The Folly of Trying to Control Technology

Technological progress in the last two centuries, and especially in the recent past, has been nothing short of amazing. So why are we so unhappy? Why aren’t we all rich? Why are we so unequal in material success? Why is social unrest just as wrenching as it was in poorer times?

When Daron Acemoglu speaks, I listen.

Well on his way to a Nobel Prize, Acemoglu is one of the most productive “young” economists. (He’s 53 but has been regarded as outstanding since his 20s.1) His popular books are written with co-authors, usually James Robinson or Simon Johnson. Acemoglu’s newest book, Power and Progress: Our 1000-Year Struggle Over Technology and Prosperity, co-authored with Johnson, is a sequel to Acemoglu’s excellent 2012 book with Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty and addresses the above questions. Given the vast scope of their undertaking, the authors mostly succeed. But while some of the remedies they propose for the problems they identify are sensible, some – in particular, reining in technological change through government action – are flat-out wrong.

In 2012, the authors laid out their intellectual approach, which is that we have to study institutions – the state and its laws, social customs, and other aspects of organized human behavior – to understand the economy and economic change. They helped establish a school of thought called “new institutionalism.”2 Here, they build on their earlier work to solidify their proposition that progress, far from being automatic, is driven by the choices we make about technology and how to divide its rewards.

I’m skeptical of the last part. Technological progress is driven by what science offers us and, more importantly in this context, by economic demand. It is rare (although not unknown) that the demand comes from government; more often it bubbles up from below, reflecting individual consumer choices.

And dividing the rewards, at least initially, can only be done by the market; people are paid for their marginal product.3 Redistribution can alter the result for better or for worse, but must interfere with the efficient allocation of resources, including human resources. Resolving the tension between allocative efficiency and socially desirable outcomes is a moral and societal decision, not an economic one.

Along the path to identifying problems and presenting their solutions, Acemoglu and Johnson teach a great deal of economic history. That is the book’s most valuable contribution; its policy prescriptions are deeply unsatisfying because it assumes we can control the advancement of technology when we cannot.

But it’s a great read.