File 2: Civilizational bases of innovation

Question 1

What was the productivity growth in Europe from the end of the 17th century based on?

Answer 1

on the accumulation of knowledge of technologies from the middle ages and passed trial and error

Question 2

Advances in technology occurred in _____ and ________. Their early inventions include____

Answer 2

in China and Islamic countries

1. paper was invented in China and adopted in arab countries
2. water clocks in china and islam
3. printing was invented in china
4. gunpowder was developped in china

Question 3

Although Europe had fallen behind China and islamic countries, enumerate some of their inventions.

Answer 3

1. Water wheel: from the roman times, improvements include damns to create ponds to stabilize and increase pressure and gears to change direction, used for grinding grain, pulping cloth
2. Eye glasses: allowed to with trade skills/craftmens to double work with small objects and increased return on inventions (increase in prod) and increased return in becoming a craftsmen
3. Clocks: problem w water wheel is that it freezes and mineral from water causes pipe to change its rate => creation of mechanical clock which allowed coordination of economic activity

Question 4

Which inventions did Europe improve?

Answer 4

1. printing: from block printing to movable type letter which allowed the production of private contracting and govermnet documents
2. gunpowder: china created it under powder form: through corning, europe compacting powder which allowed it to accelerate (basis for military equipment)

Question 5

Why did China and Islamic countries fail to build on their own lead?

Answer 5

The access to technology was restricted:

1. China saw knowledge as a confidential aspect of sovereignty
2. China saw printing as a source of dissent and Islam had religious objection to pringting the Kpran

Question 6

How did Europe take over China and Islam in terms of technology?

Answer 6

1. culture: the judeo/christian tradition had a respect for manual labor, idea that nature is subordinated by humans and a linear (rather than cyclical) sense of time
2. incompleteness of church control in europe
3. limit to ecclesiastical control allowed the development of market: facilitated development of clock/paper/contract, rulers fot to see the pay off of innovtion

Question 7

What are the key components of the market? (3)

Answer 7

1. capital market: dev assisted by need to finance commercially motivated voyages
2. labour market: movement of labour (prohibition of migration of skilled laborers)
3. a market for goods: identify the need for capital goods (ex: pump for mining)

Question 8

What are the elements that led to technological improvement in Europe? (3)

Answer 8

markets, entrepreneurships, innovation

Question 9

What are unproductive objectives of entrepreneurship that oppose effort in productive activity?

Answer 9

1. rent seeking: to increase income by changing rules (monopoloy)
2. extortion: organized crime
3. fraud

Question 10

How do you tie entrepreneurship to productive effort?

Answer 10

requires incentives:

1. productive activity must be respectable (usury: lending money at unreasonable high rate, international trade, invest in infrastructure): in china, commercial activity seen as disgrace, warfare=major source of income and wealth in medieval europe, but in england, kinf edward iv engaged in wool trade and nobilitialy later built canals and usury laws were edvaded
2. rules of law must be established: commercial law and methods for resolving disputes
3. property rights need respecting

Question 11

Do science and technology guaranteed productivity improvement?

Answer 11

no

Question 12

How did productivity improvement emerge from science?

Answer 12

thru markets that harness effort to productive outcomes privided there are limits to rent seeking, extortion, fraud which requires culture that values commercial and industrial activity and legal system that recognizes propriety rights enforces contract