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The Gifts of Athena: Historical Origins of the Knowledge Economy

Author(s):Mokyr, Joel
Reviewer(s):Khan, B. Zorina

Published by EH.NET (January 2003)

Joel Mokyr, The Gifts of Athena: Historical Origins of the Knowledge

Economy. Princeton, NJ: Princeton University Press, 2002. xiii + 376 pp.

$35 (cloth), ISBN: 0-691-09483-7.

Review Essay by B. Zorina Khan, Department of Economics, Bowdoin College.

The Gifts of Athena begins with an epigraph from Robert Hooke, a

celebrated experimental scientist often regarded as “England’s Leonardo,” who

died exactly three hundred years ago. Hooke noted that truly productive

insights were only to be attained by a “Cortesian army, well-Disciplined and

regulated, though their numbers be but small.” Hooke would not have hesitated

to induct Joel Mokyr into his “Cortesian army,” in any one of his guises as the

Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and

History at Northwestern; President Elect of the Economic History Association;

or author of The Lever of Riches (Oxford University Press, 1990).

The Lever of Riches is a standard reference for anyone who wishes an

eclectic and thought-provoking treatise on the economic history of technology.

The Gifts of Athena updates us on Mokyr’s thinking over the last decade

on the role of knowledge in generating economic growth. Lest we become

entangled in the fascinating but ultimately insoluble labyrinth of

epistemology, he immediately limits the scope of inquiry to “useful knowledge”

related to natural phenomena that can be manipulated to enhance economic

welfare. Useful knowledge comprises two categories: propositional

knowledge about natural regularities; and prescriptive knowledge or

techniques.

Propositional knowledge (denoted by the symbol Omega) refers to generalized

principles such as natural laws and empirical observations obtained through

measurement and classification. The concept is not limited to science per se,

but also extends to mechanics, geography, engineering, and socially constructed

beliefs that might be incorrect, such as my grandmother’s conviction that

exposure to evening dew caused ague. Collective knowledge ranks more highly

than what any individual knows, and raises the key question of how individual

knowledge is diffused and aggregated into the public domain. Improvements in

Omega knowledge are due to discoveries of facts that had always existed but

were previously unknown, and provide the epistemic base for the set of

prescriptive knowledge. Prescriptive knowledge (denoted by the symbol Lambda)

consists of techniques, prescriptions, and instructions, which reside in human

memory, artifacts or storage devices. Indeed, the patent law makes just such a

distinction, and awards patents for net additions to the store of prescriptive

knowledge (inventions) but not for discoveries of the sort that would fall

within the primary Omega set.

Mokyr envisages the Omega set as a prior constraint, which limits the set of

feasible techniques: “The obvious notion that economies are limited in what

they can do by their useful knowledge bears some emphasizing simply because so

many scholars believe that if incentives and demand are right, somehow

technology will follow automatically” (p. 16). As of January 2003, we do not

have a cure for AIDS or the secret to cold fusion; such knowledge might or

might not exist, but effectively the only important fact is that we do not

currently have it and this constrains our current welfare. The components of

this set also influence the costs of acquiring or using techniques. If a

solution to an industrial problem is found through serendipity but the

underlying principles are unknown, the cost and riskiness of replication tend

to be high. The conceptual system is completed by pointing out that feedbacks

can occur when the body of prescriptive knowledge serves to increase the set of

propositional knowledge.

Mokyr then poses the question that the untutored reader undoubtedly will ask:

why do we need to know a theory of knowledge? The rest of the book provides an

answer: the advances in welfare that we enjoy today are the legacy of a

revolution in knowledge that occurred some three hundred years ago in Western

Europe. The credits for its intellectual origins are shared, but in terms of

its economic exploitation Britain led the way and other countries followed. The

role of useful knowledge in this process is illustrated in chapters that center

on the British Industrial Revolution, the factory system, health and the

household, political economy, and institutions in relation to technological

change.

Growth episodes did occur before the first Industrial Revolution, but were

subject to negative feedback mechanisms that ensured the spurts were

short-lived. For instance, rent-seeking guilds raised monopoly barriers and

other coalitions suppressed the diffusion of vital technological knowledge.

However, the most important obstacle to self-sustaining growth was the narrow

base of propositional knowledge in such areas as agriculture, transportation,

power, and medicine. Thus, when the Industrial Revolution did occur, it was due

to what Mokyr calls an “Industrial Enlightenment.” Expansions in the base of

propositional knowledge, and a positive feedback mechanism between the two

types of knowledge, proved to be critical. Those who focus simply on pure

scientific discoveries miss much of the point, since valuable knowledge was

also drawn from a combination of tatonnement and conscious insight. In

the eighteenth century, exogenous discoveries about nature, changes in

artisanal knowledge, and greater access to information combined with new

inventions to create productivity advances.

Mokyr emphasizes the importance of access to knowledge, and argues that the

Industrial Revolution was accompanied by a revolution in information technology

throughout Britain, France, Germany and Scandinavia. Scholars communicated with

investigators in other countries; experts, consultants and other specialized

professionals cooperated and transmitted knowledge by varied means including

networks, job mobility and industrial espionage. The cost of access fell partly

due to innovations in postal services, improved transportation, greater

availability of cheap reading matter, and standardization of information such

as in the use of mathematics as a means of communication. Access to knowledge

also became more systematic, as in the spread of alphabetization, compilations

of technical material in encyclopedias, and the Linnaean method of classifying

and identifying botanical specimens. By the time of the second Industrial

Revolution factors that favored improved access included an institutional

environment that engendered positive interactions and the spread of free market

principles.

Knowledge and technology also caused changes in the organization and location

of production from the household to the factory. The competence levels required

of manufacturing increased and necessitated the application of more knowledge

than the ordinary household could efficiently generate, for “the division of

labor is limited by the size of the knowledge set necessary to execute and

operate best-practice techniques” (p. 140). Other explanations of the factory

system such as the role of economies of scale, transactions costs, and

increases in the intensity of work, are not regarded as alternatives, but as

complementary to this proposition. Apart from the efficiencies of specialized

knowledge, factory owners had a vested interest in adding to the skills and

knowledge of their workforce, if only to socialize their workers into

appropriate behavior. Thus, the factory system itself functioned as a conduit

through which knowledge was created, recorded, and transmitted. The mechanics

who worked for Boulton and Watt were coveted by competitors because they

embodied firm-specific techniques, insights and habits. Today, modern

innovations in communications and information technology decrease the

comparative advantage of the workplace relative to the household, and offer

some workers the prospect of a return to household production.

The fifth chapter deals with the household’s use of technologies, and its

“recipes” or additions to prescriptive knowledge. Unlike markets, households

are not entirely subject to competitive pressures, so we unfortunately cannot

count on a Darwinian process to ensure the elimination of inefficient

homemakers. Nevertheless, changes in propositional knowledge at the household

level can be credited with significant advances in human welfare, such as the

fall in infectious disease that favorably affected the morbidity and survival

rates of infants. The results of empirical studies regarding sanitation and

hygiene had a significant impact on household practices and beliefs. Mokyr

highlights the “war on dirt,” the germ theory of disease and the “war on

insects,” and advances in nutritional science. These discoveries diffused due

to the “paternalism of the educated classes and the greed of commercial

salesmen” (p. 188). The working class was persuaded by the weight of

statistical evidence (some of it incorrect), and the judicious example of their

social superiors such as the British Ladies’ National Association for the

Diffusion of Sanitary Knowledge to emulate the “culture of respectability” (p.

207). These developments shifted the onus of dealing with death and diseases

from a passive reliance on the (unknowable) vagaries of Providence to the

(knowable) responsibility of individual households. As a result of this change

in health-related household knowledge, homemakers spent more time in creating

nutritious meals, a hygienic environment, and caring for children. Indeed, it

is possible that factors such as “overenthusiastic rhetoric and brainwashing by

soap commercials” (p. 212) may have led to a suboptimal and excessive level of

devotion to cleaning and housework. Moreover, this exaggerated commitment may

have delayed the entrance of some married women to the labor force.

The next chapter deals with the political economy of knowledge, and centers on

two propositions: first, the progress of useful knowledge is far more

influenced by political economic forces than we realize; and second,

technological inertia does not indicate that individuals are irrational, but

may be the outcome of rational choice. Entrenched elites may manipulate

cultural standards and religious principles to avoid innovations that threaten

their position. The existence of democratic free market processes is no

safeguard, and indeed under some circumstances may serve to enshrine

inefficient technologies to a greater degree than other less desirable

political systems. The final chapter concludes that “useful knowledge

mattered.” Expansions in the set of useful knowledge can be induced to some

extent by social agenda, appropriate institutions and relative prices.

Nevertheless, fundamentally its growth is a function of the dea ex

machina, for there is “a great deal of autonomy to it, which cannot be

explained in terms of demand or factor endowments” (p. 293).

Starvingmind.Net refers to the “peerless scholarship” of The Gifts of

Athena, for good reason. One is impressed by the plethora of allusions

drawn from science, economics, history, Greek mythology, studies of the effects

of fluoride on the tooth decay of Colorado children, household hints from

The Woman’s Book (1911), and some thirty nine pages of references. The

description it offers of the European experience is superb, and a fair reviewer

would not fault a work for achieving its aims admirably. An editor of my

acquaintance insists that what really matters is the subtitle, which suggests

that this book is about the historical origins of the knowledge economy. I

cheerfully admit to my biases, but I have strong doubts about the relevance of

the European experience to understanding either the information economy or

global technology and culture today.

Britain restricted useful knowledge to an elite (“whose numbers be but small”),

and its institutions functioned in such a way as to prohibitively increase the

costs of access to the working class. Had the United States crafted its own

institutions in the image of Britain my counterfactual suggests that I would

not be typing this review on my own computer, but instead would be sharpening a

formidable array of pencils. (Indeed, I acquired a PC before the British Patent

Office did.) Based on comparative economic history, I am more sanguine about

the effectiveness of efforts directed towards inducing increases in useful

knowledge unaided by Athena; I am less sanguine about the welfare gains from

improved access, in the absence of institutions deliberately designed to ensure

a process of democratization.

What does the book have to tell us about the information economy in 2003 and

beyond? As a careful economic historian, Mokyr is reluctant to engage in

futuristic predictions. He speculates that such large gains in useful knowledge

were experienced in the 1990s that they possibly amounted to another industrial

revolution. He highlights the fact that marginal access costs have been

“reduced practically to zero” (p. 77). However, contemporary applications are

admittedly not a major focus of the book. So perhaps it is once again Robert

Hooke who offers us the best insight into the ambiguities of the so-called

knowledge economy: his classic treatise, Micrographia (“humbly” placed

at Charles II’s “Royal feet ? [despite] the meanness of the Author, and

of the Subject”) was printed in 1665 to great acclaim; today anyone can have

access to the digital edition at Octavo.Com — for a price of $30, or $550 for

the “research edition.”

Zorina Khan is Associate Professor of Economics at Bowdoin College, Faculty

Research Fellow at the NBER, and a member of the editorial board of the

Journal of Economic History. She has published on the history of patents

and copyrights, as well as economic history and the law.

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