*How Measurement led to the Modern World*

by on February 18, 2011 at 1:44 pm in Books, Economics, History | Permalink

That's the very good subtitle, the less interesting title is The Institutional Revolution, and it is a book manuscript by Douglas W. Allen.  Someone sent it to me in the mail.  The bottom line:

Once fundamental measurement problems were solved — involving time, distance, weights, and power, among others — it became possible to cheaply measure worker performance, input and output quality, and the role of nature, in areas of life that were unheard of before.  This ability to cheaply measure ushered in the world of modern institutions.

Pre-modern customs, in contrast, were all about dealing with trust, the need for direct supervision, and facing up to the enormous risks posed by nature.  The astute reader will note the influence of Yoram Barzel, one of the most underrated economists.

When will this book come out?

1 Levi Stahl February 18, 2011 at 9:59 am

That was me who sent it, Tyler. It should be out in the late autumn. (You'll probably get a note about this from one of my colleagues soon, FYI.)

2 JCE February 18, 2011 at 10:37 am

isn´t trust key to modern institutions as well? isn´t a financial system ultimately based on trust?

3 Andrew February 18, 2011 at 11:17 am

Science is largely measurement and (more importantly) the resources to eliminate the noise (of all varieties).

4 John February 18, 2011 at 11:44 am

Seems like we could use a modest return to the pre-modern customs that deal with both trust and risk, though now much of the risk is socially generated.

Thanks for the reference by Slocum.

5 Roger Sweeny February 18, 2011 at 11:47 am

Until it comes out, you might want to read David S. Landes' Revolution in Time: Clocks and the Making of the Modern World. But then Tyler probably already has.

6 dnb February 18, 2011 at 1:07 pm

Looks like a movement to more concrete measurements. Wouldn’t trust and risk (such as risk of hiring this specific employee) be more intuition type of trait/form of measurement, can you really measure the trust and risk of an employee. I guess background check is one way of measuring trust and risk. So we moved from input (trust of employee, risk of hiring employee) to output types of measurements.

7 Yancey Ward February 18, 2011 at 4:03 pm

In a couple of new moons.

8 Tom February 18, 2011 at 8:20 pm

FWIW, I heard a story of a foreigner seeking to enter the chili pepper trade in the bush country of Ethiopia a short while before the Marxist overthrew the Emperor. The foreigner brought with him a weighing scale in order to better assess the value of the bundles of peppers he was seeking to purchase. He was nearly lynched by the local traders who, though they well understood the workings and value of a scale, considered its use to be both unprofessional and unethical.

The point being that when you say "cheaply measure," the adverb not the verb is the important part of the phrase.

Similarly, ornithologists say that temperature in the winter can be measured to within a 1/10th of a degree by observing the foraging patterns of birds who are able to precisely calculate the caloric expenditure at various temperatures to obtain food against the caloric value of the consumption.

To generalize, the innate ability to measure and make precise rational economic decisions seems to be inversely correlated with evolutionary and economic development.

9 Six Ounces February 18, 2011 at 10:02 pm

I'm sorry, but I don't understand your point.

In the sixth century BC, Eupalinos engineered an aqueduct through a mountain with less than 2 meters of error on the horizontal plane and only 4 centimeters on the vertical plane. He recognized and corrected for both errors, although the latter was unnecessary.

The Romans built aqueducts 50kms long with a gradient of only 34 centimeters per kilometer.

The Great Pyramid of Giza was built with sides of an almost exact 440 royal cubits. The pyramid weighed almost 6 million tons, and was the tallest man-made structure on the planet for nearly 4000 years.

Ancient mariners figured out how to measure latitude, and Renaissance time-keeping helped sailors determine longitude.

The stones of the Parthenon fit so tightly together there is hardly room to slip in a piece of paper.

Technology didn't require six-sigma precision to build massive structures of incredible complexity, yet their measurements were nearly perfect.

We can't buy a pair of pants today with any assurance that the length and waist measurements are accurate.

I think the biggest problem with measurement error today is that nobody gives a damn anymore. I've watched modern buildings being constructed and you can see the errors. The workers just cover them up.

10 Andrew February 19, 2011 at 2:15 am

Ever since reading The Fountainhead I've had a visceral disgust, and probably before that more vaguely, for ornamentation. Since I suspect the errors you are often not structural but decorative, covering over them makes little difference, and this makes it even worse in my mind.

11 Bill February 19, 2011 at 6:24 am

Why not both cause and consequence? The current proliferation of applications for wearable personalized telemetry looks like both.

12 k February 19, 2011 at 6:29 am

and of course, this is not the only factor that explains modern institutions; but it is an important one.

13 TGGP February 19, 2011 at 8:57 pm

Although I'm a fan of both "Seeing Like a State" and "The Art of Not Being Governed" by James Scott, I try to make the counter-Scott case for transparency here.

14 William Sjostrom February 20, 2011 at 12:13 am

Yes indeed, the astute reader will note the influence of Yoram Barzel, who is underrated only by the mediocrities in the profession. Barzel's influence may be in part because the author, Doug Allen, himself an excellent economist, wrote his dissertation under Barzel.

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