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♪ [music] ♪

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- [Professor Don Boudreaux]
When we tell the tale

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of the hockey stick of human prosperity,
the phenomenon of innovationism

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plays a leading role in the story.

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Think about it.

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The steam engine, indoor plumbing,
penicillin, semiconductors,

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air conditioning, automobiles,
TVs, airplanes, desktops,

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laptops, iPads,
smart phones, the internet --

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the list of brilliant inventions
from the past few centuries is long.

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Yet, the number of relatively minor,
unsung improvements

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is still longer -- much, much longer.

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I'd personally like to give a shout-out
to whoever invented the sealed lunch bag.

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You rock.

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The great economic historian,
Deirdre McCloskey,

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coined the term “innovationism”
to describe this phenomenon.

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She contends that it is
the defining feature

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of the past 200 or so years
of human history.

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Of course, the world had inventors
and innovators before the 18th century,

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but they were few and far between.

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Compared to today, the world
before the 18th century

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was not only very poor, it was also static.

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People in, say, 10th century France
or 15th century Sweden

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lived their entire lives
without much change.

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Their economy, their world,
was pretty much like their parents' world,

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which was pretty much
like their parents' world and so on,

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for generations on end.

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So what caused this orgy of innovation

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and the resulting bend
in the hockey stick?

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Scholars still debate this question today.

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Of course, one important component,

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as argued by Nobel economist
Douglass North,

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was good institutions,
such as secure property rights,

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non-corrupt courts, and the rule of law.

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These institutions laid the foundation

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for the resulting expansion
of specialization in trade,

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which unquestionably fueled
the innovation engine.

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However, some scholars contend
that this explanation is incomplete.

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For example, some point
to improvements in education,

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others to the discovery
of inexpensive access to reliable energy,

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like plentiful coal in England.

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McCloskey argues that the vital spark
for all of this innovation

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was a change in attitudes.

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Specifically, the growing appreciation
among ordinary people,

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of entrepreneurial innovators,
and of the economic changes they unleash.

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Rather than celebrate
conquerors and kings,

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people began to applaud
merchants and inventors.

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Whatever the answer, getting it right
is of profound importance,

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not just because it explains how
we got to where we are today,

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but, much more importantly,
because it is crucial

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to helping still poor people
reach our high level of prosperity,

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as many around the world
are still unlucky enough

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to live on the handle of the hockey stick.

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Voting continues, so please send us

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whatever additional, Everyday Economics
questions you have.

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Here's the current leader board.
Go vote and tell us

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what topics you want covered next.

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♪ [music] ♪