Abstract

This paper discusses changes in the level of knowledge— i.e. learning— as a key source of economic growth, and argues that historically a radical change in attitude towards new knowledge has been a necessary precondition for economic growth. The Renaissance created this radically new attitude in Europe, and this paper discusses contributions to economic theory and economic policy of some of the most influential scientists involved in this process: Francis Bacon (1561– 1626) in England, and Leibniz (1646– 1716) and Christian Wolff (1679– 1754) in Germany. It is argued that these polyhistors viewed economic change as a dynamic knowledge-based process— a view that has important similarities with modern evolutionary or Schumpeterian economics. These similarities have so far not been recognized, and the paper suggests that modern economic theory would benefit from studying the theoretical and practical economics of these philosophers who laid the foundations for the industrial revolution.

Keywords: duty, knowledge, economic growth, technological change

Introduction

This is a paper about economic growth, and implicitly also about the lack of it. We postulate a religious/ philosophical gestalt-switch— a fundamental change of Man's world view— as a necessary pre-condition for economic growth. Our contention is that the attitude to creation of new knowledge— which is changed by this gestalt-switch— is a basic but neglected explanatory variable for economic growth and its absence.

In order to explain the nature of this gestalt-switch we construct two categories— two ideal types— of Weltanschauungen, or ‘world views’: One mechanical and static, centered around ‘matter’, and ‘sein’ (being), and one dynamic and organic, centered around ‘thought’ (Logos) and ‘werden’ (becoming). These categories also find their counterparts in the sphere of economics. In economics, the mechanical world view is centered around barter, accumulation, physical metaphors, equilibrium, and optimality. In this mechanical view, a fundamental characteristic of Man is his propensity to barter. The organic view in economics is centered around inventions, production, evolution, biological metaphors, and disequilibrium. This paper endeavours to show that this non-mechanical and organic model of economics— evolutionary economics— has its historic origins not in Darwinist or Lamarckian biology, but in the philosophy and economics of the Renaissance. The scarce historiography of evolutionary economics has so far neglected these authors, who were no doubt extremely influential at the time.