Title: Culture of Growth: The Origins of the Modern Economy
Author: Joel Mokyr
Scope: 4 stars
Readability: 4 stars
My personal rating: 5 stars
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Topic of Book
Mokyr seeks to understand the origins of modern economic growth.
- The Industrial Revolution took place because a specific set of beliefs and values that evolved in Great Britain.
- What Mokyr calls the “Industrial Enlightenment” generated a belief that humans can create progress by creating and applying useful cumulative knowledge.
- Economic growth is led by an elite group of entrepreneurs, bankers, inventors and engineers. It is their beliefs that are most critical to society.
- Social capital or education alone cannot create economic growth.
- Political fragmentation in Europe made it hard to censor new information and punish contrarians.
- The cultural unity, political fragmentation and the invention of the printing press enabled a Republic of Letters to emerge among European intellectuals during the Enlightenment.
- They laid the foundation for the Industrial Revolution and economic growth.
- In China a centralized government and educational system based on creating a core of common-thinking bureaucrats chocked off the possibilities of long-term economic growth.
Other books by the same author
Important Quotes from Book
“Above all, modern economic growth or “the Great Enrichment” depended on a set of radical changes in beliefs, values, and preferences—a set I will refer to as “culture”…
But which beliefs, and whose? In earlier work, I have argued that the European Enlightenment (or at least a substantial segment of it) was pivotal in the propulsion of economic growth in the nineteenth century… But the Enlightenment was not a mass-movement. It was an elite phenomenon, largely confined to intellectuals, scholars, a literate and educated minority that included not just physicians and philosophers but also practical people such as engineers, industrialists, and instrument makers, yet still a small sliver of the population. New scientific insights, the invention of new techniques, their successful application to production—all were the result of the actions of a fairly small proportion of the population. I also have maintained that what mattered was not only what people believed about social contracts, political pluralism, religious tolerance, human rights and so on, but also what they believed about the relationship between humans and their physical environment and role of what they called “useful knowledge” to improve material well-being. The fundamental belief that the human lot can be continuously improved by bettering our understanding of natural phenomena and regularities and the application of this understanding to production has been the cultural breakthrough that made what came after possible.”
“Technology is at its very core a relation of people with the physical environment and not with other people.”
“The drivers of technological progress and eventually economic performance were attitude and aptitude. The former set the willingness and energy with which people try to understand the natural world around them; the latter determines their success in turning such knowledge into higher productivity and living standards. In this book I will be concerned with attitudes. The proposition I put forward here is that the explosion of technological progress in the West was made possible by cultural changes. “Culture” affected technology both directly, by changing attitudes toward the natural world, and indirectly, by creating and nurturing institutions that stimulated and supported the accumulation and diffusion of “useful knowledge.”
“In what follows, I concentrate primarily on the one element in cultural beliefs that economists have so far neglected almost entirely, namely the attitude toward Nature and the willingness and ability to harness it to human material needs… Technology is above all a consequence of human willingness to investigate, manipulate, and exploit natural phenomena and regularities, and given such willingness, the growth of the stock of knowledge that underpins and conditions the exploitation of knowledge… It is the basic argument of this book that European culture and institutions were shaped in those centuries to become more conducive to the kind of activities that eventually led to the economic sea changes that created the modern economies.”
“social attitudes toward production and work (and leisure) are another major factor in determining the likelihood of innovation. Technologically progressive societies were often relatively egalitarian ones. In societies dominated by a small, wealthy, but unproductive and exploitative elite, the low social prestige of productive activity meant that creativity and innovation would be directed toward an agenda of interest to the elite. The educated and sophisticated elite focused on efforts supporting its power such as military prowess and administration, or on such topics of leisure as literature, games, the arts, and philosophy, and not so much on the mundane problems of the farmer in his field, the sailor on his ship, or the artisan in his workshop.”
“A critical cultural belief that drives economic growth and complements the belief in the “virtuousness of technology” is a belief in progress, and specifically in economic progress.”
“Second, the normative component postulates that economic progress is desirable,
The key element here is that those who propose the new ideas must have the opportunity to persuade others. Cultural change is to a large extent about persuasion…. Another critical element is that entrenched conservative elements trying to resist intellectual innovation for some reason are weakened.”
“What is crucial above all for modern economic growth is the leadership of entrepreneurs, bankers, inventors, and engineers
In most slave societies, educated elites concerned themselves with philosophy, poetry, history, and such entertaining leisure activities as hunting and music. While they were usually interested in military technology, engineering, architecture, and large-scale hydraulic projects, more mundane subjects such as farming, shipbuilding, iron-working, food processing, and textiles were rarely on their agendas. ”
“Yet unless accompanied by innovations and productivity growth, growth exclusively based on a cooperative ethic will eventually peter out. There must be something more than an “ethic” that values hard work, honesty, and the people who make their money through it. There must be new ideas on how to produce.”
“The problem with the theory that regards human capital as a driver of technological progress is double. First, it is not at all clear that the education provided to youngsters in the past had much practical or economic value.
Moreover, investing in education on the extensive margin (that is, spreading it to a large portion of the population) did not have much effect… The great engineers and inventors who made the Industrial Revolution were rarely well educated. Few of them went to the universities, ”
“Despite huge investments in education, the response of economic growth to the “education explosion” has been little or none”
“There was no medieval Industrial Revolution and for good reasons. One is that these inventions were not based on a deep understanding of why and how the techniques worked, and therefore they were likely to dead end in technological stasis early on.
It is striking how difficult it was for non-Western societies before 1900 to adopt Western (and indeed all foreign) ideas and techniques.
“In the rest of Europe, however, the “not invented here” syndrome was overcome and eventually abandoned.
“After 1650, the power of conservative forces to hold back new ideas dissolved north of the Alps and the Pyrenees”
“Another set of favorable circumstances in early modern Europe that created opportunities for cultural entrepreneurs was the growing gap that emerged after 1500 between accepted doctrine and an avalanche of new facts that educated people were exposed to and that often contradicted conventional wisdom.”
“It may not be an accident that Bacon, Galileo, and Newton were spanning a period that witnessed the emergence of the telescope, microscope, thermometer, barometer, pendulum clock, and air pump.”
“One bias in cultural evolution is what I call coercion bias, the ability of those in power who have a strong stake in the cultural status quo—be it religious, artistic, or scientific—to suppress innovation and persecute heterodox cultural entrepreneurs who deviate from the received wisdom… Another way of looking at this bias is to note that incumbents erect high barriers to entry into the market for ideas to protect their monopoly.”
“What emerged in medieval Europe and turned out to be of great importance is that political fragmentation was coupled with an intellectual and cultural unity, an integrated market for ideas, that allowed Europe to benefit from the obvious economies of scale associated with intellectual activity. This unity derived from both Europe’s classical heritage and the widespread use of Latin as the lingua franca of intellectuals, and the Christian Church… This unique combination of political fragmentation with the pan-European institution of the Republic of Letters holds the key to the dramatic intellectual changes after 1500.”
“Political fragmentation was thus important for more than restrained taxes and effective governance; it was a major factor in the emergence of cultural pluralism.”
Political fragmentation in the early modern period meant not so much that Europeans were more tolerant than those residing in other parts of the world from the outset (the opposite was the case) than that in Europe intolerance became ineffective in the long run. ”
“The institutional background of the intellectual community in early modern Europe consisted of a polycentric political environment coexisting with a transnational Republic of Letters, which included scholars and literati.”
With remarkably few exceptions, European scholars who made discoveries or generated new insights of any kind placed the information in the public realm through books, pamphlets, personal correspondence, and periodicals. Only in that fashion could others know and recognize their work and their reputation grow. ”
“It was in many ways a unique phenomenon,.
It is the main explanation why ultimately Europe succeeded where no other society did, to break out of the Malthusian state of subsistence economies through the relentless power of accumulated useful knowledge.
The Enlightenment was the final stage in the cultural evolution that eventually led to the Industrial Revolution and modern economic growth in Europe. It stressed the two elements needed for the material progress of the nation and society. One consisted of the growth of useful knowledge, and the interaction between theory and practice; the other of improving the political institutions that governed the rules of the economic game and how resources were allocated and income distributed.”
“The Republic of Letters that began to emerge in Europe around the time of the great voyages and reached a crescendo in the age of Enlightenment is the most significant institutional development that explains the technology-led quantum leap in economic performance heralded by the Industrial Revolution.”
“In the end, it was Europe that was the locus of the Republic of Letters”
“Even without Britain’s leadership Western Europe would eventually have found the path from the Republic of Letters to economic growth.”
“More than anything, the moderns stressed, knowledge was cumulative.
“What counts for economic history was the beginning of a long and drawn-out rise in the belief in the transformative powers, social prestige, and virtuousness of useful knowledge.”
“The impact of the cultural change was decisive, especially in Britain.”
“In China intellectual activity was controlled by and transmitted through the central administration far more than in Europe.
In Europe, education was a decentralized and competitive business, with no single entity having much market power.”
“In China, the state, though constrained in its capacity to implement its decisions on the people, was still the central entity setting the rules of education. ”
“the deeper problem was that Chinese education was almost entirely aimed at preparing civil servants. Unlike Europe, there were no schools or academies that taught useful knowledge and prepared young men for a life of commerce or industry.”
“The Chinese experience illustrates the fact that a competitive and open market for ideas was not the only road to progress in useful knowledge, it was just the most sustainable and effective one. When a dominant single ruler sponsored and encouraged top-flight scientists, useful knowledge could advance significantly. ”
“In the pre-1750 economies, periods of relative rapid growth and rising prosperity occurred quite frequently. The problem with these earlier efflorescences was always negative feedback: prosperity and development bred the very forces that would undo it.
A third fundamental ceiling to economic growth remained in place: an overly narrow epistemic base of technology, that is to say, a lack of understanding of why production techniques in use actually worked. “In short, what was missing in China’s institutions was a high level of competitiveness, both in the market for ideas and at the level of political power.”
“Nations and their economies grow in large part because they increase their collective knowledge about nature and their environment, and because they are able to direct this knowledge toward productive ends. But such knowledge does not emerge as a matter of course. While most societies that ever existed were able to generate some technological progress, it typically consisted of one-off limited advances that had limited consequences, soon settled down, and the growth it generated fizzled out. In only one case did such an accumulation of knowledge become sustained and self-propelling”
“That one instance occurred in Western Europe during and after the Industrial Revolution.”
“But most societies that ever existed were subject to what I have called elsewhere Cardwell’s Law, which is a generalization of the phenomenon that technology in any economy crystallizes at some point, and progress slows down and then fizzles out.
“To see the true importance of the European Enlightenment in the economic developments that followed it, recall that it involved two highly innovative and complementary ideas: the concept that knowledge and the understanding of nature can and should be used to advance the material conditions of humanity, and the belief that power and government are there not to serve the rich and powerful but society at large. The combination of these two and their triumph in the market for ideas created a massive synergy that led to the economic sea changes we observe, ”
- “Why the West Rules-for Now: The Patterns of History” by Ian Morris
- “Escape from Rome: The Failure of Empire and the Road to Prosperity” by Walter Scheidel
- “Enlightened Economy: An Economic History of Britain 1700-1850” by Joel Mokyr
- “The WIERDest People in the World” by Joseph Henrich
- “Bourgeois Dignity: Why Economics Can’t Explain the Modern World” by Deirdre McCloskey
- “The Birth of Plenty: How the Prosperity of the Modern World was Created” by William J. Bernstein
- “Bourgeois Equality: How Ideas, not Capital or Institutions, Enriched the World” by Deirdre McCloskey
- “Why Europe?: The Rise of the West…” by Jack Goldstone
- “Why did Europe Conquer the World?” by Philip Hoffman
If you would like to learn more about the origins of modern growth, read my book From Poverty to Progress.