No, I’m specifying what I mean, since otherwise this discussion is useless. You are intent on equating goods and technology. In the economic sense the two are different, technology refers to technological ideas. That distinction has a big impact on the issue at hand.
Not in an economic sense.
You wouldn’t know, you’ve not read any of it.
It’s not semantics it’s a meaningful discussion. If you’re defining technology as the same as a good (and if you’re not, rather referring to a specific good, have fun trying to draw a non arbitrary distinction), then the answer is, obviously, yes good/ technology do cause economic growth. If we’re discussing, what you might otherwise refer to as technological ideas then the answer is a clear no.
No, but, if you’ve bothered to read up on the subject before discussing it we may well have avoided the misunderstanding on your behalf.
Apologies, I clicked “suggest an answer” when I meant to click “reply”. Poor hand-eye co-ordination.
I think the above is completely wrong. It is important to distinguish between ideas in general (which include, for instance, ideas about how many angels can dance on a pinhead, and ideas about whether God trims his beard) and specifically technological ideas, which are, specifically, workable ideas about how to use what (capital) you’ve got (or what you might be able to get) to get what you need (or want). The former category, namely, ideas in general, is indeed not scarce, but the latter category is extremely scarce. Notice that the mere existence of a technological idea somewhere in the world is not the same thing as possession of that idea by you. Most people who are poor are poor essentially because they lack the right technological ideas.
You don’t need steel mills or oil refineries to make a helicopter. You can make a helicopter out of string, paper and bits of wood, if you know how. More practically, with the materials available to them, the people of Da Vinci’s day could have made gliders and human-powered aeroplanes, had they sufficient understanding of aerodynamics. Technology is all.
I think you have it upside down. For any given level of technology, there is an absolute limit to how much economic growth is possible, after which Malthusian forces kick in, and the only way to break free of the Malthusian stranglehold is to develop (or somehow acquire) new technology.
For instance, with paleolithic technology (fire, flint nandaxe, spear, not much more), an entire continent is required to sustain a population of tens of thousands of people at a very low subsistence level. Yet, in such a world, capital is abundant. What is lacking is the knowledge of how to exploit it to the full. With the accumulation of various technologies (bow and arrow, basket, cloth, chisel, hoe, basic agriculture, fired clay pots, etc.) we enter the neolithic age, and the number of people who can subsist on the same land multiplies a hundredfold, or even a thousandfold, and the wealth they can accumulate also grows immensely. The capital required for building a neolithic economy always existed, yet humanity lived in paleolithic poverty for many thousands of years before the neolithic age began. The same thing happens when we move from the neolithic age to the bronze age, iron age, and the beginning of literate civilization: all the materials required for creating these civilizations were already abundantly available. What delayed their being built was not lack of capital, but purely lack of knowhow.
As a general rule, there are always some people who have the time. In a basic hunter-gatherer society, most people are idle most of the time, apart from walking about for several hours a day, which activity is little hindrance to thought. In a a basic subsistence farming society, most people are more or less idle most of the year, and are busy for only a few weeks in the planting and harvest seasons. In a pre-industrial civilization, there’s usually a ruling class that is almost totally idle. Time, as such, is therefore not what is scarce. What is scarce is the ability and inclination to spend that time devising new technology.
There has never been a time in history (or human prehistory) when there has not been abundant capital available for the development and implementation of new technologies. For instance, you cannot say that there was a period in the paleolithic era when there was no wood or fibre available for making bows and arrows, or no clay available for making ceramic pots. Yet, for many thousands of years, nobody made bows and arrows or pots. Why? Capital was not the problem; lack of ideas was.
Poor countries fail to advance precisely because they lack know-how. If you go to most very poor countries, you will find the rotting remains of vast capital projects funded by the World Bank or other rich donors, which have died because the know-how required to keep the projects operating, and to develop them further was lacking locally. Factories, power stations, water utilities, materials processing plants, industrialized agriculture projects, and so on, grind to a halt, because a machine or component broke down, and no-one could be found who knew how to fix it. Many third world businesses fail to sell their products to the developed world because they lack the know-how to make their products competitive in quality or value.
(Protectionism plays a role, of course, because without “indigenisation” policies, foreigners with know-how would come in and buy up the capital and land, and make themselves very rich, but nationalism makes this prospect intolerable to the local people.)
No, that simply isn’t true. People are poor for a number of reasons, high time preference is probably the most important. One may only need a few “ideas” for most jobs.
Ideas are not scarce, and hence cannot be capital goods. They needn’t be reproduced and without IP it isn’t impossible for conflicts to arise over ideas.
I would say that production drives economic growth, not technology itself. Improving technology may improve the methods of production (thus leading to the question of capital and technology), which in turn leads to more economic growth. Technology is useless unless it is used in the factors of production.
If you have no technology, you cannot produce anything. If you have a set level of technology, and have no technological advancement, your economy will at some point stop growing, and you will hit the Malthusian brick wall. Our paleolithic ancestors spent a lot of time in “production”, and produced impressive numbers of flint axes, but they experienced no significant economic growth for hundreds of thousands of years. I would suggest that that’s because no significant economic growth is possible without technological advance. You will only grow until your current technology is being fully exploited, and then growth will cease, and possibly go into catastrophic reverse (under Malthusian pressures).
You can’t just “suggest” the idea of how to maintain a power plant or water utility or industrial facility, you have to train lots of people, and you’re only going to succeed in that aim if you have a population with a suitable basic education to start with.
Minerals as such are not scarce – they are everywhere. Does that mean that specific minerals such as precious metals, diamonds, petroleum, etc., are worthless? Obviously not.
Ideas in general might not be scarce, but good ideas are extremely scarce. They usually do have to be reproduced. If you keep a good idea entirely to yourself, it usually cannot be exploited to the full. Simple ideas can be reproduced very inexpensively, but complex ideas tend to cost a lot to propagate.
I do not quite understand the above. Is the double negative intentional, or a mistake?
Don’t get me wrong. I do not say production is not necessary to the economy. I say that it does not produce significant economic growth unless there is technical advancement. If technology stagnates, the economy will stagnate, too.
You’re missing the point, in fact, you’re missing two of them.
I don’t just mean suggest, in the causal way you intepret it. Rather, I meant that with the billions in aid we give African countries surely it would be better just teaching them about our technology.
Secondly, ideas aren’t scarce. The fact that often we can’t grasp them doesn’t change that fact. No more than somebody holding their breath makes air scarce.
They cannot be used at the same time for conflicting purposes by different individuals. Or, another way, it is possible for conflict to arise over them. As such they are scarce. Ideas on the other hand, are not.
It was a mistake, the impossible was meant to be “possible”.
Robinson Crusoe and Friday are deserted on an Island. Before arriving on the island, Robinson was a top engineer and Friday was a master chef. Let’s further assume that all of the goods required for building a top kitchen are on the Island. They know how to build a kitchen, but the fact of the matter is they wouldn’t be able to because they didn’t have the sufficient capital goods.
Unless it’s an unusual island or a very small one, there’s flint, and there’s wood, and there’s clay – all the capital required for making a good kitchen. There’s a fair chance there’s some copper about, too, in which case some good copper utensils can be made. Of course, if Robin and Friday have no skills in carpentry, pottery, the making of flint tools, basic geology (to find the copper), fire-making, metal-working, etc., then they have no chance. In fact, if they are sufficiently ignorant and lacking in skills, they will starve in the midst of abundance – because, except in marginal locations (e.g., deserts), there’s plenty of capital about, if you know how to exploit it, and nothing if you don’t. Know-how is everything.
What are you talking about? If they don’t have the blast furnaces to melt the metal, the hammers etc. to shape it, the axes to cut the wood and the correct equiptment to make smooth it they can’t make the kitchen. Despite the fact that they may know how.
The point of this is that unless they have the necessary capital goods they can’t do anything.
Yes, they do. They have flint (you know, stones made from silicates). It’s on the ground and on the beaches. Choose some stones of suitable size, chip them into shape, and they make excellent axes, hammers, chisels and knives – if they know how. They have woody plants, and grasses or palm leaves, from which they can make twine to make their axe-heads more effective by lashing them to sticks – if they know how. They have earth. With it, they can make a clay or mud-walled furnace for metalworking – if they know how. Between an engineer and a chef, they ought to be able to figure out how to make a good clay oven.