2013
Bottom line on the agricultural enlightenment: Some successes (e.g. in selective breeding, rotations, and improved tools). But on the whole the entire project was disappointing, at least before the 1840s. Contemporaries were aware of this: Voltaire in his famed Philosophical Dictionary (1816, Vol. 3, p. 91) caustically remarked that after 1750 many useful books on agriculture were read by everyone but the farmers. “Agriculture, though it depends very much on the powers of machinery, yet I'll venture to affirm, that it has a greater dependence on chemistry. Without a knowledge in the latter science, its principles can never be settled”(Lord Kames, The Gentleman Farmer, 1776, p. 5). Learning for Life Sept. 2013
A Third form of Access A market for useful knowledge was established through paid consultants. The Father of all “consulting engineers” was John Smeaton. Major inventor, engineer, and consultant. Also founded the “Smeatonian Society” --- an association of engineers (1771). Learning for Life Sept. 2013
John Smeaton (1724–1792) by George Romney, c.1779 Learning for Life Sept. 2013
Much less well-known, but perhaps more representative, is Davies Gilbert (Giddy). Learning for Life Sept. 2013
Davies Gilbert (Giddy), 1767-1839 Learning for Life Sept. 2013
Engineer, mathematician, president of the Royal Society 1827-30. • Consulted to many of the leading inventors and manufacturers of the Industrial Revolution, including the steam-engine designers Richard Trevithick and Jonathan Hornblower. • Consulted on Thomas Telford famous design of the Menai suspension bridge in Wales (compl. in 1826). • Also highly influential member of Parliament, chaired committees dealing with technical issues such as the standardization of weights and measures. Learning for Life Sept. 2013
The pathway between science and technology was most remarkably visible in coal mining These are the so-called coal-viewers, itinerant specialist consultants, who advised and assisted colliery owners. Learning for Life Sept. 2013
William Smith, 1769-1839 Learning for Life Sept. 2013
Most famous for the “map that changed the world” Learning for Life Sept. 2013
