TCS Daily

Athena's Gifts

By Lynne Kiesling - January 24, 2003 12:00 AM

In Greek mythology Athena is the goddess of both wisdom and war, and of the application of reason and intelligent activity to domestic and artisanal activity. Ancient Greeks also believed that Athena invented the horse bridle, enabling men to tame horses and to put them to useful application and work. Athena is thus a good metaphor for the relationship between knowledge and economic growth that Joel Mokyr explores in his new book, The Gifts of Athena: Historical Origins of the Knowledge Economy.

Some of the focus of this book is inside pool, concentrating on whether or not being a technology optimist means that Mokyr holds a discredited "Whig view of history", or whether or not knowledge is concrete or socially constructed (he argues that it is not a social construction). But even without worrying about some of the more arcane debates that occur in academia, a general reader will learn a great deal and think differently about the communication of knowledge, and the history of technology, knowledge, and economic performance from reading this book.

In Athena Mokyr explores the relationship between knowledge and growth. Specifically, he focuses on useful knowledge, defined as "knowledge of natural phenomena that exclude the human mind and social institutions", and the connection between its existence and its use and economic performance. This inquiry into the relationship between useful knowledge and economic performance necessitates an emphasis on the invention and diffusion of technology.

But Mokyr does not stay at the level of trite observations about the importance of technological change for growth. He digs deeper, arguing that the communication, dissemination, and aggregation of useful knowledge are primarily responsible for the unprecedented economic performance of the nineteenth and twentieth centuries. In this way the book is a testimony to its own thesis - relying on known economic and scientific history, Mokyr synthesizes and interprets this history to create new insights and a deeper understanding of human activity.

Mokyr further breaks useful knowledge into the "what" of natural phenomena (propositional knowledge) and the "how" (prescriptive knowledge, or techniques). The model underlying Mokyr's argument focuses on social propositional knowledge, which is the aggregate of all propositional knowledge that is either in peoples' minds or in external devices like computer hard disks. Knowledge transmission and access become important for creating or limiting the acquisition and the implementation of propositional knowledge. Furthermore, knowledge on one individual's part benefits others, even if the others do not know what to make of it. I do not know Java programming, for example, but the fact that others do, and that they create new products, services, and information with that knowledge, benefits me. From this starting point Mokyr then goes on to discuss learning, transmission and diffusion of knowledge, including access costs and other factors that can limit both the diffusion of knowledge and the creation of value through the application of knowledge.

At some level this concept of social propositional knowledge is intuitive, but at some level it's also dissatisfying. Economists tend to model information and knowledge as sets, with discrete additions and subtractions. Even in dynamic models with continuous additions and subtractions, our theoretical models do not do a good job of capturing how changes in information and knowledge change the nature of the game itself; our models tend to have well-defined objective functions that do not change to reflect the dynamism of competition as a discovery process. That said, though, Mokyr's use of the social propositional knowledge construct gets him pretty far in explaining important aspects of the relationship between knowledge and economic performance. But this model does not really do justice to the important roles of tacit knowledge and the discovery process in the relationship among knowledge, technology, and economic performance.

Such a construct cannot capture the deeply subconscious and embedded knowledge that enables us to transmit propositional knowledge, such as language. Mokyr discusses tacit knowledge as being efficient in cases where making that knowledge explicit is costly, but what about the myriad situations in which we cannot even consciously define or grasp the tacit knowledge that we employ in our creative and entrepreneurial processes? In this sense, as in the sense of language acquisition according to Steven Pinker, Mokyr's model is incomplete. Pinker argues that grammar is grammar and acquisition is evolutionarily tied to a certain stage of brain development. How does this theory tie into "social" knowledge transmission? Does Pinker's pan-cultural argument run counter to the assertion in Athena that some societies develop, transmit, and employ propositional knowledge better than others? Athena does not tackle this thorny question, although I suspect that many insights could come from tackling it. One other crucial aspect of tacit knowledge, both conscious and subconscious, that Mokyr does not explore is that it can contribute to an economy's dynamic efficiency by increasing the likelihood that it will meet the evolutionary criterion: the ability to adapt to the unknown. Adaptation to the unknown exists in successful societies through history, and knowledge and technology play important roles in shaping it.

Mokyr then applies his model to economic history, starting with the industrial revolution. His 1991 book Lever of Riches deepened our understanding of the role of technological change in creating unprecedented growth (and not just during the industrial revolution, but before it too). Athena adds nuance and depth to that argument, applying the model of social propositional knowledge to the shift from land to knowledge as the primary factor of production. That shift enabled the great transformation of productivity and organizational structure that we call the industrial revolution. Most importantly, the nineteenth century saw more positive feedback mechanisms than any earlier time in history, with improved communication technology and improved transportation networks that enabled scientists, inventors, and dabblers to read each other's writing, and correspond. These feedback mechanisms were the most dramatic manifestation of a virtuous circle between knowledge and economic performance to that time, and similar virtuous circles have occurred repeatedly since industrialization, as technology has made communication easier and cheaper. Mokyr argues, correctly in my opinion, that knowledge itself is not a social construction, but the communication of it is.

This trend truly began in the mid-eighteenth century with what Mokyr calls the "Industrial Enlightenment." Building on the seventeenth century scientific revolution and the cooperative vision of scientists like Francis Bacon, mid-eighteenth century scientists strove to observe, understand, and manipulate natural forces, and to share the outcomes of their efforts. This impetus created the Encyclop├ędie, which began publication in the 1750s and offered voluminous, detailed information on production processes, machinery, and how they work. The Encyclop├ędie typified the increased practical intellectual inquiry that led to more social propositional knowledge. In that sense the Industrial Enlightenment was an important, and perhaps necessary, precursor to the industrial revolution.

Importantly, this increase in social propositional knowledge creates the potential for growth and increased economic performance, but no guarantees. In the subsequent chapters Mokyr addresses the existence of institutions that may have limited the extent to which a society realized that potential. The chapter on resistance to innovation fits nicely with Mokyr's theory of useful knowledge by showing how resistance and its associated rent seeking increased knowledge access costs, thereby decreasing the diffusion and application of knowledge. For those who want to draw insights from Athena to apply to modern policy questions, this analysis of the consequences of resistance to change is directly relevant to the ongoing debates on cloning, biotechnology, and nanotechnology.

Mokyr also analyzes an undervalued manifestation of useful knowledge - increasing health and household cleanliness. After 1870, infectious disease plummeted in Western Europe and the U.S.; Mokyr explains this demographic change as an interaction of increasing household incomes and an improved understanding and implementation of private and public health measures. His argument is novel in how it points out that domestic rules of thumb governed cleanliness and health, even though no one had yet discovered the germ theory of disease. People following rules of thumb like "boil water if it smells bad because vile vapors cause cholera" improve their well-being even if they do not understand the natural phenomenon underlying the illness. The discovery and acceptance of germ theory in the 1880s and beyond unlocked the potential for new ways and levels of understanding science and health, with dramatic consequences for living standards and life expectancies. For this reason Mokyr considers the germ theory of disease to be one of the most important technological innovations in human history.

Looking at modern life through the lens of Athena allows us to interpret and understand the growth in education, literacy and numeracy, particularly over the past 200 years. It also highlights the importance of the growth in abstraction and generalization, which makes social propositional knowledge more universally useful. Examples of such abstraction include interchangeable parts, components (a light bulb is a light bulb), and standard interfaces. Useful knowledge and access to it explain a great deal about economic performance, how performance has changed over time, and why performance varies across societies. However, "technology, now as in the past, opens doors; it does not force society to walk through them." It remains for us to use the lessons of Athena to ensure that the gifts of Athena are not bestowed upon ungrateful recipients and squandered.

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