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The American Technological Challenge: Stagnation and Decline in the 21st Century

Author(s):Vijg, Jan
Reviewer(s):Mokyr, Joel

Published by EH.Net (April 2013)

Jan Vijg, The American Technological Challenge: Stagnation and Decline in the 21st Century.? New York: Algora Publishing, 2011.? 248 pp.? $33 (hardcover), ISBN: 978-0-87586-886-8.

Reviewed for EH.Net by Joel Mokyr, Departments of Economics and History, Northwestern University.

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Jan Vijg is a Dutch-born leading molecular geneticist at one of the most prestigious scientific institutions in the nation.? He displays an insatiable appetite for history and technology and an intellectual curiosity that would do credit to the most interdisciplinary of economic historians.? He is also well-read, thoughtful, and articulate, and asks excellent questions.? The result is a thought-provoking and lively ?big picture? book, ideal for undergraduate teachers who want to introduce young students without a strong background in economics and history to global history.?

This book, like a pearl, was born out of irritation.? As a young man, Vijg read a lot of science fiction, which made him think that the world of the future would be full of technological wonders, such as manned space flight, time travel, flying cars, immortality, and one hundred percent dependence on non-hydrocarbon energy.? None of these things have materialized to date, and Vijg at times sounds disappointed that his modern car is not much different from the cars he learned to drive in the 1960s, that airplane flights today are not much faster than the Boeing 707’s of his youth, and that even in medicine, his field of expertise, the rate of technological progress has slowed down.? The exciting technological hustle and bustle of earlier times, he feels, has disappeared.? We are simply coasting along, driven by momentum, but truly revolutionary macroinventions have disappeared and in his view are unlikely to re-appear.? Technological stagnation, or at best technological creep, awaits us.

Vijg is far too sophisticated a thinker to turn this book into a Jeremiad in the style of Daniel Cohen?s recent The Prosperity of Vice: A Worried View of Economics (2012).? He notes that with the technology of the twenty-first century the industrialized West has already secured an unimaginable standard of living, and that prosperity is slowly but inexorably spreading to the rest of the world.? Despite pockets of violence, the world is largely at peace, and most existentialist threats to our golden age such as nuclear terrorism are dismissed as unlikely.? Climate change and an asteroid strike, to be sure, are threats, but on the whole he realizes that the slow-down is the result of our success.? Many of humanity?s most pressing needs ? high-quality food in abundant supply, comfortable shelter, entertainment, information and so on ? are increasingly met with our existing technology.? Yet the boyish and adventurous streak in him wants more: space-travel (or at least hypersonic flights), instant-made textiles, radically different sources of energy, and household robots that obey our whims.? None of this, he claims, is forthcoming.? The IT revolution, he submits, offers scant compensation for those disappointed dreams.? As Peter Thiel, the founder of PayPal once put it, ?we wanted flying cars, instead we got 140 characters.?

To understand his disappointment, he looks at the history of technology summarized in a bare one hundred pages.? Usually these summaries have a certain ?potted? quality to them, but Vijg?s point is to understand an important issue: why successful societies seem to have sunk into stagnation after periods of technological flourishing.? His examples are, not surprisingly, the Roman Empire, Song China, Medieval Islam, and our own industrialized world, the offspring of the Industrial Revolution of the eighteenth century.? In all of them, he observes, a successful period of technological progress was followed by a slowing-down and eventually a collapse.? He observes quite astutely that such a collapse was not inevitable but brought about by foreign invasions of barbarian invaders specializing in violence and mayhem.[1] Given that such an invasion in our own time is unlikely, Vijg feels we will basically coast along, gradually improving on the margins but without setting foot on Mars or doubling life expectancy again.

The culprit of this stagnation, in his view, is decidedly not that human minds are running out of ideas, or that everything important that could be invented already has been invented, or that the ?low-hanging fruits in technology have all been picked? as my Northwestern colleague Robert J. Gordon puts it.[2]? Indeed, the technology we are developing is much like ever-taller ladders that allow us to get to ever higher-hanging fruits.[3]? Instead, Vijg points to what we would call today institutional failure.? We are the victims of our success: wealthy and sated (Vijg does not use words like ?lazy? or ?complacent,? but clearly they are in the back of his mind), we become more risk-averse, more concerned about possible losses, and we feel increasingly reluctant to venture into the unknown and the possibly risky.[4]? Medical advances are severely slowed-down and even blocked if the most minute percentage of users are negatively affected, and Vijg is eloquent and convincing in his just indignation at ?irrational? resistance to many potential sources of macroinventions such as genetically modified organisms, human cloning, and third-generation nuclear energy such as pebble-bed reactors, which are essentially disaster-proof.? Regulation and political control, he feels, are the result of such sentiments and they are getting in the way of more progress.?

What is the economic historian to make of this analysis? The idea that ?conservative? institutions may get in the way of innovation can be traced down to Schumpeter?s Capitalism, Socialism, and Democracy and has been the subject of a small but important literature in an area we may call the political economy of technological change (for a summary, see my Gifts of Athena, chapter 6). While we use the term ?technological progress? in our historical analysis, implying a clear-cut non-stationarity in the evolution of useful knowledge, we do not admit ?progress? in our institutional stories.? There may have been improvement, but it is less secure and less obvious.? Vijg is quite right in that he sees institutions as a threat to continued technological advance.? It is quite possible that a mixture of vested interests in incumbent techniques, and ?irrational? fears of what unknowable disasters innovations may inflict upon our comfortable and secure existence could throttle progress.

Yet two caveats are in order.? First, it is far from clear that in fact technology is slowing down.? Vijg relies heavily on a database of his own creation, 337 macroinventions made between 10,000 BC and 2006.? Such attempts to count the uncountable are common, but in the end run into the irrefutable complaint that inventions simply do not obey the laws of arithmetic because of complex complementarities and substitution effects.? More immediately, his diagnosis that we find ourselves in the midst of a technological slow-down is far from a consensus (as he knows all too well).[5]? Take for instance his argument that transportation has barely improved in the past half century.? Cars are not markedly different in outward appearance, and not moving noticeably faster; airplanes do not fly any faster either and are more cramped than ever.? On the surface, this argument is correct, but at closer examination some doubts creep in: cars today are far better-made, more durable, comfortable and safe than in 1965; drivers have access to hands-free costless communication with almost anywhere on the planet, can listen to a bewildering choice of high-definition music and information, and will never need to shuffle annoying paper maps or worry about getting lost.? Traffic jams are still annoying and costly, but modern technology can resolve it through pricing that will charge peak-hour driving a higher marginal cost (if the political problems of doing so can be resolved).? Airplanes are a different matter.[6]? But even here the effect of technology has been enormous, by reducing the real price of travel and thus making it available to almost everyone in the developed world ? leading of course to the congestion and queues Vijg dislikes.[7]? It is also no more than fair to point out that, before he dismisses the impact of innovation on transportation, Vijg might have benefited from reading Vaclav Smil?s Prime Movers of Globalization: The History and Impact of Diesel Engines and Gas Turbines (2010), which describes in magisterial detail the impact of technology on transport costs and the world we live in.?

What Vijg must also realize is that if he is right that further innovation may not make transportation all that much more efficient (or even cheap), it may make much of it redundant, through increasingly more effective and inexpensive person-to-person communication, in professional meetings and conferences as well as family gatherings can be conducted electronically and much work can be carried out from one?s living room.? If telecommuting and teleconferencing have not taken off quite as rapidly as many were hoping a decade ago, it is because for some reason most of us prefer it this way.? But the technology is basically here and still getting better by the day.? If the full price of transportation were to rise steeply all of a sudden due to a 9-11 type of event, this substitute for transportation would surely witness a rapid expansion.? Similar developments are evolving as these lines are being written, especially three-dimensional printing, which has the potential to alter manufacturing more than any invention since the Industrial Revolution, by providing mass-customization in ways and at prices that are totally unprecedented.? In services, the effects of pattern- and speech-recognizing software are only beginning to be felt.?

The second point is that technology, much like evolution in living species, often moves in leaps and bounds, punctuating extended periods of seeming stagnation.? Part of the reason is that at times technology comes up with a new idea that affects many other techniques and thus causes a widespread innovative wave.? Such techniques have been called General Practice Techniques and account to some extent for the intensity of first Industrial Revolution, but even more so for that of the second Industrial Revolution between 1870 and 1914.[8]? Historically such interactions can explain a great deal of the irregular and discrete behavior of technology.? At times, however, a dominant design is so effective that little change should be expected.? Who would complain that the forks we eat with or the buttons and zippers we use for our clothing have not changed in many years? Moreover, when a new technique is still in development, it is hard to fully see its full impact.? Would someone in 1760 England not have felt that for all their noise and bombast, steam engines had to date done little more than pump a bit of water out of coal mines?
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Finally, we should keep in mind that innovation is often needed to fix the unexpected side-effects of earlier technological progress, such as catalytic converters and asbestos removal.? Whether such a technique can emerge to cope with the ?mother of all side-effects? ? climate change ? remains to be seen.? But Vijg is right: the problem is not technological, it is institutional.? Solving the ?global commons? threats, and much of our technological future, depend on politics, not knowledge.

Notes:

1. A more detailed and elaborate statement in the direction can be found in Ian Morris, Why the West Rules ? For Now, 2010.?

2.? Robert J. Gordon, ?Is U.S.? Economic Growth over? Faltering Innovation Confronts the Six Headwinds?.?? NBER Working Paper 18315 (Aug. 2012).? The term does not appear in that essay, but can be found for instance in ?The Innovation Equation,? World Finance, March 2013, http://www.worldfinance.com/home/featured/the-innovation-equation.? An earlier use of the term was proposed by Tyler Cowen.
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3. I made this argument in some detail in my The Gifts of Athena (2002), in which I argue that what counts for technological development is socially useful knowledge which can be defined as the union of all sets of knowledge possessed by members of society.? Since the division of knowledge can be made finer and finer, what really matters is the access that agents have to the knowledge that is in the possession of specialists.? This access is what has become increasingly easy and cheap due to the IT revolution, and hence ? on this account ? we might well expect technological progress to keep growing at a rate that is at least as fast as in the past and possibly a lot faster.?

4. Vijg himself is anything but risk-averse, and boldly (if controversially) postulates (p. 108) that part of the higher risk aversion of modern society could be due to the larger influence of women and older voters on political outcomes, since he feels that these groups are more risk averse than young males.

5. See for example ?Has the Ideas Machine Broken Down,? The Economist, Jan. 12, 2013.

6. GPS technology ? astoundingly ? has not yet been introduced into commercial aircrafts, and a bill to fund the FAA?s plan to introduce it has a target date of 2020, by which time the technology may well be outdated.?

7. Vijg should recognize that goods and services come in two variants, following Fred Hirsch?s classic distinction between ?material? and ?positional? goods.? The former are amenable to technological progress because they are what we think of as goods subject to standard production function relations.? Positional goods are by definition zero-
sum: access to uncrowded museums, front-row tickets to opera performances, fast-track driving on highways, and VIP treatment at airports.? As income goes up, the gap between progress in material goods and the lack thereof in positional goods becomes more noticeable and perhaps more irritating.?

8. For an introduction to GPT?s see Elhanan Helpman, ed., General Purpose Technologies and Economic Growth (1998) and Richard G. Lipsey, Kenneth I. Carlaw, and Clifford T. Bekar, Economic Transformations: General Purpose Technologies and Long-term Economic Growth (2005).

Joel Mokyr is the author of The Enlightened Economy: An Economic History of Britain, 1700-1850 (Yale University Press, 2009).

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Subject(s):History of Technology, including Technological Change
Geographic Area(s):General, International, or Comparative
North America
Time Period(s):General or Comparative
20th Century: WWII and post-WWII