Tuesday, September 6, 2011

There is no economy just technology

I have finally got around to beginning to read Brian Arthur's "The Nature of Technology". This has been on my to do list for awhile but I am finally getting there and I have to say it looks quite promising at this stage. I like the style and the layout of the ideas.

But there was a sentence on page 1 - in the preface that really got me thinking. I have been pondering the nature of technology for awhile now myself. It is a fun topic and one that I need to work on for a particular project but I can't say it has been terribly fruitful so far. anyway this sentence got me thinking...

Anyay here is the first sentence....
"It was clear to me that the economy was in no small part generated from its technologies"

Well that wasn't a big insight - anybody who studies the economics of technology can figure that one out. It is the essence of the neo-Schumpeterian school which Keith Pavitt and Chris Freeman started in the early 1970s at SPRU. But it is the next sentence that really caught my eye...

"After all, in a sense an economy was nothing more than the clever organization of technologies to provide what we need". 

Now this caught my eye. It got me thinking if this were true then we sould actually invert the concepts.

In classical economics, an economy consisted of only land, labour and capital as technology was exogenous. Later work by Brian Arthur himself with others has help to make technology endogenous to the economy. But given the sentence above actually the economy is actually only a subsystem of technology.

It is possible to argue there are three integrated systems on earth. There is the environment which could tick along without us. There is us - humans - what is very recently been called the Anthropocene and then there is our technology.

Land (as opposed to the environment) and labour or human capital (as opposed to society/humanity) only exist in relation to particular technologies. Capital is actually a form of technology in itself.
And the economy - well it changes and morfs with technology.

So logically there is no economy - there is technological development and within that land, labour, capital, and the human organsation of those activities - which we call the economy). Well ok to say there is no economy is pushing it - but the economy becomes a subset of technology not the other way around.

The point is technology can not be reduced to mere hard objects and tools. As Lipsey reveals that quickly runs into problems so he includes organisational systems and  process technologies.

So just to make the point...

Land - rare earth minerals are dirt with a use (a thing they can be used in), a way of processing them and a way of transporting them.

Okay so you might argue that that is a modern example. Here is one from the first nations people of British Columbia who used to trade along the east coast of North America. They could use cedar trees (requiring a device to carve the timber), to form boxes by bending a single piece of timber. Pretty smart technology. They would trade their wares travelling by canoe at least the entire cast of what is now Bitish Columbia.

Labour - clearly labour only has meaning in relation to set of interdependent technology systems that it is performed within.

So perhaps instead of using the word economy to discuss the dynamics of a particular period of history including our own we should start using a word like hmmm techno....

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