More on this book
Community
Kindle Notes & Highlights
When farming was well established – two thousand years ago in Imperial Rome, nine hundred years ago in Song-dynasty China – these farmers were five or six times more productive than the foragers they had replaced. Think about that: it becomes possible for a fifth of a society’s population to grow enough food to feed everyone. What do the other four-fifths do? Well, they’re freed up to specialise in other things: baking bread, firing bricks, felling trees, building houses, mining ore, smelting metals, constructing roads – in other words, making cities, building civilisation.
But the more ordinary people are able to produce, the more powerful people can confiscate. Agricultural abundance creates rulers and ruled, masters and servants, and inequality of wealth unheard of in hunter-gatherer societies.
The first simple scratch ploughs used in the Middle East worked very well for thousands of years – and then spread west to the Mediterranean, where they were ideal tools for cultivating the dry, gravelly soils. But then a very different tool, the mouldboard plough, was developed – first in China more than two thousand years ago, and much later in Europe. The mouldboard plough cuts a long, thick ribbon of soil and turns it upside down. In dry ground, that’s a counterproductive exercise, squandering precious moisture. But in the fertile wet clays of northern Europe, the mouldboard plough was
...more
But the wet-clay mouldboard plough required a team of eight oxen – or better, horses – and who had that sort of wealth?
The mouldboard plough helped usher in the manorial system in northern Europe.
Archaeological evidence also suggests that the early farmers had far worse health than their immediate hunter-gatherer forebears. With their diets of rice and grain, our ancestors were starved of vitamins, iron and protein. As societies switched from foraging to agriculture ten thousand years ago, the average height of both men and women shrank by around 6 inches (15cm), and there’s ample evidence of parasites, disease and childhood malnutrition. Jared Diamond, author of Guns, Germs and Steel, called the adoption of agriculture ‘the worst mistake in the history of the human race’.
As I researched these stories, I realised that some themes emerged over and over again. The plough illustrates many of them: for example, the way new ideas often shift the balance of economic power, creating both winners and losers; how changes to the economy can have unexpected effects on the way we live, such as changing relationships between men and women; and how an invention like the plough opens up the possibility for further inventions such as writing, property rights, chemical fertiliser and much more.
Thomas Edison’s phonograph led the way towards a winner-take-all dynamic in the performing industry. The very best performers went from earning like Mrs Billington to earning like Elton John. Meanwhile, the only-slightly-less good went from making a comfortable living to struggling to pay their bills: small gaps in quality became vast gaps in money. In 1981, an economist called Sherwin Rosen called this phenomenon ‘the Superstar economy’. Imagine, he said, the fortune that Mrs Billington might have made if there’d been phonographs in 1801.
There was a reason that American farmers were so hungry for barbed wire. A few years earlier, in 1862, President Abraham Lincoln had signed the Homestead Act. The act specified that any honest citizen – including women and freed slaves – could lay claim to up to 160 acres of land in America’s western territories. All they had to do was build a home there and work the land for five years.
Barbed wire changed what the Homestead Act could not. Until barbed wire was developed, the prairie was an unbounded space, more like an ocean than a stretch of arable land. Private ownership of land wasn’t common because it wasn’t feasible.
Locke argued that we all own our own labour. And if you mix your labour with the land that nature provides – for example, by ploughing the soil – then you’ve blended something you definitely own with something that nobody owns. By working the land, he said, you’ve come to own it.
In his ‘Discourse on Inequality’ he lamented ‘The first man who, having enclosed a piece of ground, bethought himself of saying “This is mine” and found people simple enough to believe him.’ This man, said Rousseau, ‘was the real founder of civil society’.
Modern economies are also built on the idea that private property is a good thing, because private property gives people an incentive to invest in and improve what they own – whether that’s a patch of land in the American mid-west, or an apartment in Kolkata, or even a piece of intellectual property such as the rights to Mickey Mouse. It’s a powerful argument – and it was ruthlessly deployed by those who wanted to argue that Native Americans didn’t really have a right to their own territory, because they weren’t actively developing it.
This function of matching people who have coincidental wants is among the most powerful ways the internet is reshaping the economy.
In 1997, eBay introduced a feature that helped solve the problem: Seller Feedback. Jim Griffith was eBay’s first customer service representative; at the time, he says, ‘no-one had ever seen anything like [it]’. The idea of both parties rating each other after a transaction has now become ubiquitous. You buy something online – you rate the seller, the seller rates you. You use a ride-sharing service, like Uber – you rate the driver, the driver rates you.
It was 2001 when Google found theirs, and in retrospect it seems obvious: pay-per-click advertising. Advertisers tell Google how much they’ll pay if someone clicks through to their website, having searched for terms they specify. Google displays ads from the highest bidders alongside its ‘organic’ search results. From an advertiser’s perspective, the appeal is clear: you pay only when you reach people who have just demonstrated an interest in your offering.
It can seem like a natural fact of life that the name of the country on our passport determines where we can travel and work – legally, at least. But it’s a relatively recent historical development, and, from a certain angle, it’s odd.
How much might global economic output rise if anyone could get on their bikes to work anywhere? Some economists have calculated it would double.
And it’s about time: machine thinking is another area where early expectations were disappointed. Attempts to invent artificial intelligence are generally dated to 1956, and a summer workshop at Dartmouth College for scientists with a pioneering interest in ‘machines that use language, form abstractions and concepts, solve kinds of problems now reserved for humans, and improve themselves’. At the time, machines with human-like intelligence were often predicted to be about twenty years away. Now, they’re often predicted to be … well, about twenty years away.
The year was 1815. Slowly, a vast cloud of volcanic ash drifted across the northern hemisphere, blocking the sun. In Europe, 1816 became ‘the year without a summer’. Crops failed, and desperate people ate rats, cats and grass. In the German town of Darmstadt, the suffering made a deep impression on a thirteen-year-old boy. Young Justus von Liebig loved helping out in his father’s workshop, concocting pigments, paints and polishes for sale. He grew up to be a chemist, among the most brilliant of his age. And he was driven by the thought of making discoveries that might help prevent hunger.
...more
One credible estimate is that increased breastfeeding rates could save 800,000 children’s lives each year. Justus von Liebig wanted his formula to save lives; he’d have been horrified. Formula has another, less obvious economic cost: there’s evidence that breastfed babies grow up with slightly higher IQs – around three points, when you control as best you can for other factors.
conclusion. In Utah, there’s a company called Ambrosia Labs. It pays mums in Cambodia to express breastmilk, screens it for quality, and sells it on to American mums. It’s pricey now – over a hundred dollars a litre. But that could come down with scale. Governments might even be tempted to tax formula milk to fund a breastmilk market subsidy. Justus von Liebig sounded the death knell for wet nursing as a profession; perhaps the global supply chain is bringing it back.
Only a quarter of food spending was outside the home in the 1960s. It’s been rising steadily over time, and in 2015 a landmark was reached: for the first time in their history, Americans spent more on food and drink outside the home than at grocery stores. In case you think the Americans are unusual in that, the British passed that particular milestone over a decade before.
It was only in the 1960s that the industrialisation of food really started to have a noticeable impact on the amount of housework that women did.
It was, of course. But the revolution wasn’t in the lives of women. It was in how lemon fresh we all started to smell. The data are clear that the washing machine didn’t save a lot of time, because before the washing machine we didn’t wash clothes very often.
Between 1977 and 1995, American potato consumption increased by a third, and that increase was almost entirely explained by the rise of fried potatoes.
The industrialisation of food – symbolised by the TV dinner – changed our economy in two important ways. It freed women from hours of domestic chores, removing a large obstacle to them adopting serious professional careers. But by making empty calories ever more convenient to acquire, it also freed our waistlines to expand. The challenge now – as with so many inventions – is to enjoy the benefit without also suffering the cost.
But the failure rate of the pill is just 6 per cent – three times safer than condoms. In fact, that assumes typical use – use it perfectly and the failure rate drops to one twentieth of that. And responsibility for using the pill perfectly was the woman’s, not that of her fumbling partner.
The pill was first approved in the United States in 1960, and it took off almost immediately – in just five years, almost half of married women on birth control were using it.
law, medicine, dentistry and MBAs. These degrees had been very masculine until then. In 1970, men earned over 90 per cent of the medical degrees awarded that year. Law degrees and MBAs were over 95 per cent male. Dentistry degrees were 99 per cent male. But at the beginning of the 1970s, equipped with the pill, women surged into all these courses. The proportion of women in these classes increased swiftly, and by 1980 they were often a third of the class. It was a huge change in a brief space of time.
The answer is that by giving women control over their fertility, the pill allowed them to invest in their careers. Before the pill was available, taking five years or more to qualify as a doctor or a lawyer did not look like a good use of time and money if pregnancy was a constant risk.
A few years ago, an economist called Amalia Miller used a variety of clever statistical methods to demonstrate that if a woman in her twenties was able to delay motherhood by one year, her lifetime earnings would rise by 10 per cent: that was some measure of the vast advantage to a woman of completing her studies and securing her career before having children. But the young women of the 1970s didn’t need to see Amalia Miller’s research: they already knew it was true. As the pill became available, they signed up for long professional courses in undreamt-of numbers.
Gender inequality in Japan is generally reckoned to be worse than anywhere else in the developed world, with women continuing to struggle for recognition in the workplace.
But at the beginning of the 1960s, at MIT, new computers were being installed in a more relaxed environment. They didn’t have their own rooms – they were part of the laboratory furniture. Students were allowed to mess around with them. The term ‘hacker’ was born, and rather than having the modern mass-media sense of a malevolent cracker of security systems, it meant someone who would experiment, cut corners, produce strange effects. And just as hacker culture was being born, MIT ordered a new kind of computer: the PDP-1. It was compact – the size of a large fridge – and relatively easy to use.
...more
A decade ago, I saw Edward Castronova speak in front of a learned audience of scientists and policy wonks in Washington DC. You guys are already winning in the game of real life, he told us. But not everyone can. And if your choice is to be a Starbucks server or a starship captain – what, really, is so crazy about deciding to take command in an imaginary world? Castronova may have been onto something. In 2016, four economists presented research into a puzzling fact about the US labour market: the economy was growing strongly and unemployment rates were low, and yet a surprisingly large number
...more
That commentator was Charles Coolidge Parlin. He’s widely recognised as the world’s first professional market researcher – and, indeed, as the man who invented the very idea of market research. A century later, the market research profession is huge: in the United States alone, it employs around half a million people.
The nature of advertising was changing: no longer merely providing information, but trying to manufacture desire. Sigmund Freud’s nephew, Edward Bernays, pioneered the fields of public relations and propaganda. Among his most famous stunts for corporate clients, in 1929 Bernays helped the American Tobacco Company to persuade women that smoking in public was an act of female liberation. Cigarettes, he said, were ‘torches of freedom’.
Air conditioning as we know it began in 1902, and it was nothing to do with human comfort. The workers at Sackett & Wilhelms Lithography and Printing Company in New York were frustrated with varying humidity levels when trying to print in colour. The process required the same paper to be printed four times – in cyan ink, magenta, yellow and black. If the humidity changed between print runs, the paper would slightly expand or contract. Even a millimetre’s misalignment looked awful. The printers asked Buffalo Forge, a heating company, if it could devise a system to control humidity.
Air conditioning is a revolutionary technology; it has had a profound influence on where and how we live. It has transformed architecture. Historically, a cool building in a hot climate implied thick walls, high ceilings, balconies, courtyards, and windows facing away from the sun. The dogtrot house, popular in America’s south, was bisected by a covered, open-ended corridor to let breezes through. Glass-fronted skyscrapers were not a sensible option: you’d bake on the upper floors. With air conditioning, old workarounds become irrelevant and new designs become possible. Air conditioning has
...more
According to Geoffrey Heal of Columbia University and Jisung Park of Harvard, a hotter-than-average year is bad for productivity in hot countries, but good in cold ones: crunching the numbers, they conclude that human productivity peaks at between eighteen and twenty-two degrees.
You’d expect air conditioning technology to be getting cleaner and greener, and you’d be right. But demand is growing so quickly that, even if the optimists are right about possible efficiency gains, there’ll be an eightfold increase in energy consumption by 2050. That’s worrying news for climate change.
But – and this was a big ‘but’ – you couldn’t get these results simply by ripping out the steam engine and replacing it with an electric motor. You needed to change everything, including the architecture and the production process. And because workers would have more autonomy and flexibility, you even had to change the way they were recruited, trained and paid.
And as more factory owners figured out how to make the most of electric motors, new ideas about manufacturing spread. Come the 1920s, productivity in American manufacturing soared in a way never seen before or since. You would think that kind of leap forward must be explained by a new technology. But no. Paul David, an economic historian, gives much of the credit to the fact that manufacturers finally figured out how to use technology that was nearly half a century old. They had to change an entire system: their buildings, their logistics and their personnel policies were all transformed to
...more
Brynjolfsson and Hitt revealed their solution: what mattered was whether the companies had also been willing to reorganise as they installed the new computers, taking advantage of their potential. That often meant decentralising, outsourcing, streamlining supply chains and offering more choice to customers. You couldn’t just take your old processes and add better computers any more than you could take your old steam-powered factory and add electricity. You needed to do things differently;
The thing about a revolutionary technology is that it changes everything – that’s why we call it revolutionary. And changing everything takes time, and imagination and courage – and sometimes just a lot of hard work.
Statistics back this up. In the early 1960s, world merchandise trade was less than 20 per cent of world GDP. Now, it’s around 50 per cent.
But perhaps the biggest enabler of globalisation isn’t a free trade agreement, but a simple invention: a corrugated steel box, 8 feet wide, 8.5 feet high and 40 feet long. A shipping container.
Even better, McLean realised that on the way back from Vietnam, his empty container ships could collect payloads from the world’s fastest growing economy, Japan. And so the trans-Pacific trading relationship began in earnest.
The world is a very big place, but these days the economists who study international trade often assume that transport costs are zero. It keeps the mathematics simpler, they say – and thanks to the shipping container, it’s nearly true.
Both stories came to fruition in June 1974 at the checkout counter of Marsh’s Supermarket in the town of Troy, Ohio, when a 31-year-old checkout assistant named Sharon Buchanan scanned a ten-pack of fifty sticks of Wrigley’s Juicy Fruit chewing gum across a laser scanner, automatically registering the price of 67 cents. The gum was sold. The barcode had been born.
