Entrepreneurship, or what Nobel Prize–winning economist Edmund Phelps calls “grassroots innovation,” is as central to economic dynamism today as it was in the nineteenth century. Entrepreneurs unlock the value of new technologies, spur competition, satisfy unmet needs, and create new jobs.
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As the late Harvard historian Arthur Cole wrote: “To study the entrepreneur is to study the central figure in economic history.” The Industrial Revolution was powered by entrepreneurial energy. In the nineteenth century, as political and economic freedoms advanced, millions of human beings were at last free to make of themselves whatever their passions and energies allowed.
The second crucial point of convergence was far more recent, and arguably far more transformative. It began some 12,000 years ago when some of our ancestors began to routinely store food and experiment with cultivation, transforming their relationships with their environments, with each other, with scarcity, and with work. Exploring this point of convergence also reveals how much of the formal economic architecture around which we organize our working lives today had its origins in farming and how intimately our ideas about equality and status are bound into our attitudes to work.
The principal purpose, however, has been to loosen the claw-like grasp that scarcity economics has held over our working lives, and to diminish our corresponding and unsustainable preoccupation with economic growth. For by recognizing that many of the core assumptions that underwrite our economic institutions are an artifact of the agricultural revolution, amplified by our migration into cities, frees us to imagine a whole range of new, more sustainable possible futures for ourselves, and rise to the challenge of harnessing our restless energy, purposefulness, and creativity to shaping our destiny.
The economies and societies that emerged from the scientific revolution advanced through
disciplined pluralism. Pluralism is the freedom to try new ideas or new ways of doing old things or promoting new products. A society with freedom of speech and a vibrant research community enjoys a surfeit of claims to new knowledge. Likewise, a competitive business environment stimulates the adoption of new business processes and the offer of new goods and services. An economy characterised by disciplined pluralism will applaud these novelties but weed out those not worth pursuing from those that are. In these ways humans navigate radical uncertainty – and prosper from it. Economic advance through disciplined pluralism is an evolutionary process, resembling natural selection.
In their book Power and Progress, MIT economists and Nobel laureates Daron Acemoglu and Simon Johnson argue that every technology revolution must begin with a rallying ambition. It is the promise of a technology benefiting everyone that puts in motion the long journey of amassing enough talent and resources to turn it into a reality. After analyzing one thousand years of technology history, the authors conclude that technologies are not inevitable. The ability to advance them is driven by a collective belief that they are worth advancing. The irony is that for this very reason, new technologies rarely default to bringing widespread prosperity, the authors continue. Those who successfully rally for a technology’s creation are those who have the power and resources to do the rallying. As they turn their ideas into reality, the vision they impose—of what the technology is and whom it can benefit—is thus the vision of a narrow elite, imbued with all their blind spots and self-serving philosophies. Only through cataclysmic shifts in society or powerful organized resistance can a technology transform from enriching the few to lifting the many.