"It is geniuses who move a country forward, not the average citizen"
Jul 2024
A specialist for enlightenment and prosperity
Economic historian Joel Mokyr is an optimist. He believes in the power of technological progress to improve the world. But national vanities and irrational fears sparked by new inventions sometimes make him despair.
This interview by Thomas Fuster and Dieter Bachmann was originally published in German in NZZ on 2.7.2024. Translated by NZZ. Edited for context purposes by the UBS Center.
Mr. Mokyr, as a historian you are familiar with many time periods. In which era would you have preferred to live?
When I look at the material quality of life, I would choose 2024 as my date of birth. Today, people live longer and have better access to information than ever before. And thanks to high-performance computers, machine learning and artificial intelligence, conditions are continuing to improve. Think about the personalization of medicine. Instead of directing specific solutions to the average person, customized solutions for each individual are becoming possible.
And which time would you choose if nonmaterial factors also counted?
Today's world is no longer as friendly as it once was. Switzerland may be an exception. Here, people have always been isolated from wars, and the country has managed to keep barbarians out. But the rest of the world has not evolved as I expected and hoped 25 years ago, after the end of the Cold War. At that time, there was great hope that the world would move much closer toward a liberal and democratic model. Francis Fukuyama wrote about the end of history.
This hope has remained unfulfilled.
Yes, many things have turned out worse than I hoped. Instead of liberal democracies, authoritarian regimes and fascist movements are spreading. In 1990, I never thought that I would see that again. The problem with autocracies is that once they are in place, it is very difficult to get rid of them.
What does that mean for us now? Will our grandchildren have a better or worse life than us?
I am optimistic about our ability to solve technical problems. However, I am less optimistic than before about problems that require cooperation between states. An example of the difficulties of global collective action is climate change, where rich countries are failing to convince poor countries to reduce their emissions.
Let's stay on the optimistic side, and talk about technological progress. What does it take for a country to become richer and smarter?
There is no secret formula. But one thing is clear: The driving factor of growth is no longer trade, but innovation. The gains from trade eventually reach a limit, but innovation never does. New branches of knowledge are constantly emerging. Think of nanotechnology, which has only existed for a few decades and now shapes various industries. Think of the enormous potential of mRNA, to say nothing of AI. Knowledge is the key to progress.
One of your core arguments is that this knowledge is created by a very small elite. Does this also imply that the vast majority of people are rather insignificant for progress?
Yes. A small minority is crucial. These people need to be cultivated. They are the ones who should be sent to top universities to receive the best education. The problem is that we don't know who and where these people are in advance.
How do you solve this problem?
You have to educate everyone and then ensure that the education system recognizes and identifies exceptionally able and creative people. That's difficult because some of them may be eccentrics or appear somewhat strange. You can't tell by looking at them that they will one day found Facebook, Tesla or Microsoft.
A dilemma.
Yes. Worldwide, perhaps 30 to 40 universities or research institutions play a crucial role. The vast majority do not contribute nearly as much to progress. That’s why I think that politicians are far too obsessed with the PISA test, which assesses the knowledge of the entire population. The pertinent question is, how do the top 10% perform? If this group is in poor shape, you have a problem. On the other hand, a country may have poor average scores, but if the people at the top of the education system excel, the country still moves forward. This was definitely true for Britain during the Industrial Revolution.
Do you know a country where this is well implemented?
Yes, Israel. The secondary education level is not particularly good there. But the country has a brilliant system that tries to select the smartest and most mathematically gifted people and send them to top university courses. There is a special unit in the army that not only uses such talented individuals for military purposes, but also trains them in computer or material sciences at the highest level. In this way, Israel built up a high-tech industry virtually out of nothing.
In many egalitarian societies, including Switzerland, such an education policy is unlikely to gain majority support.
I understand that. You have to provide a good education not only to the elite but also the broad masses. But the motivation would be different. Everyone should have access to the fruits of technological advances, such as CT scans, artificial joints or good dentistry. But innovation emerges if the people behind such innovations are singled out and supported. It is geniuses who see things that no one else sees and who move a country forward, not the average citizen.
Looking at the most successful companies, one gets the impression that these geniuses are mainly based in Silicon Valley. What does the U.S. do better?
The U.S. overall has a mediocre education system. At the same time, there are a number of absolutely top institutions in the country that are world leaders. That is where the elite that contributes to economic growth is educated. The interesting thing is that many of these people are immigrants. They come to the U.S. from abroad because they meet like-minded and outstanding researchers there from whom they can learn and with whom they can collaborate.
Why doesn't this work in Europe?
The U.S. has always been more open to importing human capital. A footnote on this: One of the most important things that happened to America's scientific community in the 1930s was the rise of Adolf Hitler. The crème de la crème of German medicine, chemistry, technology and even music packed their bags. Many of them ended up in the U.S. and found a new home there. This was a stroke of luck for the U.S. and its research institutions. This openness has been very beneficial to the country to this day. However, the growing anti-immigrant sentiment in the U.S. is increasingly calling this model into question.
In addition, cancel culture is rampant at U.S. universities. How bad is the situation really?
It depends on where you look. In the humanities and social sciences, especially anthropology and language departments, it is quite bad. In economics, however, you see little of it. And in computer science, mathematics and medicine, such conflicts are virtually nonexistent – the analysis of T-cells or algebra does not lend itself to ideological battles. But one fact is true: Polarization has increased in America. People no longer dissent from each other’s opinions. They hate each other. A new toxic tribalism is spreading, and it could penetrate even to implausible corners of the academic world.
Can prohibitions on thinking also hinder technological progress? When it comes to nuclear energy, for instance?
In that case, the problem was not the technology itself, but the people who couldn't handle it because they had an irrational fear of something that was radically new. But the alternative of fossil fuels is much more dangerous for humanity. Nuclear energy is a largely missed opportunity driven by a few atypical events. The Germans' obsession with the topic is irrational. Or take genetically modified organisms: Such plants can survive better in heat, drought or salty soils than conventional varieties. Nevertheless, there is a completely unfounded, great resistance to so-called frankenfoods – a preposterous idea with no basis in fact.
What is your explanation for this?
Maybe it just takes more time for truly pathbreaking inventions to mature. In the mid-18th century, Benjamin Franklin, one of the Founding Fathers of the U.S., wrote a long list of beneficial things that would be possible if electricity could be tamed. This ranged from heaters and streetcars to engines. But it took about 100 years until people like Siemens, Edison, and Westinghouse made the concrete inventions in the 1870s – and thus created a new world.
You are very optimistic about growth. But bookstores are full of books advocating for an end to growth and warning of its dangers. Why?
Dramatic stories sell better ... No, seriously: This phenomenon is not new. We already had it in the 1960s. The conclusions drawn back then were also wrong. Because only growth provides humanity with resources. The idea that we somehow have «enough» resources is nonsense.
But growth can harm the environment and the climate.
Yes, I do not deny that. But to cope with the consequences of global warming, we need growth, just a different kind. We need the resources to cope with and adapt to a different planet. Cooling devices, protective walls against rising sea levels, desalination plants: These are all expensive investments. In addition, there is the demographic crisis. If fewer and fewer people are working and have to care for a growing number of old, sick people, there is only one solution. We need more output per worker – not less. That is what growth is about. Not to mention the necessary spending on armaments to defend Europe's democracies against Russia.
Globalization has always been a driver of growth. That seems to be changing. Resistance is growing. Has globalization reached its peak, as is sometimes claimed?
If only I knew that! Technology will certainly continue to drive globalization, I am quite sure of that. To some extent, however, political measures such as tariffs can negate these advantages, and there I am less optimistic. May I make an analogy to the 19th century?
Please.
Between 1815 – after Napoleon's defeat – and roughly 1870, Europe moved in a relatively peaceful direction toward globalization with increasingly free trade. The reasons for this included technological advances such as railways, steamships and telegraphy, but also trade agreements. Around 1880, the mood turned. Nationalism and rivalries between countries increased. This development culminated in World War I. I hope people wake up today and realize that deglobalization is madness, because it ignores a basic rule of economics: Trade in goods is beneficial and brings advantages to all.
But there are also the losers of globalization. Think of the China shock. It led to massive unemployment in the so-called Rust Belt of the United States.
I think the China shock is overrated. Yes, there were people whose well-paid factory jobs became redundant. At the same time, stores in the U.S. and Europe were filled with cheap goods from China, and later from Vietnam, or Bangladesh. Consumers – that is, all of us – benefited. Therefore, the answer cannot be deglobalization. Rather, we need to create a social safety net that helps those who lose out.
But one hope of globalization remained unfulfilled, that of «system change through trade.» The increase in trade has not turned autocracies into democratic countries.
Yes, somehow that doesn't seem to work. Although even Montesquieu praised the peace-creating power of trade with the term «doux commerce,» for instance.
Why doesn't this work?
The Enlightenment's idea that it could permanently improve society and make people behave better was too naive. Nationalism, human nature and the lack of trust between countries are all extremely strong forces. Rationally speaking, starting World War I was senseless. When my students ask me for the reason, I can only respond with Friedrich Schiller’s famous statement: Against stupidity, the very gods themselves contend in vain.
Economic historian Joel Mokyr is an optimist. He believes in the power of technological progress to improve the world. But national vanities and irrational fears sparked by new inventions sometimes make him despair.
This interview by Thomas Fuster and Dieter Bachmann was originally published in German in NZZ on 2.7.2024. Translated by NZZ. Edited for context purposes by the UBS Center.
Mr. Mokyr, as a historian you are familiar with many time periods. In which era would you have preferred to live?
Joel Mokyr is one of the most significant economic historians of our time. The Israeli-American dual citizen has written extensively on the economic history of Europe between 1750 and 1914. His focus is on the intellectual roots of technological progress, in particular the role of the Enlightenment. The NZZ interviewed the 77-year-old professor from Northwestern University (Illinois) in Zurich, in connection with an event organized by the UBS Center for Economics in Society. (dba/tf)
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The idea that we somehow have 'enough' resources is nonsense.
Roots of economic prosperity
Joel Mokyr’s UBS Center Opinion at the University of Zurich underscored the significance of useful knowledge and the Enlightenment in shaping the economic landscape of Europe, highlighting the unique conditions in Britain that facilitated the Industrial Revolution.
Joel Mokyr’s UBS Center Opinion at the University of Zurich underscored the significance of useful knowledge and the Enlightenment in shaping the economic landscape of Europe, highlighting the unique conditions in Britain that facilitated the Industrial Revolution.
Joel Mokyr, 20 June 2024 at the University of Zurich.