The Gifts of Athena: Historical Origins of the Knowledge Economy (review)

Most historians concede that the rise in the standard of living since the late eighteenth century is mainly due to the unrelenting expansion of scientific knowledge and its application to material production. Nevertheless, unlocking the economic, social, and intellectual dynamics that originated and sustain the growth of knowledge economy has proved a daunting enterprise. The multiple histories of scientific and industrial organization, and the innumerable fine details of invention forming the necessary skeleton of any coherent account of that historical process, defy facile synthesizes. Mokyr does not make the attempt, even though he possesses the improbable combination of talents to succeed at it. Instead, he offers a thoughtful and original approach to a fundamental development in the history of humanity.

The argument of the book is based on an abstract characterization of knowledge termed the "epistemic base," which consists of the set of propositions * containing all that is known (not all of which need be scientifically correct or even objectively knowable). The epistemic base contains a subset * that is defined by the know-how employed to produce material goods and services. To the degree that members of each set are temporally identifiable, the taxonomy provides a convenient way of thinking about how knowledge expands. Membership in * is determined by the question "true or false," which depends on what people are prepared to accept as probative. By contrast, membership in * is established by the pragmatic questions, Does it work, and Is it profitable? Advances in science (and in methods of establishing the truth of propositions in *) extend the range of potentially useful and profitable techniques; inventions in * supply materials and new questions that lead to increases in the domain of *. A crucial element in the dialectical relation between "practical" and "theoretical" knowledge is the density of the communication networks connecting elements in the two sets. Multiplication of such connections was the key to the extraordinary growth of both domains during the second and third quarters of the nineteenth century, which marks the beginning of the modern world economy.

The first part of the book rehearses the familiar ground of the scientific and industrial revolutions of the eighteenth and nineteenth century. In a chapter that surveys the impact of science on the industrial revolution, Mokyr identifies a "European Industrial Enlightenment" around the middle of the eighteenth century that lowered communication barriers between the world of practical know-how and the world of science. The continuing decline in the cost of moving technical and scientific information among people in different fields sounds the ground note of the following chapter, which takes the industrial revolution into the twentieth century. The two chapters are an outstanding overview of the technological history of the modern age.

The second section reflects on how technological change has affected the organization of work, the provision of health services within the family, and household labor supply. The chapter on work argues that the rise of the factory during the late eighteenth century was induced by the need to coordinate novel tacit knowledge then transmittable only by face-to-face communication. Although the hypothesis seems strained in the face of competing traditional reasons like scale economies in centralized generation and transmission of power, it plausibly explains the re-emergence of outwork by the falling cost of moving information relative to the cost of moving people that has resulted from the recent revolution in the technology of communications and personal data storage. The issue cries out for quantitative assessment.

The chapter on health considers the different ways in which private enterprises and private households assimilate new technology. Firms have permanent access through the market to technical specialists, and benefit from the powerful feedback of profitability. Household members, however, are often poorly equipped to evaluate the practical recommendations from medical research, the consequences of which extend over such long periods that it is difficult to isolate them from the effect of other causes. The consequence is suboptimal exploitation of medical knowledge...