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2 fundamental assumptions of the causes of the Great Divergence

  1. modern economic growth started in the “West” — that is, selected economies in the northern Atlantic region 

  2. Britain was a leader, while Continental Europe was a follower, if a rather quick one. 


Correlation between convergence club and European enlightenment

  • "convergence club” — countries that were industrialized, urbanized, educated, and rich 
  • correlation: countries belong to this club were subjected to the European Enlightenment in 18th cent
  • strong correlation is not in and of itself proof of causality 


How did The the Enlightenment affect the economy (2)

through two mechanisms 

  1. the attitude toward technology and the role it should play in human affairs 
  2. institutions and the degree to which rent-seeking and redistribution should be tolerated 


What is the ‘epistemic base’ underlying a technology? 

Narrow epistemic base refers to the people who invented the techniques did not have much of a clue as to why and how they worked 

 thorough understanding and knowledge of how tech and methodology works and are integrated


Advantages of narrow epistemic base

such a lack of an epistemic base does not necessarily preclude the development of new techniques through trial and error and simple serendipit 


Disadvantages of narrow epistemic base

makes the subsequent wave of micro-inventions that adapt and improve the technique and create the sustained productivity growth much slower and more costly. 

no one knows what will not work and thus increase the costs of research and experimentation 


Characteristics that identify useful knowledge

knowledge that:

  1. details out what works
  2. details out what does not work 
  3. => holistic


Difference bw propositional and prescriptive knowledge

prescriptive knowledge: understanding of the "how to" knowledge underlying the invention; more specific and detailed

propositional knowledge: the "what", broader definition of knowledge, catalogs of phenomena and regularities that could be relied upon even if the underlying processes were not quite understood 


Narrow epistemic base during the IR

  • difficult to link the main technological breakthroughs of the Industrial Revolution to the scientific discoveries of its time 
  • main advances during the first stage of the Industrial Revolution (say, 1760-1800) were only weakly based on science but its subsequent momentum increasingly came to depend on prescriptive knowledge
  •  epistemic base of inventions does not only include a modern definition of science but did include propositional knowledge to temporarily depend on


Differences in knowledge and its impact on modern econ growth

  • Prescriptive needed for sustainability
  • Propositonal needed to push forward and reach towards the prescriptive


Understanding of tech vs. understanding of market on growth

  • Growth was possible through capital accumulation, increasing trade, better internal allocations, freer markets, and improved institutions. But all of those processes would eventually run into diminishing returns. 
  • It is technology that remains at the foundation of modern economic growth 
  • Tech = what keeps growth sustainable, all else are catalysts


Definition of European Enlightenment

  • intellectual movement of the 17th and 18th centuries that were celebration of reason 
  • much of it concerned with natural law and justice, religious and political tolerance, human rights and freedom, inequality, legal reform, and much else 
  • At the deepest level, however, the common denominator was the belief in the possibility and desirability of human progress and perfectibility through reason and knowledge 


What caused the two types of knowledge to establish closer interaction during the Enlightenment? 

  • Baconian philosophy and Newton's achievement
  • Baconian: produce innovations of which through technological progress consisted of the application of the inductive and experimental method to investigate and reorganise science as a human activity 
  • Newton: establish the prestige of formal science in the world of learning 

=> method: by way of exploration and discovery, trial-and-error processes minimally informed by an understanding of the natural processes at work, inspired tinkering, and a great deal of serendipity and good fortune 

=> result: the growth of useful knowledge would solve technological problems and that the dissemination of existing knowledge to more and more people would have what we could call today substantial efficiency gains 


What was the link between tolerance and innovation? 

Process that Enlightenment made a difference to the growth of useful knowledge:

  1. agenda
  2. capabilities
  3. selection
  4. diffusion.

(tapped these areas to for persuasion)



Innovation and agenda

  • “Baconian Program” increasingly served as the key to the agenda of researchers.
  • The idea was that knowledge was supposed to be “useful” — morally, socially, and increasingly, materially.
  • Society was improvable through knowledge, and the purpose of the study of nature and experimentation was to help solve practical problems just as much and eventually more so than to satisfy human curiosity or to demonstrate the wisdom of the creator 
  • idea of turning research into useful knowledge was larger than the discovery of underlying general laws 
  • Many of the investigations of the eighteenth century were in the style of the “three C’s”: counting, cataloguing, classifying 

=> persuade through description and organisation of knowledge to be utilised in the most useful way

as a result

  • broaden the epistemic base of some techniques that had been in use for centuries becuase scientists felt an acute responsibility to help improve the material world (e.g.chlorine bleaching technique, the lightning rod, and the mining safety lamp. ) 
  • efforts were reinforced by commercial interests, which created a literal market in knowledge 




  • Earnest capabilities were results of interaction between prescriptive knowledge and propositional knowledge 
  • The scientific revolution advanced in part because new tools  (e.g. telescope, the barometer, and the air pump) allowed new observations and made new experiments possible - rev is known as artificial revelation 
  • widen the epistemic base of techniques. 
  • advances in mathematics added new tools to the arsenal of engineers, and theoretical work in engineering - a problem solving technology


  • Lavoisier debunked hlogiston chemistry were made possible by the equipment manufactured by his colleague Laplace 
  • 1st battery-like device that produced a steady flow of direct current at a constant voltage - outlined by outlined by Lavoisier 
  • John Smeaton was one of the first to realize that improvements in technological systems can be tested only by varying components one at a time holding all others constant 




  • selected from larger menus of ideas that are proposed to people 
  • persuasions based on rhetorical conventions:
    • logic, evidence, and authority are admissible in arguments about ideas 
    • determine the prevailing ideology in society

=> intellectual innovation would only be admissible if it did not contradict the existing orthodoxy 

  • New ideas and techniques that were inconsistent with the intellectual or technological status quo, and could thus threaten the human capital of those who were in control of the existing knowledge 
  • but it is important to see the Enlightenment as part of this changing set of criteria 
  • ideas were then selected freely by individuals on merits other than acceptability by the ruling orthodoxy, eventually emerged successful => made more efficient because one could make a reasonable presumption that new knowledge had been vetted by other specialists 



  • Open science led the rapid changes in the market for ideas because its very purpose was to disseminate new ideas and offer them to the marketplace 
  • all new knowledge is placed in the public realm and judged by peers 
  • Knowledge is a non-rivalrous good as reducing access costs to gain new info; owing to emergence of open science and a culture of sharing knowledge 
  • Reduction of access costs is also due to the need for specialisation (division of knowledge)


Diffusion - importance of access costs

  • Governed the flow of information between propositional and prescriptive
  • Much invention comes from technical hybrids or recombinations 


What kind of rewards did late eighteenth‐century inventors seek? 

  • based on the idea that 
    1. patent system limits usage is not desirable; patentees often were not the best qualified persons to exploit the inventions 
    2. if a society wished to promote technological change, it needed to create the economic incentives for inventive activities to take place 
  • belief in the sanctity of private property = natural law/ fundamental human right => found its way into a declaration by the French National Assembly in 1790 and the United States Constitution 
  • rewarding inventors who made significant contributions to the nation’s technological capabilities was good public policy 


In more details, why did the patent sytem work well?

  • a patent was often interpreted by investors as an official imprimatur of the quality of an invention (much like modern venture capitalists), and that there were “several persons who have money 
  • problem remained how society should reward those who gave their time and money to develop knowledge that was of great benefit to the rest of society. 
  • needed to be established if society was to enjoy the fruits of sustained technological progress. 
  • patent system was the one monopoly (or “priviledge” as Adam Smith called it)  


Difference between British and French reward system


  • recognized the national interest and were willing to act to pursue it aggressively. e.g. Board of Longitude, established in 1714 by Parliament, promised a large sum to the person who successfully cracked the age- old problem of measuring longitude at sea. 
  • patent system  charged a patentee £100 for the right to patent, not counting the costs of traveling to and staying in London 


  • government agents were put in charge of evaluating the contribution of certain inventions to the realm