Fifty Inventions That Shaped the Modern Economy by Tim Harford (October 2017)
Longtime TOA favorite Tim Harford guides readers through the fifty inventions he feels are currently exerting significant influence on the economy. Each chapter is short but filled with plenty of information. And as always, Harford’s blunt yet playful insights made the book a pleasure to read.
It seems like Harford collaborated a great deal with the BBC in putting this work together. Back in 2016, he debuted a podcast series through the network titled 50 Things That Made The Modern Economy where he examined the inventions he writes about in the book. Each of the fifty episodes is around ten minutes long. I’m not sure if he simply reads the chapters aloud or if he goes into new directions.
Perhaps this explains why Fifty Inventions That Shaped the Modern Economy reads more like a series of articles than a book. Outside of the general organizing concept described perfectly by the title, the chapters do not rely much on one another. This might mean the best way to read the book is one or two chapters at a time.
However, just because a book can be read a certain way does not mean it needs to. Those familiar with Harford’s past work will know his style makes his books hard to put down. This most recent work is no exception.
One up: One of the final comments in Threads (a book I recently reviewed about the refugee crisis) mentioned the inevitability of open borders. Harford makes a similar point over the course of several sections. He does so in his own way – by filtering the present through the lens of basic economic principles and making the best prediction he can about the future.
First, Harford notes how output rises whenever the factors of production follow demand. This reduces the idle time associated with any production process. A firm able to dynamically adjust its workforce based strictly on market conditions will always fill quotas and meet orders. In human-intensive work, the easier it is for prospective workers to migrate to a worksite, the easier it will be for the firm to hire for open positions. Over time, workers seeking work and workplaces seeking workers will pressure governments to make migration easier. A policy favoring immigration is among a host of options that would accomplish this goal.
Second, he mentions that in wealthy countries immigration works to directly benefit five out of every six people. The trend, again, suggests voters will push for policies that make it easier for immigrants to come into the country. However, the one in six not directly benefited will bear a cost disproportionate to the benefit gained by others. Without the right mixture of public spending and tax policy, those hurt by the process will see their own career prospects diminish. The communities that depended on these people will stagnate. The wrong policies also create the risk of fewer than five in six benefiting if the gains in wealth accumulate near the top. These dynamics might sway voters into supporting anti-immigration candidates and temporarily halt progress toward a more open border policy.
The final thought on the topic comes in his analysis of international travel. Travelers today expect a freedom of movement across borders that is, historically speaking, highly unusual, but this is the exact mentality exemplified by the open borders concept. The way the nature of passports has subtly changed over the years reflects this idea.
At a basic level, the passport is a threat: let this person in – or else. The dynamics of international relations have changed a little bit, however, and now the passport represents something a little different: let this person out – or else. The shift is subtle but significant. Governments tell their citizens to avoid certain destinations not because they will be unable to get in but because they might have trouble getting out. It reflects the importance of economic value in border calculations and illustrates the role a traveler's nationality plays when governments crunch these numbers.
However, the passport is also a form of discrimination based on nationality. In general, societies want governments to abolish discrimination based on accidentally determined characteristics. Nationality is, at the present moment, the sole exception. Perhaps the open borders will concept will really kick on once societies reconsider the passport as unethical for the way it is used as a legal form of discrimination.
One down: A lesser theme of the book is how inventions change the roles groups of people play within societies. At times, Harford looks at how the roles of women in Western societies have changed by analyzing the impacts of inventions like the washing machine or the contraceptive pill. He acknowledges the progress made in the wake of these changes yet also points out how much work remains.
One study he cites to support this point found the gender wage gap in MBA graduates opens up around the time of parenthood. Apparently, the study concluded that women take time off and are paid less for doing so while men barely adjust their work habits when becoming fathers.
I was a little annoyed by this study. I didn’t understand the need for the complexity. Did it really need to look at specific subset of MBAs to reach these conclusions? What a ridiculous use of time.
The core of the issue is far simpler. Organizations either adhere to the ‘equal work for unequal pay’ ideal or they do not. That's all there is to it. These studies fail us all every time they make data-backed excuses for what is blatant discrimination. A person's childcare decisions don't come into the equation if an organization pays equally for equal work. The academics running this study should stop using their diplomas to rubber-stamp excuses and instead just give us all a list of which employers can’t figure out how to pay appropriately.
And if the work output is unequal? Well, I would like to know why anyone would expect equal pay in that case. If the issue is how certain fields pay according to accumulated experience – which is my assumption given the use of the phrase 'gender wage gap' in conjunction with reference to extended childcare leave – then these academics need to stop wasting everyone’s time and just give us all a list of which employers use proxy measures like years of experience, number of diplomas, or past childcare decisions instead of figuring out how to pay appropriately for performance.
Some problems require extensive analysis and some problems do not. The problem of the gender wage gap does not. The solution is to figure out what someone produced and pay accordingly. Maybe some academics find this simple solution boring; I suggest they find more complex problems to study.
Just saying: The way the book is organized made it more challenging than usual to identify general themes. However, eventually I was able to group a few of my notes together. Whatever I did not cover today is coming up soon in a 'part two' post. Let it into your inbox, or else...
One thing this book did not do was consider the relative value of these inventions. Harford himself admitted finding fifty good stories was more important than identifying an official list of the top fifty inventions. But surely, reader, someone should at least go ahead and try to figure out the relative value of these fifty selections? Perhaps if I get bored enough in 2018, I’ll run out another TOA bracket in the style of the infamous Lost In Translation word breakdown…keep your eyes peeled, reader…
