How Progress Ends: Technology, Innovation, and the Fate of Nations

Frey, an economist, provides a sweeping survey of a millennium of global economic growth and stagnation with an eye toward charting possible technological futures. Through short historical case studies, he argues that a competitive market system, complemented by a decentralized or federal political structure, is best for technological innovation, whereas top-down bureaucratic systems are advantageous for scaling up existing technologies. Great Britain in the Industrial Revolution and the United States in the nineteenth and twentieth centuries are examples of the former, while Prussia under Otto von Bismarck in the late nineteenth century and Japan in the age of the zaibatsu (industrial and financial conglomerates) exemplify the latter. Stagnation sets in when a society fails to adapt its prevailing model to new circumstances, such as when a country with a centralized, hierarchical economic system cannot shift toward the kind of competitive, decentralized market that can best take advantage of technological change. Frey worries that both China and the United States will face this challenge: China because of the centralization of power under Xi Jinping, and the United States because of how incumbent firms have successfully stifled competition.