Politics and Technology
Tuesday, December 3, 2013
Daron Acemoglu and James Robinson

In our last post, we discussed how government policy can change the direction of technological change and deal with some of the environmental consequences of laissez-faire economic growth.

But of course the fact that the government could do this is no guarantee that it will do it. Whether or not it will comes down to politics.

This is a special case of the more general interaction between politics and technology, a topic that is unfortunately much ignored.

When social scientists think about technology, institutions and politics, regardless of their ideological leanings, their first instinct is to take their cue from Marx who viewed technology as an exogenous driver of history, and institutions and politics as merely parts of “superstructure” adapting to the needs and peculiarities of technology. As we noted in our post about a year ago, Marx famously summarized this perspective by stating:

The hand-mill gives you society with the feudal lord; the steam-mill, society with the industrial capitalist.

We also noted there that this view is seriously at odds with the facts, for example as recounted by historian Marc Bloch in Land and Work in Medieval Europe.

On the contrary, the development of these technologies, as with other technologies, has been endogenous and strongly responded to incentives in part shaped by politics.

History is in fact full of telling examples how technology responds to politics. Roman technology did not stagnate and then disappear in much of Europe after the collapse of the Roman Empire because it had reached some natural technological barrier, but because politics first within the Roman Empire and then among the fragmented European structure of polities that emerged after its collapse created no incentives for technological progress or even the use of existing technologies.

Nor can the phenomenal advances in sailing and ship-building technology starting in the 15th century documented for example by Carlo Cipolla in Guns, Sails and Empires be understood as the exogenous march of technology. Rather, they were a consequence of incentives created by inter-state competition for the capture of overseas trade routes and colonies.

Likewise, government policy and conflict over it is probably a first-order factor in understanding the direction of technological change today. For example, can we understand the types of technologies developed and enthusiastically used in the US health care system, which then rapidly spread to the rest of the advanced world, without considering the distorted incentives that the US health care system creates?

Though this point was made by Burton Weisbrod as early as the 1991 in a very interesting paper in the Journal of Economic Literature, there is curiously very little work on how politics affect endogenous technology, which seems a clearly under-researched area.

Returning to the issue of climate change, though the impact of government policy on the direction of technology may be potent, the politics here is unfortunately particularly challenging.

First, there is the issue of domestic politics. Government policy can be fruitfully used to redirect technological change from fossil fuel-based technologies to cleaner ones, but this will involve a significant redistribution of profits away from some of the most powerful companies in the United States. Not surprisingly, existing oil companies and energy producers relying on coal aren’t the biggest fans of a transition to clean technology.

This domestic dimension of the politics of energy technology is further complicated by the war over the science of climate change. It’s hard to know for sure, but one would imagine that without the involvement of the energy sector, there wouldn’t be so much confusion on what climate science does or does not say about man-made climate change.

Second, there is the issue of international politics. Any country that unilaterally adopts policies to redirect technological change towards cleaner technologies is likely to end up bearing the cost but not benefiting much unless others follow.

In this light, perhaps the defining political struggle over climate change is the one between the United States and China, the two biggest polluters today. Not surprisingly, this looks like a classic game of chicken or war of attrition, each side waiting for the other to make a concession while we get closer to the abyss.

If you thought that politics of technology was something you could ignore, perhaps you should think again.

Article originally appeared on Why Nations Fail by Daron Acemoglu and James Robinson (http://whynationsfail.com/).
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