Technology, Institutions, and Economic Growth (review)

What do historians and sociologists of technology have to talk about with economists? What common questions aren't we asking, and what enlightening information aren't we trading? These are not the central questions in the latest book by Richard Nelson, prominent economist and professor of international and public affairs at Columbia University. But they are questions that the readers of Technology and Culture should ask, and questions that clearly exercise Nelson much more than most economists.

Nelson's aims are focused within the discipline of economics. He seeks to push back the hegemony of neoclassical theory—and high, formal theory generally—to reintroduce some ingredients historians of technology might find blindingly obvious. As he puts it, "there is an increasing recognition among economists that there are entities out there such as universities that do research that feeds into technical advance in industry, and whose teaching programs affect the supply of scientists and engineers; government agencies financing certain kinds of R&D, and others setting standards; banks and banking systems; and a variety of organizations and laws that affect labor supply and demand" (p. 33).

Really? I think Nelson is being facetious, but I also trust that he is serious in his description of economics. Many of T&C's readers may have suspected as much, but it is useful to hear these things from one of the discipline's most important internal critics. T&C readers will surely notice that the "entities" Nelson lists are things historians and sociologists of technology have long studied, particularly universities, federal organizations for conducting and funding research, and systems of technological standards. Nelson himself recognizes this, and turns repeatedly to a handful of authors T&C readers will recognize—Walter Vincenti, Louis Bucciarelli, Alfred Chandler, Joel Mokyr—to paint in broad strokes a non-neoclassical picture of technological innovation. I could complain that Nelson ignores more relevant historical studies in favor of "big picture" writers, but, plainly, his point is not to delve into history, but to persuade his colleagues to change their ways—by, among other things, thinking more historically and sociologically.

Thus, for non-economists, the book can be hit-or-miss. The chapters are redacted versions of articles Nelson (and his coauthors) have published in economics and policy journals over the past decade. Each one stands on its own, though Nelson elegantly explains how they are connected and what, in toto, they build up to. Nevertheless, I suspect T&C readers will pick and choose from the menu. Historians of development and/or of the microelectronics industry in Asia, for instance, will find "The Asian Miracle and Modern Growth Theory" a useful introduction to how economists and policy makers talk about technology transfer and economic growth. Likewise, institutional historians and sociologists can use "Making Sense of Institutions as a Factor Shaping Economic Performance" as a dictionary to translate their understandings of technology and organizations into "economics." And epistemologically inclined readers can debate Nelson's discussions of "know-how" and "evolutionary" growth and innovation in chapters 3, 4, and 6.

There are points on which T&C readers will demand more of Nelson. I found his disaggregation of "physical" and "social" technologies convenient for bookkeeping but intellectually unconvincing. Likewise, Nelson's description of social constructivism and its challenge to objective measures of technological progress is overly dismissive and strangely at odds with his championing of evolutionary theory as a model. And his evocation of how basic and applied research contribute to innovation and economic growth is vague and somewhat dated—clearly an area where recent historical research could contribute to his theory.

In sum, the book begins and ends well: Nelson's account of growth theory and his disputes with neoclassical economics provide an excellent reference point for historians seeking inroads into economics, and his final chapters...