An Orgy of Innovation



♪ ♪ – [Don] When we tell the tale of the hockey stick of human prosperity,
the phenomenon of innovationism plays a leading role in the story. Think about it. The steam engine, indoor plumbing,
penicillin, semiconductors, air conditioning, automobiles,
TVs, airplanes, desktops, laptops, iPads,
smart phones, the internet — the list of brilliant inventions
from the past few centuries is long. Yet, the number of relatively minor,
unsung improvements is still longer — much, much longer. I'd personally like to give a shout-out
to whoever invented the sealed lunch bag. You rock. The great economic historian,
Deirdre McCloskey, coined the term “innovationism”
to describe this phenomenon. She contends that it is
the defining feature of the past 200 or so years
of human history. Of course, the world had inventors
and innovators before the 18th century, but they were few and far between. Compared to today, the world
before the 18th century was not only very poor, it was also static. People in, say, 10th century France
or 15th century Sweden lived their entire lives
without much change. Their economy, their world,
was pretty much like their parents' world, which was pretty much
like their parents' world and so on, for generations on end. So what caused this orgy of innovation and the resulting bend
in the hockey stick? Scholars still debate this question today. Of course, one important component, as argued by Nobel economist
Douglass North, was good institutions,
such as secure property rights, non-corrupt courts, and the rule of law. These institutions laid the foundation for the resulting expansion
of specialization in trade, which unquestionably fueled
the innovation engine. However, some scholars contend
that this explanation is incomplete. For example, some point
to improvements in education, others to the discovery
of inexpensive access to reliable energy, like plentiful coal in England. McCloskey argues that the vital spark
for all of this innovation was a change in attitudes. Specifically, the growing appreciation
among ordinary people, of entrepreneurial innovators,
and of the economic changes they unleash. Rather than celebrate
conquerors and kings, people began to applaud
merchants and inventors. Whatever the answer, getting it right
is of profound importance, not just because it explains how
we got to where we are today, but, much more importantly,
because it is crucial to helping still poor people
reach our high level of prosperity, as many around the world
are unlucky enough to live on the handle of the hockey stick. Voting continues, so please send us whatever additional
Everyday Economics questions you have. Here's the current leader board.
Go vote and tell us what topics you want covered next. ♪ ♪

19 Comments

  1. Assila 97 said:

    What a nice, soothing narrative voice

    June 27, 2019
    Reply
  2. Wang Yuhsiang said:

    he said orgy

    June 27, 2019
    Reply
  3. Warren Harrison said:

    I don't like how economics paints the thousands of centuries before the industrial revolution as nothing happening. Not trying to stand on a soap box but thats just plain wrong.

    June 27, 2019
    Reply
  4. Gary Stavropoulos said:

    The enlightenment when "God did it" was no longer accepted as an answer knowledge grew.

    June 27, 2019
    Reply
  5. jc leong said:

    The speed of information transfer

    June 27, 2019
    Reply
  6. vipulraj dharmakar said:

    1900-2000 growth in past 100 years, war was one main reason and mind behind tackeling leads

    June 27, 2019
    Reply
  7. Gustavo Rivas Méndez said:

    Everyone is adding more reasons in the comments, so I'll throw my 2 cents as well. Nietzsche said that Christianity paved the way for the scientific mind to develop. Through centuries, the European mind learned discipline, by attempting to interpret and assemble everything we perceive into a single cohesive system (Christianity). Later, this efforts became more objective, and pragmatic, divorcing themselves from religious dogma first in the form of alchemy, and then in science. But it was the diligence of christian tradition in its efforts to explain the world in a spiritual way, that gave birth to the efforts of trying to explain the world in more material ways. I think we should thank innovationism for our economic prosperity, but also our philosophical maturity.

    June 27, 2019
    Reply
  8. Ekanem said:

    can you make a video on how to make a country rich, comparing both the western and asian models/paths to prosperity?

    June 27, 2019
    Reply
  9. Crypto Jensen said:

    Thanks

    June 27, 2019
    Reply
  10. Cipi Ripi said:

    I would put it more simple… gunpowder.
    The introduction of gunpowder in Europe (gunpowder is an ancient chinese invention) changed the warfare. Heavy knights clad in iron, mounted on powerful horses were no longer the masters of the battlefield. They could be defeated by rows of musketiers armed with matchlock (and later flintlock) muskets. And those musketiers does not have to be nobles, which trained their entire life for war. They could be humble servants, drafted by the thousands and drilled in weeks rather than years. A much cheaper alternative to expensive knights.
    But in order to be effective, they had to be trained and drilled. This require money, not land. These musketiers cannot be rewarded by some plot of land, but paid in money. Real money, cash. So, kings and princes need money. But who had money? Not the nobles that lived of the land on their estates, but merchants, artisans and craftsmen. They were the "moneyed men" of the day. Then, as the musketiers grew in importance, merchants, artisans and craftsmen grew in importance too, since the latters support the formers.
    That's why entrepreneurial spirit became more and more important to the state and society. Entrepreneurial spirit ment money, money ment soldiers, soldiers ment power, political power. In the end, entrepreneurs became the backbone of the state.

    June 27, 2019
    Reply
  11. Mujangga said:

    Innovationism…? You mean White Men?

    June 27, 2019
    Reply
  12. Fernando Bennet said:

    It was the U.S Congress' creation of the patent system in the late 18th century. We economically incentivized and protected the intellectual property rights of inventors by giving them a platform to monopolize their inventions. Perfect competition does not allow for profiting from innovation and leads to a net financial loss. A framework for investment has thereby increased our propensity for innovation.

    June 27, 2019
    Reply
  13. Reizarf Egroeg said:

    The Black Death caused the eventual spark in innovation. The Black Death killed off 30 – 60% of Europe's population. Most of those who died were the peasants. Peasants and the unskilled labor of Europe, mostly consist of the lower IQ people. So, the mass death of low IQ people raised the average IQ of Europeans. The Black Death was a sort of eugenics basically. The Europeans would then go on to innovate and colonize the world because the population as a whole was more intelligent and able to sustain good institutions.

    June 27, 2019
    Reply
  14. Humayun Ahmed said:

    The first Algebra textbook in the middle east in middle ages and the discovery/formulation of Calculus in Europe thereafter is (in my opinion) is the foundation of the tip of the hockey stick.

    June 27, 2019
    Reply
  15. Crypto Jensen said:

    Individual freedom

    June 27, 2019
    Reply
  16. Trilochan Basnet said:

    Bring The Intelligent Investor (Benjamin Graham) to your subjects

    June 27, 2019
    Reply
  17. SpaceWalkTraveller said:

    Yes the Orgy on Innovation. Steam engines, semiconductors, cars, planes, TV, radio, computer, internet, phone, western medicine, laser, satellites, the discovery of electricity are just some of the things that were invented or discovered by White Man. No wonder everyone wants to live in a western country.

    June 27, 2019
    Reply
  18. Rob F. said:

    Isn't it accurate that advancements in agriculture served as the wellspring of rapid invention/advancement. It allowed for larger communities to develop by mobilizing around centralized areas with "plentiful" food. As the community grew, an increased number of specialized trades became necessary… ranchers, tool makers, carpenters, seamstresses, etc.

    June 27, 2019
    Reply
  19. Logos Christian Academy said:

    One of the strongest correlations with human flourishing is conversionary Protestantism, as explained by Robert Woodberry in "The Missionary Roots of Liberal Democracy." It undergirds moral courts, the rule of law, the spread of literacy, property rights, human (God-given) rights, and the expectation that one think for oneself instead of passively accept the announcements of higher authorities. Furthermore, many early Protestants were postmillennial, meaning that they expected the kingdom of God (i.e. the true church) to continue advancing through the earth bringing with it the blessings that generally follow righteousness.

    http://isites.harvard.edu/fs/docs/icb.topic965299.files/Woodberry%20APSR%202011.pdf

    June 27, 2019
    Reply

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