The Routledge Handbook of Smart Technologies

An Economic and Social Perspective

Heinz D. Kurz, Marlies Schütz, Rita Strohmaier, Stella S. Zilian, Heinz D. Kurz, Marlies Schütz, Rita Strohmaier, Stella S. Zilian

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000471434
• Edition: 1
• Topic: Commerce
• Subtopic: Gestion de l'information

This Handbook provides a thorough discussion of the most recent wave of technological (and organisational) innovations, frequently called "smart" and based on the digitisation of information. The acronym stands for "Self-Monitoring, Analysis and Reporting Technology". This new wave is one in a row of waves that have shaken up and transformed the economy, society and culture since the first Industrial Revolution and have left a huge impact on how we live, think, communicate and work: they have deeply affected the socioeconomic metabolism from within and humankind's footprint on our planet. The Handbook analyses the origins of the current wave, its roots in earlier ones and its path-dependent nature; its current forms and actual manifestations; its multifarious impact on economy and society; and it puts forward some guesstimates regarding the probable directions of its further development. In short, the Handbook studies the past, the present and the future of smart technologies and digitalisation.

This cutting-edge reference will appeal to a broad audience, including but not limited to, researchers from various disciplines with a focus on technological innovation and their impact on the socioeconomic system; students across different fields but especially from economics, social sciences and law studying questions related to radical technological change and its consequences, as well as professionals around the globe interested in the debate of smart technologies and socioeconomic transformation, from a multi- and interdisciplinary perspective.

PART 1 Disruptive technological change Historical record, economic analysis, methods and tools

1 IS TECHNOLOGICAL PROGRESS INEVITABLE?

Robert Skidelsky

DOI: 10.4324/9780429351921-3

Introduction

Since the Industrial Revolution, technological innovation has subjected economies to what the economist Joseph Schumpeter called “gales of creative destruction” (Schumpeter 1994: 82–83). This is a novel experience in human affairs. Between the invention of the plough 10,000 years ago and about 1700 there was technology, but no technological momentum. Technologies came and went; some were known in some places and unknown in others; some were forgotten, others frozen; they remained primitive; there was no basic improvement in ‘man’s estate’ for thousands of years. As John Maynard Keynes noted:

From the earliest times of which we have record – back, say to two thousand years before Christ – down to the beginning of the eighteenth century, there was no very great change in the standard of life of the average man living in the civilised countries of the earth. Ups and downs certainly. Visitations of plague, famine, and war. Golden intervals. But no progressive, violent change…. This slow rate of progress, or lack of progress, was due to two reasons – to the remarkable absence of important technological improvements and to the failure of capital to accumulate.

(Keynes 1978a: 323)

The “remarkable absence of important technological improvements” should alert us to the possibility that the technological dynamism of the last 250 years, while being a crucial episode in the ascent of our species, is destined to fizzle out as it exhausts its contribution to human well-being. It was the historian Arnold Toynbee who pointed out that automation, by simplifying the apparatus of living, produced a “consequent transfer of energy from some lower sphere of being or action to a higher one” (Toynbee 1974: 198). Keynes himself said the same thing in his essay cited previously: the solution to the problem of production would free humans for the first time in their history to devote their energies to non-economic purposes (Keynes 1978a: 326). Technology, like Mephistopheles, having done its work, could retire from the scene. It is difficult to embrace this view tout court, but we should at least expect a much greater degree of discrimination between the development and uses of different types of technology, with medical technology, for example, continuing to advance, but the pace of work and consumer technology slowing.

The two absences, or failures, mentioned by Keynes – stagnation of technology and capital – are linked. Technology failed to improve because capital failed to accumulate: economists would say it was ‘consumed’ rather than being invested in new tools and machines.

Capitalism was the first social organisation in history to make capital accumulation its object. Its three essential properties were the drive for riches, competition for profit in markets, and concentration of capital ownership in a class of capitalists. Although Karl Marx saw the concentration of capital ownership as the unique property of capitalism, the emergence of capitalist civilisation preceded the concentration of capital and is thus a part of the story of capital accumulation. But capitalism was not solely responsible for the acceleration of technology. Parallel to its emergence as the dominant socio-economic form was the emergence of a scientific outlook, which reoriented intellectual life to the production of useful things. It was this which made a sustained improvement in the tools of production seem feasible and desirable, thus making competition between capitalists for money a social instrument of technological improvement. Capitalism and science jointly reversed the “remarkable absence of important technological improvements” to which Keynes referred.

Capitalism has a strong claim to be humanity’s greatest social invention, by virtue of the fact that it solved for the human species the problem which has plagued all living things: the imbalance between population and resources. From its start, the human population has waxed and waned round relatively fixed means to support it. The Reverend Thomas Malthus made a law out of these historical cycles: owing to its almost limitless fertility, population tended to expand faster than the land available to feed it. The problem of excess mouths to feed was met in one of two ways: starvation or migration. But the cycle then started up again. Fewer mouths meant more food per mouth, and with more food came more children, and so on.

Technology offered a non-tragic solution to the problem by increasing the yield of natural resources. If productivity could keep pace with population, the Malthusian problem was overcome. The technological dynamism of capitalism made this possible for the first time in human history. In fact, capitalist civilisation did better than that: it generated social mechanisms which caused population growth to fall relatively to productivity growth, enabling the world to feed ever greater numbers at a higher standard of living.

However, by making the economy dynamic, capitalism made it disruptive. Since the 19th century the economy itself has been the main source of social disruption. Keynes rightly mentioned the “visitations of plague, famine, and war”. War has been a declining factor in human affairs as economic competition replaced military competition. Plagues and famines continue, but on an incomparably lesser scale than in the past. Instead we have periodic “crises of capitalism”. Capitalism made disruption endogenous. Since the 19th century capitalism has been in the business of destroying old and creating new ways and forms of life. Periodic redundancy of jobs has replaced periodic redundancy of population.

Capitalism and science are yoked together, not in a base-superstructure relation, as Marxists have claimed, but in a complicated civilisational matrix which it will be the purpose of this essay to investigate. How did this unique civilisation arise?

The discussion will be divided as follows: lucky and unlucky geography, attitudes to work, the key institutions, and from religion to science.

Lucky and unlucky geography

Although humans are creators of the tools they use, the kind of tools they use and the pace of their adoption has always depended on their location: by location meaning the natural endowments of a given region, including climate. The claim is that different locations give rise to different needs and habits of thought and these give rise to different mental outlooks and institutions. These mentalities and institutions persist, rendering the societies which have them ‘path-dependent’ long after the geographic impetus is exhausted.

The geographic hypothesis was invented in the 18th century to account for the perception, of which western Europe had by then become very much aware, that it was forging ahead in wealth from the rest of the world; and it has been extensively used from Montesquieu onwards to explain (and celebrate) the inventive energy of the west in contrast to the supposed lethargy of everyone else.

Jared Diamond’s theory of the ‘lucky location’, in his books The Third Chimpanzee (1991) and Guns, Germs, and Steel (1997), is the most celebrated recent example of the geographic hypothesis. Rejecting the idea that dominant peoples come from ‘superior’ genetic stock, he argues that those who came to dominate others did so because of advantages in their local environment. His principal claim is that, because of similarities in climate, technology diffuses more readily latitudinally than longitudinally. That is why technologies spread along Eurasia, but not up and down Africa and the Americas.

The most famous historical rendering of the geographical theory is Karl Wittfogel’s Oriental Despotism (1957). Wittfogel believed that the way people earn their living determines their institutions, and their institutions in turn determine their receptivity to innovation. The river-based delta agricultures of the Middle East, India, and China favoured ‘despotism’; the rain-based, geographically fractured, farming of Europe favoured warring states and free institutions.

The geographic hypothesis has done sterling work in explaining some aspects of the technological record as revealed by archaeology and history. The ancient empires of the ‘Fertile Crescent’ (Mesopotamia) around 5000BC to 500BC, together with those of India and China at roughly the same time, have been called ‘hydraulic civilisations’. Friedrich Klemm writes of the Fertile Crescent:

The technology of Mesopotamia and of Egypt was to a considerable extent determined by the three great rivers, the Euphrates, the Tigris and the Nile. Irrigation, the building of dykes and canals, the control and utilization of flood waters, were major engineering undertakings on a scale that necessitated organization by the State.

(Klemm 1964: 18)

The ability to control river flooding by dykes and earthworks could increase grain production tenfold (Headrick 2009: 18). In China, a major ‘hydraulic’ economy, the first flood control system along the banks of the Yellow River dates from 2200 BCE; the Grand Canal, a waterway of over 1000 kilometres, linking the Yellow River to the Yangtze, dates from about 500 BCE. After a thousand years of hydraulic engineering the country was covered with a network of waterways, which banished serious floods and droughts for 22 centuries. The first Indian population centres from around 6000–5000 BCE were along the banks of the Indus River (in modern Pakistan) and the Ganges basin. The Mesopotamian empires have long since disappeared, but ‘hydraulic’ empires persisted into modern times in China.

All the institutions and practices of the hydraulic economy were built around the need to control water. Not only could these civilisations support far more people than their Neolithic ancestors, “but they also built monuments and cities, invented writing, mathematics, and calendars, and created elaborate religions, literatures, philosophies, and other forms of culture” (Headrick 2009: 17). David Graeber has described how early currencies grew out of the need for a convertible and portable way to pay standing armies (Graeber 2011: 225–228).

Geography can also help explain the original ‘retardation’ of the Mediterranean lands compared with those of the Fertile Crescent. The neoliths of Greece and Italy, who emigrated from Anatolia, “avoided becoming ‘civilised’ as long as possible”, because there were always new lands for foraging and settlement. Not till the first millennium BCE – that is 9,000 years after the Asian settlements – did inhabitants of Greece and Italy come to occupy all the land available and found themselves in the same predicament as others: they had to civilise themselves or perish (Headrick 2009: 34). However, their climatic conditions then started to bring economic and civilisational benefits.

The usefulness of geography as an explanatory tool is not exhausted by considering only ancient economies. Immanuel Wallerstein does not dismiss the factors of “climate, epidemiology, soil conditions” in explaining the “crisis of feudalism” in 14th- and 15th-century Europe, and the search for new land in the west and east to replace depleted seigneurial revenues (Wallerstein 1974). Geography helps explain why the steam engine was invented in Britain and not China, and why it was first applied to railways in Britain and paddle-ships in the USA.¹

1 Great Britain had “ample deposits of coal, iron, and tin and an indented coastline and navigable rivers that made transportation easy” (Headrick 2009: 92).

A frontier or ‘edge’ culture’ always differs from an interior one, an urban culture from a rural one. The ‘frontier thesis’ of Frederick Jackson Turner helps explain the enduring mindset of the American mid-west (Turner 2003).

The assertion that today’s ‘virtual networks’ have abolished the importance of location is a claim too far. States, which exist in geographical spaces, and are, to some extent their product, can close down global networks, and have already done so in the name of national security. Yuval Noah Harari’s conclusion is the safest: “Geographical, biological and economic forces create constraints. Yet these constraints leave ample room for surprising developments, which do not seem bound by any deterministic laws” (Harari 2014: 197).

Attitudes to work

Technology is labour-saving. As economists tell it, technological innovation is a function of the balance between capital and labour. When labour is scarce (expensive) there is an incentive to substitute capital for labour; with plentiful (cheap) labour this incentive disappears. However, historically, conquest not technical innovation has been the main method of overcoming labour scarcity. Ancient economies were slave economies. Slavery was the fruit of conquest, which brought both more land and more hands to work it. But it was also the product of an attitude of mind which regarded manual work as degrading and ‘fit only for slaves’. The thought tha...