Last week, I was in Berlin where I gave a talk in the conference on Contextualising Technical Innovations in Prehistory. The declared focus of the conference was on the evolution of technology in the 4th and 3rd millennia BC, but many of the presentations ranged much more widely, and a few even connected the Bronze Age to the Modern Age. One of the recurrent themes was that you cannot understand the dynamics of innovation if you decouple your theory from what else is happening in the society. It’s not really the lone genius who pushes technology into the future. After all, it’s not enough to invent something; in order for an invention to become an innovation, it has to be adopted by the society, or at least some substantial segment of it.
David Warburton in his talk, Why Innovate?, proposed that most of innovation is driven by the interests of the powerful and wealthy, the elite. That’s why in the hierarchical societies we see a lot of technological change in the production and elaboration of luxury items, consumed primarily by the elites, and very little innovation in labor-saving devices that would benefit the majority of population.
Gary Feinman’s talk Flying Cars and Polychrome Vases: Cross-cultural Perspectives on Technical Innovations and Their Connection to Social Inequality developed this idea further and in a very interesting way. Feinman is a Mesoamericanist who works in Oaxaca (and now also in China). Half of his talk was on Mesoamerican archaeological cultures. For example, he showed this image:
But the most thought-provoking part of his talk was on the parallels he drew between the Ancient World and modern America. As readers of this blog know very well, during most of the twentieth century – until the late 1970s – inequality of income and wealth was declining in the USA. During this period, known as the Great Compression, a variety of well-being indicators were climbing up. The last 40 years have seen the opposite trend: climbing inequality and stagnating, or even plunging, well-being.
In his talk, Gary Feinman made the following observation: during the period of declining and low inequality, the majority of innovations favored the common people. Just think of the spread of the automobile, the radio and TV, the washing machine, the vacuum cleaner, indoor plumbing, electric lighting, the electric steam iron, and the dishwasher. As a result of this technological progress, by the end of the 1960s, the commoners in the USA enjoyed a much higher quality of life than the wealthiest elites in the Roman Empire, for example.
Unfortunately, it all ended in the 1970s. Here are the main innovation during the new Gilded Age that Gary listed in his talk:
|Economic financialization||Computing, ATMs, credit cards, fiber optics, big data|
|Personalized communication and consumption||Internet, cell phones, personal computers, fiber optics|
|Surveillance||Drones, cell phones, internet, big data|
|Medical innovations||More directed to extending life than to lessening infant mortality|
Without necessarily endorsing each and every one of these categories, I think it is fair to say that the technological progress since the late 1970s has benefited primarily the wealthy and the corporations. Certainly, the great surge in the well-being of common people has come to an end. Can you point to any major area where technology made our life easier?
Unlike Gary, I actually think that the Internet is a real achievement that improved the life of many people in America and elsewhere. Of course, it also made it easier for the corporations to track our preferences and push their unwanted products on us (but you can always “just say no”). The Internet, however, did not reduce the drudgery of living, in the same way that the washing machine (just think about doing laundry before them), the automobile, and the vacuum cleaner achieved.
But in the last 40 years there were no comparable improvements. Where are those household robots that we were promised in the 1950s? Where are the flying cars?
I am fortunate that I rarely need to deal with traffic jams, but when I am trapped in one, how many times I wished that I could just push a button and soar above the mess… (Now don’t start on telling me that it’s impractical, I understand it as well as you).
OK, if I can’t have my flying car, what happened to the promise of superfast public transportation? I live in the Boston-Washington corridor. How come I need to fly to Washington? Where is the bullet train that would take me there in comfort? That’s not science fiction – superfast trains have been a reality in Japan and Europe for decades. China now has them. Even Russia, for crying out loud!
Here’s a graph from Gary’s talk that provides some explanation:
As you can see, during the 1970s the public spending on new transport and infrastructure has declined below the 2 percent of GDP level; in fact, it is now lower than the level that we need to spend just to keep our current infrastructure (and that level has also been declining).
All those devices that helped the common people–from cars to vacuum cleaners to computers–were originally invented for the rich and for corporations. They trickled down because later innovators found ways to make them cheaper and cheaper and cheaper, while the incomes of the common people went up because they had manufacturing to do and labor-saving devices to save them from working around the house. Indeed inventions normally start as luxuries. I’m sure agriculture did; the theories of why it “had to happen” because of “necessity” don’t make the grade.
I disagree. The wealthy never cared about washing machines – they had servants who washed their laundry. Ditto for the vacuum cleaners.
I’m not convinced the rich had no use for labor-saving devices. It would allow their servants to perform more work per unit time, which could be used to shrink the servant headcount. After all, it’s always been difficult to find good help, at least if one believes British TV dramas about the aristocracy.
I think the overall premise though is correct – that the more recent innovations have been designed to benefit the elite, even when they are not the primary users. Two examples are Google and Facebook. Commoners predominately use them, but the main beneficiaries are the advertisers.
It depends on the relative prices of labor versus capital. If it’s much cheaper to hire another Filipino servant than buy a vacuum cleaner, then it’s economically rational to hire a servant. So when labor is cheap, the wealthy will have no interest in investing into devices that improve labor productivity.
This is a version of the Habakkuk Hypothesis (citation = sometime in the early 1960’s) or in a pre-industrial context, the Domar Hypothesis on Serfdom vs Free Labor (1970). It’s a bit ad-hoc in the sense that while it’s intuitive, once you think through the possible feedback effects (more or less what Ken says above) it could go either way. The Habakkuk Hypothesis was reintroduced and formalized by Acemoglu and Zilliboti in the late 1990’s in the context of “Directed Technological Change”. Basically, the relative price of labor versus capital is itself an endogenous variable, so while it can indicate what kind of fundamental changes are taking place, it’s not a direct determinant of these changes. What matters is the change in the substitution possibilities between capital (vacuum cleaners) and labor and which of these the technological innovation economizes on. But yes, if labor is abundant, price of labor is cheap, price of capital is high, there’s greater incentive to invest in technologies which make capital more productive.
But this is on the production side, not on the consumption side. On the consumption side, it makes much more sense to go for innovations which the median individual will like, not the innovations that a couple of wealthy billionaires might be willing to pay some money for.
Radek, what if the median individual has no disposable income to spend?
Well, disposable income has a precise definition. It’s an individual’s after tax, after transfers, income. In that sense everyone has a disposable income. Suppose median individual’s disposable income is very small. By the fact it’s the median income, that means there is a lot of individuals close to it.( Lots of individuals * small income) could still be greater than (a couple individuals * large income). This is the reason why I brought up the “median” rather than the “average”.
This also means that yes, there’s some room for inequality to play a role here. But, as mentioned by someone else above, what technological innovation does in many cases is make goods which were previously the luxury items of the elite, affordable to the general (median) public. So you can’t really say “rich people consume X, and innovation made X cheaper, therefore it benefited only the rich” because with X being cheaper now poorer people consume it as well (this is actually one of the major conceptual difficulties in constructing viable estimates of price indices, like the Consumer Price Index, of constructing poverty thresholds, or even of comparing national incomes across countries which are at different levels of development).
I watched some movie from the 80’s the other day where the “rich guy” in the movie had a “cordless phone”. Big bulky thing, but he could talk to his “business partners”. This big bulky cordless phone was a big status signal of his wealth. Of course now everyone and their dog has a cell phone. Yes, the innovations in communication technology of the past 30 years means that that rich guy, who was already consuming something like it, can buy a better quality “cordless phone” at a lower net price, but they also mean that people who never could afford it have it too. I also remember back when Chinese food restaurants were considered fancy dining and shrimp were a dish that was only served at places where you needed a reservation (sort of, that change was on the cusp of me growing up).
I am not arguing that inequality has no effect on the direction of innovation, just that it is not at all clear – either empirically or theoretically – which way it goes, and under what circumstances. A lot of ground breaking, life-improving-for-ordinary-folks innovations actually did take place in circumstances of high or even increasing inequality (end of 19th, first quarter of 20th century) so without some serious concrete evidence I remain highly skeptical of the postulated hypothesis. Could be, but someone has to do a lot more work to convince me.
(Actually, I pretty much don’t buy it, but I’m trying to remain open minded)
I’m very skeptical, at least in how this is framed. Aside from drones (which I don’t think are really relevant here and you’d really have to stretch it to argue that they “benefit the wealthy and the corporations”) and the medical innovations (which I’d question on empirical grounds), all but one of the items in the list seem like things which primarily benefited the middle class. In a particular way. If I had to characterize the nature of innovation since the 1970’s I’d rather cast it in terms of “improving the consumption of leisure by the middle class”. Flat screen TVs, playing on the internet, easier communication with friends and family.
The exception, where this might be right, is possibly financial innovation, although even there I’d argue it’s more complicated. The financial innovations – ATMs, debit cards, credit cards, access to financial markets, etc. – have definitely been targeted and consumed by the middle class, although whether it did them any good is a different question.
In terms of life expectancy and infant mortality, life expectancy has a pretty much constant trend, post WW2. Infant mortality also has a pretty much constant (decreasing, log-linear) trend post 1965 or so. In fact, it is the period 1950-1970 where infant mortality stayed roughly constant, rather than falling, unlike post 1970. Before 1950 you do see a big drop in infant mortality, much bigger than the 1970-2014 one, but that is mostly driven by large decreases in infant mortality among African-Americans (partly due to improved sanitation and health care in the South, and partly due to increasing average incomes obtained as a result of the so-called Great Migration up north). So I don’t see the case here. I guess one could look at relative expenditure on innovation in these two areas but given that they’re very different in nature (reducing infant mortality involves a lot of low hanging fruit, increasing life at the end is much more difficult) I wouldn’t draw any strong conclusions from that. And even if somehow this does support the claim, it could very well just indicate a “old age bias” rather than a “wealthy bias”, in that as fertility rates fell and the overall population became older, it decided to spend more on old people than kids.
Cell phones are a particularly strange item to include in the list, as a visit to any low income country, where they are ubiquitous, can attest. In some poor countries, even the street beggars have them (granted, partly because there are concerted efforts by governments and NGOs to distribute them cheaply). Even if I’m exaggerating here, cell phones have made that particular piece of technology – communication – far more available to the poor than to the wealthy (who more or less had it anyway long time ago). I had a student a few years ago who wrote their senior thesis on the impact of cell phones on absolute poverty rates in Africa and they found a modest, though very much significant, negative effect. I wouldn’t stand 100% behind it – it was solid work but it was still undergraduate research – but at the very least, it appears that basic, preliminary evidence points in that direction.
Although I’m skeptical, even disagree on this, the sentiment might not be too far off. But I would look towards production innovations not the consumption innovations (which people focus on, as here, because they’re everywhere and easily visible). To the extent that innovation has benefited the wealthy in the last 40 years, it’s probably by enabling the replacement of labor with machines in the production process, particularly in manufacturing.
Hi Radek –
As I said in the main post, I also find some of the items in the table questionable. And in general I an in agreement with most of the things you say. Things are not quite as clearcut as Gary argues. On the other thing, in terms of financial innovations such as ATMs and personal banking, they were not particularly beneficial to the consumer. What the corporations have essentially done is fired the human tellers, and partly substituted their labor with machines. I say ‘partly’ because they shifted a substantial amount of work on us, the consumers. The interfaces for dealing with our electronic accounts are not designed with our convenience in mind. It can be a harrowing and laborious experience to accomplish through the Internet tasks that took a human teller seconds to do in good old times.
I agree about the off-loading of tasks onto consumers (same goes for this LaTex fad in economics journals where work which previously was done by editors and typesetters is now expected of the author. Anyway…) But with the tellers who lost their jobs, those vacuums and dishwashers that you mention above also got some servants fired. It’s the very nature – almost a definition – of innovation that it destroys certain kinds of tasks/employment and creates others. I don’t think there’s any necessary build in bias.
Radek, you are absolutely right about cell phones which made a huge difference in low and not so low income countries. However, it is no secret that cell phones are used as a tool of surveillance by governments adn corporations as well as GPS and internet. The same is true about “electronic money”, debit and credit cards.
Necessity alone may not be sufficient to explain invention/innovation; however, relative purchasing power and/or fostering actions by governments and/or the powerful can facilitate/speed the paths for certain innovations to take off. The slow implementation of high-speed rail in the U.S. illustrates the latter, as powerful agents withhold necessary support for available technology.
Furthermore, I do not accept the lone lightbulb model of invention. Need may help spur inventions in certain directions as friends, family, coworkers encourage an inventor to work more concertedly (or not) depending on relative need/potential market. Invention and innovation are always socially embedded/constructed, albeit to different extents.
As to the general thesis: “David Warburton in his talk, Why Innovate?, proposed that most of innovation is driven by the interests of the powerful and wealthy, the elite.” – I’d like to see the formal argument. At first pass, it seems like incentives would favor innovation which benefits the median, not the tail. Remove intellectual property rights, where innovators are dependent upon wealthy sponsors, and it may be true.
I can concur with the general premise of the final graph (that an expanding economy will proportionally invest more in infrastructure), there are several important caveats. First, the US GDP has more than quadrupled in real terms since the 1950s (both total and per capita), so 3% of GDP c.1960 is far less than 1.5% c.2000. As such, the total money spent today on infrastructure expansion is much greater than during the 50s and 60s in real terms. Second, whereas the 1950s and 1960s saw major highway network construction across the country, most construction since that time has been lesser,decentralized projects that “fill in” that transport infrastructure — connecting suburbs to each other and to metropolitan cores (i.e. suburban to (sub)urban), and micropolitan centers to metropolitan areas (i.e. rural to urban). Since most of this work occurred piecemeal, with much more limited size and scope, it’s really no wonder that it has not consumed a larger proportion of the (ever increasing) US GDP. The great frontier of road and water infrastructure was conquered many years ago. Perhaps oil/gas pipelines, light rail, power-lines and internet cables would be more interesting for a contemporary vantage point. Moreover, it might be questioned whether road and water infrastructure are really the universal “public goods” we’re assuming them to be here — they’re unquestionably bourgeoisie monopolies (automobiles, oil, utilities) for better or for worse — and the necessity of high interest bank loans to own cars is a massive burden on a US working class that needs cars to get to work. I would argue that the four technological domains listed above (medicine, computing, communication, financial advances) are at least as beneficial to ‘commoners’ as the “public goods” of roads and water. After all, all of these innovations are both broadly beneficial AND sources of power for certain groups over others, in different contextually dependent ways, so it’s probably scientifically unsound to lump them into “beneficial” vs. “not beneficial to ‘commoners'” categories for comparative analysis. This is a major problem in Blanton and Fargher’s (2008) “Collective Action and the Formation of Premodern States.”
Hi Rudy – so what are the major infrastructural investments of the last three decades? I’ll give another example of what needed to be done decades ago: burying the power cables underground. Our electric lines in Connecticut are completely exposed to falling branches, wet snow, etc. As a result every year we end up without power for days.
Peter, exactly – burying the power cables underground. A German friend was surprised to see electric poles in the American countryside. She is young enough not to remember them in Germany. Her comment was that it looked like a Third World country.
We, too, lose power several times a year as a result of snow, or rain, or wind a little bit heavier than normal. Just this past Thanksgiving we had to use generator until Friday just because there was about five inches of wet snow.
The focus of the paper was innovation in the US not their diverse affects across the globe. Cell phones, as you state, have a different impact where there were no prior landline phones. But, cell phones in the US also allow the state to track people.
The point you made about declines in infant mortality prior to the 1970s fits the argument as widespread indoor plumbing is an innovation.
Gary, I think both you and O.Voron above are a little quick to make the connection “state=corporations/wealthy”. States are always trying to come up with ways to keep tabs on the people, but that doesn’t necessarily have anything to do with existing levels of inequality. And one could even argue that it’s the wealthy, with lots of money to be hidden from the taxman, that could get financially smacked by the availability of this surveillance (again, I’m not saying it’s so, just that without concrete evidence it’s hard to say which way this goes).
With infant mortality, the point was that between 1950 and 1970, when inequality was very low by historical standards, infant mortality stayed constant not declined. It declined 1970-2014, when inequality was rising. And also, quite dramatically, 1930-1940, but it’s not clear that this had anything to do with inequality. I’d also be willing to bet (not too much) that if I could find data pre-1930, then we’d also see big declines towards the end of the 19th century, exactly during the period of high inequality (basically, what African-Americans got in 1930’s, whites got forty years earlier).
And from a theoretical point of view, even if I accept the claims as an empirical “stylized fact” – that when inequality is high, innovation favors the rich, and vice-versa – that still leaves the question of causality open. Did innovation since 1970’s favor the rich because inequality increased? Or did inequality increase partly as a result of innovation that favored the rich?
GPS navigators? Child monitors? Self-moving vacuum cleaners? Roof solar panels? Not to mention that the internet is not just one invention, but dozens of them (online banking, online price comparing, email, online dating, etc., etc.)
Flying cars, on the other hand, would be only for the elite, at least for the first few decades. They would use too much fuel, and can be used safely only if there’s few of them.
Online banking is simply shifting the work onto the consumer. It’s no improvement over the good old days – as I mention in a response above. All this online stuff simply means that you never can get to a live person to resolve any issues.
Online banking means that I don’t have to drive to the bank every time I need to move ten bucks from my savings account to checking. If I have a serious issue, I can still drive to the bank.
When you consider the bulk of the population, I think there is no question that washing machines, refrigerators, indoor plumbing, indoor gas lines, indoor electricity, autos, interstates, and university education (when states actually funded it in the 1960s/1970s) fundamentally were game-changers for[peoples in ways that ATMs, online dating, self-moving vacuums, and child monitors are not.
Gary, a number of innovations you mention, such as indoor plumbing and household electricity became widespread during the first quarter of the 20th century or so, and were adopted to public use a few decades earlier. In other words, these innovations occurred precisely when inequality was very high.
Indoor electricity is much older, and so are autos. Washing machine sales in the US reached almost a million per year by 1918. A lot of households had gas lines and refrigerators before WWII. You are comparing the last 20 years with a whole century before that.
When we discuss household appliances, don’t forget that pretty much everything that could be made automatic already is. I live in a lower-middle-class household, and the only thing in it that is not yet automatic is my wife, which makes me think further automatization might not be a good idea.
As for university education, online courses might eventually become a much greater game changer than state universities.
The first autos date to the turn of the 20th century in the US, but they sold in small numbers. The innovation of mass market autos postdates WWII, the time known as the “great compression” as incomes were more equal.
Many of the first uses of home technologies (e.g., indoor plumbing) also have a longer history, but “miraculously” they were installed in a large number of US households *after* 1930, as inequalities diminished. Many rural areas, where a much larger proportion of people lived at that time, did not get indoor bathrooms and gas service until after 1950.
This is where we need data.
“Although electricity was still expensive , it was gradually coming down in price. During the 1910s, the number of homes wired for electricity grew steadily: 16 percent in 1912, 20 percent in 1917 and 35 percent in 1920.
Most homes had only enough wiring to power their electric lights.
….Before the 1900s, power plants operated in the evening only. This was because electric lights were generally the only things they powered. Usually this night current was turned on between 8 p.m. and midnight.
When the first practical electric appliances were introduced in the late 1900s, customers needed daytime current to operate them. Irons were very popular, and most of the housewives who requested day current wanted it for ironing. Since Tuesday was “ironing day” in most households, this was the one day a week when power was turned on during daylight hours.
By the 1910s, most towns had adopted day current for at least one day a week, and many towns had expanded to 24-hour service.”
Vehicle ownership per capita growth was almost linear in 2010-2080, except for a slowdown during WWII. Later it slowed down due to saturation, I’d think.
Sorry, here’s the link: http://transportblog.co.nz/wp-content/uploads/2011/06/vehicle-ownership-rates.jpg
American Society of Civil Engineers’ 2013 report grades US infrastructure a D+
During the period in which US infrastructure spending as share of GDP fell (and I agree that is a reasonable indicator, since there is probably a relatively stable level of infrastructure spending required to properly service a given level of economic activity), defence spending as a % of GDP also fell dramatically (albeit in a somewhat step-wise fashion), yet US tax % of GDP has remained relatively stable. So, something else took up that available spending. So, why did Social Security, Medicare, Medicaid, etc, etc squeeze out infrastructure?
One effect of all that highway spending was to increase zoning and other land rationing regulations. Which pushed up the value of approved-for-housing-land. Which raised the cost of infrastructure construction and reduced the tax-benefit of infrastructure (since the increased tax take from zoning tended to drown out the increased tax take from better serviced land).
At the same time, women were entering the workforce at an accelerating rate, and spreading across the income levels. The pattern of high-income women marrying high-income men started to take hold.
Immigration also spread out in its coverage, leading to a more diverse (so somewhat harder to locality-mobilise) society.
At the same time, the rate of innovations being taken up across households has accelerated. So the US is actually, if anything, more “gadget convergent” than it used to be. On a “revealed preference” basis, I am not sure that claims about who innovations have benefited more hold up. But I can see factors which would encourage a more divided society, with an elite more insular and living more in socio-economic “bubbles” as Charles Murray puts it.
Like many of the other commentators above I don’t think that Feinman’s examples really support his premise. Classifying things like the internet and cellphones as tools of the elite seems to be a really big stretch. For example, I can think of tonnes of examples where the internet seems to be of benefit to the general populace rather than the elite, not just in terms of convenience/ease of finding information but also in terms of reducing costs (online retailers/virtual exchange markets), access to resources (online education courses), access to new jobs/avoidance of gatekeepers (freelance websites, crowdfunding, youtube), access to entertainment (online streaming/piracy) and so on. There have also been notable examples of the internet and various social media sites being used to organise the protests against the elites, and although the role of Twitter/Facebook etc. in the Arab spring is occasionally over exaggerated, there is no doubt that the internet can serve as a tool for counter culture movements (i.e. Anonymous/the Silk Road). This is just one of the examples offered by Feinman but I think it is indicative that his judgments are far too subjective.
A declining improvement in infant mortality may also be indicative of the fact that we have, in large part, tackled many of the low hanging fruit in regards to infant mortality and that now medical developments are likely to be more piecemeal. I don’t know enough about the data to make any definitive statements either way but I think it’s crucial here to remember the maxim that correlation does not equal causation. Declining improvements in infant mortality MIGHT be due to growth in inequality but simply pointing out the two things occurred together is not enough.
Finally, on a random note, Peter in regards online banking. Despite your personal frustrations I would echo vdinets sentiments. I live in Japan and bank with HSBC, before internet banking the only way for me to take care of my banking would have been over the telephone, which I still have to do on occasion. This is almost always less convenient than using my online banking. So I don’t think that we can chalk this one up either to being an overall negative for the customers. Many of us are very grateful not to have to set foot in a bank to arrange minor transactions.
Peter asked: Can you point to any major area where technology made our life easier?”
Radio and TV, the washing machine, the vacuum cleaner, electric lighting, the electric steam iron, and the dishwasher were all simple and pretty obvious hardware evolutions enabled by the taming of electricity. Like automobiles, they have all undergone continuous technological progress and cost reductions since the 1970’s, which continue to benefit the “common people” and hopefully enhance their well-being. It should be noted that all this pre-1980’s technology also hugely benefited the wealthy and the corporations.
But as far as making life easier is concerned, they all pale into insignificance when compared to the thousands of benefits brought about by internet for all individuals, rich or poor, despite what Peter’s experiences at the bank may have been. Unlike the automobiles and hoovers of the 1930’s, the internet is a game-changing technology, cutting across commercial and technical barriers of all kinds, forcing change or extinction on reluctant corporations and bureacracies, opening new opportunities for entrepreneurs, and above all giving access to information.
Do you remember what it was like trying to find a book before the internet/digital era began? Or paying for twenty volumes of an encyclopedia? Or finding your wife in the mall? Or finding a spare part? Or scouring through columns and columns of small print looking for a deal? Or waiting a week for 24 photos to be processed and finding you had your finger over the lens in half of them? Or finding an address in the suburbs? I can’t think of any other technology revolution that has had such a major and rapid impact, particularly for the common man.
Fair enough. I don’t agree that the technologies of the previous wave of innovations pale into insignificance when compared to the information ones, but your comment is good for balance (as I said earlier, I don’t agree completely with Gary Feinman’s view either – the truth must lie in between). One thing to note is that my wife refuses to be equipped with a cell phone, so I still have to search the department store aisles the old fashioned way…