Long-run Economies and the Results of Revolution

An Analysis of Technological Growth in the West

January 19th, 2009 at 8:45 pm - by admin

What does all this mean for the economy, and more importantly the establishment of Western technological hegemony? We clearly see the West in modern day analysis to be hugely dominant in scientific progress, with very little (especially in the two and a half centuries or so prior) research and scholarship occurring outside of Western society¹ and it should become more clear how the legal revolution discussed prior has seriously aided in the development of this dominance; one could go as far as saying that without this legal revolution² it would have been impossible to create this self-sustaining set of knowledge-driven technological growth.

Why? The answer to that question is effectively “confidence.” The rise of codified law, and in turn the rise of structured taxation, delated social and criminal³ responsibility (through the formation of corporations) and a strong framework for establishment of constitution-like human rights in terms of organization and deliberation makes for a workably strong financial, economic and therefore academic environment.

Structured and repeatable taxation is quite possibly the most important economic change as a result of this revolution; we see, with the rise of codified taxes (which particularly refers to the entire elimination of ad-hoc taxation, but also discusses the checks and balances type system where even the codified tax law cannot be made in to semi-ad-hoc taxation on the fly), a dramatic increase in capital investments⁴. During a system of ad-hoc taxation, investment in capital structures such as factories for production and research institutions could not occur without clear government (in this case, mostly monarch) support, as a bad year of overclaiming ad-hoc taxation could make management and use of the structures impossible.

Furthermore, what we see in structured taxation⁵ is an increased willingness for parties to work together. When ad-hoc taxation is not decreasing the implicit rating of everyone’s debts, social parties are more likely to be willing to take the lowered risk of selling capital goods, forming the clear foundation for proper social investment and monetary interaction.

An important part of the rise of codified law is the associated rise of equality and impartiality. No longer are you at the whim of whether the monarch is friends with your competitor, or any other lack of objectivity, as legal structures are unlikely to impose such arbitrary regulations in written form⁶.

These changes, and the entire restructuring of society resulting from legal revolution and the fall of the absolute reignship of the monarchy, clearly established a set of precursors for formulation of the Industrial Revolution - the period in which one can safely say the West was absolutely dominant in technological and economic growth, and furthermore, a period of massive amounts of technological growth⁷. There’s still some entirely open ended questions about this revolution, however — namely, how sustainable (or, how inherently self-sustaining) is this “knowledge-based technological revolution,” and will technological growth sustain in the West (or, globally) indefinitely, or will it crash⁸ eventually like it has so many times in the past?

This certainly isn’t to say there is none. I simply suggest that there’s significantly more occurring within Western society. Again, to reaffirm, this is not an Occident bias, many members of Eastern societies come to Western society to contribute scholarly and technologically. [↩]
And, a set of other things - particularly the rise of the university corporation - which set up the West perfectly to undergo the Industrial Revolution [↩]
Not to mention the rise of clearly defined criminal law, and a deliverance of written and structured social expectations. [↩]
Arguably, the increase is so large that it might as well be considered the creation of investment in capital structures. [↩]
As well as the other creations of codified law, particularly that of contract law and similar agreement-type law. [↩]
Not to say this hasn’t happened. Racism, subjectivity and other bias is quite common in legal systems, but, rather, to say that it’s less likely than without a structured legal system. [↩]
Resulting almost entirely from the rise of science. Revolutions in physics and physical laws drastically shifted the technological centers of the West to newer and more efficient means of production. [↩]
Carlaw, Bekar and Lipsey’s book, “Economic Transformations” covers a few scenarios where certain “macroeconomic levers” could be used to halt progress. Obviously social revolution away from our current technology-oriented supporting infrastructure could tear down any such progress, but, can this happen, or is the growth of technology itself halting it? [↩]