Syllabus: Issues relating to planning, mobilization, of resources, growth, development and employment
Context: 2025 Nobel Economics Prize awarded to Joel Mokyr, Philippe Aghion, Peter Howitt focusing on innovation economics.
Mokyr’s Core Argument
- Growth as Social Technology
- Modern growth is social technology before mechanical; influenced by scholar David Hounshell’s pedagogy significantly.
- Industrial Enlightenment relied on civic machinery: printers, coffee houses, learned societies, guilds enabling knowledge travel.
- Apprenticeships, shop-floor heuristics, rule-of-thumb engineering formed codebase of progress and industrial development.
- Guilds in contestable markets incubated capability; ossified guilds throttled entry blocking innovation and competition.
- Schumpeter’s creative destruction works only when social plumbing allows new ideas displacing entrenched privilege.
- Complementary Laureates’ Contributions
- Aghion-Howitt Schumpeterian growth framework provides dynamic microfoundations for innovation and entrepreneurship processes.
- Innovation rents attract entrepreneurs; incumbents litigate/lobby; policy either hardens moats or protects productive churn.
- Engine misfires when experimentation costly, entry blocked; hums when institutions favor contestability and diffusion.
- Mokyr shows how societies built engine; Aghion-Howitt show tuning under pressure maintaining innovation dynamics.
Contemporary Relevance
- AI and Jobs
- Technology shocks rarely one-for-one job killers; they reprice competencies, reorganize tasks requiring transition management.
- Social question: who bears cost of moving from old tasks to new ones requiring policy intervention.
- Aghion-Howitt injunction: protect process rather than incumbents through portable benefits, skills bridges, data portability.
- Public Debt Management
- Dutch and British states became credible borrowers by building civic capacity: tax systems, representative institutions, enforceable contracts.
- Fiscal sustainability is institutional, not merely arithmetic; requires capacity building beyond austerity measures alone.
- Inequality and Privilege
- Guild history shows privilege often hides behind quality control, safety claims requiring contestability mechanisms.
- Counter is lower entry/diffusion costs so insiders’ rents bid down by capability, not pedigree.
- Digital markets: pro-competitive procurement, open standards, limits on self-preferencing as modern analogues.
- Technological Diffusion
- Nick Crafts’ revisions show general purpose technologies (steam, ICT, AI) appear late in macro data.
- Require complementary investments, firm reorganization for full impact realization taking considerable time historically.
- Jared Diamond’s lens: technology embedded in landscapes, path dependencies reminding institutional embeddedness importance.
Conclusion
- Mokyr’s quip feels true because prizes are lagging indicators; frontier problems are historical in essence.
- Economic history’s comparative advantage: documents how societies learn to argue productively, build forums, rules.
- History’s answer blunt: prosperity is exception; must be argued for institutionally and incessantly continuously.