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Friday, April 22, 2016

How History Can Help

First, from MIT news:

How history can help us solve global economic issues: ...Professor Anne McCants is an historian whose research projects span multiple centuries of European economic development..., she has worked for decades to better understand the standards of living in the past and those features of the economy that contribute to social welfare. ...
Q: How can the field of history help us in solving the world’s economic issues?
A: In the same way that cosmology and geology (the two historical sciences) have been absolutely critical to most important developments in science — for example, we depend on the fossil record, the tectonic record, and the cosmic record for much of the evidence necessary for the study of everything from biology to theoretical physics — so too the study of history provides the accumulated evidence of how human systems function, and more importantly thrive.
History matters because without a credible story about where we have been before, we truly have no idea where we are now. And without evidence about past sequences of cause and effect, it is well-nigh impossible to develop intelligent plans for the future. ...
Q: What is the key barrier you see to multi-disciplinary, sociotechnical collaborations, and how can we overcome it?
A: In a way, all humans are historians. Every decision we make is framed on the basis of what we believe to be true about the past. The key, of course, is for us to be good historians, knowing true and useful things about the past, or at the very least having a method that explicitly seeks that as its goal. All of the disciplines benefit then by working alongside history, to increase their stock of evidence on which to draw, and to ensure the validity and reliability of that evidence. ...
Q: What has your extensive experience as an historian of economic development taught you that can help in the process of making tools that can enable anyone to innovate?
A: Economic history viewed on a very long timescale tells us that innovation and population size/density are highly correlated. The mechanism here is easy enough to imagine. Great ideas often emerge serendipitously, and more people represent more opportunities for such moments. Once one person has a good idea, many can go on to benefit from it, so there is not the per capita diminishment of good ideas the way there is for a field of grain, for example. Broadly then, innovation has been greatest in places where there are many people.
However, economic history viewed on shorter time horizons tells us that population size alone is not enough. Rather, it is in populations where lots of people are both permitted and capable of “having a go,” to quote my colleague Deirdre McCloskey, where innovation thrives best.
What allows people to have a go? Two conditions are critical: 1) being accorded the social dignity to speak their minds and pursue their own goals; and 2) access to the human capital that allows them to achieve their full potential. Both of these factors are severely limited by rigid systems of hierarchy and by the conditions of poverty.   Hierarchical systems depend on keeping people in their “place.” And for the majority, being in place means a priori not having a go. Poverty works its damage through the second mechanism, namely it sabotages human capital in a process that starts at birth, indeed even before birth.
If your mother is nutritionally deficient or immunocompromised during your gestation; if you are born with a low birthweight; if your protein intake in infancy and early childhood is too low to support your inherited growth potential; if you ingest lead or other toxins from a contaminated household environment as a toddler; if you are not exposed to a rich human vocabulary long before you can read; if your home is plagued by insecurity of multiple kinds so that your own response is the early and frequent production of an abundance of stress hormones; we know from detailed medical, economic, and historical research that all of these conditions un-level the playing field long before the “game” as we typically measure it even begins — that is, before you head off to school, take your first exams, participate in your first sports, or try to form your own first relationships.
So, the tools needed for anyone to be able to innovate have to start with programs that mitigate the terrible (and multiplying) effects of poverty, especially on the youngest members of our society. And we have to create the social conditions that allow everyone the full human dignity to try and have a go.
Q: What economic, sociopolitical, or cultural issues do you think most need to be addressed to make progress toward the global economic goals MIT has identified?
A: ... We fret endlessly (as we well might) about the quality of our schools, and admission to and curriculum in our universities. Yet we too rarely talk about the damage that social exclusion and economic inequality intermingled with absolute poverty do before children come anywhere near such institutions.

Second, from today's links, this is from Anton Howes:

How Innovation Accelerated in Britain 1651-1851: I successfully defended my PhD thesis a few weeks ago, and will soon be turning it into a publishable book manuscript.
In 1651 Britain had just finished a destructive civil war. Tens of thousands had died. Its monarch had been beheaded. Its mode of government overturned. In its weakened state, it was about to engage in the first of many wars with the Dutch Republic for supremacy over trade. 
Fast forward two centuries to 1851 and Britain was a country triumphant. It was the world’s technological leader, and now pressed its advantage to accumulate the largest empire in history. ...
The dramatic transformation - an Industrial Revolution - had been brought about by an acceleration in the rate of innovation. I am interested in what caused that acceleration. ...
So to discover the causes of Britain’s unprecedented acceleration of innovation, I delved into just about every recorded activity, behaviour and experience of 677 innovators of the time. ...
After staring at my data for long enough, I began to notice a pattern. People went on to innovate if inventors had been among their teachers, colleagues, employers, employees, neighbours, friends, family, and acquaintances. And the more I looked, the more examples I found. Of the hundreds of inventors I studied, nearly all of them began to innovate after meeting inventors. Inspiration mattered - inventing seemed to spread from person to person.
But this wasn’t the spread of a particular technique, design or blueprint. It was the spread of a new approach - the very idea of inventing. ... Hundreds of people in Britain began to see room for for improvement everywhere. ...
So people became innovators because others inspired them with a mentality of improvement. But we need to explain why this mentality was so uniquely virulent in Britain in the period. There were epidemics of innovation in prior societies - the Dutch Golden Age, Song Dynasty China, the Renaissance. So why did it become endemic only in Britain?** I think there was something special about this particular strain of the mentality of improvement.
The vast majority (over 80%) actively tried to spread innovation. They published about it, lectured about it, funded it, and advised on it. They founded and joined societies devoted to spreading it further. ...
Innovators in Britain very rarely kept secrets. Even the 40% or so patent-holders very rarely sued for infringement; and they very rarely lobbied to extend them beyond the usual time limits. ...
Like any ideology, it had its disagreements. James Watt believed himself entitled to protect his patents from infringement... But ultimately, the vast majority of Britain’s inventors adhered to two commandments: improve, and pass it on.
Here, my thesis reaches its limits. I can’t explain why Britain was unique by looking at Britain alone. The ideological commitment to proselytising innovation seems a likely candidate to me because it was so widespread: nothing else came close to being as common. But I need to compare the experience of inventors in Britain with those in other societies where invention failed to accelerate. More on that later.

    Posted by on Friday, April 22, 2016 at 08:57 AM in Economics | Permalink  Comments (39)


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