One path to prosperity

We can learn much from Joel Mokyr’s work on the Industrial Revolution in Europe

- 

This year’s Nobel prize in economics was awarded to Joel Mokyr, Philippe Aghion and Peter Howitt, for explaining how innovation drives economic growth.

Dr Mokyr, who received half the prize, is known for many great books that explain how countries develop through long-run technical change and industrialisation.

Dr Mokyr’s story of the Industrial Revolution is that of the gradual accumulation of knowledge. Much of this knowledge, especially in Britain, was what he calls prescriptive knowledge, the kind that came up with a more efficient steam engine or a better way of spinning cotton. That is a well-known story, told by many others before him. The new machinery was ingenious, but not based on scientific discovery. It was the result of tinkering, sometimes for years, by skilled artisans. Dr Mokyr’s insight shows that science still played an essential role as a body of knowledge and a way of thinking, contained in the heads of inventors as they tinkered away. By using scientific approaches of experimentation and documentation, combined with great artisanal originality, entrepreneurs were able to sustain technological innovation and deliver long-run economic progress.

Joel Mokyr has just coauthored a new book, Two Paths to Prosperity: Culture and Institutions in Europe and China, 1000 -2000, that is very interesting reading. The book should be titled One Path to Prosperity: the penultimate chapter on modern China is quite unsatisfying in illustrating anything like a second path to prosperity. The main story, however, of the sources of the Industrial Revolution in Europe is deeply satisfying. Cultural attributes initiated institutional change, which in turn reinforced benign cultural attributes. This cultural and institutional development in Western Europe triggered the accumulation of scientific and artisanal knowledge that formed the foundation for the technical change of the Industrial Revolution of the 18th and 19th centuries.