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.