Bottom-up or top-down? The Origins of the Industrial Revolution Presented to the symposium Innovation and Creative Production: “Innovation from the Bottom-Up” New York University, Dec. 6, 2016 Joel Mokyr, Departments of Economics and History Northwestern University Berglas School of of Economics, Tel Aviv University
[email protected] version of July 2017 Note: Some of the below is adapted from my A Culture of Growth: Origins of the Modern Economy. Princeton: Princeton University Press, 2016. I am indebted to Ashish Aggarwal for research assistance, and the Balzan Foundation for financial support. ABSTRACT Was technological progress during and after the Industrial Revolution top-down or bottom- up? The technology that created the great inventions was driven by a combination of pathbreaking ideas and the dexterity and skills of trained artisans. While those forms of human capital were quite different, they both came out of small elites of intellectuals and craftsmen, what is rapidly becoming known as “upper tail human capital.” I analyze the institutions that drove the incentives for both, and show they came together to produce the Great Enrichment. These incentives were both material and social: between 1500 and 1700, the search for financial security and reputation cooperated in producing a unique institutional environment in which the elites in western Europe produced the three legged-stool of European modernity: the Reformation, the Scientific Revolution, and the Enlightenment. Once these three movements had succeeded, the foundation for modern economic growth had been laid. 2 Introduction Whether we like it or not, elites mattered in economic history. Throughout history, they helped to set up institutions and define the rules of the game of the economy: priests and kings wrote the laws, and judges and generals enforced them.