Civilizational Bases for Innovation

Question 1

European Inventions

Answer 1

The Waterwheel
→ Dates back at least to Roman times
→ Went through a long period of improvements - dams to create ponds to stabilize and increase pressure, improvements in gears to change or modify directions of motion
→ The technology was used across a range of activities - grinding grain, hammering metal, pulping cloth for paper, etc., bringing improvements in productivity in each

Eyeglasses
→ Approximately doubled the useful work life of a craftsmen working with small objects; iii) this increased the return on inventions like gauges, micrometers, and other precision instruments
→ Thus increased the average return on investments in becoming a craftsman
→ They also developed ways to standardize production of eyeglasses
→ The tools themselves used in this process allowed for a boom in productivity

The clock
→ There were limitations to sun dials and waterclocks
→ They used craft skills and mechanical knowledge developed in other areas to develop the gears for the clock
→ There was continuous improvement
→ Made possible the coordination of activity by discrete individuals.

Question 2

Why did Europe lead productivity growth from the 17th century onwards?

Answer 2

→ While early societies were good inventors, they weren’t good diffusers
→ Ex. The use of the printing press was restricted in China
→ power always seemed to limit technology to their control, which in turn limits productivity

Question 3

What made Europe different from Islamic and Aisian producers?

Answer 3

1. Culture/the Judeo-Christian tradition?
2. Respect for manual labour
   → Creates drive for productivity
3. The idea that nature should properly be subordinated to humans
4. Linear rather than cyclical sense of time
   → If you see time as a cyclical process, there is no drive to improve on the past
5. The seperation of church and state
   → limits to ecclesiastical control made possible the development of a market

Question 4

How does unproductive entrepreneurship limit innovation?

Answer 4

→ Rent-seeking: whereby people/commercial entities attempt to increase their incomes by changing rules in their favour (development of a monopoly)
→ Extortion: When people take money, property or services through coercive means (organized crime)
→ Fraud: The use of deception and manipulation to take money from people

Question 5

What incentives are needed to tie productivity to effort?

Answer 5

→ Usury Law: Prohibitions on interest that could be charged
→ International trade
→ Investment in infrastructure
→ Property rights need to be respected

Question 6

What conclusions can we draw from the history of European Innovation?

Answer 6

→ Science and technology don’t guarantee productivity improvements
→ Productivity improvements emerged because of the market which harnesses effort to productive outcomes providing there are limits to rent- seeking, extortion, and fraud
→This requires a culture that values commercial and industrial activity and a legal system that recognizes property rights and enforces contracts.