The Enlightened Economy: An Economic History of Britain 1700 – 1850 — Joel Mokyr

Ideas matter. So does the ability to execute those ideas. Britain had both, in the form of the Enlightenment and the Industrial Revolution, both of which were important but neither of which has been fully considered as twinned phenomena. Nows they have been, and have been impressively.

The Enlightened Economy sounds boring but isn’t, and it ties together two trends that Mokyr argues should be appreciated more: the dovetailing of the Enlightenment and the Industrial Revolution, both of which are entangled and driven by ideas to a greater extent than previously appreciated. Both were concerned with ideas; both occurred around the same time; and many participants in one also participated in the other. Furthermore, ideas motivated both; as Mokyr says, “Ideas, in the eighteenth century as much as the twentieth, competed in a market for ideas.” But the idea of a marketplace of ideas was new and relied on a lessening of religious control and a greater willingness to challenge existing ideas and beliefs. Ideas had to be “contestable,” as well as cumulative and consensual, to become useful and lead toward exponential growth. The strange thing is still that the Industrial Revolution didn’t happen earlier or in some other place. The other strange thing is how many ideas that played out across the eighteenth century continue to play out today, as reading The Enlightened Economy or Louis Dupré’s excellent The Enlightenment and the Intellectual Foundations of Modern Culture shows.

In terms of economic structure and organizations, consider that Mokyr writes that “More than anything else, the reduction in [the power of British trade guilds] was hastened by mobility; many of the activities that urban craft guilds controlled could and did move out of their geographic sphere to the countryside or to towns free from guild control.” Later on the same page, he says that “The London guilds, known as ‘livery companies’ saw their powers erode when economic activity moved to the suburbs such as Whitechapel and Spitalfields.” You can see the same issues with union or government control versus the private sector, which is still widely debated.

The same basic dynamic has been occurring in the United States for decades: heavy manufacturing in the Northeast and Midwest has become more mobile, both abroad to places like China and Mexico as well as to union-unfriendly Southern states like Alabama. Recent wrangling around car company bailouts showed that political logic follows economic logic: senators representing states with BMW, Toyota, Honda, and Audi plants fulminated against bailouts, while northern states where unions still have some power favored bailouts. In the meantime, however, union power has been waning in the private sector for years, even as it has grown in the public sector, where the inability of cities, towns, school districts, and the like to go bankrupt thanks to immediate competition allows unions to exist. Still, the overall direction of the world is obvious to current observers, even if it wasn’t to many eighteenth Century ones. The power of individual and capital mobility lessens the power of rent seekers (Mokyr: “In the second half of the eighteenth century, most important intellectuals became increasingly hostile to what modern economists would call rent-seeking, namely the use of political power to redistribute rather than create wealth”).

As mentioned previously, one major issue and still unresolved issue is why the Industrial Revolution happened when and where it did. Almost no one knows. The discovery process itself became systematized:

The pre-modern economies were at times capable of creating radical inventions, but such advances tended to settle down rather quickly into new dominant design largely because most inventions were arrived at through trial and error and hit-and-miss procedures. Systematic research and development based on something we would recognize today as scientific rigor was still highly uncommon.

And those techniques are only more common because we pass them down and forget less successful techniques.

Of course, Mokyr is in part writing about the current economy: he writes about workers, locations, idea transmission, and more. Today, Richard Florida relies heavily on concept of “the creative class” (I wonder if I’m a member) in his writing and “highly qualified personnel” (HPQs), as Alex Usher calls them in an academic context. The most interesting thing is how (relatively) few of such people, networked together, can make an enormous difference in not just the quality of their own lives but the productivity of everyone around them. As Paul Graham says in “Taste for Makers“, “Nothing is more powerful than a community of talented people working on related problems. Genes count for little by comparison […]” I’ve been looking for more formal studies of the general ideas around talent clustering but haven’t been able to find any. Nonetheless, such people are likely to be the ones who push society forward through thinking or finding new ideas, becoming repositories of ideas, or seeking new methods of doing things. As Mokyr says:

[… I]t is important to realize that an economy in which there are innovators is not one in which all or even most people are inclined to experiment or to take risks, much less express their disrespect for the wisdom of their teachers and ancestors by declaring the new to be better.

We still see elements of this kind of thinking in the education system, although the system seems better at critiquing itself than it once might have been in the past. Self-modification is relatively rare. The absolute number of people willing to be innovators might now be higher, the percentage might be the same. The comparisons between the eighteenth century and now, which Mokyr sometimes makes and sometimes leaves to the reader, might be the most radical and unusual parts of this book.

It is a book about ideas that on its own contains many ideas that illuminate how the world was changing—and how it is today, as we live in a society that is saturated with ideas—provided that we are willing to find and follow those ideas. And think about them on a meta level—in other words, deal with ideas about ideas. This is relatively hard and requires a lot of training to accomplish. Mokyr reminds us of why it is important.

A final note about the materiality of the book in question: The Enlightened Economy is scholarly and concomitantly expensive. It’s also very nicely bound and easy to read. It feels like it will last a very long time, which is good, because I haven’t digested it yet and doubt many could in a first reading.

%d bloggers like this: