Joel Mokyr, Winner of the Nobel Prize in Economics

In celebration of his work

Joel Mokyr has won the Nobel Prize in Economics. It is a prize well-won. Joel Mokyr has had a great influence on our understanding of the British Industrial Revolution, and indirectly on our understanding of why poor countries are poor today. He argues that the Industrial Revolution was a combination of a culture which turned to innovation, combined with the skilled labor and minimum level of technology needed in order to put their ideas into action. Both are necessary for growth, and societies which lack either will stagnate.

I will cover Aghion and Howitt later, as their work is rather separable, and I would like more time to read their work; nevertheless, I agree with their inclusion, and think they merit the award. I see their work as doing more to explain the world as it will be, while Mokyr explains the world as it is.

Mokyr has communicated principally through books, of which I have read three: “The Lever of Riches”, “Why Ireland Starved” and “The Enlightened Economy”. “The Lever of Riches” had the greatest effect on me, although I suspect that this was in part due to when I read it in context to the other books. By the time I had gotten around to “The Enlightened Economy”, an economic history of England from 1700 to 1850, I had already become so familiar with his arguments second hand that I did not even finish the book.

“Why Ireland Starved” is an early work, best described by Barbara Solow’s review as “a string of separate articles testing various hypotheses about important issues in Irish economic history. … it is fair to say that his view of economic history is to see it as a regression equation whose dependent variable per capita GNP and whose independent variables are the sum of [various factors]. Each chapter in the book represents an attempt to assess the contribution of these variables to poverty in Ireland”. It is also not a book which has many definite answers, though he has a few facts that he establishes convincingly: in particular, Ireland was not overpopulated at the onset of the famine. I mainly got out of it a sense of how Ireland worked at the time. The primary trading good was pigs, which were essentially potatoes with legs. Tenancies were notionally for a year or at will, but were in practice held for a long time. And so on.

Unfortunately his answer to his title question is a bit unsatisfactory, insofar as he doesn’t really have a believable one. He doesn’t find that Everywhere in Ireland had substantial potato acreage. When the blight came, everyone got a negative shock. Running a linear regression need not uncover the true relationship when there is non-linear relationship – as Solow colorfully puts it, “if it were true that two grains of strychnine were a fatal dose, and we regress excess mortality on a cross section on a cross section of counties, some of which had large percentages of people taking 6 or 8 or 17 grains, we would not by Mokyr’s method find an association between mortality and strychnine”. I think the book is, on the whole, an outbreak of vulgar Fogelism, and he in fact improved for moving away from rudimentary quantitative methods. (This is not to say that he would not use quantitative methods, for he did and has; simply that he moved away from unwarranted confidence in simple regressions).

But back to “Lever of Riches”, which is a much better book. Its theme is incredibly simple – he covers all of the innovations and inventions that occurred leading up to the Industrial Revolution. Economic historians distinguish the two, incidentally – innovations are iterative improvements upon existing technologies, while inventions are akin to paradigm shifts. In the context of the Industrial Revolution, the steam engine was an Invention, but the constant tinkering of mechanics and their innovations to make the machine practical were of considerable importance.

What I took away from “The Lever of Riches” was a sense that the Industrial Revolution was inexorable. Living standards were probably stagnant – more on this later – but the technology was not. The simple answer to “why couldn’t have an Industrial Revolution happened during the Roman Empire?” was that not only did the technology not exist, but the years and centuries worth of prerequisite technology did not exist. The Roman works were feats of organization, not technology. In everything, technology was getting better and better. Crops were becoming more fecund, the three field system kept land usable longer, animals became larger and more productive, the windmill was invented, the heavy plow broke open the heavy fields of Northern Europe, the firearm with its attendant precision metal manufacturing allowed for every machine which required, the horse collar allowed horses to be useful, ships became genuinely seaworthy, and on and on. This is not a book which does well by summarization – this is a book which has its effect by amassing undeniable evidence behind its side of the story. (From what I have read, this can be taken as Mokyr’s writing style – and it is why, with apologies, I did not finish “The Enlightened Economy”.) Everything of technological interest required a long chain of prerequisite inventions. Could you imagine manufacturing a watch in the time of the Romans, without any of the tiny discoveries and accumulated knowledge from manufacturing wheellocks and flintlocks?