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Culture, Growth and Manufacturing in America

I have been wrapping up Joel Mokyr’s book “Culture of Growth: The Origins of Modern Economy” which explores the cultural origins of the Industrial revolution.

We know that the Industrial Revolution kick-started the economic growth and prosperity (along with other complex ramifications of colonization and globalization), that we live in during this period. Without the economic engine, I can’t think of my career, let alone this blog.

Mokyr asks why this revolution began in Europe and particularly in Britain. What are its antecedents? As the title shows, Mokyr argues that cultural rather than institutional factors led to the emergence of the industrial revolution. Particularly, it is the mindset of the people in various regions competing over ideas. This approach to knowledge and discovery slowly invigorated the revolution, aided by the prevalent attitude in society that science should lead to improvements in quality of living.

In his arguments, Mokyr focuses on two “cultural entrepreneurs” – Francis Bacon and Isaac Newton, who typified the cultural approach to social progress and personal improvement through scientific inquiry.

It is largely a thesis I agree with, although I do not know how one can argue the counterfactual. The discussions are unfortunately a bit too long drawn out, and there are many repetitions in the book. The language is technical, and the narrative style is unremarkable.

The most interesting aspect of the book is where I am now — two chapters comparing China and Europe. China was as advanced as Europe during the medieval age, if not more. So, a natural question arises.

Why did China not have an Industrial Revolution?

Particularly, Mokyr focuses on what is called the Needham Question,1 as rephrased by Lin: “Why did Industrial Revolution not originate in China?”

A common explanation is that there is nothing unusual about historic cycles. The flourishing of science during the Tang and Song dynasties (from the 7th to 12th century) was followed by the inhibition of ideas during the Ming and Qing dynasties (from the 14th to 19th century).

In fact, by the time of the Qing era, elite education in China was such a selective and exclusionary activity that even the very best of scholars could not make it to the top. As Mokyr argues…

Moreover, it has been argued that Qing China actually overproduced
human capital. A classical education in China prepared one for a career in
the civil service, but in 1800 there were 1.4 million degree holders competing
for no more than 20,000 posts. Even the very best scholars, those who made
it to the Hanlin Academy (an intellectual honor society) could face unem-
ployment. Rowe feels that the state’s reduced demand for officials and its
venal fashion of distributing the offices was at fault (Rowe, 2009, p. 152), but
the deeper problem was that Chinese education was almost entirely aimed at
preparing civil servants. Unlike Europe, there were no schools or academies
that taught useful knowledge and prepared young men for a life of commerce
or industry. Although it was slow in the making, by the eighteenth century
much of Europe was making that transition, and other cultures, China
included, increasingly lagged behind.

In fact, the over-reliance on elite education and the diminishing of “useful knowledge” that prepared young men for a “life of commerce and industry” led to the retrogradation of industrial growth during the Qing era in China.

America –  Where are we now with Cultural Entrepreneurship?

Looking at the level of innovation and worries about the stagnation of ideas in America now, one hypothesis is that we are arguably in the same position as Qing-era China.

Our elite institutions are increasingly selective. The institutions have built and continue to buttress a large, comfortable upper class doing jobs that service the super-elite. This class is secure from the vagaries of the world, such as financial crises and pandemics. These jobs are philosophically “soft” jobs — lawyers working on complex contracts, physicians and surgeons of tertiary care, university faculty and administrators, financial advisors of complex instruments, banking and investor class, unicorns, and some highly technical jobs (computer scientists and engineers).

The vast middle has nowhere to go because the middle has been carved out. Learning by doing jobs is absent, with a diminishing scale of investment in manufacturing. At the lowest end are service jobs — that are going through what’s mistakenly called The Great Resignation — the “essential” workers stuck servicing the basic needs; restaurant and food delivery, truckers and drivers, nurses and pharmacists, warehouse workers, and store employees on whom the vast middle depends.

So, where do we go from here? It is hard to argue that we are fueling the roots of the new industrial revolution, here. Where will the next spike in the next revolution occur?

  1. The Needham question is starkly phrased as “Why did the Chinese Society in the 8th century favor science compared to western society in the 18th century inhibit it?”.

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