Fifty Inventions That Shaped the Modern Economy

by Tim Harford

Twelve thousand years ago, humans were almost entirely nomadic, hunting and foraging their way into every niche

Animals were migrating to the river valleys in search of water, and people followed.3 This shift happened in many places—more than eleven thousand years ago in

These fertile but geographically limited river valleys changed the way people got enough to eat: it was less rewarding to roam around foraging for food, but more rewarding

to give the local plants some encouragement.

Agriculture began in earnest. It was no longer just a desperate alternative to the dying nomadic lifestyle, but a source

of real prosperity.

Agricultural abundance creates rulers and ruled, masters and servants, and inequality of wealth unheard of in hunter-gatherer societies. It enables the rise of kings and soldiers, bureaucrats and priests—to organize

Different types of plows led to different

moldboard plow cuts a long, thick ribbon of soil and turns it upside down.8 In dry ground, that’s

fertile wet clays of Northern Europe, the moldboard plow was vastly superior, improving drainage and killing deep-rooted weeds,

turning them from competition i...

Starting about a thousand years ago, thanks to this new plow-based prosperity, cities of Northern Europe emerged and started to flourish. And they flourished with a different

The dry-soil scratch plow needed only two animals to pull it, and it worked best with a crisscross plowing in simple, square fields. All this had made farming an individualistic

But the wet-clay moldboard plow required a team of eight oxen—or, better, horses—and who had that sort of wealth?

The moldboard plow helped usher in the manorial system in Northern Europe.9 The plow also reshaped family life.

foraging to agriculture ten thousand years ago, the average height for both men and women shrank by about six inches, 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

The development of the bar code has reshaped the world economy,

It’s the result of a meta-invention, an invention about inventions—a concept called “intellectual property.”

Some, like the iPhone, have been insanely profitable. Others, like the diesel engine, were initially commercial disasters. But all of them have a story to tell that teaches us something about how our

world works and that helps us notice some of the everyday miracles that surround us, often in the most ordinary-seeming

But we shouldn’t fall into the trap of assuming that inventions are nothing but solutions. They’re much more than that. Inventions shape our lives in unpredictable ways—and while they’re solving a problem for someone, they’re often creating a problem for someone else. These

The original Luddites were weavers and textile workers who smashed mechanical looms in England two centuries ago.

They smashed the looms because they rightly feared that machines would make them poorer. They were skilled

workers who knew that the machine looms would devalue

their s...

The Luddites weren’t worried about being replaced by machines; they were worried about being replaced by the cheaper, less skilled workers whom the machines would empower.

So whenever a new technology emerges, we should ask: Who will win and who will lose out as a result? The answers are often surprising, as we’re about to see.

Thomas Edison’s phonograph led the way toward a winner-take-all dynamic in the performing industry. The very best performers went from earning like Mrs. Billington to earning

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, because nobody was interested in paying for a copy of the second-best when you could have a copy of the best. In 1981,

when inequality is caused by a change in the tax code, by corporate collusion, or by governments favoring special interests, at least you have an enemy. But we can hardly ban Google and Facebook just to protect the livelihoods of newspaper reporters. Throughout the

the top 1 percent of musical artists take more than five times more money from concerts than the bottom 95 percent put together.11 The gramophone

John Warne Gates described it more poetically: “Lighter than air, stronger than whiskey, cheaper than dust.”2 We simply call it barbed wire.

Joseph Glidden’s design for barbed wire wasn’t the first, but it was the best. Glidden’s design is recognizably modern: it is the same as the barbed wire you can see on farmland today. The wicked

few years earlier, in 1862, President Abraham Lincoln had signed the Homestead Act. It 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. The ide...

But settlers needed fences, not least to keep those free-roaming cattle from trampling their crops.

Barbed wire changed what the Homestead Act could

The old-time cowboys also lived on the principle that cattle could graze freely across the plains—this was the law of the open range. The cowboys

enforce legal boundaries, many of the fences were illegal, too—attempts to commandeer common land for private purposes. When

And if the cowboys were outraged, the Native Americans were suffering far worse. These ferocious arguments on the frontier

John Locke—a great influence on the Founding Fathers of the United States—puzzled over the problem of how anybody might legally come to own land. Once upon a time, nobody owned anything; land was a gift of nature or of God. But Locke’s world was full of privately owned land, whether the owner was the King himself or a simple yeoman. How had nature’s bounty become privately owned? Was that inevitably

Locke argued that we all own our own labor. And if you mix your labor with the land that nature provides—for instance, by plowing 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’s true that modern economies are built on private property—on the legal fact that most

Modern economies are also built on the idea that private property is a good thing, because private property gives people an incentive to invest and improve in what they own—whether that’s

One example is digital rights management, or DRM. DRM systems are attempts to erect a kind of virtual barbed wire around digital property such as a movie or a song, to prevent people from copying it illegally. Musicians may have copyright

digital economy are no less impassioned today than they were in the Wild West: digital rights campaigners battle the likes of Disney, Netflix, and Google, while hackers and pirates make short work of the digital barbed wire.11 When

This function of matching people who have coincidental wants is among the most powerful ways the

Internet is reshaping the economy.