Psychological origins of the Industrial Revolution

Abstract

Since the Industrial Revolution, human societies have experienced high and sustained rates of economic growth. Recent explanations of this sudden and massive change in economic history have held that modern growth results from an acceleration of innovation. But it is unclear why the rate of innovation drastically accelerated in England in the eighteenth century. An important factor might be the alteration of individual preferences with regard to innovation resulting from the unprecedented living standards of the English during that period, for two reasons. First, recent developments in economic history challenge the standard Malthusian view according to which living standards were stagnant until the Industrial Revolution. Pre-industrial England enjoyed a level of affluence that was unprecedented in history. Second, behavioral sciences have demonstrated that the human brain is designed to respond adaptively to variations in resources in the local environment. In particular, Life History Theory, a branch of evolutionary biology, suggests that a more favorable environment (high resources, low mortality) should trigger the expression of future-oriented preferences. In this paper, I argue that some of these psychological traits – a lower level of time discounting, a higher level of optimism, decreased materialistic orientation, and a higher level of trust in others – are likely to increase the rate of innovation. I review the evidence regarding the impact of affluence on preferences in contemporary as well as past populations, and conclude that the impact of affluence on neurocognitive systems may partly explain the modern acceleration of technological innovations and the associated economic growth.

Quantifying the Scientific Revolution

“…In line with these ideas, our results show a strong association between per capita scientific production and the activity of parliaments. tendency to defer to others' judgments (Baumard, 2018, Inglehart and Welzel, 2005, Jacquet et al, 2018, Nettle, 2018. This behavioral approach to creativity suggests that individuals in affluent environments should be more innovative in science, but also in all kinds of activities, because the tradeoffs between exploration and social learning are similar (Baumard, 2018).…”

“…One possible lesson from such quantitative findings is that while labels such as the "Scientific Revolution" can serve to raise awareness about a phenomenon (the acceleration of scientific production), they can be misleading when it comes to actually understanding it. Such labels tend to dichotomize the world (e.g., pre-scientific vs. scientific) when in reality change is continuous (i.e., varying amounts and intensities of innovation) (Baumard, 2019). In other words, 18th-century England was "more scientific" (in the sense of being scientifically more productive) than 17th-century England, but 17thcentury England was also more scientific than 16th-century England, and so on.…”

“…An important factor may be the unprecedented living standards experienced by English people (and more generally by Europeans) from the 17th century onward (Allen et al, 2011, Cummins, 2014, Fouquet and Broadberry, 2015, Morris, 2013. Affluence has predictable effects on human psychology (for a recent review, see Pepper and Nettle (2017), and can alter the dynamics of cultural evolution (Baumard andChevallier, 2015, Baumard et al, 2015). In particular, recent research inspired by lifehistory theory have shown that in a harsh environment, when the levels of available resources are low and unpredictable, individuals tend to be more short term-oriented, more risk averse, and more conservative.…”

Cultural evolution by capital accumulation

“…Individuals at the beginning of their growth invest mainly in their biological capital, that will be lost upon their death. It is only when they become richer, moving upward on their pyramid of needs, that they can begin to invest in forms of capital that are further away from biology, improving their environment at a larger scale, or investing in knowledge (see Baumard, 2018 for a review). Here, we capture this effect by assuming that the ratio κ is low when the amount of disposable capital, x, owned by an individual is below a thresholdx and increases to a higher value when x >x.…”

“…Adding more individuals to a population, all unable to innovate beyond existing knowledge, does not foster the accumulation of more knowledge. This helps understand, for instance, why the industrial revolution took place in relatively small but rich countries, rather than in the most densely populated but poorer ones (Baumard, 2018, Clark, 2008, McCloskey, 2016. Second, the respective rates of cultural evolution in different fields of knowledge all depend similarly on the time and resources that individuals have at their disposal to innovate.…”