North on Adaptation
By Arnold Kling
My second essay on Douglass North is now up.
To most economists, the agricultural revolution and the late Industrial Revolution are technological events. That is, the technology “arrived” and spread, leading to social change.
Douglass North instead suggests that these revolutions were institutional in nature. The technological capacity existed and went unused prior to the major economic revolutions. What was missing was the impetus to develop the rules and norms of behavior needed to incorporate the technology.
Think of the steam engine, which was first designed over 2000 years ago by Hero of Alexandria. North argues that until the 19th century, most of industrialization rested on existing scientific knowledge. The dependence on scientific discovery is a very recent phenomenon. As I read it, he implies that if intellectual property rights and other institutional arrangements had provided the necessary incentives, the industrial revolution could have taken place hundreds of years earlier.