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The Lever of Riches: Technological Creativity and Economic Progress

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According to Joel Mokyr, economic growth is the result of four distinct processes: Investment (increases in the capital stock), Commercial Expansion, Scale or Size Effects, and Increase in the Stock of Human Knowledge (which includes technological progress proper as well as changes in institutions). Throughout his brilliant book, he correlates technological creativity with economic progress throughout classical antiquity, the Middle Ages, the Renaissance, the Industrial Revolution, and then into the later 19th century.

In Chapter 12 ("Epilogue"), he further develops what is assuredly an invaluable frame-of-reference within which to understand our own time. Why does technological creativity occur? There are two components in the invention-innovation sequence: "technical problems involve a struggle between mind and matter, that is, they involve control of the physical environment." The other component is social: "For a new technique to be implemented, the innovator has to react with a human environment comprised of competitors, customers, suppliers, the authorities, neighbors, possibly the priest."

This brief commentary has only inadequately suggested the scope and depth of Mokyr's rigorous inquiry into technological creativity and its contributions to economic progress. In weeks and months to come, there will be new "levers" which help to create new "riches." The historical context within which Joel Mokyr places these opportunities is a contribution of incalculable value.

This very interesting but relatively brief book is devoted to the role of technological innovation in economic history. In a series of well written and very well referenced chapters, Mokyr discusses the role of technological innovation as a motor of economic growth and social transformation. Topics covered include a general discussion of technological innovation and growth, narrative chapters on technological innovation in the Classical world, Medieval Europe, Renaissance Europe, and the Modern world up to about 1850, discussions of why China and Classical civilization failed to develop an industrial civilization, and a discussion of the analogy between technological innovation and organic evolution. This is a work of synthesis; Mokyr presents little novel information and draws heavily on an impressive body of existing scholarship. Mokyr presents some interesting and important conclusions. Technological innovation is not driven primarily by ordinary market forces. The Industrial Revolution was the culmination in many centuries of technological innovation dating back to the Middle Ages. The failure of China to develop an Industrial Revolution remains a persistent puzzle. By about 1400, Chinese civilization was the world leader in many key technologies but then slides back and is eventually overtaken and then explosively surpassed by Europe. An important point made by Mokyr is that no nation or culture was a perpetual locus of technological innovation. In Europe, innovations were most common in Italy during the Renaissance, followed by major sites in the Low Countries and Germany, followed by the British explosion. Europe, with its divided polities, may have been more conducive to the development of industrial technology. European intellectual and scientific traditions may also have favored the emergence of industrial technology. Whatever factors responsible, Mokyr concludes that the emergence of industrial technology was probably an unusual and highly contingent event. This is similar to the conclusion reached by Kenneth Pomerantz in his recent book, The Great Divergence, an explicit comparison of economic development in China, Japan, and Europe. These conclusions and analyses completely undermine the common and facile notions of European capitalism leading automatically to the success of European culture.

The fall of the Berlin Wall did more than free Eastern Europe; it also freed historians from the somewhat chilling influence of Marxism and post-modernism. By the late 1990s, a new flowering of grand economic history had brought us David Landes's "the Wealth and Poverty of Nations" and Jared Diamond's sublime "Guns, Germs and Steel". But before them came 1990's "The Lever Of Riches", with Joel Mokyr setting out in wonderful detail the notorious economic mystery story called technological progress.

Mokyr starts with the technologies of Greek and Roman antiquity, then moves on to the neglected breakthroughs of Western Europe's Dark Ages (the horseshoe, the horse collar, the waterwheel) and the Islamic Golden Age. But his history naturally centres on the Western European technological flowering that began around 1400.

He caps this narrative with an ambitious discussion of an issue he regards as central to the mystery of technological development: the relative decline of China, the pre-eminent technological power of the centuries up to 1400.

Mokyr, writing before the upsurge of interest in complex adaptive systems, ends the book comparing technological progress with biological evolution. The attempt is only partially successful, but you feel he's opening a new chapter of debate. "A society that has ceased to concern itself with the progress of the past will soon lose belief in its capacity to progress in the future," he concludes. And he's right.

It is a good book and surprisingly maligned by a couple of the other reviewers.

h0td0gsh0p complains that Mokyr does not understand physics. However, the passage he quotes is entirely correct. The verge-and-foliot escapement mechanism was invented precisely because a falling object exerted a variable force on clock mechanisms due to differences in temperature, humidity, etc, which made earlier clocks highly imprecise.

The reader from Bath complains that Mokry says that waterwheels were invented in Medival Europe. However, what Mokry actually says is that, "The waterwheel may NOT have been invented in Medieval Europe, but it was there that its use spread far beyond anything seen in earlier times." He points out that in 1086, the Domesday Book lists roughly 1 waterwheel for every 50 households! The Romans were capable of producing fairly advanced overshot waterwheels (as the one near Arles France), but there are very few examples (about 3 places?) that are known.

Overall, I found the book very well researched.

This is an important book about the historical process that not so long ago was unashamedly called "progress." Mokyr is professor of economics at Northwestern and author of The Economics of the Industrial Revolution. The present work undertakes a systematic cross-cultural, longitudinal study of the causes and conditions of economic growth. A central contention is that contemporary microeconomics lacks the conceptual equipment to elucidate the increment to economic growth supplied by technological change. This is a startling claim: can a science founded in industrialising Scotland to explain the causes of the wealth of nations fail to explicate what everyone knows is the mainspring of economic growth? Mokyr aligns with economists who believe that this is so. They call their heterodoxy "Schumpeterian economics." In the Theory of Economic Development (1912), Joseph Schumpeter emphasized that innovation is the fundamental impulse of capitalist production. Innovation is all-sided. Production, product, resource procurement, efficiency, and marketing are all drawn into the kinetic performance. The key to this dynamism was the relentless, aggressive drive of entrepreneurs. His contemporary heirs replace the entrepreneur by the inventor as the chief wealth-producing agent. While this assessment of the critical role of technology may seem obvious to the layman, it's scandalous in microeconomics.

Readers are alerted to heterodoxy on the first page when Mokyr signals that his findings are at odds with "one of the most pervasive half-truths that economists teach their students, . . . that there is no such thing as a free lunch." We are apprised that it is the specific achievement of technology to deliver banquets for millions. It does so thanks to transactions between creative minds and nature that result in tapping natural powers and harnessing them to productive output. The wheel, the sail, the water mill, the wind mill (a wheel-sail), and the steam engine exemplify ways by which ingenuity coaxes nature into delivering disposable power at a precise point. These transactions occur outside the domain of market exchange, although they may and often do intersect with exchange. But it is not obvious to orthodox economics, whose doctrine is that technological innovation can be calculated as a response to market demand or else as a production cost. Mokyr answers that technological input is supply-led in the double sense that technology creates products and services unimagined by consumers, and that technology creates the incomes that make a demand for technology possible.

Mokyr's strategy for supplementing economics with a theory of technological innovation is to accept the half-truth that growth can be understood within economics of commercial expansion, size and scale effects, and investment. This will capture "microinnovation," that is, efficiency improvements and other changes that are made more or less spontaneously in the course of production. But then he passes on to macroinnovationm, which "involves an attack . . . on a constraint that everyone else takes as given" (9). Macroinnovators are mavericks who would change the givens. Market reward doesn't come easy. The strategy is to focus micro- and macroinnovation simultaneously in selected time-slices, and to examine their cross-fertilisation as well as the intersections between macroinnovation and the market.

The study is divided into historical narrative and systematics. The narrative covers classical antiquity, the middle ages, and the development of technology in western Europe from 1500 to 1914. The systematics is assisted by three comparative studies, of classical antiquity and medieval Europe, of China and Europe, and of Britain and Europe. Each study develops a theme meant to elucidate why macroinnovations occur and the circumstances that influence their uptake into production. They illustrate of the book's centrepiece, an analytical chapter entitled "Understanding Technological Progress." The second part of the author's systematics attempts to forge links between the dynamics of technological change and the Darwinian analysis of evolutionary change. This is a very ambitious undertaking, not easily understandable without specialist knowledge of evolutionary thought.

Here are some of Mokyr's results:

* Opposition to technological innovation is culturally pandemic. Often it's income- and market-related. Labour combinations and tariffs, over many centuries, document attempts to protect inefficient productive methods. There's also a syndrome of technology aversion. Islam and China after 1400 A.D. exhibit this syndrome after having passed through a long period of technology development. These cultures became progressively more risk-averse and xenophobic to the point of stigmatizing the imitation of foreign innovations. His description of the closure of these cultures helps understand the values and institutional prescriptions that arrest innovation; but what occasioned this turn-about? Mokyr believes that it expressed conservatism or risk-aversion at the power centers of society, that is, anxiety about loss of social control.

* Status values and the structure of preferences in a culture may assign low status to commerce or technology or both. This well-known diagnosis of Greek and Roman antiquity is confirmed by the author's investigations. He reminds us that this preference structure was nuanced. The Greeks discovered the science of mechanics and developed metallurgy and machine construction to a high pitch. But in the Greco-Roman world machines of war and building construction were the only areas in which sustained applications were made.

* Governments do not figure in Mokyr's study as significant promoters of technological innovation. The positive role of the mandarins prior to the onset of risk-aversion is emphasised, as is the strong affirmation of technology development in revolutionary and Bonapartist France. But these are exceptions; the author is more impressed by the tendency of governments to discourage innovation. The optimum recipe was the circumstance of early modern Europe, where a diversity of competing states and domestic institutions removed the option of risk-aversion taken in China and Islam. This diagnosis is confirmed by those cases where monarchs successfully imposed risk-aversion-Spain and Hapsburg went into economic decline. Since the author's history stops at 1914, we are left wondering whether the strong involvement of governments in R & D since 1945 marks a fundamental enhancement of the institutional capacity to promote technological innovation. The Soviet Union developed its technology entirely under government auspices, with mixed success. Perhaps Mokyr will explore this experience in a subsequent publication.

* The influence of ambient attitudes is discussed episodically throughout the study. The prevailing thought is that technological development is fostered best by an environment open to new ideas and new practices, which is not risk-averse and not intolerant, and which accords dignity to inventors and inventions. Religions are reckoned to be endogenous variables expressing a society's preference structure; Mokyr observes wryly that "every society . . . gets the religion it deserves" (171). The social rigidity of the Hindu religion strongly discouraged innovation, whereas the Judeo-Christian affirmation of man's dominion over nature provided support for technological intervention. Lynn White's fine studies of the Benedictine order are cited to substantiate this claim. The Protestant ethic is not mentioned as a relevant consideration.

Coming now to innovation and invention themselves, Mokyr treats them as aggregates and seeks to discern their properties. He stipulates that growth through invention and innovation is "any change in the application of information to the production process in such a way as to increase efficiency, resulting either in the production of a given output with fewer resources (i.e., lower costs) or the production of better or new products" (6). An invention is an increment in the set of total knowledge of a society, which is in turn the union of sets of individual technical knowledge. Since an invention that isn't utilized is without economic effect, the on-going synchronization of invention and innovation are critical to sustaining economic growth. The absence of this synchronisation is the reason why few societies have been technologically creative.

Space doesn't permit a discussion of Mokyr's extended analogy between organic evolution and the cultural evolution of technology. Let it be said that he endorses the punctuated equilibrium model of evolution because it incorporates macroevolution. As for the underlying psychology that microeconomics never elucidates, Mokyr's thinking is convergence with my own elucidation of "polytechnic rationality" which I developed in The Politics of Progress: The Origins and Development of the Commercial Republic.

Understanding topics of human achievement often means understanding their history. Such is the case when we investigate the creation of unprecedented wealth during the last centuries of our existence. The result is as we see it, but it could have been very different. An indeed, many examples of similar initial conditions exist, which did not translate into an industrial revolution, and hence a "lever of riches".

And so, this is a book of history. Indeed, the creation of wealth is more than the economic decision to put so many people with so many tools at work, in order to produce so much output. After history went its course, it turns out that some people can produce many, many times over what other people can do during a similar period of time.

The question is why, and that answer is easy: technology. Having, and being able to use it, technology is the difference between eking out a living at the margin of subsistence, or breaking through age-old Malthusian constraints. The hard question is why some people do, and others do not, have the use of this technology.

The history part shows in a very clear way, and into some modest detail, how many societies of the past at some point stagnated, while a few, including medieval Europe did not. But apart from learning history, we also learn to think *about* history. What influence have factors like, say, climate? Or religion? Can we learn something by borrowing models from evolutionary theory?

Apart from theoretical considerations, there is also a good deal of more practical history. How does Roman Europe compare with medieval Europe? Why did Europe see progress at an age and a stage where China did not, or at least much less? And why did England take off in a way that turned the rest of Europe into a bunch of followers?

The picture that emerges is one where a multitude of necessary conditions have to combine into a long story of increasing capability and efficiency. Only if and when those conditions are met, societies make the kind of progress that allows them to follow the road to improving material life. And though the book thereby confirms this road is not necessarily an easy one for those who didn't find it yet, it also yields some thoughts about how to hand over our own lever of riches to those who still need it so much.

As I would reserve 5 stars for those truly outstanding books you should read as a masterpiece of art, even if you couldn't care less about the topic, I will quote this book four stars. Highly recommended if you're interested in this subject.

Why were and are some societies so much more creative than others? Joel Mokyr, well known economic historian, tackles this important question. In his view, technological creativity has two components: invention (individual breakthroughs) and innovation (social and economic factors that lead to widespread adoption and improvement of technology).


He then takes the reader on a breathtaking journey through classical antiquity, the middle ages, the Renaissance, the Industrial Revolution and the late Nineteenth century. This section alone is worth the price of the book.We learn how while the ancients came up with many sophisticated technologies, it remains an open question as to why many technical solutions eluded them.We learn how medieval Europe (contrary to popular belief about the dark ages), saw many inventions that had eluded the ancients: water driven machines, the horse shoe, the stirrup, the horse collar. By 1200, medieval Europe had absorbed Oriental knowledge, and then surged ahead. By 1500, Europe "controlled more energy, machinery and organizational skill than any civilization, ancient or contemporary". The author does a splendid job in conveying the sense of excitement and creativity that swept Europe. What followed is justly described as "The Years of Miracles". The details of the creative process are beautifully illustrated. One example: "The basic idea for the construction of the atmospheric engine was based on the realization that the atmosphere exists".

The next section tries to extract some "regularities" from the narrative. The author examines various hypotheses. This section is the most difficult part of the book and will need careful study. After careful analysis the author presents a biologically inspired hypothesis to answer the question raised in the first chapter. He is careful to point out aspects where the analogy to Biology does not apply. In the author's view, the proper analogy to the Biological concept of Species is technique itself. "Like evolution, technological progress was neither destiny nor fluke. Yet the power of Darwinian logic -- natural selection imposed on blind variation -- is that we need not choose between the two".

In an epilogue, the author presents a few thoughts on the future -- albeit very hesitatingly and tentatively. One cannot but be impressed by his caution and humility.

Does the author succeed in answering the central question? Alas, this reviewer is not learned enough to decide. Many parts of the book rang true given my own experience with technology. It will surely influence and inform my thinking.

Joel Mokyr's Lever of Riches is a book on technological creativity. Throughout his book Mokyr searches for the variables that affect the technological change. As it is deduced from the text that the technology, by itself, is not the only cause of the richness of a nation, but the interactions among the law, trade, administration, institutions and inventions create the vital, and generally short-lived, environment for the technological progress which yields to richness.

It is clearly seen from The Lever of Riches that Mokyr follows a scientific methodology with which he tests hypothesises of different historians who tried to solve the technological progress mystery, and he refutes most of these hypothesis by using sound justifications. From chemistry to agriculture, metallurgy to shipping, by narrating the different inventions of the historical periods from classical antiquity to year 1914, Mokyr tries to address the causes of technological progress.

I was quite satisfied by the explanations made by Mokyr, especially the attitudes of societies, the techniques used before and after 1850, the policy on patent system, the dispute between guilds and firms, comparison of China and Europe, the evolution of macro and micro inventions which those all together effects the technical progress.

There is huge difference between Mokyr, Joseph Needham and Lynn White on the technique they used and the information they provided. In his Science in Traditional China, Joseph Needham mainly focuses on the technological progress and social changes in China which took place for nearly 1500 years. It is not possible to understand from Needham's text why China could not develop a Western-style technological progress model, which Mokyr shows by describing the attitudes of guilds, the emergence patent system, the perception of societies' on value, the techniques (learning by doing, learning by using) used by the European's, the interaction among the countries and many more. The linear reasoning approach applied by the Lynn White is quite different than that of Mokyr's scientific approach. White's solutions to the technological progress phenomenon are basically an incremental technological change in tools and their effect on political and social system. White claims that the usage of stirrup, plough and reinforced armour led to a change in the political system. Despite it has valuable explanations, contrary to Mokyr, White's text does not give us any information on the guilds, the techniques employed for utilization of inventions, or the developments and their interactions in mining, shipping, and the change of the centre of gravity of technological progress.

In the search to answer why Europe led other continents and why England led Europe until 1850, Mokyr examines different sectors (chemistry, mining, metallurgy, etc) one by one and shows how a technical change in one sector affects other sectors. It is obvious from his text that by switching among the sectors and time periods, Mokyr has both vertical and horizontal depth of knowledge on technological change and its agents.

In order to understand the Industrial Revolution, the mutual progress made by the humanity shall be inspected, and Mokyr does this. Inventions made in China, medieval Islam and Europe are explained with their effects on society and productivity. But since the Industrial Revolution emerged in England, the text narrated by Mokyr mainly deals with the developments occurred in England and Europe.

I think that there is no one-single root cause of the technological progress, but dozens of macro and micro causes that forms the shape, speed, and path of the progress. From The Lever of Riches, we see that, indeed, the technological progress phenomenon is not an easy one which can be explained by a single theory.

It was enlightening for me to read how England led others by performing learning-by-doing and learning-by-using technique, a technique which eventually led England behind of Germany and United States due to England's resistance of changing her techniques with the new scientific methods which were mainly generated by the universities.

Despite he has questions whether the progress or stagnation is the normal state of a society, I could not see the reason why Mokyr did not focused on the fact that the progress cannot be achieved without stagnation due to the need of consuming the products of the progress.

One comment to the book may be that Mokyr seems to be inclined to see the negative sides of the craft guilds, and why he did not mentioned their contributions to the cumulative body of knowledge, which is explained in detail in Civilization and Capitalism, of Braudel.

I am totally glad about having read this book, and I believe those who seek the answers for or interested in the technological progress phenomenon will find The Lever of Riches an indispensable source of reference.

Excellent historical references and socio-economic conclusions.
This book is a must-have. Highly recommended.

Joel Mokyr is one of the foremost experts in the technological dimensions of the industrial revolution. Here he ranges further to examine the technological (as opposed to scientific) achievements of different societies (mostly Classical, Medieval and Modern Europe, and China) and their contributions to material welfare and productivity. This short review is unparalleled for its concision and the depth of insight it offers into vexing questions about economic and technological growth. There are no sure and easy answers and Mokyr doesn't offer any, but he goes well beyond a bland survey of different views and critically evaluates different theories. This is definitely an economist's perspective on technology (if you want the engineer's perspective look elsewhere), but Mokyr easily handles the technical details of various devices when required. A modern classic in the field.