I studied financially to University of Edinburgh, something that meant that I was reading a lot about Economic History of Northern Britain And that, in turn, meant that I was reading a lot of Joel Mokirone of the three economists who won this year Nobel Monday. Later, as I started my career as an economist, I was lucky enough to get to know him personally, and his latest research continues to shape my understanding of economic growth.

Written by Allison Schrager

Whenever I feel uncertain about the future of the economy, I turn to Mokir. His work is the basis of my understanding of why some economies prosper, others stop developing and others decline. It offers hope and warning at the same time for countries trying to navigate the current economic uncertainty and sheds light on large questions about the impact of artificial intelligence and the viability of the Chinese model. As a fan of his work, and in honor of his award with the Nobel Five most important courses by Joel Mokir.

1. Growth often encounters resistance

Economic growth has been decisive for prosperity, thanks to it, people live longer, more comfortable and free from hard manual labor. But it often encounters resistance, because it is accompanied by reversals and uncertainty.

Mokir had once explained to me how, initially, the men refused to work in the factories. They were used to working for themselves, as small growers or craftsmen, even though they were poor and their lives were not easy. But it was the way they knew. The concept of modern work, to be somewhere specific time, staying all day long, taking orders from a boss with whom you had nothing to do with, was so offensive and humiliating for men, who for years had been forced to hire women and children. It took some generations of social adjustment to make this transition.

2. Development takes time

The industrialization was made possible by some basic innovations that changed the nature of labor and production. But there were critical inventions that no one initially knew how to exploit, such as the locomotive, which put the factories on the way and made industrial production possible. It took over 100 years for her contribution to even start to make productivity statistics.

Often, the most decisive inventions take years to find their best application, and in ways that no one could predict. It is true that the rate of adoption of innovations accelerates every year. It is also true that there are already inventions today that will deeply affect the world many years from now.

3. Growth is unpredictable

New innovations are destroying jobs, but they also create new ones. And it is futile to try to predict what they will be. Innovations transform the economy in ways impossible to imagine (as we saw above). As Mokir once told me:
“Imagine trying to explain to someone in 1920 what a cyber security expert is.‘

4. Development is cultural

One question has been the question of economic historiography for decades: Why was Great Britain the first country to be industrialized and enriched?
Other countries also invented things, or more wealth and natural resources, or had a better climate.

Mocir’s work often focuses on the culture of development, which is decisive. It all depends on exposure to risk and experimental mood. This was a key feature of the Scottish Enlightenment, where societies were relatively educated, human existence was accentuated, and curiosity and individuality were appreciated. It is not enough for a nation to invest money and build infrastructure, a government cannot plan well -being. The most critical innovations are often discovered through testing and error.

5. Development is not inevitable

For centuries, the economies of the world have almost been growing. There was some progress, but it was small, and when the empires collapsed, it was often lost. This is what has been doing so excellent for the last few hundred years. It is true that growth tends to accelerate, and that the innovations that boost the economy generate even greater inventions. But if the right conditions for growth are not maintained, nothing is guaranteed.

As people are facing a future of lower growth, there is temptation for policymakers to allow the state to play a more active role in the economy. Politics, of course, has its role. But all governments must realize that abundance does not arise from the best planning. The crucial element of growth is exposure, in danger, uncertainty, change and creativity.

This is Joel Mokir’s great lesson, and the reason his work remains more timely than ever.