An Orgy of Innovation

The list of famous inventions from the last few centuries is long, and you may even be making use of one right now — laptops, smartphones, tablets, and televisions, for instance. There are countless unsung improvements, too, that make our daily lives much easier. We’ve all benefited from zip top sandwich bags, twist bottle caps, and long-lasting batteries, to name a few!

The economic historian Deirdre McCloskey coined the term “innovationism" to describe the phenomenal rise in innovation over the past couple hundred years. While there have always been inventors and innovators, that number exploded after the eighteenth century, leading to what we’ve described in previous videos as the “Hockey Stick of Human Prosperity."

Why has innovation grown so rapidly? Economist Douglass North argues it has to do with institutions such as property rights, non-corrupt courts, and rule of law, which lay the foundation for innovation to take place. Others attribute the rise to factors such as education or access to reliable energy. McCloskey argues that what really kicked innovation into high gear is a change in attitude — ordinary people who once celebrated conquerers and kings began to celebrate merchants and inventors.

In this video, we discuss these ideas further. After all, a better understanding of what drives innovation could help poor countries that still live on the handle of the “Hockey Stick" reach a much greater level of prosperity.

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- [Professor Don Boudreaux] When we tell the tale of
the hockey stick of human prosperity, the phenomenon

of innovationism plays a leading role in
the story. Think about it. The steam

engine, indoor plumbing, penicillin,
semiconductors, air conditioning, automobiles,

TVs, airplanes, desktops, laptops, iPads,
smart phones, the internet. The list of

brilliant inventions from the past few
centuries is long. Yet, the number of

relatively minor, unsung improvements is
still longer, much, much longer. I'd

personally like to give a shout-out to
whoever invented the sealed lunch bag. You

rock.

The great economic historian Deirdre
McCloskey coined the term “innovationism” to

describe this phenomenon. She contends
that it is the defining feature of the

past 200 or so years of human history. Of
course, the world had inventors and

innovators before the 18th century, but
they were few and far between. Compared to

today, the world before the 18th century
was not only very poor, it was also

static. People in, say, 10th century
France or 15th century Sweden lived their

entire lives without much change. Their
economy, their world, was pretty much like

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

for generations on end.

So what caused this orgy of innovation and
the resulting bend in the hockey stick?

Scholars still debate this question today.
Of course, one important component, as

argued by Nobel economist Douglass North,
was good institutions, such as secure

property rights, non-corrupt courts, and
the rule of law. These institutions laid

the foundation for the resulting expansion
of specialization in trade, which

unquestionably fueled the innovation
engine. However, some scholars contend

that this explanation is incomplete.
For example, some point to improvements in

education, others to the discovery of
inexpensive access to reliable energy,

like plentiful coal in England.

McCloskey argues that the vital spark for
all of this innovation was a change in

attitudes. Specifically, the growing
appreciation among ordinary people, of

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

celebrate conquerors and kings, people
began to applaud merchants and inventors.

Whatever the answer, getting it right is
of profound importance, not just because it

explains how we got to where we are today,
but, much more importantly, because it is

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

around the world are still unlucky enough
to live on the handle of the hockey stick.

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