Mokyr’s ‘The Lever of Riches’

When Joel Mokyr won the Economics Nobel this year, the chorus of appreciation for his work on Economic History was too loud to be ignored. So I picked up his ‘The Lever of Riches: Technological Creativity and Economic Progress’ which was published three and half decades ago.

Mokyr’s core argument is that economic growth is primarily driven by ideas and not just capital and natural resources. I gleaned many ideas from the book:

• The ancient world of the Greeks and the Romans were limited in their technological acumen. Most of the Roman ingenuity was in public infrastructure – roads, waterways and buildings and very little on mechanical devices. In Mokyr’s words: “ The Rome of 100 A.D. had better paved streets, sewage disposal, water supply, and fire protection than the capitals of civilized Europe in 1800.”
• Most economic growth before the middle ages was driven by trade (Smithian) and little by way of innovations and tinkering that birthed new technologies that were then successfully marketed (Schumpeterian)
• It was only in the so-called Dark Ages and the later part of the Middle Ages that technological improvements that reduced the drudgery of common citizens begin to emerge in a larger scale.
• The invention of the compass made navigation easy and unlocked new markets. Clocks called for precision engineering and resulted in quantification of productivity.

By the middle of the fourteenth century, the custom of dividing the hour into 60 minutes of 60 seconds each had become standard. Four o’clock was four o’clock for all individuals, an hour was an hour. This communicability of facts and concepts, the “1-see-what-you-see” stage of information diffusion, was an important element in the diffusion of innovations. Moreover, it permitted a more accurate measurement of’ productivity. After all, implicit in our notion of efficiency is the need to measure time: productivity is a flow concept. Clocks brought home differences in efficiency: more productive workers and better implements and tools could he seen to produce more output per hour. Productivity comparisons became easier, and with them the choice between the faster and the slower. Clockmakers brought new standards of accuracy and complexity to the construction of’ mechanical contrivances, and many played important roles in subsequent inventions in other industries.

• Galileo’s theory of mechanics helped explain the physics behind machines.
• Most of the mathematics and science that explained some of the existing innovations were yet to be explained which prevented its widescale replication.
• Improvements in mettalurgy resulted in the widescale adoption of some technologies, the most famous of which was definitely Gutenberg’s printing press
• Innovations in optics resulted in telescopes that led to a better understanding of the motions of the Universe.

Eventually, the Industrial Revolution took off in the West beginning in Britain. One of the greatest and most complex debates in economics is the argument around the Great Divergence – How did the West take off despite being a laggard compared the rest of the world.  Mokyr offers some arguments – values, institutions, standards, political fragmentation which encouraged quick adoption of rival technologies etc. Innovations could also happen only when the elites had a stake in the material improvement of the lives of the common peasants and village folks. This is one reason why it took two thousand years for real improvement in human well being to take off. For instance, there was no way India could have been a technological powerhouse, with the caste system entrenched.

The scientific revolution of the 17th century and the sidelining of religion during the Enlightenment also played a role. (An earlier piece on the Age of Genius – the 17th century)

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