Wednesday, September 26, 2018

Fifty Inventions that shaped the modern economy

Your favorite invention might not be included and the author doesn't pretend his choice of 50 inventions includes the most innovative or most impactful.  Tim Harford will make you conscious that society has been dramatically and subtly changed by a variety of innovations.  You might think of inventions as some sort of mechanical device and of course there are lots of them.  Tim goes into re-organizing principles.

The first invention really uploads civilization and is relatively simple  The plow which probably was inspired by the use of sticks to form furrows for planting seeds changed society in very profound ways.  It allowed fewer people to produce the food needed by the whole population allowing others to develop specialties.  Society was able to become more complex, but there was a cost. 

Winners and losers were created by each invention.  Luddites were known for smashing new equipment that threatened their jobs (true).  On the other hand most inventions have eventually led to better jobs as well as more satisfied consumers. In recent decades this has not been as true and many jobs have been lost.  In the future one can conceive that driverless vehicles threaten the livelihoods of millions of truck and taxi drivers.

One solution is the Welfare State.  Otto Bismark is credited with attempting to set up a welfare program, but not as successful as the one brought about by the Depression of 1930's.  Frances Perkins under the supervision of Franklin Delano Roosevelt.  Minimum wage, pension and unemploment benefits provided a safety net that contributed to economic progress.  Admittedly welfare can be abused, but another factor is that it slows down inequality.  One experiment the author points out took place in Dauphin, Manitoba in 1974-79.  Basic income cheques were given out.  Three results noted were that fewer teenagers dropped out of school; fewer people were hospitalized for mental illness and hardly anyone gave up work.   Recently in Ontario another basic income test was cut even after initial positive changes.

He recounts a series of what might be called convenience food including frozen tv dinners, fast food, and processed food that freed up time and energy from preparing meals.  This allowed mainly women to do other things including pursuing a career.  It also affected our nutrition and not always in a positive way.  It has provided a wide range of jobs from manufacturing, restaurants, marketing, etc.

The Pill led to more education and career advancement for women.  Until the pill became more accessible women did not start professions demanding a long education such as law and medicine.  This trickled down to other careers that had long been dominated by men.  Now most western societies have a  birth decline.

Air conditioners are the result of an effort to control humidity for printing.  Willis Carrier expanded his invention to air conditioners and applied to movie theatres which led to summer blockbusters.  It was soon realized that cooling work and study habitats led to more productivity.  They make a tremendous difference in hot climates, but there is a downside.  By pushing hot air away they help heat up the outdoors.  More importantly they require a lot of energy which in turn has environmental consequences. 

Elevators changed geography, but in a way were the result of transit improvements.  The two set of inventions made possible the concentration of high rise buildings where more workers could be assembled.  Air conditioners made work more productive in skyscrapers.  Before the elevator it was undesirable to live more than a few floors off the ground,  but afterwards pent houses were considered very prestigious.This pattern of one invention opening up the doors for additional inventions is a constant force.

Shipping containers were the result of efforts to standardize boxes for transporting goods between ships and trucks and rail.  Making them one size ends up cheaper and more efficient.  They allowed manufacturers to seek out low wages and minimal regulations anywhere in the globe.  On my trip to New Zealand I noticed (and used) a number of washroom usually in park area that were inside shipping containers making good use of available resources.

In writing about toilets and sanitation he explains a little human psychology.  Flush toilets were  a bit of a novelty when first introduced at the Great Exhibition at Crystal Palace in 1851. Back in 1775 a simple invention was the S bend that enabled to stop the waste smell from coming back.  What was really needed was a sewer system to collect the human waste and take it away from being able to contaminate our drinking water.  Unfortunately that is an expensive proposition that politicians are reluctant to suggest.  However once organized it was passed into law in only 18 days.  The speed was attributed to the fact that the Parliament was beside the Thames River which had become a depository for a great deal of smelly waste.

Toilets were slow to catch on and in much of the world still haven't.  The author says that despite the fact that it has external positives i.e. good for society), but people are more motivated by selfish desires.  As an example mobile phones have less external positives, but more selfish appeal; hence there are far more mobile phones in the world than flushing toilets.

Paper money was noted by Marco Polo after his travels in China where he was amazed that instead of sending metals to pay for bills they would authorize pieces of paper stamped with the emperor's approval to substitute.  The trick was not to convince buyers and sellers that paper (actually at this time made of tree bark) was as precious as gold or silver.  Instead the value came from the stamp of government approval.  Obviously much easier to transport.  Originally backed up by gold secured in a safe place, but today it is just declared legal by the government.  There has been a temptation to just print more money to overcome government debt but this has led to dangerous inflation and even the downfall of governments.  Today governments have gone one step further and that much money is not represented by paper (actually cotton or flexible plastic weaves) but digitally.

Harford covers many other inventions and explores their ramifications.  He also discusses ways to encourage more inventions.   Someone, somewhere is applying their imagination to solve some annoying problem and we will soon have to make an adjustment.  A lot to ponder.

A blog regarding how innovations can be destructive and are resisted for that reason:  http://www.therealjohndavidson.com/2013/03/the-innovators-dilemma.html

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