This book is an interesting read coming straight off the back of Human Origins. The book starts out by explaining the impact the invention of the plow had on humanity — it asserts that farmers being able to produce substantially more than they needed for their own subsistence was a driving factor in the creation of both other specializations (by freeing people up from farming), but also a more unequal society (as it allowed a ruling class to live off resources produced by others). This is an interesting assertion to me.
Next the book moves on to observing that with all innovations there is a winner and a loser. An early example is the phonograph — before the invention of recorded media there was a market for quite-good-but-not-great performers to entertain people. Once there was an ability to record great performers, the earning capacity of the great performers went way up but the earning capacity of the not-quite-great performers went down. So while society overall might benefit from innovation, it is not true that all participants in the market benefit at the time of the innovation.
The book then starts walking through a series of inventions. Each is presented as its own chapter, generally of only a few pages. This makes the book easy to set aside when you need too — a perfect book for brief moments of peace in your day.
One interesting observation in the book is that sometimes new innovations don’t produce the productivity increase you’d expect for a long time. Two examples given are the conversion of factories from steam to electricity, and the adoption of computers. The reason provided? Sometimes an innovation requires that you rethink your entire business to derive benefit — if you just replaced your one big steam engine with one big electric motor, then you missed out on all the benefits of not laying your factory out around the needs of steam driven drive shafts for example.
Not all of the inventions in the book are positive however, which I think is a strength for the book. For example the book also briefly tells the story of leaded petrol and its impact on crime rates in the United States. This is interesting to me because I’ve had a theory for a while that leaded petrol had caused behavioral changes in children growing up in heavily polluted cities, and it turns out there is data to back that up. Another example is the use of antibiotics in high intensity farming, where economic incentives exist that produce an outcome that overall is bad for society.
The book closes with the observation that while inflation has devalued our currency, the money you have today is able to purchase many things which didn’t even exist 100 years ago — so while sometimes investments don’t earn as much as inflation, that doesn’t mean that the future isn’t better because of the new creature comforts it holds.
Business & Economics
Abacus
July 31, 2018
352
Based on the series produced for the BBC World Service Who thought up paper money? How did the contraceptive pill change the face of the legal profession? Why was the horse collar as important for human progress as the steam engine? How did the humble spreadsheet turn the world of finance upside-down? The world economy defies comprehension. A continuously-changing system of immense complexity, it offers over ten billion distinct products and services, doubles in size every fifteen years, and links almost every one of the planet's seven billion people. It delivers astonishing luxury to hundreds of millions. It also leaves hundreds of millions behind, puts tremendous strains on the ecosystem, and has an alarming habit of stalling. Nobody is in charge of it. Indeed, no individual understands more than a fraction of what's going on. How can we make sense of this bewildering system on which our lives depend? From the tally-stick to Bitcoin, the canal lock to the jumbo jet, each invention in Tim Harford's fascinating new book has its own curious, surprising and memorable story, a vignette against a grand backdrop. Step by step, readers will start to understand where we are, how we got here, and where we might be going next. Hidden connections will be laid bare: how the barcode undermined family corner shops; why the gramophone widened inequality; how barbed wire shaped America. We'll meet the characters who developed some of these inventions, profited from them, or were ruined by them. We'll trace the economic principles that help to explain their transformative effects. And we'll ask what lessons we can learn to make wise use of future inventions, in a world where the pace of innovation will only accelerate.