Institutions, Technological Creativity and Economic History

  • Joel Mokyr


Economic Science faces a painful dilemma. Although still in many ways the Queen of the Social Sciences, it has rarely been very successful at answering the main question posed by its founder and perhaps most influential member, Adam Smith. Why are some nations rich and others poor? Why do some nations that were poor become rich and others do not? Why do some nations that were rich become poor and others do not? Smith’s own answer turned around specialisation, the division of labour, and the gains from trade, all of which are still acceptable responses to those questions. Yet not long after Smith published his magnum opus, it became gradually clear that he had underestimated the importance of technological change in economic history. This is forgivable: by the time that Smith was writing the “Wealth of Nations”, the British Industrial Revolution was just getting underway. By the time his great mid-nineteenth century followers, John Stuart Mill and Karl Marx, were taking classical economics further, it had become clear that technology was the pivot around which economic progress turned. Early in this century J.A. Schumpeter criticised the static nature of economic theory and proposed a more dynamic approach, focusing on the entrepreneur as an agent of constantly changing technology (Schumpeter 1934).


Technological Change Technological Progress Industrial Revolution Economic History Great Inventor 
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© Springer-Verlag Berlin · Heidelberg 1994

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  • Joel Mokyr

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