I find myself wondering about incentives and transaction costs, here.
Is the historical record good enough to describe the people who were producing these inventions, and the environments they were working in? Do we have enough information to apply modern models to them, like cognitive load, or culture of innovation, etc?
By way of example, we’ve discussed several times Xerox PARC and Bell Laboratories as unusually fecund sources of innovation; but both of these were after 1920 and their chief role in the story here is launching the computing industry, which was responsible for the growth since 1970.
I have no real idea what the big sources of innovation were in 1870. There was the War of the Currents between Westinghouse and Edison, which points to companies investing in relatively ad-hoc engineering labs; but there was also a lot of acquisition of small companies in a way analogous to startup acquisition today. Whence these companies’ inventions?
This was also the Reconstruction Era, so Civil War innovations might have been able to distribute. Although my inexpert impression of that war was not so much that it was a source of new discoveries in the way of WWII, but rather than it was a boom in adoption of recent inventions, and that largely on the marine and military front.
I also have the impression that patents were much weaker at the time, and the cost of doing business was lower: patents were easier to get, cheaper to keep, easier to prosecute, and there was nothing like today’s patent trolls. There were a bunch of developments on that front during this period too, including international recognition of patents, switching from requiring scale models to requiring diagrams, etc.
Tangentially related is the overall question of liability and regulation, which on the aggregate I expect to have the effect of squeezing out growth of the [large harm + larger gain] type. At least legendarily, there were lots of cases where a small town or village would be destroyed or relocated in the name of a mine, or a port, or a dam. These options are all off the table now.
Following on that, this was also the period during which Westward Expansion was completed, which meant the introduction of huge quantities of land for distribution to migrants, as well as the above mechanism being applied to Native American tribes. We added...14? 15? states to the country during this period. We had only won the territory west of the Rocky Mountains <25 years prior, more than doubling the territorial expanse of the country. One complete generation working more-than-double the total natural resources seems like the kind of thing which would drive a huge growth boom. These options are also off the table in the future.
Re invention, in the late 1800s it was mostly done by private, individual inventors, not corporations. Companies would buy patents from inventors once a the invention worked, and then commercialize it. Edison’s lab was unusual, a first. The corporate R&D lab got going in the early to mid-1900s. Some more context:
I find myself wondering about incentives and transaction costs, here.
Is the historical record good enough to describe the people who were producing these inventions, and the environments they were working in? Do we have enough information to apply modern models to them, like cognitive load, or culture of innovation, etc?
By way of example, we’ve discussed several times Xerox PARC and Bell Laboratories as unusually fecund sources of innovation; but both of these were after 1920 and their chief role in the story here is launching the computing industry, which was responsible for the growth since 1970.
I have no real idea what the big sources of innovation were in 1870. There was the War of the Currents between Westinghouse and Edison, which points to companies investing in relatively ad-hoc engineering labs; but there was also a lot of acquisition of small companies in a way analogous to startup acquisition today. Whence these companies’ inventions?
This was also the Reconstruction Era, so Civil War innovations might have been able to distribute. Although my inexpert impression of that war was not so much that it was a source of new discoveries in the way of WWII, but rather than it was a boom in adoption of recent inventions, and that largely on the marine and military front.
I also have the impression that patents were much weaker at the time, and the cost of doing business was lower: patents were easier to get, cheaper to keep, easier to prosecute, and there was nothing like today’s patent trolls. There were a bunch of developments on that front during this period too, including international recognition of patents, switching from requiring scale models to requiring diagrams, etc.
Tangentially related is the overall question of liability and regulation, which on the aggregate I expect to have the effect of squeezing out growth of the [large harm + larger gain] type. At least legendarily, there were lots of cases where a small town or village would be destroyed or relocated in the name of a mine, or a port, or a dam. These options are all off the table now.
Following on that, this was also the period during which Westward Expansion was completed, which meant the introduction of huge quantities of land for distribution to migrants, as well as the above mechanism being applied to Native American tribes. We added...14? 15? states to the country during this period. We had only won the territory west of the Rocky Mountains <25 years prior, more than doubling the territorial expanse of the country. One complete generation working more-than-double the total natural resources seems like the kind of thing which would drive a huge growth boom. These options are also off the table in the future.
Re invention, in the late 1800s it was mostly done by private, individual inventors, not corporations. Companies would buy patents from inventors once a the invention worked, and then commercialize it. Edison’s lab was unusual, a first. The corporate R&D lab got going in the early to mid-1900s. Some more context:
https://www.worksinprogress.co/issue/the-rise-and-fall-of-the-american-rd-lab/
The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth