VoxEU Column Economic history Productivity and Innovation

The persistence of technological creativity and the Great Enrichment: Reflections on the 'Rise of Europe'

Much has been written on why the process of modern economic growth, or ‘the Great Enrichment’, started in western Europe in the 18th century. This column, which first appeared as a chapter in a recent Vox eBook, argues that political fragmentation, coupled with an intellectual and cultural unity, a more or less integrated market for ideas, allowed Europe to benefit from the increasing return associated with intellectual activity.

Editor's note: This column first appeared as a chapter in the Vox eBook, The Long Economic and Political Shadow of History, Volume 1, available to download here.

How and why did the modern world and its unprecedented prosperity begin? Many bookshelves are filled with learned tomes by historians, economists, political scientists, and other erudite scholars, providing endless explanations as to why the process of modern economic growth or ‘the Great Enrichment’ started in western Europe in the 18th century. One of the oldest and most persuasive of these is the political fragmentation of Europe throughout most of its history. No ruler was ever able to unite Europe in the way the Mongols and the Mings united China. As a result, European rulers found themselves competing for the best and most productive intellectuals and artisans. Scholars have debated the merits and mechanisms of what Eric L. Jones called ‘the states system’ and the consensus seems to be that, while the costs were substantial in terms of warfare, protectionism, and coordination failures, in the very long run the benefits turned out to be larger.

In 1789, in the closing chapter of his Rise and Fall, Edward Gibbon wrote that:

"Europe is now divided into twelve powerful, though unequal, kingdoms, three respectable commonwealths, and a variety of smaller, though independent, states ... The abuses of tyranny are restrained by the mutual influence of fear and shame; republics have acquired order and stability; monarchies have imbibed the principles of freedom, or, at least, of moderation; and some sense of honour and justice is introduced into the most defective constitutions by the general manners of the times. In peace, the progress of knowledge and industry is accelerated by the emulation of so many active rivals...".

Other Enlightenment writers, such as David Hume and Immanuel Kant, saw it the same way. Interstate rivalry did many things, and not all of them good for economic growth. But they stimulated policies that encouraged innovation and the adoption of modern technology, from the reforms of Peter the Great to the Sputnik panic in the United States in 1957. More important, perhaps, is that the ‘states system’ constrained the ability of political and religious authorities to control intellectual innovation. If they clamped down on heretical and subversive (that is, original and creative) thought, their smartest citizens would just go elsewhere (as many of them, indeed, did).

The objection to this view is that fragmentation is not a sufficient condition. The Indian subcontinent and the Middle East were fragmented for much of their history, and Africa even more so, yet they did not experience a Great Enrichment. Clearly, more was needed. One element of scientific and technological development, that has perhaps not received as much attention as it should, is the size of the ‘market’ that intellectual and technological innovators faced. In 1769, Matthew Boulton wrote to his partner James Watt, ‘It is not worth my while to manufacture [your engine] for three counties only; but I find it very well worth my while to make it for all the world.’ What was true for steam engines was true for books and essays on astronomy, medicine, and mathematics. Writing such a book involved fixed costs, and so the size of the market mattered. If fragmentation meant that the constituency of each innovator was small, it would have dampened the incentives.

This difficulty was resolved in late medieval and early modern Europe. What emerged and turned out to be of great importance, is that political fragmentation was coupled with an intellectual and cultural unity, a more or less integrated market for ideas, that allowed Europe to benefit from the increasing return associated with intellectual activity. This unity was rooted in Europe’s classical heritage (with the widespread use of Latin as the lingua franca of intellectuals), and the structure of the Christian Church. While, for much of the Middle Ages, the intensity of intellectual activity (in terms of both the number of participants and the intensity of the debates) was light compared to what it was to become after 1500, it was transnational. By 1500 or so, national boundaries mattered little in the thin but lively community of intellectuals in Europe. Many of its leaders moved back and forth within Europe, despite the slow and uncomfortable nature of travel. Two of the most prominent leaders of 16th century humanism, the Valencia-born Juan Luis Vives and Desiderius Erasmus embodied this footlooseness: Vives studied in Paris, lived most of his life in Flanders, but was also a member of Corpus Christi College in Oxford and served for a while as tutor to Henry VIII’s daughter Mary; Erasmus moved back and forth between Leuven, England, and Basel but also spent time in Turin and Venice. In the 17th century such mobility among intellectuals became even more pronounced.

Moreover, through the printing press and the much improved postal system, written knowledge spread faster than ever. Attempts by conservatives to suppress new ideas foundered in a pluralistic environment. The reputations of intellectual superstars like Galileo and Spinoza were such that, if local authorities tried to prohibit the publication of their works, they would easily find publishers abroad. Galileo’s ‘banned’ books were smuggled out of Italy and published in Protestant cities, as in the case of the Discorsi, published in Leiden in 1638 and the Dialogo, re-published in Strasbourg in 1635. Spinoza’s publisher, Jan Riewertz, placed ‘Hamburg’ on the title page of the Tractatus to mislead censors, even though the book was published in Amsterdam. In this way intellectuals could manipulate a set of divided and uncoordinated polities for the sake of intellectual freedom.

This unique combination of political fragmentation, along with the pan-European institution of the Republic of Letters, holds the key to the dramatic intellectual changes after 1500. Books written in one part of Europe found their way to other areas, and were soon read, quoted, plagiarised, discussed, and commented upon everywhere. When a new discovery was made anywhere in Europe, it was debated and tested throughout the continent. Fifty years after the publication of William Harvey’s De Motu Cordis, the English doctor and intellectual Thomas Browne reflected on Harvey’s discovery that ‘at the first trump of the circulation all the schools of Europe murmured ... and condemned it by a general vote ... but at length [it was] accepted and confirmed by illustrious physicians.’

The superstars of European learning catered to a European, not a local, audience and enjoyed continent-wide reputations. They saw themselves as citizens of a ‘Republic of Letters’ and regarded this entity, in the words of Pierre Bayle (one of the central figures in it), as a free commonwealth, an empire of truth. The political metaphor was mostly wishful thinking, but it reflected the features of the community as an institution that set rules of conduct for the market for ideas – above all the central belief in contestability and the willingness to slaughter sacred cows, and a commitment to open science. To return to Gibbon: he observed that the philosopher, unlike the patriot, was permitted to consider Europe as a single ‘great republic’ in which the balance of power may continue to fluctuate and the prosperity of some nations ‘may be alternately exalted or depressed’, but which guaranteed a ‘general state of happiness, system of arts and laws and manners’ which ‘advantageously distinguished’ Europe from other civilisations.

What this meant was that, in this regard, Europe’s intellectual community had the best of both worlds, with the advantages of an integrated transnational academic community superimposed on a competitive states system. This system produced many of the cultural ingredients that paved the way for the Great Enrichment: a belief in social and economic progress, a growing regard for scientific and intellectual innovation, and the commitment to a Baconian programme of knowledge in the service of economic growth. Its scientists adopted the idea of experimental science as a prime tool, and accepted the use of increasingly more sophisticated mathematics as a method of understanding and codifying nature. It also produced the European Enlightenment, in which the belief in progress was translated into a coherent political programme, a programme that, despite its many flaws and misfires, still dominates European polities and economies.

It should be emphasised that Europe’s success was not the result of any inherent superiority of European (much less Christian) culture. It was a classical emergent property, a complex and unintended outcome of simpler interactions on the collective entity. It was the result of contingent institutional outcomes, and was neither designed nor planned. Once in place, however, it created self-reinforcing and autocatalytic dynamics that made knowledge-driven economic growth not just possible but sustainable. As long as we regard the Republic of Letters as an ‘institution’ in the Northian sense, we can see the Industrial Revolution as the outcome of institutional changes — but institutions at the level of the continent, not only the institutions of the modern nation state as most scholars still seem to believe.

The idea of knowledge-driven economic growth as the primum movens of the Industrial Revolution is still controversial, and rightly so. Examples of purely science-driven inventions in the eighteenth century are few, though after 1815 their number rises rapidly. Yet, dismissing the scientific revolution as irrelevant to modern economic growth misses the point that, without an ever-growing understanding of nature, the artisan-driven advances of the 18th century (especially in the textile industry) would ineluctably have ground to a halt. Moreover, some inventions still needed inputs from learned people, even if they cannot be said to be purely science-driven. For instance, the marine chronometer – one of the most important inventions of the era of the Industrial Revolution (though rarely mentioned as a part of it) – was made possible through the work of earlier mathematical astronomers. The first of these was the sixteenth-century Dutch (more accurately Frisian) astronomer and mathematician Jemme Reinerszoon, known as Gemma Frisius, who suggested the possibility of what John Harrison (the ingenious watchmaker who cracked this thorny problem) actually did.

It is interesting to note that the advances in science were driven not only by the emergence of open science and the growing sophistication of the transnational market for ideas, but also by the appearance of better tools and instruments, which in turn facilitated research in natural philosophy. The most famous ones were the microscope, telescope, barometer, and modern thermometer, all developed in the first half of the 17th century. Improved physics, mathematics, and biology refuted many misconceptions, inherited from classical antiquity, and made contestability increasingly irresistible as a principle of investigation. The newly discovered notions of a vacuum and an atmosphere stimulated the emergence of atmospheric engines. In turn, steam engines inspired scientists to investigate the physics of the conversion of heat into motion, and, more than a century after Newcomen’s first pump, thermodynamics was developed.

Taken together, these examples indicate that the interaction of propositional knowledge (knowledge of ‘what’) and prescriptive knowledge (knowledge of ‘how’) constituted a positive feedback or autocatalytic model that may not converge to any kind of basin of attraction. In other words, once the process gets going, it becomes self-propelled. In that sense, knowledge-based growth is one of the most persistent of all historical phenomena – though the conditions of its persistence are complex and require above all a competitive and open market for ideas. This has two important corollaries. First, we must recognise that things could have turned out differently than they did, with fairly minor changes in initial conditions or accidents along the way. Had political and military developments taken different turns in Europe, conservative forces might have prevailed and taken a more hostile attitude toward the new and progressive interpretation of the world. There was nothing predetermined or inexorable in the ultimate triumph of scientific progress and sustained economic growth, any more than, say, the eventual evolution of Homo sapiens (or any other specific species) on the planet. Second, once in motion, the force of technological and scientific progress may be irresistible, notwithstanding the backlash it has encountered in recent years. The world still consists of competing entities, and seems not much closer to unification than it was in 1600. The costs of fragmentation in terms of lost gains from trade and coordination are high, but there may also be unintended benefits to the ‘new nationalism’.

Author's note: This column is based on sections from my book, A Culture of Growth: Origins of the Modern Economy (Princeton University Press, 2016).

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