Explorations in Economic History, 2018

The Past & Future of Innovation

For 97% of recorded history, economic growth was slow, intermittent, and reversible. Then the Industrial Revolution changed everything. Will innovation continue — or are we heading back to stagnation?

By Joel Mokyr · Northwestern University & Tel Aviv University

The Big Picture: 10,000 Years at a Glance

For almost all of human history, economies barely grew. Any gains from innovation were swallowed by population growth. Then, around 1750, something unprecedented happened — the "Great Enrichment" began, and the world was never the same.

Stylized representation of global GDP per capita over millennia. Hover to explore.

Three Brakes on Pre-Industrial Growth

Mokyr identifies three fundamental reasons why economies stayed stagnant for millennia — and how each brake was finally released. Click each card to learn more.

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1. The Malthusian Trap

Any rise in prosperity led to population growth, which pushed income back down through diminishing returns to land.

How it was released: The demographic transition broke the link between income and population growth. Fertility fell with rising income. Meanwhile, technological progress in agriculture raised yields so dramatically that land was no longer a binding constraint. After 1800, productivity growth simply outran population growth.

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2. Political Predation & Rent-Seeking

Wealth attracted plunder. Wars, confiscatory taxes, and mercantilism repeatedly destroyed economic gains — a negative-sum game.

How it was released: Enlightenment ideas attacked mercantilism. After 1815, liberalism, free trade, open markets, and professional civil services took root. "Old corruption" waned in Britain by 1850. The international order since WWII has further reduced predatory wars between nations.

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3. Lack of Scientific Knowledge

People didn't understand why things worked. It was "engineering without mechanics, farming without soil science, medicine without microbiology."

How it was released: The Scientific Revolution and the Enlightenment created a culture where formal knowledge was applied to production. The Industrial Revolution "invented the method of invention" (Whitehead). Once innovation was grounded in science, progress became self-reinforcing and much harder to reverse.

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The Science ↔ Technology Feedback Loop

The key insight: science and technology don't just flow one way. They co-evolve like two symbiotic species, each making the other stronger.

"The two forms of knowledge coevolved as it were like two symbiotic species, mutually enforcing and abetting one another."

Technology helps science through two channels:

  • Setting the agenda: Inventions focus scientists' attention. The steam engine inspired Carnot's thermodynamics. The Wright Brothers' flight sparked formal aerodynamics.
  • Better instruments: The telescope, microscope, and barometer enabled the Scientific Revolution. X-ray crystallography led to 29+ Nobel Prizes. Today, lasers and supercomputers are the new enablers.
  • Resilience: Knowledge distributed across millions of minds and stored digitally is nearly impossible to "unlearn" — making growth hard to reverse.

Can Bad Institutions Kill Growth?

Historically, institutional failures have destroyed prosperity. But Mokyr argues that in a globalized world, knowledge and talent are mobile — innovation will simply migrate to where it's welcome.

⚠️ The Risks

  • Corruption at unprecedented levels hampers growth in many countries (Russia, Venezuela, Nigeria)
  • Autocracies suppress dissent and "out of the box" thinking
  • Rising rent-seeking even in developed economies (patent trolls, non-compete contracts)
  • Growing inequality weakens social cohesion

🌍 The Counterforces

  • Ideas generated somewhere become available everywhere instantly
  • Top scientists migrate to where they can work best — brain drain punishes bad institutions
  • International order makes predatory wars between states very unlikely
  • Global competition makes ideological heavy-handedness costly in the long run

The Measurement Problem: Is GDP Fooling Us?

Mokyr argues that GDP and TFP were designed for a "wheat-and-steel economy," not an age of digital services, product quality improvements, and free online tools. The gap between measured and actual progress is growing.

iPhone cost in 1957 tech
$150T
Would consume 30× global electricity — yet GDP barely captures this decline
Supermarket products
Product variety grew from ~9,000 (1975) to ~47,000 (2008) — not counted in CPI
LED vs. incandescent
85%
Potential reduction in lighting energy use — durability 30-50× longer
Free digital services
$0
Maps, email, encyclopedias, messaging — enormous value at zero price = zero GDP

Cost per human genome sequencing (log scale). From $95 million (2001) to ~$1,250 (2015) — outpacing Moore's Law.

Pessimists vs. Optimists: Scoring the Debate

Techno-pessimists (Gordon, Cowen) say the low-hanging fruit has been picked. Mokyr counters: science lets us build taller ladders to reach higher-hanging fruit. And the two flavors of pessimism can't both be right.

The Logical Contradiction

You can't simultaneously worry that machines will replace all workers (technological unemployment) and that technology isn't advancing fast enough (stagnation). The good news: they can't both be right. The better news: they can both be wrong.

What about "bite-back" effects?

Mokyr acknowledges that past productivity growth was partly borrowed from the future — burning fossil fuels, polluting soil, depleting fisheries. Some future innovation will go toward fixing past damage rather than raising living standards. But this is a self-correcting process:

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Problem: Coal pollution in 19th-century cities caused severe health damage
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Fix: Low-sulfur coal, scrubbers, switch to natural gas, now renewables

The Technological Frontier: What's Coming

Mokyr argues technology "pulls itself up by its bootstraps" — each advance gives researchers more powerful tools. Here are the frontiers he identifies, each a potential game-changer.

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Artificial Intelligence

Deep learning, pattern recognition, personalized education & medicine

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Gene Editing (CRISPR)

Editing base pairs in genetic sequences with unprecedented precision

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New Materials

Graphene, carbon nanotubes, nano-engineered materials with custom properties

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Driverless Vehicles

Autonomous transport transforming commuting, logistics, and urban design

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Decarbonized Energy

Solar panel costs plummeting, making clean energy economically viable

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3D Printing

Additive manufacturing revolutionizing prototyping and custom production

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Quantum Computing

Solving problems that are intractable for classical computers

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Synthetic Biology

Manufacturing organic products without living organisms as intermediaries

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Super-Microscopy & Lasers

Nobel-prize-winning tools revealing the nanoscopic world like never before

🪜 The Ladder Metaphor

Pessimists say the low-hanging fruit has been picked. Mokyr's response: science lets us build taller and taller ladders. Each generation of tools — telescopes, microscopes, computers, lasers — gives researchers the power to discover things that were literally invisible to their predecessors. The James Webb Space Telescope is to Galileo's first telescope what today's data science is to Linnaeus's notebooks. The difference is just in scale — but in these matters, scale is everything.

The Verdict

"There is no technological reason for growth in economic welfare to slow down, although institutions may become in some areas a serious concern."

The past is a poor guide to the future. The positive feedback loop between science and technology — each making the other more powerful — shows no signs of diminishing returns. Growth based on the expansion of useful knowledge is not easy to arrest, much less reverse. It is hard and perhaps impossible for a society to "unlearn" what has been learned, especially when knowledge is distributed across billions of people and accessible through digital media.

The real threats to growth are institutional, not technological: corruption, rent-seeking, suppression of dissent. But in a globally connected world, innovation will migrate to wherever it's welcome.