Information technology revolutions transform the production and exchange of ideas and drive profound institutional and cultural change. Our contemporary experience with computer-based information technology raises important questions about how the diffusion of ideas in new media shapes institutional change and how institutional innovations support the diffusion of knowledge, the accumulation of human capital, and markets. History provides unique settings in which we can document the causal impact of changes in information technology and institutions, and the best evidence on their long-run effects.
This project has focused on studying these dynamics in European history, an ideal laboratory for understanding the causal forces driving economic change. Early modern Europe provides a historical setting in which we observe two profound and interlinked social changes: the introduction of the printing press and the political and cultural shock of the Protestant Reformation. The printing press transformed how ideas were transmitted, influencing economic activity and shaping changes in politics and religion. The Reformation challenged the ruling institutions, reshaping religion and the political economy process in Europe. These shifts shaped the paths of economic development, including later changes in knowledge production. Further, historical settings provide rich evidence in which to study the causal forces and economics connecting changes in technology, institutions, and growth.
This research more broadly uses historical evidence to our economic understanding of how Europe became: a society with economic growth; a society with intellectual innovation and competition; a more secular society; a society with states that collect revenue and provide public goods; and a society with sustained scientific and technological development.
The research delivers several key conclusions. First, the impact of the printing press was not a pure technological phenomenon: it was profoundly shaped by the extent of economic competition in the printing industry. How printing shaped economic change varied over time and space with differences in economic competition in the industry. Second, the introduction of religious competition, which printing promoted, changed the larger political economy. This led to shifts in resources away from religious and towards secular uses. It also led to pioneering innovations in the provision of public goods, including public education and welfare provision, which fostered growth. Third, the introduction of printing increased the returns to scientific study and research during the Renaissance. In particular, the introduction of printing promoted the Scientific Revolution through its joint impact on the labor market and the market for ideas. Fourth, the subsequent development of the modern research university in early 1800s Germany led to a dramatic pivot and acceleration in inventive and industrial activity starting in the early 1800s. The shift in inventive and industrial activity towards universities occurred before other developments which previously have been emphasized, including the construction of railroads and the reduction of internal tariffs.
