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2023 | Book

Science, Technology and Innovation in the History of Economic Thought


About this book

This book provides an overview of the importance of science, technology, and innovation in the history of economic thought. It charts how science has responded to societal needs and global challenges to highlight the way in which knowledge and technology have been used to benefit society. Particular attention is given to modern concerns, such as climate change, technological unemployment, and social unrest, which are contextualised within the work of the Scottish Enlightenment, Marx, Weber, and Schumpeter. Broader debates, including the relationship between invention and economic development, the alienation of labour, and institutional change, are also considered.

This book aims to shed new light on our understanding of science, technology, and innovation by placing them within ideas from the history of economic thought. It will be relevant to students and researchers interested in the history of economic thought and the economics of innovation and technology.

Table of Contents

Chapter 1. Introduction
In this volume, a link between Science, technology, and innovation in the history of economic thought is established. There is barely any study linking these three important issues within the history of economic thought. Literature has usually studied them in an unconnected way. However, all of them consist of a societal knowledge with a need for vocation, inventiveness, and a desire for change. All of them are systems of knowledge about the physical world—matter and business type—which try to explain how matter and life works and how we may change it.
Estrella Trincado Aznar, Fernando López Castellano

Classical contributions

Chapter 2. Some Misconceptions Regarding Innovation (and How Reading Classical Authors Might Help Overcoming Them)
This chapter reunites three related reflections about innovation in the form of a short essay: the first one refers to the etymology of the word innovation and the fact that, originally, it was used with a negative connotation (in the sense of a subversive change). A second point deals with the question of whether the well-established concept of innovation system—despite its fruitfulness—does not contradict Schumpeter’s own concept of innovation. And third—closely related to the previous—a question so far much neglected, namely, who does really innovate in companies?
Thomas Baumert
Chapter 3. Invention, Institutional Change, and Economic Development: From Scottish Enlightenment to the IPE
This chapter relates the work of the pioneers of the study of innovation who were part of the Scottish Enlightenment with current theorists. All of them search for a non-individualistic concept of innovation. The individualistic innovation paradigm is based on the seminal work by the british author Jeremy Bentham, Defence of Usury (1787). Bentham claimed that innovation is the driving force of development and it must go hand in hand with credit. Then, rates of interest must be determined in the free-market. But previous authors from the Scottish Enlightenment had another definition of growth and innovation which was more preventive of uncertainty. David Hume had a historical perspective, making innovation a consequence, not a cause, of growth. Although change is desirable, it should not be at the expense of the past, as this past is the matter and substance for learning by doing. Adam Smith also pointed out limits to innovation advocating for usury laws and claiming that it is not the greatest individual inventiveness what increases the amount of capital, but the skill with which work is customarily done. In the period of the Scottish Enlightenment, other economists put forward a non-individualistic vision of innovation, as is the case with John Rae, who talked about an expansion of capacities. All these elements have entered into the recent developments of institutionalism at the hands of Institutional Political Economy. The idea of institutional innovation rejects the concept of equilibrium in favour of the process and shows that the market and the state are nothing more than the face of the same coin where limitations and skills are intertwined.
Estrella Trincado Aznar, Fernando López Castellano
Chapter 4. The Pre-Schumpeterian Concept of Innovation: Friedrich List and Two Pioneer Contemporaries
Since the late 1980s of the twentieth century, much attention has been devoted to the economy of Innovation and Technological Change, especially to the concept of “National Innovation Systems.” This concept, even despite the growing trend of globalization in recent decades, has remained robust and has even expanded its scope, including both geographical and sector-specific areas. The National Innovation System is not only a concept, but a research field that helps to explain and understand the level of development and the state of national production systems, as well as their evolution over time. This chapter studies the pre-Schumpeterian evolution of the concept of National Innovation Systems and finds contributions in the context of the transition between the First and Second Industrial Revolutions in authors who show interest in the economic transformation that these revolutions were bringing to Europe. In particular, it stresses the contributions of Friedrich List, and the less known of Charles Babbage and Johann Heinrich Von Thünen.
Pablo José Martínez Rojo
Chapter 5. Technoscientific Rationality and Capitalist Accumulation. Transhumanism as Alienation in Marx’s Humanist Approach
The transhumanist movement aims to liberate the human subject through scientific and technological development. However, from Marx’s notion of alienation, transhumanism can be conceived as a process that exacerbates the degree of subordination carried out by the capitalist system. This research presents the relationship between capitalist accumulation, scientific and technological development, and the alienation of the labour process. It delves into how technoscientific rationality and the capitalist pursuit of profitability have created a “Promethean gap,” manifested in the transhumanist movement. It examines the impact of technoscientific commodities in a transhumanist scenario. The chapter also shows how technoscientific rationality and the dynamics of capitalist accumulation are associated with generating transhumanist and utilitarian ideals. This aspect coincides with the intensification of the alienating and fetishist condition of the system.
Baruc Jiménez Contreras

Neoclassical Contributions and Its Alternatives

Chapter 6. Energy Efficiency, Productivity and the Jevons Paradox
In this chapter, the Jevons paradox is studied in the context of the debate on the limits to Growth. This “Jevons paradox” is part of a more general criticism of William Stanley Jevons to classical economics. For Jevons, when the cost of production declines due to resource efficiency, the marginal utility of commodities that use the given resource declines, increasing directly the consumption of those commodities and indirectly the consumption of other commodities with which they are exchanged. Then, scientific progress and resource efficiency is not a good path to the lesser use of resources. Actually, as coal is a non-renewable energy resource, it may be depleted. Jevons’ line of thought led to new areas in economics that imply that economics cannot be fully split from other sciences. The chapter assesses the current importance of the Jevons paradox in the macroeconomic and the microeconomic level, looking at the relationship between economic growth and energy efficiency. Finally, the chapter comments on the energy policies proposed to avoid the rebound effect, with some concluding remarks on the evolution of the concept.
Estrella Trincado Aznar, José María Vindel
Chapter 7. Max Weber: Science, Technology and Vocation
Weber considered that instrumental rationality is a product of modern science and constitutes a distinctive sign of Western society, with the complexity of technological progress as its most developed expression. He considered that the expansion of instrumental rationality would lead to the divorce of the worker from the means of production, generating a bureaucratization of society as a whole (iron cage). The last few decades have witnessed an increasing separation of the dynamics of science and technology, which calls into question the traditional theory of knowledge and the motivation of scientific staff. This autonomous dynamic of technology has allowed the proliferation of explanations according to which technological transformations unilaterally determine the evolution of economic and social forms. Weber had already suggested an interdependence between the logic of technological rationality, the instrumental mastery of reality and the social forms that the economy takes. In this sense, Weber’s thought represents an opportunity to identify the objective conditions that determine those economic forms, as well as to establish the extent to which individual action gives meaning to the logic that makes these forms present themselves as they do, or the degree in which the subject is guided by a sense of purpose (vocation) or by an objectivity created by the action itself, which is imposed on the consciousness. Answering these Weberian questions will help us obtain a more accurate picture of the current role of technology, of the relationship between science and values, and of the epistemological and ethical problems associated with these transformations.
Alfredo Macías Vázquez
Chapter 8. The Age of Innovation: More Schumpeter than Keynes
Schumpeter considered “creative destruction” the main force of economic progress. During his life, he kept the essential of this idea, but emphasis changed from individual entrepreneurs to big business or even states. In Schumpeter’s time, unemployment and the Great Depression were at the center of the stage. He was on the conservative, “liquidationist” side, which was run over both by the Keynesian revolution and by the Chicago school. But after the economic shocks of the 1970s, technological and organizational innovation proved the key for economic growth and competitiveness in modern economy. Economists from “New-Growth Theory” and “Evolutionary Economics,” working within the neoclassical framework or trying to substitute it, became inspired by Schumpeter’s work and developed it in several ways. As economics moved from short-run economic fluctuations to economic growth, Schumpeter’s influence and fame grew, and the last quarter of the twentieth century can be rightly named the age of Schumpeter.
Manuel Santos Redondo
Chapter 9. The Crisis of the Neoclassical Framework and the Schumpeterian Echo in the Current Paradigm of the Economic Analysis of Technological Change
Despite a relative early attention, it was already well into the twentieth century when Schumpeter tried to reintroduce the question of technological change in economic analysis, without much success then, since this field would be dominated for decades by the vision of the Neoclassical synthesis of Kaldor and Solow. The response to the Neoclassical growth model at the end of the twentieth century came from its treatment of two increasingly relevant variables—human capital and technology—and its impossibility to explain the patterns of convergence between countries. Among the main currents that focus on the inclusion of technology as a variable, the New Growth Theory approach stands out, with the combination of knowledge creation and technology as a driver of development and the systemic approach to innovation initiated by Freeman, within the framework of Industrial Economics and an evolutionary perspective that considers these elements endogenous to the economic system. This chapter analyses the echo of Schumpeterian thought in the new paradigm of technological change, which can be interpreted as a return to the origins of this branch of economic analysis.
Antonio García Sánchez, Luis Palma Martos, Ignacio Martínez Fernández

Some Specific Controversies Solved

Chapter 10. On the Capital Controversies as a Choice of Paradigms
In economics, the conventional (also called neoclassical or marginalist) theory is characterised as a framework based on demand and supply functions to explain prices, exchanged/produced quantities and remuneration rates of productive factors. This theory had to face a huge opposition during the 1950s and 1960s, during the Capital Debates or Cambridge-Cambridge Controversies (CCC). This chapter studies how the CCC arose and evolved, as well as how they apparently came to an end in the 1960s and have now been forgotten. To this end, our research makes use of Thomas S. Kuhn’s characterisation of the history of scientific thought, by presenting the debate as a real choice between paradigms. We shall see how answers to the question of why the CCC did not lead to a Scientific Revolution that would bring about the demise of the neoclassical hegemony in economic theory fall outside the logical rigour of the competing theories and reflect the inherent circularity of the communication between different economic paradigms.
Ramiro E. Álvarez, Jose A. Pérez-Montiel
Chapter 11. Technology and the Labour Market: Technological Unemployment as a Historical Debate
Technological unemployment has been an unintended consequence of production since the early eighteenth century. The introduction of new technologies has generated intensive stages of labour being replaced by capital as a factor of production, and the schools of thought have debated adjustments to the labour market based on the assumptions that form the foundations of each doctrine. This chapter reflects on the consequences of technological unemployment in twenty-first-century capitalism, in a framework of greater equilibrium in the distribution of income.
Elena Gallego Abaroa
Chapter 12. Humanity Is Facing Its Sustainability: Will Technological Progress Make the Future Unsustainable?
This chapter delves into the profound impact of digitalisation and technology on sustainability, offering a balanced analysis of its advantages and challenges. We explore how emerging technological trends, including advances in artificial intelligence and novel computing systems, can contribute to sustainable development while addressing the increased energy demands and resource usage inherent to these technologies. An urgent concern highlighted is the rapid accumulation of e-waste, a by-product of technological obsolescence, and the innovative approaches to transforming this waste into value by extracting valuable minerals. We also explore the Thales Alenia Space’s ASCEND project, an ambitious endeavour aiming to position data centres in space to capitalise on reduced temperatures, mitigating the environmental footprint of energy consumption. However, despite potential benefits, we underscore various hurdles, such as extensive infrastructural requirements and the implications of space radiation. Crucially, we advocate for fair ecological transitions that account for the socio-economic realities of developing nations and urge the need for sound policy-making and regulation to drive equitable digitisation. Finally, the chapter identifies the significant environmental toll exerted by the extraction of minerals, the increasing energy consumption of ICT, and the need for strategies to minimise these impacts while maximising the potential of digitalisation for sustainability. Ultimately, we argue that the intersection of digitalisation and sustainability warrants a comprehensive, integrated approach, fostering a more sustainable and equitable future.
Javier Arribas Cámara
Chapter 13. Why Inventions Fail to Become Innovation? Some Examples from Spain and Italy
Countries like Spain or Italy have historically had a good level of invention; however, it is in innovation that Spain or Italy have had (and still have) a significant gap, especially if we compare them with nearby countries, such as Great Britain, Germany or even France. This tells us that turning invention into innovation, that is, into economic development, is not an easy task. In fact, there are many different reasons why inventions do not become innovations. This chapter reviews some of them, such as the lack of an innovative ecosystem or the aversion to novelty, paying special attention to a purely conceptual reason, ignorance of the true meaning of innovation, and showing how this lack of knowledge has been a fundamental factor in the poor results obtained. To achieve this, the case of Isaac Peral and his famous submarine is analysed.
Juan Francisco Galán


Chapter 14. Conclusion
In this volume, a link has been established between Science, technology, and innovation in the history of economic thought. Innovation depends on our flexibility to change. And change is law of nature, but institutions also give us safe harbour. They address to a common reality and give sense to the common world, which allows ourselves to be carried away by the flow.
Estrella Trincado Aznar, Fernando López Castellano
Science, Technology and Innovation in the History of Economic Thought
Estrella Trincado Aznar
Fernando López Castellano
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