The Future Economy: Introducing the Risk Talking podcast


On the inaugural episode of Risk Talking, Joel Mokyr, the pathbreaking economic historian, joins Allison Schrager to discuss the past, present, and future of innovation and the modern economy. What sparked the industrial revolution? What are the intellectual underpinnings of economic growth? What is the future of work in an increasingly technologized world? And does today’s stifling political environment threaten our prosperity? Mokyr and Schrager take up these questions—and much more.

Listen to Allison Schrager’s new show “Risk Talking” on Apple, Spotify, or wherever you get your podcasts.

Audio Transcript

Allison Schrager: Welcome to Risk Talking, a new economics podcast. You may wonder, “There’s a lot of economic podcasts, why do we need another one?” Well, this one takes a slightly different tack. We take the biggest economic questions of the day, we talk to the most interesting minds of the field, and to be honest, this is what economists do. I feel like I am always trying to get answers to these questions, and I have these fabulous conversations with all these very smart economists I’m lucky enough to have access to, and I always thought it would be great if everyone could listen in. For the first episode, I could think of no one better to speak to than Joel Mokyr, mainly because I’ve been a huge fan since I was in undergrad and just really enjoyed reading his research on economic history. He is the most prescient economic historian that you will ever meet, mainly because he understands how technology changes economies in really profound ways. And his insights about what happened in the Industrial Revolution offer a lot of lessons for the changes we have today.

Three hundred years is merely a blip in the history of humanity, let alone the history of the world. But since the 18th century, mankind has experienced a staggering revolution. Technological innovations have transformed the way we live, delivering immense gains in life expectancy, freeing us from back-breaking labor, and generating innovations that change our way of life, unleashing prosperity that has no precedent in world history.

What sparked this revolution? Scientists, philosophers, and politicians have long sought to answer this question, but Joel Mokyr’s work takes an economic approach examining the intellectual roots of the industrial revolution with rigor and originality. Joel is an economic historian and professor at Northwestern University, where he has taught for nearly 50 years. He’s written extensively on the relationship between ideas and innovation in his books, which include The Gifts of Athena: Historical Origins of the Knowledge Economy and The Enlightened Economy: An Economic History of Britain from 1700 to 1850. Most recently, he wrote A Culture of Growth: The Origins of the Modern Economy in which he makes the case that enlightenment culture spurred the industrial revolution. Joel and I discussed a wide range of topics: What drives economic growth, what system of government best encourages innovation, whether the intellectual environment is becoming less open to new ideas, and the future of work in an increasingly virtual world. A conversation with Joel is an education, and I’m excited to share his thoughts with you.

Thank you so much for joining us.

Joel Mokyr: My pleasure.

Allison Schrager: Let’s jump right in with what may be one of the most controversial question in economic history, which is, humans made some progress and dawdled along for a long time, but then starting a couple 100 years ago, we experienced these huge, huge unprecedented gains in productivity and living standards, and they’ve sustained themselves for hundreds of years. So, why did industrialization happen? What spark drove this, and why did it happen where it did?

Joel Mokyr: That is the $64 million question, of course, so I’ll give you my take on it, and other people will probably differ. You’re right. Much of human history is not a history of long-term progress and economic growth. And there’s some debate as to whether there was no growth at all, as some people have argued, or whether the growth was absolutely minimal and infinitesimal. But even very low rates of growth, if you compound them over thousands of years, they will result in some increase in living standards. I would say by 1700, most people in the world, at least the world that’s documented, which would be Asia and Europe, probably were living at a higher living standard than people did during the Roman empire, but not by a huge amount.

And so, something happened in the 18th century that changed all that, and the real question is, what was it? I’ll give you my take on it, and people can debate it. You said the question was controversial, so will my answer be, but I don’t care. Here is the point. Economic growth and economic progress is not driven by the masses. It is not driven by the population at large. It is driven by a small minority of people who economists refer to in their funny language as upper-tail people, meaning if you think of the world following some kind of bell-shaped or normal distribution, it’s the elite, it’s the people who are educated—not necessarily intellectuals. They could be engineers, they could be mechanics, they could be applied mathematicians.

They don’t have to be philosophers, but they have to be people who are really good in what they’re doing, and I think those are the people who are driving economic progress. I’m not just thinking James Watt and five people. It’s not that simple. But I would say, if you look at the top 2 percent or 3 percent of the population anywhere, those are the people that are driving economic growth. And that’s still the case. I mean, in the United States, much of the technological progress they’ve been experiencing has been driven by a fairly small number of people. Some of them are Caltech geeks, and some of them are just really good people who are coming up with novel ideas, but basically that’s what it is about.

And so, what changed is our ability to generate better technology. And in doing so, we owe a lot to a fairly small elite who underwent major cultural and social changes in the previous centuries. And that’s what I try to outline in my book, A Culture of Growth. And A Culture of Growth isn’t really about culture as we generally define it. I don’t particularly spend a lot of time worrying about things like religion or popular culture, or things like that. I look at the people who are driving the economic growth, and that’s all way down from Newton and Galileo to a bunch of engineers that very few people have ever heard of. But these are the people who built the machinery and came up with the fundamental ideas that made economic growth possible. And you can see that starting to happen in the late 17th, early 18th century, and it’s closely associated with what we typically call the Enlightenment.

But it’s important to realize that the Enlightenment was about many things. It was about the state, it was about philosophy, it was about human freedom, and justice, and all kind of things. And I’m just cutting out a small slice of that huge pie, which is about economics. And I call that the industrial enlightenment, and it really is about how to achieve material progress. And material progress isn’t all progress, and people were also interested in establishing more human rights and a civil society and the social contract, and I’m all for that, but that’s not what economics are about. They are about economic growth, and when you say economic growth, in this period you’re talking first and foremost about technology. You’re talking about machinery, you’re talking about ideas, you’re talking about all kind of contraptions that make life in some way better.

And it’s not just about the steam engine or the mule or anything like that, it’s about ideas that try to manipulate nature in a way that benefits humans. And so, I’ll give you one example—it’s not machinery, but it is very critical. It’s vaccination against smallpox, which is very much on people’s minds these days, right? But this is an 18th-century idea. This English country doctor, Edward Jenner, basically came up with this idea. It’s not a machine in any way, but it is a pathbreaking, I would say a radical idea, of how to use what we know about nature to improve human life. And that’s what economic growth in the end is all about. Now, it’s not all human life, it’s material things. It’s how not to get sick, how to get more to eat, how to have better clothing, better housing, to heat your place, to be warmer in the winter and cooler in the summer.

It’s about all these things that define our material comfort and our material wellbeing. It doesn’t necessarily create a better society, and I would have never argued that. I’m not even sure what a better society really is, but even if I knew that, I would say it’s not obvious that society in the 20th century, which after all produced Stalin and Hitler, is necessarily a better place than it was in the 18th century. I mean, that would be an absolutely absurd statement, but what is clear is that life in the 20th century anywhere on this globe is better than it was in the 18th century, in the narrow and somewhat limited material sense that economists are interested in.

Allison Schrager: You are probably unaware of this, but I probably quote you in about one-third of my Bloomberg columns. And I recently quoted your book the A Culture of Growth at length. It seems to me—and you might even know better than I because you spend more time with college students—that, you write about in the A Culture of Growth how there was this thing that changed, this questioning of elders, this rebel spirit. And if you were in a fairly intellectually repressive environment, you could move to a place where your ideas would be more open. Anecdotally, it seems like young people don’t have that rebellious spirit, or aren’t as open to questioning ideas. Do you observe that, or does that worry you?

Joel Mokyr: No.

Allison Schrager: You’re not worried about it?

Joel Mokyr: I want to come back to what I said earlier. I don’t care if 95 percent of people are not willing to question traditional knowledge, or anything like that. I care about the other 5 percent. And it’s never been the case that rebels and nonconformists were a majority. And they don’t have to be, and it probably would be total chaos if they were. What I want is a world in which if you are a rebel. Basically, every invention is an act of rebellion, right? I mean, it is an act of disrespect toward earlier generations. It’s basically telling your forefathers, “Hey, you guys were making steel or headache medication or anything one way, and I can do better than you.” Which is in some ways a kind of disrespectful. And what you want is a society in which such people are encouraged, even though they are a small minority, so you don’t want a society in which you can find yourself burned at the stake because you said something that other people consider to be sacrilege or heresy. You don’t want that.

As long as basically you take a somewhat live-and-let-live kind of attitude in which ideas are judged on their own merit and do they work, rather than what do they say about our previous generations, I’m fine with that. And if that is done by 5 percent of the popular, it wouldn’t be different than anywhere else. As long as these 5 percent of the population are the people that go to MIT and start up firms and are allowed to have a chance, I’m fine with that. And what the other 95 percent of the population do is not particularly relevant, except that they don’t form an organization that says, “Oh my God, don’t make waves. We should respect what previous generations knew.”

And that happened a lot, unfortunately in history, and it’s still happening of people objecting to innovation for one reason or another. And so much of the progress that we have achieved in the last say, three centuries, has been achieved through a struggle between people who were thinking outside the box, to people who said don’t make waves and don’t destabilize society with these radical ideas like nuclear power and vaccination and anything in between.

Allison Schrager: Do you feel like society’s becoming less open to ideas or is it over-hyped that we live in a repressive culture?

Joel Mokyr: I don’t think we live in a repressive culture. I see new ideas around me all the time. Even better yet, what I see is society responding to crisis by directing its innovative efforts and juices toward solving problems that are on everybody’s mind. The last two years have given you a very good example of that. How many people were involved in coming up with vaccines and medications against corona? I don’t know. I looked at this new book that just came out a couple of months ago—I can’t think of the author now, it’s at home.

You look at the index—a couple of hundred people—I mean, two or three of them will get a Nobel prize, but there’s a superstructure of maybe 300, 500, maybe 1,000 people who helped develop the drugs, make them, and everybody was hugely motivated. We’re seeing the same thing in other crises, such as global warming and salination of groundwater and whatever else is happening. And I think the system is actually working reasonably well in applying innovation to solve the problems of humanity that can be solved. Now, nobody has ever argued that all problems that society faces can be solved by better technology, but the ones that can be, insofar as we can do it, we will solve it. I would make a cautious prediction that the world is facing an energy crisis in one form or another.

I mean, people have different takes on it, but everybody agrees that something needs to be done. And my sense is—we’ve been working on nuclear fusion now for, I don’t know, about 50 years and we know it’s possible. We can’t do it economically yet. I will not live to see it, but you will, and once that’s there, it will be one of the greatest steps that mankind has ever taken, because it essentially means infinite energy at very low cost and zero environmental impact. And that’s a dream that seems too good to be true, but then of course so was electricity in 1800.

Allison Schrager: So, you talk about society directing resources. I think China has definitely shown a different model of economic growth. You wrote in A Culture of Growth how China really didn’t take off in terms of innovation in the 18th century, just because they had a different culture than Europe did. Do you think the culture they have now is conducive to innovation?

Joel Mokyr: That is a really hard question and I go back and forth on it. But my sense . . . I was in China about 12 years ago and I taught a long course in Shanghai at Fudan, and at that time I actually would’ve answered that they could. I would’ve been very bullish about China. It was before the authoritarian crackdown of Xi Jinping, and I become more skeptical about China because I actually think that a society that penalizes people for thinking in ways that are not convenient to the government, those societies in the end will not be nearly as creative as societies in which there’s some freedom of thought in which the government basically shrugs and takes an agnostic view, and you can say and think whatever you want. If the market for ideas accepts your idea, good. If they don’t, that’s your problem, and we’re not going to put you in jail for saying things to annoy us.

Now, that wasn’t the case in Stalin’s Russia or in Brezhnev’s Russia for that, and as a result, they fell behind radically behind the West in this 1970s, 1980s, and eventually their system collapsed. What China is trying to do is to have it both ways, to let people think relatively free about things that are technical and don’t matter, and suppress people who come up with social-political ideas, which they don’t like. And whether that model actually works, I am doubtful about, but the truth is we haven’t actually tried anything like that in human history. It has nothing really to go by. I mean, in Stalin’s Russia it wasn’t just social and political ideas were suppressed, they actually took an active interest in science, and they basically decided what science was good, what science was bad.

The same was true for a shorter time, with similar results, of Hitler’s Germany. They suppressed large amounts of physics because it was Jewish science. I mean, if you start thinking like that you are going to fall behind, and I think the West has basically come up with the only political model that truly works, which is essentially, let 100 flowers bloom, as Mao Zedong said but never did. But we did it in the West. It was his metaphor, and I think it’s worked really well for us basically since the 18th century. People basically took a view of go ahead if you have a good idea, try it out, and let’s see what happens. And the other thing that we do really well, I think, in the Western world is create incentives.

Economics is all about incentives. You really expect people to respond to rewards and to penalties in what they do, and I think we have developed an absolutely . . . This is in a way a Western invention that came out in the 17th and 18th century, and it’s much of my Culture of Growth book is about that. We do reward people for having good ideas. Even so ideas really can’t be made property, right? Isaac Newton, to come up with just the most striking example, or say Einstein, somebody like that, I mean, clearly they’re not going to capture the rents that their ideas suggest for the economy at large. But we can make them famous, we can give them a Nobel prize. We couldn’t give Newton a Nobel prize because there was not a Nobel prize in his day, but he was treated very well by his country, and 100,000 people came out to his funeral, and he was treated with huge respect and he got all kind of goodies.

He was considered a bit of an idol at his time, and so were other people who made major contributions to science. Even though they’re not paid in cash, they’re given a comfortable life, they’re given respect, they’re given honor, they become celebrities. The Nobel prize is only the tip the iceberg, but we actually reward successful ideas in a very, very good way. The Russians under Stalin didn’t do that. In fact, you were lucky if he didn’t send you to the gulag if you had ideas that they didn’t like. I mean, the Chinese model, it remains to be seen.

I have some hope, some hope, that the current authoritarian regime in China is going to be temporary, that at some point, they’re going to come to their senses and realize that this kind of autocracy that has become truly oppressive in the last five or six years—more so than before—that that is in a way costly in terms of economic development. And if that were to be the case, one hopes that they would perhaps come up with a somewhat more pluralistic and open-minded government. But that’s not a prediction I’m willing to engage in, because we have seen repeated in history that rulers like that can take over and rule for 25 years and then die in bed as Joe Stalin did.

Allison Schrager: So, it’s not only, as I said, cracking down on ideas, but they’re also engaging in a much more aggressive industrial policy, deciding what industries can grow, depriving others of capital. Can industrial policy be conducive to growth, or do you need to let markets decide where capital is going?

Joel Mokyr: Well, I would say the success rate of China in building up an economy that was vastly richer, more successful than they had been in, say 1978 shows that yes, the answer is—and we learned that actually again, under communist Russia—is you can industrialize as part of an industrial set of policies, and you can have successes. Stalin may not have succeeded in raising living standards in Russia a great deal. He did to some extent, but not nearly as much, but he did succeed in building an industrial base that could defeat Nazi Germany, which is something for which we should all be thankful. China may not have raised living standards in terms of income per capita, which in China is still a fraction of what it is in the West, but boy, they are supplying every dollar store in the United States with cheap consumer goods, for which Americans should be grateful.

The question of success here has to be defined with some care. Now, so far, this has worked well for them, and they are now a huge economy, they’re soon going to be the largest economy in the world. Now, that’s a meaningless term. Economists thinks in per-capita terms, they don’t think in overall terms. I mean, you expect an economy of 1.3 billion people to be big. What else could it be? But living standards in China on average are still a fraction of what they are in the West, and they have made of course, major errors in these policies, as you point out. I mean, these industrial policies often lead to terribly allocated decisions, building way too many apartments, for instance, and they have this real estate collapse that they’re now facing. The environmental cost of their economic growth, both in agriculture and in manufacturing, have been tremendous, and on and on and on.

So yes, I mean, the market usually is wiser than any policymaker, but that doesn’t mean that policy makers are completely hopeless. I wish the world was that simple, but it isn’t. And so far, their track record has been pretty good. I think that if they don’t relax some of their more autocratic policies in the economy, that may not be sustainable. That may not be sustainable, but they have done things that government does, and they have done it extremely well. For instance, you look at infrastructure investment in China and you see what they’ve built. I mean, as I said, I was there 12 years ago—haven’t been since—and the infrastructure that they’ve built is truly amazing.

I mean, in terms of railroad stations, airports, hydraulic projects, things like that . . . I mean, they’ve done better than we have in terms of infrastructure. They’ve done much better than many countries in the West. I mean, Germany’s infrastructure is terribly neglected, and so this is something a government policy does, but private enterprise will have great difficulty in building infrastructure. A government decision can be basically, “Oh, we’re going to build this railroad, bang.” And they build it. They can do that in China, and we cannot do this in the United States. Ask Joe Biden.

Allison Schrager: You strike me as being in the techno-optimist camp. But I’ve said for a long time—I mean, maybe the excess of vaccines will change people’s conversation around this, but a lot of economists point to slowing productivity as evidence that maybe this nice boost we had coming off industrialization has run its course. Why do you think that’s wrong?

Joel Mokyr: I think, if I may—this going to be a terrible heresy in economics—but I think productivity is overrated. And what I mean by that is not that I don’t think as a concept it’s overrated. Of course we want to squeeze as much outputs from our inputs as we can. But we’re not measuring it right. We measure productivity the way most economists do, and we basically look at some kind of output function, and we subtract off the inputs, and what’s left is productivity. And the problem, of course, is in the nitty gritty of national income accounting, which is where the data comes from. And what I’m saying now, every person in the Labor Department knows, but the question is, what can they do about it? And the real problem is that most of the important contributions to economic welfare are often seriously, seriously, seriously underestimated in our procedures.

And I believe that they are getting more and more underestimated. If the degree of underestimation is more or less constant, then you don’t care because over time if it isn’t changing over time, you can still see what the trend looks like. But I think that’s not right. I think we are more and more underestimated because the knowledge economy and the digital economy are famously subject to underestimation. And so the example I always give to my students is, you look at Twitter, and I don’t tweet myself, but lots of people do, and it has clearly been something people like, just by revealed preference. Zillions of people tweet, my colleagues tweet, my students tweet, my friends—some of them—tweet. And so it’s something people want to do.

Allison Schrager: Did you see there was actually a little tweet storm about you yesterday?

Joel Mokyr: That could be. I don’t check it. But the point about Twitter is not that. The point about Twitter is that it’s free. You don’t pay to either send a tweet or read a tweet, and so it doesn’t enter the national income accounts. Think about it. I mean, if its price is zero, you multiply, I don’t know how many billions of tweets we send each year, by zero, you get zero. And so, we have come up with an invention—I would think of it as an invention, even though it’s not really a device as such—which has made a lot of people much better off, which hasn’t entered into the national income accounts. And that thing gets multiplied all over the place. I still remember driving around the country, Allison, in the 1970s. And you had to get these maps from AAA in order to find your way around, to get from A to B.

And then it was a real problem if you were driving alone, because you couldn’t really read a map while driving, so you had to stand at the side of the road and open that map, and then the wind would blow it around. It was a pain. And today, who uses maps? Nobody. People even don’t know what maps look like. Cars come pre-equipped with GPS, and it will show you the fastest road, and it will show you where the traffic jams are. I mean, this is a huge thing that’s improved our life a lot, but it’s free. I can get it on my smartphone through Google Maps, and so it enters basically the GDP with a price of zero, means it doesn’t enter, and so we can add up all these things.

I mean, you look at advances in medicine, both clinical and preventive. Dentistry—I mean, that’s one of my favorite examples. I mean, think about the advances in dentistry. I mean, the quality of dentistry today is so much better than it was even 20, 25 years ago. I know—I have been a patient for as long as I live. New techniques are coming in all the time. Now, some of them cost a little bit more, and that’s how they enter GDP. But in a competitive industry, once an invention has been made, the marginal cost of producing it is very low, and eventually these prices will come down, and there’s such this huge increase in what we call an economy’s consumer surplus. And GDP doesn’t measure consumer surplus, it measures output.

And output is what goes in the productivity calculations, so I’m not impressed with these productivity declines. I mean, just look at the enormous gain in human welfare that we have achieved because we were able to come up with vaccines against corona. Now, it’s not a net addition to GDP because before that we didn’t have corona, but think about the subtraction we would’ve had if it wasn’t for that. And so, I remain a technological optimist, but I’m also very much aware that measures that measure technological progress in a system that was designed for an economy that produced wheat and steel aren’t appropriate for an economy that produces high-tech things that are produced by a knowledge economy.

And what a lot of my colleagues are working on now, and some of them are really awfully good at it, is ways of measuring what the knowledge economy produces. It’s hard because the price mechanism doesn’t work very well in a knowledge economy, because knowledge has all these funny properties that mean it’s not really a good. It’s something odd which doesn’t satisfy all the conditions we need to have for a good. But that’s how the world is.

Allison Schrager: Yeah, it’s extraordinary. As you know, I interview some quirky people for my research—sex workers, bounty hunters, whatever, and what always strikes me is that they all talk about how much their jobs have changed in the last five to 10 years because of technology. How they find clients, how they do their work—it’s been completely transformed. It doesn’t matter who you talk to or what they do, that’s true.

Joel Mokyr: Yeah. You know something? I’m giving a talk in a couple of weeks at the National Bureau about the future of work. And think about it. I mean, we are going to have somewhere between a quarter to a third of people basically working from anywhere, right? Covid basically accelerated it, but this was in the works for a long time. People no longer come into the office, they no longer put papers away and file cabinets. I mean, things have changed dramatically in how I do my work. I’ll tell you a little dirty secret, Allison, but promise not to tell anybody. I used to go to the library four days a week and I would spend 20 to 25 hours a week at least in the shelves, pulling out books, pulling out articles, pulling out journals. I barely go to the library anymore. I mean, why should I? Everything in bloody hell is on my screen here.

Every article I want to look at—even things that aren’t even published—I Google them. Even books published 200 years ago appear on my screen as PDFs. Many of them searchable. I’d be crazy to go to the library. And so the way I do my research, the way I write my own stuff has changed dramatically. My best research assistant is sitting right here on my desk, and it’s my laptop. I mean, that is an amazing thing. Somebody would’ve told me this when I was a graduate student, I would’ve laughed him out of the room. Of course you need to go to the library. When I was a graduate student, I lived in the library. I was there 12 hours a day. I mean, these things have changed dramatically. The way you go to the dentist, the way you go to the doctors, you go to the hospital, you do your shopping—everything has changed.

Here is one example I give my students. Think about what it meant to buy shoes. The way we measure the cost of buying shoes is basically the amount of money that you plonk down for a pair of shoes. That’s the transaction. National income accounting doesn’t care about how long it took you to drive to the shopping center, how long it took you to find a parking place, how long you had to stand in line before the cashier, how long you stood in line or had to look for the right size of shoes. I mean, none. So now you go, I pair buy a pair of shoes, I go online, I go to Amazon. I get exactly the shoes I want. I get to choose the size I need. I don’t have to try shoes on. I mean, I size 7, 7.5, 8, 8.5—just click, bang.

Two days later, a box of shoes appears in my house, and if I somehow don’t like them, I send them back. In terms of economic welfare, this has reduced the cost of buying shoes dramatically. I’m better off. I have more time to do other things, and I go through the frustration of finally finding the shoes I want and damn it, they don’t have my size. Think about it. I mean, this is true across the board for books, for music, for whatever you want. I’m a music fan, so I have at home still this huge collection of music in vinyl records, which I barely ever play. I still have a collection of CDs, which I barely ever play. I want to play music today, and I want to listen to a Mozart quartet.

I go to Spotify. Not only do they have the Mozart quartet, that they have 14 different performances. I don’t even know which one to choose. In some ways it’s a super abundance of choice. I mean, I can choose any performance I want of this one quartet. I can find music that is rare, by rare composers that few people have heard of. You search for it on Spotify, and there’s a 90 percent chance they have it. It’s just amazing. I mean, those are small things to me, but they add up. In a digital knowledge economy, everything is different.

Allison Schrager: Picking up on what you just said and what you said a couple minutes earlier about the future of work, you wrote in City Journal some months ago about how this move to the virtual world has been a long time coming. And now it seems like people are going to be going into their offices less or working from home more. People seem to be reluctant to let go of the past, but in some ways, do you think that’s almost a return to a more traditional way of work? I mean, you’ve always pointed out that the factory model might have just turned out to be an anomaly.

Joel Mokyr: Well, it’s too early to be sure, and there will probably be a large core of jobs which will be very difficult to switch to remote, at least in the foreseeable future. I mean, with remote-controlled robots, there’s a lot of things that we may be able to do, including landscaping, things like that. People like that may eventually be able to do things remotely, but it seems a bit far away. But in principle, the factory, as I think about it now in my waning years, is an anomaly. You’re putting people in a regime in which space and time are no longer under their discretion, and in which they’re subject to kind of rigid discipline, in which a foreperson tells them what to do, and people can get disciplined and punished and so forth.

And I think we’re moving away from that, not to mention, of course, the cost of commuting, and finding a parking place, and getting stuck in traffic jams, not to mention the environmental and other costs of driving to work. All of those are going to be vastly reduced, so this is all extremely nice. And that takes us a little bit back to a world in which people work from home. But there is a difference, and the difference is that in the past, people worked from home, but we are now moving to a world of where you can work from anywhere. So, you don’t have to be at home, and if you have three small children at home, you can go to the local coffee bar and work from there. Or you can go to your office as. I don’t have three small children at home, I only have a dog. But I have options, and the point is now we have more choice.

In the past, before the industrial revolution, people had to work at home, and in the factories, they had to work in the factory. And today I can play what we call in economics mixed strategies. I can, instead of going 8:00 to 5:00 to the office, I can show up at 11:00 work for a couple of hours, have lunch with a few colleagues, and then go home and work for the rest of the evening at home, and that’s fine. Or I can come in twice a week and work at home the other days, but basically it becomes a matter of more choice, and if we learn anything from introductory economics, it’s that having more choice typically makes you better off.

Allison Schrager: Yeah. You’ve written a lot about how much people resisted the factory model when it was forced upon them, so I guess we shouldn’t be surprised that no one wants to go back to work now. Maybe it was just never natural to begin with.

Joel Mokyr: No, but look, I mean, people are heterogeneous. So, for some people, the water-cooler effect is dominant. They want to go to work. That’s where they interact with people, they have their social life. They go drinking after work. I mean, for some people that’s fine, and there are people for whom that’s not suitable, and so these are the people that choose home. So, people sort themselves into what suits them best. And of course, that’s what you want, that’s what makes people better off. If I’m an antisocial, shy person who really doesn’t enjoy meeting people at the water cooler, I stay at home.

And if I’m an extrovert that likes to do that, I go to the office and I meet other extroverts. And there’s no way that cannot make people better off, because they can basically do whatever they damn well please. Now, employers obviously have a say on this, and there’s a big debate in economics now, to what extent remote work affects productivity. And there’s issues there, because there’s issues of monitoring, of supervision, measuring effort. But none of these things are unsolvable.

Allison Schrager: What about coming together? I mean, this is Nicholas Bloom’s work on this, that there is something about having people come together in-person to innovate. A lot of people don’t innovate entirely on their own. They need that community and dynamic to push innovation.

Joel Mokyr: Absolutely. Absolutely. And then there is a question of, to what extent do they need to interact in-person as opposed to interact over Zoom or something like that? And the answer appears to be that doing nothing but electronic communication is probably not good. You have to at least have met a few times in person and have dinner together and all that. But after you’ve done that, then electronic communications become much more efficient. In fact, I have that with my co-authors. I mean, I’m working with people, writing articles and books, and I met all of them, and it would be awkward if I had not. But now that I know who they are, and we meet maybe once a year, we can communicate five times a week by email or other means, and that works just fine. I think some mixed internal solution probably, as we call it, would probably work the best.

Allison Schrager: But what about mentoring? Taking an interest in a young person, wanting to train them, wanting to promote them. Can you really take that much of an interest in someone you’ve maybe met a couple times and mostly interact with virtually?

Joel Mokyr: No. No. I cannot, and I would not, and that’s why I’m in my office, and my door is open, and students come in. But having met them a few times—or more than a few times, because I’m teaching in person, so I see their faces I get to know them—but after that I think electronic communications work much more efficiently. That’s exactly the point, so I’m a great believer in this mixed strategy in which I come in some of the days, and I meet people, and I talk to people, and then electronic communications work much better. And I think that is probably the way a lot of people are going to go. But it still means, for instance, that if you’re going to go into the office twice a week rather than five times a week, that you can afford to live farther away, which would mean a different world of real estate. People may be living more farther away.

They may not live in the boonies in Alaska, but they could live 40 miles away from Chicago, where real estate is cheaper and you have more trees and less congestion. And then you only have to drive in twice, it’s not so bad. That kind of thing I can see happening. Now, that will mean serious disruption for many people, of course. And I’m very aware of that. But technological change is always about disruption. There are always people who pay a price for it because their skills are no longer needed, their location is no longer valuable. That’s the nature of the beast. The alternative is worse.

Allison Schrager: What’s the alternative no change?

Joel Mokyr: No change. And we’ve seen societies that didn’t change. My famous favorite example is Tokugawa, Japan. Tokugawa, Japan, in about 1600, basically decided they did not want to change. They wanted stability above all, and for two centuries or more, they basically had that, more or less. And then one day the Americans showed up, Admiral Perry showed up with his ships in Tokyo Bay, and people said, “Oh my God, look at what these Westerners have.” And then the Japanese changed their ways. But for 250 years they had a stable society, which was almost completely stagnant economically, and it was not a good outcome. And if it was a bad outcome for Japan, it was a worse outcome for Qing China, which was basically the dynasty that ruled China from 1644 until 1912.

And they were above all about stability, and don’t make waves, and don’t cause trouble, and so on and so forth, and that didn’t work out for them either. The truth is that dynamic change is the only way of getting life to be better than it used to be. And one of the things that economic historians do is they tell people how the good old days weren’t good at all. They were miserable, they were terrible. On that, we all agree, essentially, even my colleague, Robert Gordon, who tends to be a technological pessimist. He has a very nice presentation in which he shows how the good old days were really bad in terms of almost anything you can think of. Access to information, dentistry, you name it.

Allison Schrager: Is the bad old days the turn of century, or the 1960s?

Joel Mokyr: No, the bad old days would be the 19th century, the 17th century, the Middle Ages, Roman Empire. I mean, I’m taking a broad view here. Life in the 1960s in some ways was vastly better than it was in the 1860s, and life in the 1860s was much better than it was in the 1760s. But life in the 1760s wasn’t maybe all that much different than it was at the time of Julius Caesar. You can see how the hockey stick starts bending upward, and that started happening at around 1750, 1800, and we’re still on it. And life in 2200 will be vastly better than it was today, unless we blow the world up in a nuclear disaster, which seems somewhat more likely today than it did last month, but let’s hope for the best.

Allison Schrager: We’re getting to the end, so I just want to end with one question. You’re a historian, and do you think in the end, we’re going to look back on the pandemic as really important in terms of our path, in terms of did it accelerate all these changes?

Joel Mokyr: Yeah, I think so. I think it certainly accelerated two major things. The first was the work from anywhere, which was moving very slowly before, and now it’s moving much more quickly. And the other thing is that it has accelerated a trend in medical technology which will be truly revolutionary, and that is research in messenger RNA, which is extraordinarily promising. It’s comparable to the antibiotic revolution, and maybe more important. It will really change the way in which we combat disease, because this is really just a general-purpose technology that allows itself to be applied to a whole bunch of things, many of which we can’t even yet imagine. So yeah, I think in some way the pandemic has had extremely negative effects, like the sharpening of real inequality, both within each society and between societies, and it’s obviously ruined a lot of people’s lives and it is done all kind of really bad things.

But in terms of technology, it’s been a blessing, which is a terrible thing to say, but I think we should realize that most things like that in the world are neither wholly bad nor wholly good. But they’re complicated. Maybe I shouldn’t make this analogy, but look at the current war in Ukraine. It’s a terrible thing for almost everybody involved, but it has made people perhaps much more aware of the values of democratic nations as opposed to what autocratic dictatorships can do, and how they can screw up big time in ways that democracies don’t. Sending that message is valuable, even though it’s learned over the dead bodies of too many Ukrainians.

Allison Schrager: Well, as you said, change is important, and it’s often something unpleasant that drives change.

Joel Mokyr: There’s a famous technological historian who made the famous utterance that “Technological progress is neither good nor bad, nor is it neutral.” This is known as Kranzberg’s law. It was Melvin Kranzberg who said that, and people keep citing that, although nobody quite knows what he meant.

Allison Schrager: Thank you, this has been great. Let me just close up. So that’s all Joel Mokyr. You can find some of his writing on the City Journal website, city-journal.org, and we’ll link to his books and essays in the description. You can also find City Journal at Twitter, @CityJournal, and on Instagram @CityJournal_MI. And as always, if you like what you heard on the podcast, please give us a five-star rating on iTunes. Thank you so much for joining us, it’s always a delight to speak to you, and I always walk away full of things I’m going to use later. It’s such a gift.

Joel Mokyr: Very good.

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