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December 1, 2002
David Warsh, Proprietor


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Knowing More about Knowing How

The last ten years have seen a heightened interest in the avalanche of technological change which, for the last twenty or thirty years, has been such a striking feature of the present age.

I don’t mean just more frequent and better newspaper stories, like the typically useful account that appeared in the Wall Street Journal last week of CTI Molecular Imaging Inc., the little manufacturing company that sought and gradually won the acceptance in hospitals of PET (positron-emission-tomography) scanning as a diagnostic tool.

Nor do I mean book-length stories of particular technological developments over the centuries such asĀ Longitude, Mauve, The Pencil, The Lunar Men, Tuxedo Park and A Thread Across The Ocean, though these often make wonderful reading.

Instead, I am thinking of a welter of books by economists, historians and others who seek to understand the broad processes underlying technical change itself, and of two such books in particular.

The Gifts of Athena: Historical Origins of the Knowledge Economy, by Joel Mokyr, just published, can be expected to make something of a splash, for its author is one of the leading economic historians of the generation of the baby boom. Schumpeter and the Endogeneity of Technology, by Nathan Rosenberg, professor of economics emeritus at Stanford University, has been less noticed, but is interesting in many of the same ways.

Rosenberg’s four Schumpeter Lectures at the University of Graz sum up a great deal of what has been learned over the years about the economics of knowledge — the dialogue between science and technology, the intricate relationship between innovators and “imitators,” the economic significance of universities. That knowledge creation is in many ways an economic process — that it occurs “inside” and not “outside” the system of incentives — is what “endogeneity” means.

The effect is to perform an audit on what Schumpeter, the patron saint of economic growth, understood in 1950 — and what has been found out since. Unfortunately, Rosenberg’s lectures were published only in a library edition. Not many casual readers will be perusing its 125 pages given the very aggressive price of $90.

Yet both books seek to call attention to the significance of the institutions that have arisen to create, preserve and diffuse knowledge. These are not stories of lone geniuses or small groups who accomplished brilliant deeds against long odds but rather chronicles of interlocking communities of persons committed to gaining and exchanging information about how to understand the world — and how to change it.

Mokyr, 56, is professor of economics and history at Northwestern University. He is president-elect of the Economic History Association, a man of wit and charm and erudition. His 1990 narrative of technological creativity and economic progress, The Lever of Riches, supplanted David Landes’ 1972 classic, The Unbound Prometheus, as the standard introduction to the economic history of technological change. (Mokyr took a longer view, starting with classical antiquity, whereas Landes began his account with the Industrial Revolution as of about 1750.)

About “Gifts of Athena,” however, there is something distinctly intermediate. For one thing, it reflects Mokyr’s involvement in various disagreements among economists that were engendered by the appearance in the 1990s of various “new” theories of economic growth, which generally sought to put the economics of knowledge near center-stage.

An elaborate and somewhat elusive distinction in the book’s first chapter between “omega” and “lambda” knowledge seems to stem from this debate — between “propositional” knowledge of (or belief in) regularities and principles on the one hand and “prescriptive” knowledge about their application on the other. That the world is round is propositional knowledge. The first maps to the West Indies are prescriptive. So is the Global Positioning System. Does dividing the modern world into “knowers” and “doers” help to understand it? Maybe so. Maybe not.

Then, too, Mokyr’s book reflects the his membership in a group that for years has met regularly in London and Oxford to discuss the application to social science of ideas drawn from evolutionary biology. John Ziman, a distinguished physicist who was among the organizers of the group, edited a collection of papers by its members called Technological Innovation as an Evolutionary Process. Mokyr’s contribution is “Evolutionary Phenomena in Technical Change.”

But as the economist says himself, the biology project must be pursued with caution. “Much like DNA,” he writes, “useful knowledge does not exist by itself; it has to be ‘carried’ by people or in storage devices. Unlike DNA, however, carriers can acquire and shed knowledge so that the selection process is quite different.” Alas, it is precisely this ability of humans to pick and choose what knowledge to keep and what to throw away to that makes technological innovation so different from Darwinian random selection. Perhaps game theorists will come to the rescue, with revealing models of deliberate trial and error.

Once its theory of knowledge has been describe, Mokyr’s book picks up steam. Its second chapter sums up much of what is known about the Industrial Revolution and drives home the point that the origins of the “industrial enlightenment” of the 19th and early 19th centuries is to be found in the scientific revolution of the 17th century.

“[T]he crucial elements were neither brilliant individuals nor the impersonal forces governing the masses,” he writes, “but a small community of at most a few thousand people who formed a creative community based on the exchange of knowledge.” Members of these elites met and mingled in scientific societies, academies, Masonic lodges, coffeehouse lectures and other public functions. They advocated universal schooling and literacy. Interaction between knowers and doers had reached a critical threshold, and Great Britain’s industrial transformation couldn’t have been accomplished without them.

Something of the sort may be going on now, says Mokyr. It helps when you add some government funders of basic research, industrial laboratories and venture capitalists to the mix. “It always seems rash and imprudent when historians analyze contemporary events as if they occurred sufficiently long ago to be analyzed with some perspective,” he writes. Nevertheless, the cluster of innovations around semiconductors and their applications may represent the same kind of discontinuity that separates one epoch from another, much like the two previous Industrial Revolutions.

“For a true technological watershed to take place, there has to be more than a general purpose technology such as steam power or electricity or chemical engineering. There has to be a profound change in the generation and deployment of knowledge. The significance of the information revolution is not that we can read on a screen things that we previously read in the newspaper or looked up in the library, but that marginal access costs to codified knowledge of every kind have declined dramatically. The hugely improved communications, the decline in storage and access costs to knowledge, may turn out to be a pivotal event.”

In Mokyr’s hands, it does not seem an incautious assertion.

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