What do we know about population and technological progress?

by on May 19, 2011 at 6:50 am in Economics, History, Uncategorized | Permalink

Bryan Caplan writes:

The more populous periods of human history–most obviously the last few centuries–clearly produced more scientific, technological, and cultural innovations than earlier, less populous periods. More populous countries today produce many more scientific, technological, and cultural innovations that less populous countries… Here’s a challenge for you: Name the most credible measure of idea production that isn’t at least moderately positively correlated with population.

Is this about the absolute number of ideas generated or ideas as a percentage contributor to economic growth?  If we are estimating the costs and benefits of greater population, or the future of economic growth rates, the latter is arguably the more important variable.  In any case, most plausible theories of economic growth imply that higher populations should lead to higher rates of ideas generation, as measured in terms of value.  Ideas are non-rival and can be enjoyed by the entire group, thus yielding a higher social rate of return.  There are also larger markets to pay for the ideas or award more fame to the inventors.

Here is a famous Michael Kremer paper arguing for a version of Caplan’s position.  That all said, it is far from obvious that Caplan is correct:

1. The measured rate of technological progress, as it contributes to gdp, seems to have peaked in the 1930s.  At that time total population, including the population of scientists, was much lower than today.  “Effective” total population was yet lower, given the backward nature of transportation and communications and trade at the time, compared to today.

2. A recent paper by Ashraf and Galor (it’s also worth reading for other reasons) concludes: “…population density in pre-industrial times was on average higher at latitudinal bands closer to the equator.”  Yet the countries closer to the equator did not end up being the drivers of industrial progress, even though they sometimes had higher rates of progress in agricultural times.  Northern Europe, with the exception of the Dutch Republic, was never the star for population density.  This paper also indicates that technology drives population growth — more than vice versa — and that “time elapsed since a region’s neolithic breakthrough” predicts later technological progress fairly well.

If you add an extra baby to most societies, ceteris paribus, the rate of expected idea generation does indeed go up in theory.  But how important a factor is that, compared to other influences on ideas generation?

Or: at very gross time scales (“the last few hundred years” vs. “the dark ages”) a positive relationship holds between population and ideas production, or at very gross numerical comparisons (“one million people” vs. “ten people”).  But viewed at finer granulations (by the way, the evidence in the Kremer paper is quite gross; e.g., pp. 710-712), the relationship isn’t nearly as strong as one might expect.  In the time series, it’s been largely a negative relationship for the last eighty years or so, as mentioned above.

What model might give you a positive relationship between population and innovation at grosser scales but not finer scales?  Let’s say there are various technological “platforms,” such as “fire,” “agriculture,” and “fossil fuels,” and maybe someday “uploads.”  At any point in time, growth rates depend on how much a region has exhausted the potential of its current platform.  This is largely independent of current population.  That said, larger population areas may have a greater chance of progressing to the next platform, so there is a long-term, gross correlation between population size and levels of technology.  Furthermore, if all regions have more or less exhausted the current platform, the larger region has a greater chance of leading the next breakthrough and thus being first to have the new and higher growth rate, even if most of the time it doesn’t have a higher growth rate for technological progress.  That view is hardly anti-population, but it explains why you will find screwy population-innovation correlations all over the place.  Finally, further breeding, as a recipe for progress, is an extreme lottery ticket and it only works at some special margins.

1 Rahul May 19, 2011 at 8:11 am

A large group might come up with more ideas but the size might make it harder to implement and enjoy the fruits of those very ideas.

2 E. Barandiaran May 19, 2011 at 8:46 am

Please give me your best few references to a detailed analysis of measures of technological progress. Thanks.

3 Ed May 19, 2011 at 9:01 am

As is pointed out, Caplan’s argument is simply factually incorrect.

By any measure, the greatest period of technological innovation in history fell roughly between 1750 and 1950 (yes, innovation has fallen off recently, though the “where is my flying car” crowd refuses to believe the evidence). As for world population, it was about one billion in Napoleon’s time. It reached four billion around the time I was born in 1970, and is seven billion today and rising. For world population, nothing compares to the post-green revolution period. If there is a relationship, population growth is a result of technological innovation, not a cause.

Even looking at pre-industrial societies, the concept is ridiculous. All those big population bubbles in pre-19th century China never coincided with any notable period of technological innovation.

4 Nick Bradley May 19, 2011 at 1:37 pm

Are you Crazy? In China’s golden age (1000 – 1650), the population exploded compared to the rest of the globe..and China lost 1/3rd of its population in the 14th Century.

5 Swedo May 19, 2011 at 9:14 am

There was a lot of progress during the Renaissance, and one could argue it was partly because the Black Death reduced population.

Likewise, one could argue Rwanda today has a high growth rate because of a similar reduction in population.

One important driver of innovation is the availability of capital, in the widest sense. The obvious example today would be China.

6 Ted Craig May 19, 2011 at 9:36 am

While important advances take place when populations are larger, they seem to occur among fairly small groups. Most major development seem to take place in a very limited geography (think Detroit in the 1900s or Silicon Valley in the 1980s).

7 Finch May 19, 2011 at 9:46 am

This was a good post. I’m sympathetic to pro-population growth arguments, though maybe this is because anti-population growth arguments are generally weak and misanthropic. The lack of effective critics, though, has caused the pro-population growth ideas to stagnate.

I think you’ve hit on something in your final paragraph. The rate of technological progress is dependent on where we are in the exploration of science and technology. This is something the singularity folks with their accelerating returns, and Hamsonites with their diminishing returns, miss. We don’t know what we don’t know. Tomorrow we may discover something big, like combustion or the semiconductor effect or nuclear energy, that will lead to big progress. Or there might be nothing out there for a while. It’s not at all obvious that what we haven’t got to yet is “the small stuff,” because we don’t know the necessary precursors to “the big stuff.” I suppose I’d argue that the future rate of technological progress is effectively random, in that it depends on things that are presently unknowable. Population will affect how fast we move along an upward curve that varies radically in slope.

8 Norman May 19, 2011 at 9:50 am

The most disingenuous premise in macroeconomics right now is the idea that TFP is the same as technology. TFP is the part of output unexplained by the measurable stuff we decided to aggregate and include in an accounting exercise. We refer to it as technology for convenience, not because we have any observable support for labeling it thus. TFP is an error term. Let’s not confuse TFP growth with technological progress.

9 E. Barandiaran May 19, 2011 at 10:01 am

Your point is one of several reasons to ask for detailed analysis of measures of tech progress. I hope Tyler provides references.

10 Floccina May 19, 2011 at 10:02 am

I would say today that we will generally get more innovation with a larger population going forward than we would with a smaller population. Wealth does aid in innovation but with per capita wealth still rising population growth is good. The argument that Wealth aids in innovation is an interesting argument for allowing big differences in wealth world wide.

11 Thomas DeMeo May 19, 2011 at 10:22 am

Ideas aren’t bricks. One idea can be more important than a billion others, and context is as important as the idea itself.

12 Aretino May 19, 2011 at 10:26 am

One possible explanation for the decline of innovation starting in the 1930s – the destruction of the German education system, Humbolt’s gift to civilization. This system of roughly 50 universities gave the world its second scientific revolution and third renaissance (after the ones in the 1100s and 1400s).

13 Contemplationist May 19, 2011 at 10:52 am

I guess we are not allowed to mention possible differences in productivity constrained by group IQ and conscientiousness-trait differences? No, we aren’t! Okay, lets blabber on then

14 Marian Kechlibar May 19, 2011 at 12:00 pm

Population is clearly not always correlated with productivity.

Nigeria and Egypt have multiplied their populations over the last 100 years up to 10x, but these countries still produce no intellectual nuggets.

15 E. Barandiaran May 19, 2011 at 12:05 pm

A question to Tyler. What did you learn from the old “Cambridge Capital” controversy and how relevant the lessons are for technological progress?

On the Cambridge capital controversy, two quotes.

From Wikipedia
The Cambridge capital controversy – sometimes simply called “the capital controversy” – refers to a theoretical and mathematical debate during the 1960s among economists concerning the nature and role of capital goods (or means of production) and the critique of the dominant neoclassical vision of aggregate production and distribution. The name arises because of the location of the principals involved in the controversy: the debate was largely between economists such as Joan Robinson and Piero Sraffa at the University of Cambridge in England and economists such as Paul Samuelson and Robert Solow at the Massachusetts Institute of Technology, in Cambridge, Massachusetts. The two schools are often labeled “Sraffian” or “neo-Ricardian” and “neoclassical”, respectively.
Most of the debate is mathematical, but some major elements can be explained in simple terms and as part of the ‘aggregation problem’. That is, the critique of neoclassical capital theory might be summed up as saying that it suffers from the fallacy of composition, i.e., that we cannot simply jump from microeconomic conceptions to an understanding of production by society as a whole. The resolution of the debate, particularly how broad its implications are, has not been agreed upon by economists.

From Ed Prescott
“I will argue that much of the failure of monetary economics to progress over the last 25 years is the failure to construct models that provide guidance on how the national accounts should be extended to include production of ‘financial services’. In the 1960s there was the famous Cambridge capital controversy. This controversy bears on the issue ‘What is money?’ The Cambridge capital controversy was a silly one, as pointed out so clearly by Arrow (1989). Arrow, being a general equilibrium theorist, pointed out that there are multiple types of capital goods and with multiple capital goods only under very special conditions is there an aggregate capital stock. I emphasize that this does not mean that a model with a single capital good, which is matched to the value of some capital good statistic, is not useful in drawing scientific inference. I use such models along with other national accounts statistics to draw quantitative inference concerning a variety of phenomena, including business cycle fluctuations, secular movements in output and hours worked in the market sector, depressions and prosperities, and even in the behavior of stock prices. Rather, it means that for some purposes this single capital stock abstraction is not a good one for drawing inference.” — Edward Prescott (2005). “Comments on ‘Inflation, Output, and Welfare’ by Ricardo Lagos and Guillaume Rocheteau”, International Economic Review, V. 46, N. 2 (May): 523-531

16 Jeff May 19, 2011 at 1:53 pm

The relationship is not as simple as money people lead to more ideas. If that were the cases, China and India would lead the world in innovation instead of the United States and Europe.

Educated people lead to more ideas, which is certainly related to a premise of capital. I think this helps explain why certain periods of lower population (e.g. the Renaissance) lead to higher ideas – the Renaissance was driven by an increase in the number of educated people, despite the overall population decline.

This also lends credence to the “one big event” hypothesis and Tyler’s levels of progress as well. The printing press sparked the innovation of the Renaissance, computers sparked our modern progress, etc. And the occurrence of “one big event” would be directly related to the number of ideas but is more of a lottery system – a larger educated population plays the game more often and will therefore win more often but that doesn’t mean you don’t win sometimes when the game is smaller.

17 Lord May 19, 2011 at 2:43 pm

Population as the fountain of wealth suffers from what we do know, namely that ideas are not spontaneous creations independent of experience and knowledge or even adequate nutrition and security.

18 Luke Carlson May 19, 2011 at 4:44 pm

The Ancient Greeks made far greater technological, cultural, philosophical, and scientific innovations than the Romans–despite the Romans’ far greater population.

19 Ape Man May 19, 2011 at 5:13 pm

Carlson,

On what ground do you make that claim?

20 Ape Man May 19, 2011 at 5:14 pm

Carlson,

On what grounds do you make that claim?

21 Luke Carlson May 20, 2011 at 3:21 am

Rome does not have an answer to Aristotle.

I could make a grocery list comparison, but I do not have the time. I will simply quote John Bell, an economist who taught at the University of Illinois back in the ’50s and ’60s, to prove my point. Bell makes a similar claim in his book A History of Economic Thought (Second Edition on pages 25-26): “The cultural and intellectual heritage left by the ancient world of Greece has enriched civilization far beyond any feeble attempt at an evaluation … The total contribution of the Romans to Western though was small compared with that of Greece.”

According to Wikipedia, the Roman Empire had around 56ish million people during the reign of Constantine (it might have been bigger during the reign of Augustus). The Ancient Greeks (including all their colonies) had around 10ish million.

I might have to qualify my claim a little–I do not know if the Greeks innovated more technologically. In cultural and scientific terms they definitely did. I can go into more specifics in you are not convinced.

22 Greg May 20, 2011 at 7:58 am

Regarding the latitudinal population/innovation issue, William H. McNiell has some interesting observations in his book Plagues & Peoples. Roughly, before the advent of modern medicine peoples of the lower latitudes were in a struggle for subsistence because of parasites and endemic disease, as is still true in some areas today. It is difficult to consider scientific and technological innovation when one is struggling to survive.

23 Troy Camplin May 20, 2011 at 4:38 pm

Maybe institutions matter. With good institutions, more population will generate more ideas, including more gdp-generating ideas. With bad institutions, more population may make things worse, or have no effect, or have fewer ideas than a place with low population and good institutions. Culture and incentives matters, too. Which are, of course, related to institutions. The issue is: what happens when only population/population density is the variable, and all other things are held constant? More people = more ideas. That much should be obvious. If you have the institutions right.

24 Deogratius Marenge May 21, 2011 at 5:06 am

technology innovation is directly proportion to the size of population since the area where there is more industries,communication network and sources of power the population is higher than where there is less,these can be proved by comparing the population of Dar es salaam and other regions in Tanzania

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