Capitalism, “Science and Technology”, and Our Uninnovative Era
Although tech magazines and Silicon Valley types are always trying to impress us, the consensus among people who know seems to be that we are living in a highly uninnovative era (isn’t it odd that there isn’t a word for that?), at least compared to the recent past.
Journalists and academics (especially philosophers) are easily dazzled by the ability of self-updating neural networks to make deep fakes and write bland screenplays. Rarely do they stop to think about the absolute miracle of human ingenuity running in the background of these toys.
Consider: the slick tech experts walk into the demo room, confidently knowing that they will find outlets to plug in their laptops. Watching with starry eyes as some AI-generated image of Winston Churchill sings Taylor Swift, the audience fails to consider the power stations converting thermal and kinetic energy into electricity, the transformers stepping up the voltage to transport it vast distances with minimal heat loss and then down again to the precise level needed, the vast network of wires making up the power grid, splitting into the finer filigree of a building’s wiring with outlets at every useful point, the unfathomably complex monitoring systems to avoid load-shedding, the back-ups, the synchronous condensers, the inverters, and everything else that went into guaranteeing the stable, reliable DC current powering the whole show. Nothing on the screen can be as impressive as that. But all of this is 19th century technology (the first electricity station was built in 1882), as is the office building they are sitting in (mass production of concrete and steel is only possible due to processes discovered in the 1850s), as are the ballpoint pens they use to jot down notes (patented 1888), the revolving door they walked through to enter the building, and so on and so on.
What would our world be like if that pace of innovation had been sustained? It’s beyond imagining. But voices as disparate as the energy scientist Vaclav Smil, the socialist engineer Paul Cockshott, the neoclassical economist Edmund Phelps, the economic historian Deirdre McCloskey, and many others agree that we are in what the tech writer Matt Ridley calls an “innovation famine”. Others discuss a “productivity crisis”. This might surprise people, so it’s worth thinking about what innovation is.
An interesting take on the economic causes of the innovation famine can be found in The Innovation Illusion, by Frederk Erixon and Björn Weigel. One crucial point they make is that innovation is not the same as technological invention. We are still inventing new technologies — not just silly digital toys but also important things: new devices to harness and store energy, or at least cheaper ways of building the devices already invented (mostly, again, in the nineteenth century). Although the failed experiment of peer review has done immeasurable damage to scientific discovery, and research funding councils spend millions every year on the suppression of originality and excellence, human inventiveness manages to break through even these formidable institutional barriers. Innovation, however, means much more than just technological invention. It means the uptake of new devices, methods, and procedures.
To illustrate the difference: I was recently reading Scott Sehon’s interesting book, Socialism: A Logical Introduction. Sehon analyses various arguments for and against capitalism and socialism. One of them is what he calls the “Progress Argument” for capitalism. This argument is based on (i) recognising that a rise in average living standards from US$1,000 to US$18,000 per year, a rise in life expectancy from 30 to 70 years, and a decline in the global share of people living in absolute poverty from 90% to 10% seem, prima facie, to be good things, and (ii) observing that the bulk of these changes correlate with the age of capitalism. This only amounts to an argument for capitalism, Sehon painstakingly explains, insofar as some other system, e.g. socialism, couldn’t have delivered the same benefits. Sehon goes on to argue that the Soviet system did in fact deliver similar benefits, and concludes that their cause was not one particular economic system but, rather, “science and technology”. He then points out that the Soviets also had “science and technology” — for example, they launched Sputnik into space.
The term “science and technology” is never very useful, and in this case it confuses invention and innovation. The Soviets had no problem with invention. They had some of the best scientists and engineers in the world, and — perhaps more importantly — they were industrialising 50–100 years after Britain and the United States and could therefore imitate and improve already-invented technologies rather than running through all the failed attempts that led up to the original inventions. They did, however, have a problem with innovation, meaning, again, the uptake of new methods and devices. When the country fell apart in the 1990s, they were still using open-hearth blast furnaces to make steel — a technology that most developed nations had phased out in the 1950s. It’s hard not to think that this sort of uninnovativeness played a significant role in the decline.
Innovation is also not always technological. Charles Babbage’s On the Economy of Machines and Manufactures (1832) is full of examples, from “speaking tubes” in offices, which, before the days of radio intercoms, saved vast amounts of time and energy by sparing employees from going up and down stairs to receive instructions, to double-entry bookkeeping, to a technique for lining up all the pins in a box. None of these require complex new materials or processes – they’re just good ideas for saving effort. What you need for these innovations to proliferate, and for life to therefore get easier for everyone, is a society willing to try out new things. The barriers to this are social and psychological — conformism, groupthink, authoritarianism, fear of the unknown, status quo bias, dogmatism, snobbism, vainglory. It’s a rare system that can overcome these. Capitalism appears to have provided this at one point in its history.
Capitalism, however, has not retained this capacity, hence our innovation famine. As Erixon and Weigel start their book:
Modern capitalism is like a painted ceiling in a cloistered cathedral, depicting the illusion of a clear blue sky. Corporate and political leaders in the West project an image of capitalism as a borderless space, restless for change and impatient for innovation. The reality, though, is that capitalism is trembling under the weight of old, bureaucratic, and conformist corporations with few instincts left for radical innovation.
As a result, we are starved for innovation when we need it the most. We haven’t decarbonised. We haven’t electrified. We rarely update our infrastructure (making most other investment in tangible things a losing bet). Our tax codes and legal systems are as chaotic and antiquarian as the Pitt Rivers museum. Our interfaces are an unusable mishmash of QWERTY phenomena and Dark UX. Hospital receptionists enter patient data on 1990s computers and then print it out to show to other departments, etc.
I won’t go into the causes of this decline of the innovative spirit. But I do want to quote one other source: a 1996 book called The Introspective Engineer, by Samuel C. Florman. Florman begins by complaining that, back in 1987, he was reading a rather alarming report by the Committee on International Cooperation in Engineering, showing that “the United States was no longer the undisputed world leader in the realm of engineering research”, while everybody else in the US was ignoring this and instead obsessing over a dispute about appointing Robert Bork to the Supreme Court. Reading Florman’s comment on this today is incredibly eerie:
Don’t people see, I mused, that our Constitution depends on our technology? What would become of the hallowed American system of justice if our trade deficit continued to rise, if our economy became depressed, if we suffered from extensive unemployment, if our poor lost all hope and our workers became desperate? What would become of our fine judicial theories if the middle classes fell prey to uncertainty, and if the dispossessed began to riot? Very quickly we would begin to hear some new and not very palatable interpretations of our constitutional rights.
This, to remind you, was written in 1996.
You have surely seen a lot of commentary blaming technological innovation for the decline of democracy and the rise of authoritarian populism. It’s time, I think, to revisit Florman’s suggestion that it’s the opposite cause: the decline of innovation. Capitalism without innovation isn’t just pointless; it’s destructive.
