Title: The Gifts of Athena: Historical Origins of the Knowledge Economy
Author: Joel Mokyr
Scope: 4 stars
Readability: 2.5 stars
My personal rating: 4 stars
See more on my book rating system.

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Topic of Book

Mokyr argues that useful knowledge, particularly understanding how and why things work, is the key to economic growth.

If you would like to learn more about the historical origins of economic growth, read my book From Poverty to Progress: How Humans Invented Progress, and How We Can Keep It Going.

My Comments

While this book has been very influential in thinking about the causes of economic growth, I find it very hard to read. It is much too full of needlessly complex terminology and lacking in concrete examples. The constant use of the Greek letters is particularly annoying.

If you are interested in this topic, I would recommend reading Mokyr’s other books first:

• A Culture of Growth” by Joel Mokyr
• “Enlightened Economy: An Economic History of Britain 1700-1850” by Joel Mokyr

Key Take-aways

• Long-term economic growth is caused by the growth of propositional knowledge, which leads to technological innovation.
• Propositional knowledge includes science, informal knowledge about nature, geography, and engineering. It focuses on natural phenomena.
• Progress in exploiting the existing stock of knowledge will depend first and foremost on the efficiency and cost of access to knowledge.
• Before 1800 most inventions were made without really knowing how and why they worked. This meant that they rarely led to continued and sustained improvements.
• The range of experimentation possibilities that needs to be searched over is far larger if the searcher knows nothing about the natural principles at work.
• An increase in propositional knowledge after 1800 enabled long-term sustained invention. This was ultimately due to the Scientific Revolution and the Industrial Enlightenment.
• The Industrial Enlightenment sought to:
  • Reduce the costs of accessing information
  • Understanding why things worked
  • Increase the interaction between those who controlled propositional knowledge and who carried out the techniques.

Important Quotes from Book

The growth of human knowledge is one of the deepest and most elusive elements in history.

The growth of knowledge is one of the central themes of economic change, and for that reason alone it is far too important to be left to the historians of science.

Simply put, technology is knowledge, even if not all knowledge is technological.

The central phenomenon of the modem age is that as an aggregate we know more.

My interest in what follows is confined to the type of knowledge I will dub useful knowledge.

In what follows, I am motivated by the centrality of technology.

Useful knowledge as employed throughout the following chapters describes two types of knowledge. One is knowledge “what” or propositional knowledge (that is to say, beliefs) about natural phenomena and regularities. Such knowledge can then be applied to create knowledge “how,” that is, instructional or prescriptive knowledge, which we may call technique. In what follows, I refer to propositional knowledge as Omega knowledge and to prescriptive knowledge as Lambda knowledge.

In this kind of model the social nature of knowledge is central: learning or diffusion would be defined as the transmission of existing knowledge from one individual or device to another.’ Similarly, I will refer to the union of all the techniques known to members of society or in accessible storage devices as the set Lambda.

The idea underlying this book is the proposition that Omega-knowledge serves as the support for the techniques that are executed when economic production takes place. For an inventor to write a set of instructions that form a technique, something about the natural processes underlying it must be known in this society.

What is propositional knowledge? It takes two forms: one is the observation, classification, measurement, and cataloging of natural phenomena. The other is the establishment of regularities, principles, and “natural laws” that govern these phenomena and allow us to make sense of them. Such a definition includes mathematics insofar as mathematics is used to describe and analyze the regularities and orderliness of nature. This distinction, too, is not very sharp, because many empirical

Useful knowledge includes “scientific” knowledge as a subset. Science, as John Ziman (1978) has emphasized, is the quintessential form of public knowledge, but propositional knowledge includes a great deal more: practical informal knowledge about nature such as the properties of materials, heat, motion, plants, and animals; an intuitive grasp of basic mechanics (including the six “basic machines” of classical antiquity: the lever, pulley, screw, balance, wedge, and wheel); regularities of ocean currents and the weather; and folk wisdoms in the “an-apple-a-day-keeps the- doctor-away” tradition. Geography is very much part of it: knowing where things are is logically prior to the set of instructions of how to go from here to there. It also includes what Edwin Layton (1974) has termed “technological science” or “engineering science” and Walter Vincenti (1990) has termed “engineering knowledge,” which is more formal than folk wisdom and the mundane knowledge of the artisan, but less than science.

In the end, what each individual knows is less important than what society as a whole knows and can do.

For the economic historian, what counts is colIective knowledge.

Progress in exploiting the existing stock of knowledge will depend first and foremost on the efficiency and cost of access to knowledge.

Much of the likelihood that knowledge will be transmitted depends on the social organization of knowledge, storage technology, and who controls access to it. Knowledge, however, is transmitted over time as well as among individuals.

If access costs are low, the likelihood of losing an existing “piece” of knowledge is small, and the search for new knowledge will be less likely to reinvent wheels. Access costs thus determine how likely it is that Omega will expand-that is, that new discoveries and knowledge will be added-because the lower access costs are, the more knowledge will be cumulative.

Access costs, however, depend not just on technological variables. They also depend on the culmre of knowledge: if those who possess it regard it as a source of wealth, power, or privilege, they will tend to guard it more jealously. Secrecy and exclusionary practices are, of course, artificial ways to increase access costs.

An addition to Omega is a discovery, the unearthing of a fact or natural law that existed all along but that was unknown to anyone in society. An addition to Lambda is an invention, the creation of a set of instructions that, if executed, makes it possible to do something hitherto impossible.

The relationship between Omega and Lambda is that each element in Lambda -that is, each technique-rests on a known set of natural phenomena and regularities that support it.

The Omega set is in part the result of purposeful search in the past for useful regularities, but a lot results simply from curiosity, an essential human trait without which no historical theory of useful knowledge makes sense. Hence, a very large part of Lambda does not serve any useful purpose and does not serve as the epistemic base of any technique.

The Omega set maps Lambda into and thus imposes a constraint on it much as the genotype maps into the phenotype and constrains it without uniquely determining it. The obvious notion that economies are limited in what they can do by their useful knowledge bears some emphasizing simply because so many scholars believe that if incentives and demand are right, somehow technology will follow automatically.

Yet throughout history things that were knowable but not known were the chief reason why societies were limited in their ability to provide material comforts. Certain societies, including in all likelihood our own, did not have access to some feasible techniques that would have benefited them a great deal because they lacked a base in Omega.

A central argument of this book is that much technological progress before 1800 was of that nature. Although new techniques appeared before the Industrial Revolution, they had narrow epistemic bases and thus rarely if ever led to continued and sustained improvements.

I submit that the Industrial Revolution’s timing was determined by intellectual developments, and that the true key to the timing of the Industrial Revolution has to be sought in the scientific revolution of the seventeenth century and the Enlightenment movement of the eighteenth century. The key to the Industrial Revolution was technology, and technology is knowledge.

The true question of the Industrial Revolution is not why it took place at all but why it was sustained beyond, say, 1820. There had been earlier clusters of macroinventions, most notably in the fifteenth century with the emergence of movable type, the casting of iron, and advances in shipping and navigation technology. Yet those earlier mini-industrial revolutions had always petered out before their effects could launch the economies into sustainable growth. Before the Industrial Revolution, the economy was subject to negative feedback; each episode of growth ran into some obstruction or resistance that put an end to it. Growth occurred in relatively brief spurts punctuating long periods of stagnation or mild decline.

But perhaps the main root of diminishing returns was the narrow epistemic base of technology. When new techniques came around, often revolutionary ones, they usually crystallized at a new technological plateau and did not lead to a stream of cumulative microinventions. In key areas such as ship design, metallurgy, medicine, printing, and power technology, patterns of “punctuated equilibrium” can be observed between 1400 and 1750. The main reason for this pattern was that too little was known on how and why the techniques in use worked.

In the pre-Industrial Revolution era, narrow epistemic bases were the rule, not the exception, especially in medicine and agriculture, but also in metallurgy, chemicals, and power technology. In both Europe and China, techniques worked despite a lack of understanding of why they worked.

When no one knows why things work, potential inventors do not know what will not work and will waste valuable resources in fruitless searches for things that cannot be made, such as perpetual-motion machines or gold from base metals. The range of experimentation possibilities that needs to be searched over is far larger if the searcher knows nothing about the natural principles at work.

Engineering knowledge is most crucial precisely when the epistemic base is narrow. It would be a grave error to suppose that the Industrial Revolution in its early stages was driven by a sudden deepening of the scientific foundations of technology. But the gradual and slow widening of the epistemic bases of the techniques that emerged in the last third of the eighteenth century saved the process from an early death by exhaustion.

To oversimplify a bit, the Industrial Revolution could be reinterpreted in light of the changes in the characteristics and structure of 8-knowledge in the eighteenth century and the techniques that rested on it. As the two forms of knowledge co-evolved, they increasingly enriched one another, eventually tipping the balance of the feedback mechanism from negative to positive. Useful knowledge increased by feeding on itself, spinning out of control as it were, whereas before the Industrial Revolution it had always been limited by its epistemic base and suppressed by economic and social factors. Eventually positive feedback became so powerful that it became self-sustaining.

Regardless of how one thinks of science, it seems incontrovertible that the rate of technological progress depends on the way human useful knowledge is generated, processed, and disseminated. This is hardly a new idea.

Two historical phenomena changed the parameters of how the societies of western Europe handled useful knowledge in the period before the Industrial Revolution. One was the scientific revolution of the seventeenth century. The other is an event that might best be called the Industrial Enlightenment. The Industrial Enlightenment was a set of social changes that transformed the two sets of useful knowledge and the relationship between them. It had a triple purpose. First, it sought to reduce access costs by surveying and cataloging artisanal practices in the dusty confines of workshops, to determine which techniques were superior and to propagate them. Thus it would lead to a wider adoption and diffusion of best-practice techniques. Second, it sought to understand why techniques worked by generalizing them, trying to connect them to-the formal propositional knowledge of the time, and thus providing the techniques with wider epistemic bases. The bewildering complexity and diversity of the world of techniques in use was to be reduced to a finite set of general principles governing them. These insights would lead to extensions, refinements, and improvements, as well as speed up and streamline the process of invention. Third, it sought to facilitate the interaction between those who controlled propositional knowledge and those who carried out the techniques contained in prescriptive knowledge.’ The philosophes of the Enlightenment echoed Bacon’s call for cooperation and the sharing of knowledge between those who knew things and those who made them. Yet in the 1750s, when the first volumes of the Encyclopie were published, this was still a program, little more than a dream. A century later it had become a reality. What made Bacon’s vision into a reality was the Industrial Revolution.

Historians have generally not been able to support the notion that the scientific revolution led directly to the Industrial Revolution. The missing link may well be the Industrial Enlightenment, forming the historical bridge between the two.

The Industrial Enlightenment placed a great of deal of trust in the idea of experimentation, a concept inherited directly from seventeenth century science.” Even more important, perhaps, was scientific mentality, which imbued engineers and inventors with a faith in the orderliness, rationality, and predictability of natural phenomena–even if the actual laws underlying chemistry and physics were not fully understood. In other words, the view that nature was intelligible slowly gained ground. 

Once the natural world became intelligible, it could be tamed: because technology at base involves the manipulation of nature and the physical environment, the metaphysical assumptions under which people engaged in production operate, are ultimately of crucial importance.

Why and how the Industrial Enlightenment happened is the central question that holds the key to the modern economic history of the West.

Britain’s success in the Industrial Revolution was to a remarkable extent based on French inventions. From chlorine bleaching to gaslighting to Jacquard looms, Britain greedily looked to France for inspiration. To oversimplify to the point of absurdity, one could say that France’s strength was in Omega, Britain’s in Lambda, and that the mapping function bridged the Channel.”

Perhaps the crucial difference between the two nations was in the way the political structures affected the mapping from propositional to prescriptive knowledge. In France, engineering knowledge was mostly regarded as inspired by and in the service of national interests and political objectives, on the part of both those in control of the state and those wishing to undermine it. In Britain, overall, the subsets of Lambda of interest to the engineers and scientists of the time were far more industrial and commercial.

T’he changes in useful knowledge, both propositional and prescriptive, came from a variety of sources in Britain, France, Germany, and Scandinavia and spread quickly beyond these sources to other societies in the Northern Atlantic region. In that sense the Industrial Revolution, much like the Enlightenment that preceded and triggered it, was a Western event.

For better or for worse, the history of the growth of useful knowledge is the history of an elite: the number of people who augmented the sets of propositional and prescriptive knowledge is small, even if we take into account the majority of experimenters, philosophers, would-be inventors, and thoughtful mechanics whom history has not recorded because they contributed small sentences to the book of Lambda knowledge. The bulk of productivity gains came from the small incremental improvements by anonymous technicians and mechanics who find a way to tweak the instructions on the margin to make things work just a little better.

The growth of useful knowledge, like the growth of living forms, has, however, a great deal of autonomy to it, which cannot be explained in terms of demand or factor endowments.

Useful knowledge, more often than not, emerges before people know what it will be used for.

New useful knowledge is expensive and requires a considerable investment-far more, indeed, than can be readily measured just by looking at the cost of invention. The nature of all evolutionary change is that it is inevitably wasteful because of the inherently uncertain nature of the process.

The argument in this book is that useful knowledge mattered. It is neither Whiggish nor naive to suggest that its accelerating growth since 1750 has affected the world more than all other social and political changes taken together. The roots of twentieth-century prosperity were in the industrial revolutions of the nineteenth, but those were precipitated by the intellectual changes of the Enlightenment that preceded them. To create a world in which “useful” knowledge was indeed used with an aggressiveness and a single-mindedness that no other society had experienced before was the unique Westem way that created the modem material world. It is this useful knowledge that first unlocked the doors of prosperity and threw them wide open, as Kuznets noted. Nations began to walk in, first hesitantly, slowly, almost half-heartedly. But once Britain had made the first steps to its immense gain, others learned and followed. Those that did became rich and comfortable beyond any measure. Eventually it became a rush, if not for all. Even today resistance to and concerns about technology are still rampant, but the institutional setup of the world is such that holdouts that reject modem technology or cannot adopt it will eventually have to change their minds and somehow limp through the doorway.

Related Books

• “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
• “A Culture of Growth” by Joel Mokyr
• “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
• “Inventing Freedom: How the English… Made the Modern World” by Daniel Hannan
• “Rulers, Religion, and Riches” by Jared Rubin
• The Making of Europe… 950-1350” by Robert Bartlett
• “Power over Peoples: Technology, Environments and Western Imperialism…” by Daniel Headrick
• “Why Europe?: The Medieval Origins of Its Special Path” by Michael Mitteraur
• “The Early Modern Great Divergence” by Broadberry and Gupta
• “England’s Divergence from China’s Yangzi Delta” by Brenner and Isett
• “Needham Puzzle: Why the Industrial Revolution Did not Originate in China” by Justin Lin

If you would like to learn more about the historical origins of economic growth, read my book From Poverty to Progress: How Humans Invented Progress, and How We Can Keep It Going.