Summary: For centuries, “innovator” was a slur rather than a compliment. A new analysis of more than 23,000 books suggests that Western culture gradually became more receptive to new ideas, helping turn ingenuity into sustained prosperity. Countries where resistance to innovation declined earlier or further usually produced more notable scientists and inventors. Societies that learned to welcome new ideas grew richer, and living standards rose substantially, especially for the poor.

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In 1548, the government of England’s 10-year-old Edward VI issued a proclamation against those who “doeth innovate.” Offenders would “suffer imprisonment, and other grievous punishments.” The target was unauthorized change to church ceremonies, but for more than two centuries, the word “innovator” remained an accusation. My research suggests that the gradual decline of this hostility to novelty helped the West turn new ideas into sustained economic progress.

An innovation is a new idea put to use: a better plow, a new crop rotation, a vaccine. Such ideas matter because, unlike a loaf of bread, they can be used by many people at once without being used up. A farmer who gives a neighbor a loaf no longer has it, but if he teaches the neighbor a better way of growing wheat, both can use the knowledge. Each farmer still needs his own land, seed, and labor, yet the method need only be discovered once; after that, others can adopt it, and later generations can improve it. Resisting the new method can deny its benefits to people far beyond the farm where it began.

But a useful invention can put someone out of work. The Roman historian Suetonius tells how an engineer offered Emperor Vespasian a cheap way to haul columns to the Capitol. The emperor paid him well but declined the device, saying he had to feed his poor. Seventeen centuries later, English textile workers known as Luddites smashed the machines they blamed for cutting their wages, and their name became a byword for technophobia. Today, leading mathematicians warn about AI’s effects on their profession. While their concerns about how mathematicians are trained and how the field builds understanding are serious, no profession enjoys contemplating its own replacement. Resistance cannot be dismissed as ignorance when the losses are immediate and personal, while many of the gains go to strangers or future generations.

How a society responds to innovation depends partly on its culture, the beliefs and values people learn from one another and pass between generations. An unfamiliar method can put a farmer’s crop at risk and, in a culture suspicious of novelty, his standing with his neighbors. Where obedience is prized, a scholar’s challenge to established teaching may be treated as insolence before anyone considers the evidence. When challenging accepted views becomes less costly, the same effort can yield more discoveries, and because each discovery becomes material for the next, the gains can compound over centuries.

To trace how attitudes toward innovation changed over time, I looked at what earlier generations praised and condemned in more than 23,000 books in the Western literary tradition, available in English or English translation through Project Gutenberg. They preserve the views of a literate minority, but one with an outsized role in teaching, government, and innovation.

First, I adapted a framework the Dutch psychologist Geert Hofstede created to compare national cultures. Using AI, I scored each book on cultural values from the framework, focusing on the four most relevant to innovation: deference to authority, discomfort with uncertainty, individualism, and what I call patience, which covers saving, planning, and adapting inherited practices to changing circumstances. The AI read passages of several thousand words from each book and judged whether each passage endorsed, rejected, or took no clear side on each cultural value. Each book’s score reflects the share of passages supporting a value minus the share opposing it. Because the AI judges what each passage argues, rather than tallying how often it uses words linked to a value, the method distinguishes what a book endorses from what it merely depicts.

Fourteen scholars of literature and classics at the University of St Andrews compared pairs of books chosen for strong contrasts, judging which book in each pair leaned further toward a given value, without seeing the AI’s scores. Leaving aside cases where a scholar did not know both books or judged them about equal, they agreed with the AI 93 percent of the time. If you know the books, you can see whether you agree with the AI.

I then combined the four cultural values into a resistance index that rises with deference to authority and discomfort with uncertainty and falls with individualism and patience. Earlier books remain in the index as new ones appear, but gradually receive less weight. The index shows that resistance to innovation fell by about half between 1000 and 1920. I repeated the exercise on roughly 5,000 books from four collections outside Project Gutenberg and again found declining resistance between 1500 and 1890.

What might explain the decline? The economic historian Deirdre McCloskey argues that printing, religious reform, and political upheaval gave ordinary people a greater voice, so that commerce and innovation came to be admired rather than scorned. The Nobel laureate Joel Mokyr points to a related change among Europe’s educated elite, who began to challenge inherited authority and to share what they found. The motto of the Royal Society, founded in 1660, translates as “take nobody’s word for it.”

The books broadly support this timeline but suggest the change began earlier. The index fell sharply between about 1130 and 1230, centuries before the printing press or the Royal Society, though the early evidence is thin and that fall was partly reversed later. Most of the lasting decline came after 1500, with deference to authority retreating fastest in the 16th and early 17th centuries.

Did invention rise as resistance fell? To find out, I grouped books by country of origin and built a separate index for 13 countries. Between 1500 and 1900, countries whose index fell earlier or further produced more notable scientists and inventors, even after allowing for the fact that larger populations have more potential innovators. The pattern fits the cultural story, but it is an association rather than proof of causation, since prosperity and institutions can also change attitudes toward new ideas.

How much might these changing attitudes toward innovation matter for living standards? Suppose population had grown exactly as it did between 1000 and 1920, but the resistance index had stayed at its year-1000 level. My growth model, which depends on assumptions about how strongly culture affects invention, suggests that by 1920 productivity would have been about 44 percent lower, leaving the same workers and equipment to produce little more than half as much. The model attributes about two-thirds of the speed-up in productivity growth between 1500 and 1700 to falling resistance to new ideas.

Vespasian turned down the engineer’s device to protect the poor. Yet through cheaper food, better medicines, and less exhausting work, the poor have been the great beneficiaries of innovation. Nobody has to improve a crop to eat a cheaper loaf or understand a vaccine to be protected by it. We all gain from a culture in which “innovator” is no longer an insult.

“The ongoing advancement and adoption of artificial intelligence continues to raise concerns about widespread job losses. Over the past three years, our regional business surveys have asked firms about their AI adoption and its effects on their workforces. This year, we found that AI use among regional businesses has continued to rise sharply, with more than 60 percent of service firms and about half of manufacturers now using AI—a notable increase from 40 percent and 26 percent, respectively, reported in 2025. Despite this rapid adoption, regional firms’ investments in AI are generally modest, usage tends to be concentrated among a small share of workers within firms, and layoffs have remained uncommon. And, while some firms have scaled back hiring due to AI, others have added workers to help them use it. Retraining employees in response to AI remains the primary way firms are adjusting their workforces.”

From Federal Reserve Bank of New York.

“The Bank of Central African States (BEAC) has officially joined the Pan-African Payment and Settlement System (PAPSS), marking a significant step in strengthening Africa’s cross-border payment infrastructure and opening a new chapter for financial integration in Central Africa while driving greater intra-African trade.

As one of only two regional central banks on the continent, BEAC serves the six member countries of the Central African Economic and Monetary Community (CEMAC)—Cameroon, Central African Republic, Republic of Congo, Gabon, Equatorial Guinea and Chad. Its participation provides PAPSS with a strategic entry point into Francophone Africa and significantly expands the reach of the network across the continent.

With BEAC joining the network, PAPSS now connects 28 African countries, bringing together more than 190 commercial banks and fintechs, supported by 16 switches. Through its extended network partners, PAPSS participants are also able to send money to more than 250 additional financial institutions.”

From Afreximbank.

Listen to the podcast or read the full transcript here.

Today, I’m joined by Dr. Brian C. Albrecht, chief economist at the International Center for Law & Economics and author of the Economic Forces newsletter. Brian writes about competition, regulation, how markets work, why prices matter, and why good intentions often produce bad policy. His work matters because human progress depends not only on innovation, but also on the institutions and incentives that let useful ideas spread, compete, and improve ordinary lives.

Brian, we’re trying to alert our listeners to the economic underpinnings of modernity: why the last 200 years are so fundamentally different from the previous 300,000 years that Homo sapiens has been on the planet. Online, you’re described as one of the chief defenders of price theory. Why does this amorphous idea matter for the great enrichment and for human progress?

One thing that makes the modern world unique is that markets are a huge part of our lives. Markets let us coordinate across time and place in a way we couldn’t have imagined 300 years ago. And price theory is about studying prices: what causes them to move, how they coordinate behavior, when policies affect them productively or destructively.

Can you talk about prices as a signaling mechanism, and draw out the distinction between prices emerging spontaneously under free markets versus politicians trying to set prices?

I take a line from Alex Tabarrok that a price is a signal wrapped in an incentive. Hayek used the example of tin. Users of tin don’t need to know where a shortage came from or whether there’s a new usage; they see the price go up. That allows coordination across time and place. I can decide whether to hold off on tin production or do something else with my factory because tin is more expensive—all that coordination comes from a simple signal.

Thinkers try to distinguish free market prices from others. What does the price of my electricity bill convey? It’s not set by the same forces as the grocery store, where Krogers, Albertsons, Walmart, and Costco bid for chicken from the wholesaler. There’s gradation, and at the other extreme is not allowing prices at all: a government edict, a ration.

The other aspect of prices is incentives. If you own a grocery store and set the price of bananas too low, you sell out and leave money on the table. That’s a signal to raise prices tomorrow. But when the government sets prices, the Politburo chief isn’t making that money. What incentive do they have to set prices in a way that conveys information?

So it’s not just free market prices that give a signal; a government-regulated price like electricity, with taxes and green levies on top, still allows people to adjust. But at some point you get a situation like we did in Eastern Europe, where I grew up, where prices are so divorced from reality that the system collapses.

That’s an extreme example. Less extreme is just shortages. Mayor Mamdani in New York is known for wanting subsidized government-led grocery stores, but those have been tried elsewhere. It’s not that the system collapsed; there are just shortages in these stores.

In public debates, politicians often ignore scarcity and tradeoffs. Why is it so difficult for people to accept that there are scarcities and tradeoffs?

People accept scarcity in situations where they face the feedback themselves.

Any time you go to the grocery store, you’re confronted with scarcity. In other parts of life, that feedback isn’t as tight. In a large organization, you make budgeting decisions that don’t affect you. If you spend extra on the company card, how tight is that feedback?

The government has more insulation because it doesn’t have shareholders. Local governments might have tighter feedback because they’re more responsive to voters. Totalitarian regimes don’t have any feedback.

Right now, we are in the middle of the conflict in Iran. The price of gas has gone way up, and some people have suggested that we should cap the prices of gasoline. But we’ve been here before in the 1970s. What does the 1970s episode have to teach us about what to do when gas prices are going up because of geopolitical conflict?

Every few generations, you need to relearn the lessons of price controls.

The stories from the 1970s are generally known. There were gas lines and energy caps on different things across the economy. It all circles back to the core idea that when you cap prices, people aren’t able to adjust to reality. There’s less supply than there was before the conflict, and price controls don’t change that; they just hide it. In the 1970s, scarcity showed up as gas lines. At other points in time, it showed up as different types of shortages.

Tyler Cowen has written that we’ve forgotten the lessons people learned in the 1970s about price, wage, and rent controls and are now beginning to relearn them. As an economist, do you think that economic understanding is so counterintuitive that, unless taught, the default position is some sort of diktat socialism? If every generation needs to be retaught, then human nature must be the opposite. Have you thought about that?

I’ve thought about it in the context of Hayek’s idea about the micro and macrocosm. His point is that our brain evolved to think about our day-to-day lives and families rather than larger systems. Modernity, especially through markets, but also through things like the internet and social media, brings those larger systems into contact with our brains, which developed in the microcosm, and that’s a fundamental tension we have to keep dealing with.

Another thing that makes economics tricky is that some parts are intuitive and some parts are not. When I tell my students there are tradeoffs, everyone nods. When I ask whether they’d buy more or fewer bananas if the price rises, everyone answers correctly. There’s an intuitive part we think we understand, and then we think we can make the jump ten steps down the road. Economics would almost be easier to teach if it were completely unintuitive. When you go into quantum physics, nothing’s intuitive, so you don’t even try to intuit it; you look at the experiments and the math.

There’s an idealistic vision of the future where AI and robots give us everything we need, eliminating scarcity. Is that kind of future possible, or are human desires infinite?

I was working this morning on a paper about how when we get more stuff, we discover desires we didn’t even realize we had. There was an LLM released that was only trained on text up to about 1930. You ask it what a computer is, and it says a computer is a person who computes because it’s predicting what a person in 1930 would think. They can’t imagine what we think of as a computer, so they don’t know that desire is possible.

That’s how human desires are infinite. Each time I don’t have to worry about where my water comes from, I can buy something fancier and worry about the next thing. Some of that may be resources, some social status. So far, as soon as we can take care of something without worrying about it, another desire appears. I can’t think of a good reason that would end.

The fundamental scarcity that isn’t settled is time. Even if AI does all the work, time with my kids is still scarce. And once there’s scarcity, there are tradeoffs. I’m excited for what AI will do, but the core principle of scarcity doesn’t go out the window.

Let’s talk about your work on monopolies and market concentration. A lot of people seem confused about the difference between firm size and monopoly power. They look at big companies like Apple, Walmart, or Amazon and say that they are monopolies. But those two terms aren’t identical, are they?

A monopoly, in the strictest sense, means one seller. The term grew out of times when you truly had one seller; the king said only one person could do something. In economics, it doesn’t need to be one seller, but rather one big player in a market. With one dominant player, you could imagine that company being a monopolist, or at least having market power. But what if you’re a small player in many markets? Amazon isn’t the biggest in retail or groceries, but add up enough, and it’s a very big company. Companies can be big because they’re diversified. “Monopoly” is a weird term for that.

Another distinction: the East India Company’s monopoly privileges came from politics, but companies often get big by winning a market. If you provide lower-cost or higher-quality goods, you’ll win the market and become a bigger company. That’s fundamentally different from the old-school idea of a player who’s there because they stole something and have power over you.

Right, so people often misunderstand what it means to be a monopoly. Still, people feel uncomfortable when JetBlue wants to take over Spirit. They feel concentration will result in high prices. How often do big companies raise prices rather than lower them?

In the broad sweep, the way to get rich is to lower prices.

The retailer everyone’s talking about is Costco. Costco has low prices. Combined with a membership fee that people happily pay, they get a lot of customers. No one says Costco’s profit comes from crazy high prices. They came in and lowered prices, maybe not on every item, but as a bundle. Before that, it was Walmart. Way back it was A&P. Even in tech, Microsoft and Apple lowered the price of computers and became big. That’s the default way most companies make money: find a cost saving, lower prices, attract more customers, and get profits over the long run.

And it protects you against competition, right?

Yeah, for sure. If I were born in 1920, maybe my job would be to open a corner shop selling lollipops as a retailer, but in today’s world, I can’t compete with the scale of Costco or Walmart. I could compete on a different margin, a gentler boutique experience, for instance, but it’s harder. The flip side is that I get to talk about economics all day instead of operating that corner store. These cost savings help consumers directly through lower prices and indirectly by freeing up resources for people to produce other stuff and move into services.

Now, when it comes to mergers, people are often concerned about collusion. What if all the sellers get together as one legal entity and collude to raise prices? We can separate winning the market by being more efficient versus winning by convincing everyone to stop competing, but mergers sit in between. Is the merger like Walmart, getting scale efficiencies and lowering prices, or like collusion? In most situations, it’s like Walmart, with real efficiencies and synergies. But in airlines or other situations, it can be more collusive, and that’s case-by-case.

To me, that’s why international competition is so important. Even if United takes over American, JetBlue, and Spirit and we end up with one company, so long as they’re exposed to international competition, it’s harder to collude and raise prices.

That’s a real benefit of international trade: if there are pockets of waste from implicit collusion or inefficient mergers, a constant force of external competition is a disciplining force. We want that pressure because it’s what lets us lower costs, improve quality, and generate progress in the longer run.

Let’s stick with airlines. Here’s something that freaks me out. The internet has a lot of information on my income and yours. At some point, between companies knowing our spending patterns and how much we can afford, they’ll discriminate the prices of plane tickets. If Brian is twice as rich as I am and he logs onto American Airlines, his price will be twice as high as mine because the company knows he can pay twice as much. How do you feel about that future?

Let me talk through the economics.

We can work out that the only way that price discrimination works is that you’re able to lower prices for the marginal consumer. Why do you not lower prices in general? Because you’re worried you’ll have to lower prices for the people you were making profit from. If someone says they won’t pay $100 but will pay $50, why not do that? Because the next person will say the same, and soon everyone will beg for $50.

Price discrimination lets you set different prices for different people and lower prices for consumers who wouldn’t otherwise buy the good. If willingness to pay is a proxy for income, you lower prices for poorer people and raise them for richer people. How you think about those tradeoffs depends on the situation, but there’s no disputing that the only way price discrimination works is if you lower prices for some and possibly raise prices for others.

If poorer people would get a price cut, and the rich pay more, why does the left oppose price discrimination so much?

I’ve tried to push that line, though it’s a little bit tongue-in-cheek. The only way price discrimination is profitable for firms is if it gets new people in the door, which means lowering prices for some people, who tend to be poorer. We should take that seriously as one of its benefits.

Also, who knows where technology ends up. There may be ways for people to hide their identity, or third-party sellers where you call and say, “Hey Brian, buy this ticket for me.”

That is in some sense wasteful. People respond to the threat of theft by installing locks, which reduce theft but are themselves a waste of resources. So there could be a role for policy there. Maryland just passed a law trying to ban this sort of price discrimination for grocery retailers. It had stuff like you cannot use tracking information to lower prices in the store, which isn’t something anyone does, but they’re imagining a future where that happens. In the meantime, it’s not a first-order priority.

Free-market economists emphasize competition over regulation. You just talked about a policy response, a regulation. Should an ordinary person rely on competition as a better way of handling these important issues?

People say the reason they feel safe at the grocery store is food regulation. But it’s not really true. It’s mostly because of competition. The Walmarts of the world try very hard to keep their products safe because they have to in order to keep customers coming back. Competition is a facet of the world that we rely on every day.

If you go to a different country, or even a different US city, you often ask whether the tap water is safe to drink. But people never ask that when opening a Coca-Cola. I remember traveling through Zimbabwe during the hyperinflation in 2008. You couldn’t buy anything, but we found a shack in the middle of nowhere selling ice-cold Coca-Cola. I drank it without thinking twice.

That’s a great example, and I’m ashamed I hadn’t thought of that connection because I’ve written on the importance of brands. Brands have to fight to protect against knockoffs. I can go into a McDonald’s anywhere in the world and expect some level of quality. The power of these big brands is that they keep their quality good enough that you trust what you’ll get and reach a price point that lets them be anywhere in the world.

To circle back to price theory, I try to understand how this is possible: the incentives, rule of law, institutions, and competition that make it possible. That’s what I try to do in my research.