Fifty Inventions That Shaped the Modern Economy

by Tim Harford

to double in twen...

The ubiquitous kiosks that sell prepaid mobile airtime effectively function like bank branches: you deposit cash, and the agent sends you a text message adding that amount to your balance; or you send the agent a text, and she gives you cash. And you can text some of your balance to anyone else.

If you’re plugged into the financial system, it’s easy to take for granted that paying your utility bill doesn’t require wasting hours trekking to an office and standing in a line, or that you have a safer place to accumulate savings than under the mattress. Around two billion people

Napoleon needed to tax things to fund his incessant wars, and property was a good target for taxation. So he decreed that all French properties would be carefully mapped and their ownership would be registered. Such a property

Alexander Cumming. A watchmaker in London a century

But Cumming’s world-changing invention owed nothing to precision engineering. It was a bit of pipe with a

it. In 1775, Cumming

patented the S-be...

Cumming’s solution was simplicity itself: bend the pipe. Water settles in the dip, stopping smells from coming up; flushing the toilet replenishes the water. While we’ve moved on alphabetically from the S-bend to the U-bend,

Piso Firme means “firm floor,” and when economists studied the program they found that the ready-mixed concrete dramatically improved children’s education. How so? Previously, most house floors were made of dirt. Parasitic worms thrive in dirt, spreading diseases that stunt kids’ growth and make them sick. Concrete floors are much easier to keep clean: so the kids were healthier, they went to school more regularly, and their test scores improved. Living on a dirt floor is unpleasant in many other ways: economists also found that parents in the program’s households became happier, less stressed, and less prone to depression when they lived in houses with concrete floors. That seems to be $150 well spent.

But here’s the problem: if cheaply made, it will rot from the inside as water gradually seeps in through tiny cracks in the concrete and rusts the steel. This process is currently destroying infrastructure across the United States;* in twenty or thirty years’ time, China will be next. China poured more concrete in the three years after 2008 than the United States poured during the entire twentieth century, and nobody thinks all of that concrete is made to exacting standards.

The Code of Hammurabi—a law code from Babylon, in what is now Iraq—is nearly four thousand years old. It devotes considerable attention to the topic of “bottomry,” which was a kind of maritime insurance bundled together with a business loan: a merchant would borrow money to fund a ship’s voyage, but if the ship sank, the loan did not have

The gentlemen of Lloyd’s would have had no qualms about taking my bet on my own life. The proprietor saw

something to be analyzed and traded, the mutual assurance societies of the Alps viewed risk as something to be shared. A touchy-feely

The evidence is growing that insurance doesn’t just provide peace of mind, but is a vital element of a healthy economy. A recent

Mariana Mazzucato, William Nordhaus, and the crew at some of my favorite podcasts: 99% Invisible, Planet Money, Radiolab, and Surprisingly Awesome.

Knowledge: How to Rebuild Our World After an Apocalypse (London: Vintage, 2015). 2. James Burke,

Foragers, Farmers and Fossil Fuels, 153.

Krell, The Devil’s Rope: A Cultural History of Barbed Wire (London: Reaktion

Passport: The History of Man’s Most Travelled Document (Canterbury, England: Queen Anne’s Fan, 2008), 63. 2. Ibid., 3.

Woman Behind the New Deal: The Life and Legacy of Frances Perkins—Social Security, Unemployment Insurance, and the Minimum Wage

Revolution at the Table: The Transformation of the American Diet (Berkeley: University of California Press, 2003).

Birth of the Pill (London: Macmillan, 2014), 7.

This Man’s Pill: Reflections on the 50th Birthday of the Pill (Oxford: Oxford

Business Enterprise in American History.

How We Got to Now, 81–83.

Empire of Things: How We Became a World of Consumers, from the Fifteenth Century to the Twenty-first (London: Allen Lane, 2016), 192.

How Play Made the Modern World (New York: Riverhead Books, 2016);

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (Princeton, NJ: Princeton University Press, 2016),

Marc Levinson, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (Princeton, NJ: Princeton

Koeppel, Banana: The Fate of the Fruit That Changed the World (New York: Hudson Street Press, 2008). 2. Ibid.

Debt: The First 5,000 Years (London: Melville House, 2014), 47.

Edward Glaeser, Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier (Macmillan: London, 2011), 138. 7. “Six Stories”;

Money Changes Everything: How Finance Made Civilization Possible

Double Entry: How the Merchants of Venice Created Modern Finance (London:

When All Else Fails: Government as the Ultimate

Manager (Cambridge, MA: Harvard University Press, 2002). 2. Ulrike Malmendier,

Firm: The Story of McKinsey and Its Secret Influence on American

Copyrighting Culture: The Political Economy of Intellectual Property (Oxford:

Kurt W. Beyer, Grace Hopper and the Invention of the Information Age (Cambridge, MA: The MIT Press, 2009). 2. Lynn Gilbert

Morton Grosser, Diesel: The Man & the Engine (New York: Atheneum,

Daniel Charles, Master Mind: The Rise and Fall of Fritz Haber (New York: HarperCollins,

Robert Buderi, The Invention That Changed the World: The Story of Radar from

Fernand Braudel, Civilization and Capitalism, 15th–18th Century: The Structure

Philosophies (Oxford: Blackwell, 1977) and in Felix Martin’s Money: The Unauthorised Biography (London: Bodley Head, 2013),

Nicholas Shaxson, Treasure Islands: Tax Havens and the Men Who Stole

Lymbery and Isabel Oakeshott, Farmageddon: The True Cost of

Halliday, The Great Stink of London: Sir Joseph Bazalgette and the Cleansing

How the Toilet Changed History (Minneapolis: ABDO, 2015). 5. Johan Norberg, Progress: Ten Reasons to Look Forward to the Future (London: OneWorld, 2016),

Money Changes Everything: How Finance Made Civilization Possible (Princeton,