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As Nassim Taleb acutely points out, history does not crawl, it leaps. Furthermore, it is almost never linear, but often advances disruptively, alternating rhythms and periods of more or less progress, most of the time impossible for contemporaries themselves to interpret. The main engine of these leaps are ideas, ideas that influence, for better or for worse (thank God, generally for the better), economic, political, and social changes. The most tangible dimension in the first case is what we call innovations. Addressing the capital importance of some of the innovations that have had the greatest impact on the development of humanity is the purpose of Tim Harford’s latest book Fifty Inventions That Changed the World (Conecta, 2018). With the same fresh and agile style that characterizes the author of The Undercover Economist (DeBolsillo, 2016), Harford offers a complete mosaic of some of the ingenious devices, artifacts, techniques, or simply improvements that largely explain the great progress in terms of growth and social well-being accumulated by our species, especially since the Renaissance and particularly intensely since the takeoff of the Industrial Revolution.
Harford, author of the celebrated blog on economic topics The Undercover Economist (also the title of his first book, The Undercover Economist), begins the text by analyzing the importance of a seemingly simple technical advance such as the plow: an invention in the agricultural sector, when it represented almost the entirety of the economy, which allowed for multiplying harvests, making better use of resources, and generating a surplus that fueled a notable expansion of urban areas.
Harford addresses other technological revolutions such as: the dynamo, another revolution that lowered the cost of generating electricity and allowed the expansion of other sectors just at a time when the economy was sluggish; the elevator, which allowed the construction of skyscrapers; the clock, which allowed us to order time and better coordinate economic activity; the battery, the basis of consumer electronics – where is the mobile charger, by the way?; radar, without which the development of civil aviation would not have been possible; unleaded gasoline, which prevented us from a global health crisis; paper, surely today the most antifragile technology for the storage and transmission of human knowledge; or, more recently, the iPhone that put the world of the Internet within our reach, changing almost everything. And that's just to list some of my favorite chapters.
With each of these innovations, we discover flesh-and-blood people who, supported by previous technologies, or simply by serendipity (which did not usually save endless hours of work), responded to challenges and problems of our species, originating new solutions, often for problems that were not even fully aware of existing, and giving rise to new challenges. The author has the ability, in each case, to explain the anecdotal, while the fundamental is being forged at the base.
Each story is different, in some cases we are facing highly successful business milestones, such as the iPhone, a disruptive improvement with a clear before and after; in other cases, its impact could only be appreciated over time. For example, the origin of modern banking, that of massively attracting deposits to then carry out credit operations. A business that has its roots in the religious order of the Templars and of which visible vestiges still remain from northern Europe to Jerusalem.
The mosaic offered by the author is but a small sample of some of the most visible changes in the spontaneous order of markets. All innovations enrich each other, and their accumulation generates an exponential effect on the advancement of well-being and progress. The accumulation of capital determines the advancement of human civilizations, from the Stone Age to the Silicon Age, and what is to come. Banking, for example, and improvements in risk management, improved credit and expanded the horizons of exchange: the possibilities of the economy were greater, as were those of generating more savings and accumulating more capital. And so it continues to this day.
Harford reviews many other such innovations, such as the limited liability company, insurance, intellectual property and registries, or paper money. In some cases, these are individual inventions, with names and surnames, others collective, the result of a slow and prolonged period of decantation and synthesis: all of them include amusing anecdotes and nuggets of erudition that, in many cases, shed light on our recent technological history. And beyond the small stories, almost tales that could be perfectly read to primary school students, the book allows us to reflect on what makes innovation possible, beyond the ingenuity of its inventor. In short, how we generate a favorable framework so that we can all benefit from those whose light bulb goes on, and how we encourage more people to have theirs go on. That, in short, is what capitalist economics is all about.