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What Medieval China Teaches Us about Overregulating Innovation

Blog Post | Economics

What Medieval China Teaches Us about Overregulating Innovation

European powers established their dominance through the very technologies that China repressed.

The launch of OpenAI’s ChatGPT chatbot in late 2022 triggered a flurry of panic about the risks posed by artificial intelligence (AI). In fact, a recent CNN poll reveals that 42 percent of business leaders believe that AI could “destroy humanity” in 5–10 years. 

Though pessimism about potentially transformative technologies is nothing new, what is truly concerning are the calls for government regulation of AI development and deployment. For example, in March, leading figures in the tech industry, including Elon Musk, called for a temporary pause in the development of AI systems “more powerful than GPT-4.” Their open letter has received over 33,000 signatories. An April YouGov poll also disclosed that almost 70 percent of Americans endorsed a similar six-month pause on AI development. These polls ominously reveal that a non-negligible number of Americans, fearing threats to existing stability, not only desire ethical regulations of AI but also want suffocating restrictions on the entire industry.

Why is this concerning? History reveals that a severe bias toward stability and the overreach of technological alarmists in the policy space can dangerously obstruct human progress. Look no further than Medieval China.

In the 12th and 13th centuries, the Song Dynasty was the pinnacle of global civilization, destined to outpace the rest of the world. In the words of Harold B. Jones, “asked to pick from among the world’s nations the one with the best prospects for years ahead, an early fifteenth-century futurist would have bet on China.” Song China led the world in technological progress, inventing gunpowder, movable print, and the compass. It was home to the most advanced infrastructure and fleet of trading ships in the world, enriching China through overseas commerce with the coastal states of Africa. Moreover, by opening its society to foreign travelers, China benefited from the scientific knowledge and expertise of foreign innovators, making impressive strides in agriculture and astronomy. Some even say Song China was on the cusp of its own industrial revolution centuries before Great Britain. China simply had the materials and knowledge to dominate the world long before the West. Why didn’t it?

Despite Song China’s vibrant society and thriving economy, it was constantly skirmishing with its northern neighbors, eventually succumbing to the military prowess of the invading Mongols in 1279. The subsequent Yuan Dynasty marked the first time in China’s thousand-year history that a foreign-ruled dynasty seized all of China, an embarrassing defeat for Chinese traditionalists. 

The Yuan Dynasty was short-lived, as internal factionalism and corruption led to widespread rebellions, propping up the Ming Dynasty in 1368. However, still humiliated by the “barbarian” occupation, Ming leaders made it a priority to distinguish themselves from their Song predecessors. Blaming the collapse of the Song Dynasty on their embracement of a “disordered” open society, the Ming dynasty established a highly authoritarian and isolationist regime, significantly extending the Great Wall and, more significantly, unleashing an “anti-modern revolution” meant to reinvigorate China with traditional Confucian values and restrain destabilizing innovation.

Part of this anti-modern revolution was cultural, stifling innovation by stressing conformity and suppressing individualism. For example, one of the first actions of Zhu Yuanzhang, the founding Ming emperor, was to institute a strict dress code. He banned foreign fashion and dictated standards for each social position, reinforcing a neo-Confucian hierarchy. Technological progress and commercial prosperity brought about choice, fostering unsettling social disorderliness that could manifest itself through clothing. Thus, for fear of disrupting the existing order, the Ming emperor banned expressive clothing. 

In a similar vein, the Ming Dynasty reinstituted the controversial imperial examination system. The Ming education system generally prioritized the regurgitation of Confucian philosophy, overlooking scientific and technical skills. Though science was still taught, the subject matter was to be accepted as canonical wisdom rather than questioned and improved. The general environment created by the examination culture de-emphasized contributions from creative individuals—if you wrote about new ideas on an exam, you were simply marked wrong. Individualism had no place in the Ming Dynasty.

However, the costliest aspect of this revolution concerned destabilizing technological innovations. Most significantly, the Ming Dynasty severely restricted innovation regarding exploration and oceanic shipping, famously (or infamously) enacting the Edict of Haijin. This policy severely restricted private maritime trading and exploration, leading to the destruction of many private ocean vessels and the imprisonment of hundreds of merchants. The sentiments of this policy were most notably manifested through the destruction of Admiral Zheng He’s fleet.

Everyone knows the famous rhyme, “in 1492, Columbus sailed the ocean blue”; however, what many people do not realize is that several decades before Christopher Columbus, a Chinese admiral named Zheng He made larger and more ambitious voyages with a fleet 300 times larger than Columbus’s. Yet, rather than opening the world to trade as Columbus did, the Ming government burned his great fleet, stifling a critical source of economic advancement. Why did they hinder such progress? Though the official reasoning concerned piracy, many scholars point to a general fear of foreign interaction and the rise of a powerful merchant class, all of which would have disrupted the post-Mongol order—the Ming emperor appeared to prefer stagnation over progress, for stagnation weakened threats to his power.

As China fostered a long period of cultural and technological stagnation, Europe entered a great age of individualism and innovation. By embracing scientific progress and overseas commerce during the Renaissance, Europeans made remarkable economic and technological strides, overtaking China as the global economic and technological epicenter. In fact, European powers used the very innovations that China repressed to establish their dominance—namely, maritime and naval technologies. As the Ming Dynasty burned ships and oppressed merchants, Europeans were establishing enriching trade routes and colonizing the globe with their powerful navies. The British even used these tools to later humiliate China during the Opium Wars. Thus, the Ming Dynasty’s “anti-modernism” significantly contributed to the “Great Divergence,” subjecting China to a centuries-long game of catch-up with the West.

Therefore, as we consider a temporary termination of the deployment of AI, the legacy of the Ming Dynasty provides a cautionary tale. Through unregulated data collection and short-term jolts to the labor market, AI certainly has the potential to disrupt existing stability. However, there is something to be said about the potential upsides of AI development. From automating monotonous tasks to revolutionizing modern medicine, many benefits would be delayed by a pause in development, delays that, like what happened in China, could set the United States back for decades. Though techno-optimism has its own concerns, we must also be wary of the over-implementation of the precautionary principle, for, as the Ming Dynasty shows, ill-advised and overcautious social policy meant to preserve stability can and often does foster costly stagnation.

Blog Post | Urbanization

Introducing Centers of Progress: 40 Cities That Changed the World

“Cities, the dense agglomerations that dot the globe, have been engines of innovation since Plato and Socrates bickered in an Athenian marketplace,” as urban economist Edward Glaeser explains in his book The Triumph of the City.

Athens’s storied breakthroughs in philosophy are but one example of how cities have often been the sites of pivotal advances throughout history. Kyoto gave us the novel. Bologna gave us the university. Florence gave us the Renaissance. Paris gave us the Enlightenment. Manchester gave us the Industrial Revolution. Los Angeles gave us cinema. Postwar New York gave us modern finance . . . the list goes on. As Glaeser also notes, “Wandering these cities—whether down cobblestone sidewalks or grid-cutting cross streets, around roundabouts or under freeways—is to study nothing less than human progress.”

If you’re not able to travel to each of these extraordinary cities, perhaps the next best thing is to embark on a virtual tour from the comfort of your home. To that end, I wrote a book surveying 40 of history’s greatest urban centers, showcasing each city at a moment in time when it notably contributed to progress.

Centers of Progress: 40 Cities That Changed the World offers a fact-filled yet accessible crash course in global urban history, spanning from the agricultural revolution to the digital revolution. This book affirms the importance of cities to the story of human progress and innovation by shining a spotlight on some of the places that have helped create the modern world.

The book’s chapters can guide you through the Library of Alexandria, the stock exchange of Dutch Golden Age-era Amsterdam, and the pubs of Edinburgh during the Scottish Enlightenment, all in an afternoon.

Centers of Progress “takes the reader on a time-travel cruise through the great flash points of human activity to catch innovations that have transformed human lives” at their moment of invention, according to writer Matt Ridley in the insightful foreword that he kindly provided. Come explore Agra as the Taj Mahal was erected and Cambridge as Isaac Newton penned the Principia. Meet engineers in Ancient Rome, Silk Road merchants in Tang Dynasty Chang’an, music composers in 19th-century Vienna, and Space Age flight controllers in Houston.

Learning about past achievements may even hold the secret to fostering innovation in the present.

As I note in the book, “Although there are some exceptions, most cities reach their creative peak during periods of peace. Most centers of progress also thrive during times of relative social, intellectual, and economic freedom, as well as openness to intercultural exchange and trade. And centers of progress tend to be highly populated. . . . Identifying those common denominators among the places that have produced history’s greatest achievements is one way to learn what causes progress in the first place. After all, change is a constant, but progress is not.”

From the fall of the Berlin Wall to Hong Kong’s transformation from a war-ravaged “barren island” into a prosperous metropolis, many of the stories featured in Centers of Progress hold valuable lessons about the importance of ideas, people, and freedom. I hope that you will consider joining me on a journey through the book’s pages to some of history’s greatest centers of progress.

Blog Post | Manufacturing

What Engels’ (Least) Favorite Color Teaches about Capitalism

"Any one not Aniline"

This article was published at Matzko Minute on 8/28/2023.

Did you ever receive one of those 90s chain emails in your inbox? You know, the kind where you fill in your favorite band/animal/team/color/etc. and then send it to ten friends or else you’d have bad luck for the week?

I recently stumbled across a 19th century version, a “confession” filled out by Friedrich Engels, the original champagne socialist who is now best known for popularizing Karl Marx’s ideas.

Little on the list is truly surprising. Engels wouldn’t be the first notorious womanizer (and accused rapist) to declare his love for women even while evincing a base misogyny.

But the answer that immediately caught my eye was Engels’ favorite color: “Any one not Aniline.” Now, if you’re an ordinary, well-adjusted denizen of the 21st century, odds are that you immediately considered opening a new tab to ask Google, “What color is aniline?”

There’s no need to click away. Aniline was mauve. And it is hard to overstate the extent to which various shades of the new purple swept the world of fashion in the 1850s and 1860s.

That’s because aniline was the first commercially-scalable synthetic dye, invented at a time when chemists were unlocking the secrets of the universe by distilling, vaporizing, and generally futzing with every substance they could get their hands on.

Aniline was actually the product of a failed British attempt in 1856 to synthesize quinine in hopes of making anti-malarial treatments cheaper and easier to produce than the old way of grinding up the bark of a hard to acquire Amazonian tree. The result wouldn’t especially help imperialists expand their empires over mosquito-infested jungles, but it did produce a particularly vivid shade of purple.

The researcher, an eighteen year old college student named William Perkin, was also an amateur painter, and immediately saw the value of a cheap, easy to produce dye that was more durable than existing alternatives. Seeking capital investment, Perkin partnered with Robert Pullar, a Scottish dye entrepreneur who would later become a radical pro-free trade member of Parliament. By the end of the century, Perkin and Pullar owned a global network of synthetic dye factories that brought color to the masses.

This meant that purplish, pinkish, and reddish dyes were suddenly this cheap and widely available for the first time in human history. Tweaking the distillation process could produce mauveine, fuchsin, and safranin, which are the synthetic forerunners of the colors we call mauve, fuchsia/magenta, and saffron today. It may have been the single most significant moment in modern fashion history.

Prior to this, many of the dyes used for clothing and paint had to be ground up from natural ingredients. For instance, if you lived in 4th century Rome and wanted to wear purple clothing, you needed someone to find and grind up twelve thousand snails of a particular species that lived mostly in the Eastern Mediterranean Sea. Doing so would yield 1.4 grams of dye, which was barely enough to color the trim of a single piece of clothing. The cost of purple was thus astronomical; pound for pound, “Tyrian purple” was worth three times as much as pure gold! And purple dye was so hard to acquire, at any price, that sumptuary laws often prohibited anyone except royalty from wearing purple clothing.

But after 1856, the ability to synthesize aniline meant that purple hues were suddenly everywhere. What had once cost pounds of gold now cost mere pennies. Mauve was all the rage — people were contracting “mauve measles,” as British wags put it — a fact that would not have been lost on Engels’ when he wrote out his list in 1868 since his family fortune was tied up in textiles. (He properly capitalized “Aniline” since it was then still a proprietary product.)

When you see televised depictions of Victorian era fashion, like middle class women wearing acres of brightly-colored fabric, you are looking at a byproduct of the synthetic dyes revolution.

And that wave of color cascaded step-by-step, class-by-class, down throughout society. Cheaper, more durable, and more vivid products abounded, from housepaints to wallpapers. Today, we take for granted the idea that color is near costless. It would strike a 21st century consumer as bizarre if they were told that a bright purple dress or mauve house paint would cost 10x (or 1000x) the price of one that was white.

Even so, the rise of synthetic purple sparked a sartorial reaction. Purple, as long as it was rare and inaccessible to the plebeians, was considered dignified, elegant, and noble. But once purple became commonplace, it was gauche and uncouth. A century later when cultural critic Paul Fussell summarized the ways that dress signified class status, he lumped purple in with polyester fibers and sports jerseys as markers of belonging to the grubby “proles.”

And that brings us back to Engels’ sneering response, “Any one but Aniline.” On the one hand, it’s not surprising that a textile manufacturer might be annoyed at the disruption to his existing (and profitable) supply chain. Engels was also a product of inherited wealth, and making fun of Aniline was common sport for his class at the time. A satirical Punch cartoon of 1877 featured a dilettante sniveling about a debutante, “She affects Aniline dyes, don’t you know! I weally couldn’t go down to suppah with a young Lady who wears Mauve twimmings in her skirt, and magenta wibbons in her hair!”

Pecuniary self-interest and class snobbery aside, Engels wouldn’t be the first socialist guilty of reflexive suspicion towards technological innovation and the capitalists that had made it possible. The Luddites you will always have with you.

For whatever reason, Engels failed to see how the invention of synthetic dyes was a boon to workers and society as a whole, a future in which the rare colors of kings would become the ordinaries of proles. Capitalist incentives had once again commissioned a technological innovation that could push back against harsh, natural scarcity. Life would become a little bit brighter and bolder because of it.

Every one Aniline.

Blog Post | Energy & Environment

From Poverty to Progress

How division will stifle US prosperity.

This article originally appeared in the Washington Examiner on August 10, 2023.

Why isn’t everyone in dire poverty, hungry, diseased, illiterate, missing teeth, eking out a subsistence existence in the wilderness, and making do with Stone Age technology? After all, that’s how we started. Penury is the default state of humanity, as is a lack of technology. In fact, advanced technology and widespread prosperity are relatively recent innovations.

What has allowed all the progress we’ve experienced to date to take place? And what stands in the way of further advancement? In his valuable bookFrom Poverty to Progress: Understanding Humanity’s Greatest Achievement, Michael Magoon seeks to explain progress’s origins and enemies.

First, Magoon offers a sweeping overview of how the world has changed into a place where an increasing number of people enjoy prosperity, peace, advanced medicine, and other wonders of modern life. With graphs and data, Magoon demonstrates the historical and ongoing transformation of the human experience “from poverty to progress.” Magoon provides a valuable service in painstakingly recording the many ways in which our ancestors would envy modern life.

Magoon then explains the origins of the metamorphosis. He dispels popular but mistaken ideas about the roots of progress, such as the fallacy that progress comes from the government — he writes, “Throughout history governments have done far more to hinder progress than they have done to promote it” — or from politicians or top-down policies by brilliant planners. “Rather than flowing down from politics and government, progress bubbles up from society,” he notes.

Magoon then shows how that occurs. His theorized five keys of progress are food, trade, decentralization, industry, and energy.

A “highly efficient food production and distribution” system is a prerequisite for progress, he claims. The next two keys are the ability to engage in trade, mutually beneficial exchange, and decentralization of power, freeing humanity from the restrictions that come with a controlling central authority and fostering nonviolent competition.

Another key to societal advancement is developing at least one high-value-added industry that exports, he claims. As he notes, plentiful energy promotes progress. Historically, obtaining such energy has involved the use of fossil fuels.

With these five keys in hand, humans unlock new solutions and copy solutions others have achieved.

To unlock further progress, I would add an economic liberty key ensuring all of a society’s people can participate in the market processes of innovation and exchange. I might also add a communications technology key involving written language, without which transmitting ideas over time or across distances is difficult. Still, Magoon’s list holds considerable explanatory power.

The preconditions for progress that he names are relatively recent and rare in the grand sweep of history. Moreover, transitions toward attaining the keys to progress have not occurred everywhere at once and have only been achieved unevenly. Magoon thus recognizes that societies across history and the globe often differed dramatically in their tendency to stifle or foster innovation. He discusses many types of societies, such as hunter-gatherer societies, agrarian societies, herding societies, industrial societies, and commercial societies. He sees each society type as a logical adaptation to a particular environment.

The book concludes with an examination of the current constraints on progress, including geography, extractive institutions, geographic and cultural distance separating poor countries from rich ones and discouraging the former from copying the latter, monopolies stifling competition, historical legacies inhibiting change, and identity-based rationales for stagnation. (“We have our own ways.”) But he says the biggest threat to progress, which could unravel the conditions for innovation in the rich countries, is divisive ideologies.

Because society primarily comes from self-organizing, experimenting with solutions, and then copying the solutions that work, a centralized government driven by ideology inherently attacks the very foundations of progress.

Divisive ideologies split people into groups of good and evil, often along class, racial, religious, or urban/rural divides. Magoon notes that the ideology called “critical theory” (also often known as “wokeness”) may be a particular threat to progress because of its current spread in the United States, a major innovation center.

A thought-provoking and extraordinarily wide-ranging book, From Poverty to Progress is a must-read for anyone interested in the history, and future, of progress.

Blog Post | Health & Medical Care

Freeing American Families

In their new paper, Vanessa Brown Calder and Chelsea Follett propose reforms to make family life easier and more affordable.

Fertility is on the decline in the United States and around the world. Although some commentators celebrate population declines for environmental or other reasons, others fear that below‐​replacement fertility will result in negative economic and social consequences. As a result, many countries are pursuing various policies intended to boost fertility rates, such as baby bonuses, cash benefits for families with kids, paid family leave, and universal childcare. In the United States, members of Congress in both parties favor greater federal intervention to boost fertility rates or to support families more generally.

However, such policies are costly and have limited effects on fertility. International evidence indicates that expensive efforts to subsidize childbearing have failed to raise countries’ fertility to replacement levels and sustain fertility rates there. They typically fail even to meet policymakers’ more modest fertility objectives. Recent estimates suggest that fertility initiatives in the United States would be similarly misguided, with some $250 billion in annual subsidies needed to achieve a modest increase of 0.2 extra children per woman.

Although policymakers should avoid implementing similar initiatives, many other reforms would make family life easier and more affordable. This study proposes reforms to labor laws, child safety policies, tax and trade policy, and health policies that affect birth and conception, in addition to education, housing, and safety policy changes that would reduce the cost of raising children. Evidence suggests that some of these reforms could boost fertility, for instance, by reducing work‐​life tradeoffs or other intensive parenting requirements. However, these reforms are also worthwhile as standalone measures that improve family life.

Read the full paper here.