ForNotes_Slides4_Social-Evolution_Hilbert_Apr29 - Social...

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Unformatted text preview: Social Evolution Martin Hilbert (Dr., PhD) How do technologies transform societies and lead to a process of evolution of humankind's civilization and society? How do technologies transform societies? The Khmer empire (+/‐800‐1400 A.D.) The secret of “Barays” and the arising surplus water management system stretching across over 1200 square km (460 square miles) “Civilization advances by extending the number of important operations which we can perform without thinking about them.” Hayek (1945) The Use of Knowledge in Society. AER, 35(4). around 1200 A.D. Khmer empire - civilization that dominated area around Cambodia for ~600 years, very successful, dominated an area 3x bigger than Cambodia, created impressive buildings (e.g. Angur Wat). Their secret was "barays," water management systems that provided a standardized solution to a typical need they were having. It helped water rice fields. Before that everyone was taking care of their own fields. After the introduction of barays, they were able to liberate resources. Now, not everyone had to work in rice production. They used the extra time on their hands to draw and become architects. Others became soldiers and started to invade other countries. Others became lawyers and started to make policies. Civilization becomes possible because there is all this time on one's hand, which allows us to be liberated from mundane tasks like feeding ourselves. This is done by automating some of our processes. 1 (Civilization quote on top right) Technology is what drives and enables civilization, and leads to human progress. If you look at the state of the art solutions to life people out of poverty and to help societies to develop, "The End of Poverty" says that in order to reduce pov, you have to bring technology to developing countries. Examples listed on slide …for human development! Embody knowledge to create surplus and liberate resources for other aspects of well-being Boosting agriculture/economy Irrigation systems, storage bins, fertilizers, etc. Improving basic health Ceramic stoves, refrigeration, rainwater harvesting systems, water pumps, antimalarial bed nets, etc. Technology is what drives human progress. It's more than just "toys for the boys." Investing in education Lab material, computers and software apps, etc. GENERAL PURPOSE TECHNOLOGIES Electricity, Motorization, ICT, etc. …creating surplus through technology… The fundamental theory of how tech transformed society is based on the idea of long waves of human evolution. These are cycles of high growth and low growth. Kondratiev long waves “Kondratiev-Schumpeter-Freeman-Perez" classification: 1. 2. Industrial Revolution--1780 Age of Steam and Railways--1848 3. Age of Steel, Electricity and Heavy Engineering--1895 4. Age of Oil, the Automobile and Mass Production--1940 5. Age of Information and Telecommunications--1973 6. the “6th Kondratieff”…? Kondratiev said that ever 40-60 years, there seemed to be such alternating cycles. Together with Schumpeter, they identified and characterized 3 of such waves (listed on slide). Freedman and Paris added two more recent waves (in red on slide). 2 Loooooong waves! …didn’t start with the industrial revolution! Stone-age: 2.000.000 – 3.300 bc Bronze-age: 3.300 – 1.200 bc = 1.996.700 years = 2.100 years Iron-age: 1.200 – 586 bc = 614 years Babylon-Hellenistic age: 586 – 167 bc = 419 years Roman age: 37bc – 324 = 316 years Byzantine age: 324 – 638 = 314 years Arab age: 638 – 1000 = 362 years Medieval age : 1000 – 1800 = 800 years Water-power age: 1780 – 1848 = 68 years Steam-power age: 1848 – 1895 = 47 years Electro age: 1895 – 1940 The length of each period characterizing social evolution become shorter and shorter. Things seems to become faster. Tech change accelerated. (incl. Crusader&Ottoman) Motor age: 1940 – 1973 Digital age: today 2000 1973 – ???? “Molecular age”? “Green age”? Usually, people say a long wave takes between 40-60 years. However, we realize the tech paradigm is characterizing and driving human evolution, and started since the days we climbed down the trees. E.g. stone age - we used stone tech and that distinguished us from other animals, we automated processes E.g. bronze age - bronze tech --> Iron Age After that, humans split up a bit (not as clear cut how automation continued). In the 1780s though, water-power came up, followed by steam-power, etc = 45 years = 32 years ==40+ 27 years years 2000 – ???? The digital age is the most recent process of social evolution, but surely not the last stage. There are other paradigms already looming to be explored. We don't know when it will start. Some think it has to do with bio tech and molecular tech (based on the ability to manipulate molecules), but who knows? Social evolution will definitely continue past us. Information and Communication Technologies (ICT) How does society evolve? There is always a carrying technology and an abling technology. Tech was used to automate process to give us time to do other things, like create civilization. Automobile, aircraft Progress Electrical engineering Steam-engines Water wheels Stone tools Bronze tools Iron tools 2,000,000bc 3,300bc 1,200bc 1780 1848 1895 1940 1973 20?? TIME Source: Hilbert and Cairo, 2008; Cristopher Freeman et al. As time goes by, 2001. Schumpeter, (1939). Business Cycles: A Theoretical, Hist., & Stat. Analysis of the Capitalist Process. Information and Communication Technologies (ICT) How does society evolve? Human Progress Progress Automobile, aircraft Electrical engineering In the beginning, it was stone/bronze/iron tools. In modern times, we use water mills and wheat mills. The steam engine lead to the industrial complex. Electricity was an important abling tech. Then, we had the auto. Lastly, we had the digital rev and ICT. We see some long waves of social evolution. The green lines gives us a trend line through the diff waves of social evolution. The green line is human progress. It is exponential, meaning that human progress is accelerating. The period between these long wave paradigms are becoming shorter and shorter. Steam-engines Water wheels Stone tools Bronze tools Iron tools 2,000,000bc 3,300bc 1,200bc 1780 1848 1895 1940 1973 20?? TIME Source: Hilbert and Cairo, 2008; Cristopher Freeman et al. As time goes by, 2001. Schumpeter, (1939). Business Cycles: A Theoretical, Hist., & Stat. Analysis of the Capitalist Process. 3 Tech evolved: exponential, goes in jumps, and accumulative (e.g. you need electricity in order to have digital tech). Not everything needs everything, but in general, it is an accumulative process. Schumpeter calls this the "contours of economic evolution." The Contours of Economic Evolution Energy consumption 45 years 40 growth of 80% Steam-engines water-powered Electrical engineering growth of 80% 30 Mechanization 50 aircraft Mechanization Red line shows energy consumption. We see the same exponential tendencies. 10 20 growth of 80% Water wheels We have some kind of performance indicator on the yaxis (GDP). If we map these economic capacity of the world, we see periods of growth between the different long waves. Usually the economy has grown 80% during each period. During each period, the economy is multiplied by a factor of 1.8. That's what makes it exponential. 60 Automobile 68 years 3,000 70 Motorization 47 years steam-powered 2,000 ICT 80 32 years 90 Btu (British thermal unit, US) Electrification 1,000 100 Digitalization 5,000 4,000 J.A. Schumpeter (1883-1950) ongoing? GDP per capita (USD, world) 6,000 7,000 J.A. Schumpeter (1883-1950) 1780 1848 1895 Source: based on Cristopher Freeman et al. As time goes by, 2001. 1940 1973 2000 TIME Schumpeter called this process of ongoing human evolution through these kind of discrete jumps as "creative destruction." “Creative Destruction” Creative destruction is a centerpiece for modern thinking for how economies evolve. An economic principle observed by Schumpeter in 1942. CD is an essential fact of capitalism. Ice production story - we have a higher quality ice, but lots of job lost in the process...but without CD, we wouldn't have the higher living standards that have emerged over time 4 Joseph Alois Schumpeter Business Cycles: The Contours of Economic Evolution (1939) “…the history of capitalism is studded with violent bursts and catastrophes…. we […] come to the conclusion that evolution is a disturbance of existing structures and more like a series of explosions than a gentle, though incessant, transformation…” “This process of economic change or evolution, moreover, goes on in units separated from each other by neighborhoods of equilibrium. Each of those units, in turn, consists of two distinct phases, during the first of which the system, under the impulse of entrepreneurial activity, draws away from an equilibrium position, and during the second of which it draws toward another equilibrium position… we observe in the course of those fluctuations in economic life which have come to be called business cycles and which, translated into the language of diagrams, present the picture of an undulating or wavelike movement in absolute figures or rates of change” The refrigerator is part of the long wave of electrification. Schumpeter's theory holds that creative destruction works on many different levels, so the fridge is part of a larger technological paradigm. There are many simultaneous cycles (look at quote on wavelike fluctuations on slides). => Economic and social evolution is a process that is always “out of equilibrium”! “…as the process gathers momentum, these effects steadily gain in importance, and disequilibrium, enforcing a process of adaptation, begins to show. … this is the process by which the effects of the entrepreneurial activity spread over the whole system, dislocating values, disrupting the equilibrium that existed before. The term Windfall correctly expresses the character of both these gains and losses…” [“creative destruction”] “Many simultaneous cycles: an indefinite number of wavelike fluctuations which will roll on simultaneously and interfere with one another in the process … many fluctuations, of different span and intensity, which seem to be superimposed on each other…” There is a dynamic that goes on between higher and lower level cycles. Source: Schumpeter, J. (1939). Business Cycles: A Theoretical, Historical, And Statistical Analysis of the Capitalist Process. New York: McGraw-Hill. Retrieved from He had three self-centered goals: best horseman in Europe, greatest lover in Vienna, greatest economist in world (achieved 2/3...people guess). So he says the "history....[quote on slide]...transformation (e.g. there is a logic of jumps and disruptive innovations; biologists call it punctuated equil and here we call is creative destruction). The general tendency is exponential. "The processs...rates of change" - as we draw away from equilibrium/old way of doing things to a new way of doing things (steam engines ---> electricity; destroys the old way and creatively draws us toward the new way) Long wave 1st 1771+ “Industrial Revolution.” Mechanization 3rd 1875+ Electrification Motorization 5th Early 1970s+ New or redefined infrastructures Classical mechanics and hydraulics (e.g. Water-powered technology 2nd 1829+ 4th 1908+ Underlying scientific paradigm Dominating General Purpose Technology Isaac Newton and Blaise Pascal) Steampowered technology Canals and waterways. Turnpikes. Hydraulic energy (greatly improved waterwheels). (e.g. Sadi Carnot and James Joule) (e.g. Michael Faraday, James Maxwell, Heinrich Hertz, Nikola Tesla, Thomas Edison) Mechanical Information theory and computer science Digital technology (e.g. Claude Shannon, Alan Turing, Norbert Wiener, Vannevar Bush) Digitization Electrical networks (for lighting and industry). Working conditions for agriculture. Amount and quality of food. Clothes and culture. Automobiles. Oil and oil fuels. Petrochemicals (synthetic). Buses, tractors, airplanes, tanks. Road networks, highways, ports and airports. Pipeline networks. Engineering (e.g. Nikolaus Otto, Gottlieb Daimlet, Karl Benz, Wright Brothers) Combustion and oil motorpowered technology Mechanical cotton industry. Forged iron. Machinery. Electrical industry technology and electrical household equipment. Copper and cables. Electromagnetism Electricitypowered technology Social change Steam engines and machinery. Iron and coal mining. Railroad. Production of rolling stock. Steam energy for various industries (incl.textiles). Railroads (use of steambased machinery). Coal transport, large ports, warehouses and sailing vessels worldwide. Natural gas in cities. Thermodynamics New or redefined sectors Worldwide digital telecommunications (cable, fibre optic, radio, satellite). Hardware. Worldwide service infrastructure. Transportation and changes in social networking over far distances for work and private. Changes in reach of democracy. Change of daily schedule for work and private. Home comfort and reduction of housework. Working conditions. We never really are in equilibrium. "As the process gathers...creative destruction..." We are gonna apply Schumpeter's theory to the most recent 5 long waves of social evolution in an interactive exercise. Transportation and changes in social networking over far distances for work and private. Changes in corporate governance. Computers and software. Telecom. Control instruments. E-services. Social networks and entertainment. Source: based on Cristopher Freeman et al. As time goes by, 2001. Heat has to do with the movement of molecules (fast moving, hot). Information and Communication Technologies (ICT) …and where’s medical progress? Progress Automobile, aircraft But what about medical progress? Physical structures are things like pills and medicines. They are very important in prolonging our life. You can re-draw these curves on medical progress too or other technologies. This doesn't change the fact that we can think about social evolution in terms of technological change driving it. Electrical engineering Steam-engines Water wheels GENERAL PURPOSE TECHNOLOGY 1780 1848 1895 1940 1973 There are other ways to classify this kind of evolution. Prof used the main references in economic literature (Water, purification, engineering, etc) TIME 5 How do societies evolve? 2nd Kontradieff (steam engine rev). Look at the # of railroad firm foundings in Mass. Before 1825, there were no railroad companies. Around 1850, they started to raise (15-20 railroad companies). And then after a while, the founding started to decrease. This is clearly a wave. Empirical evidence of creative destruction The 2nd Kondratieff: Railroad firms founding Source: Dobbin and Dowd (1997), Administrative Science Quarterly, 42 (1997): 515 Empirical evidence of creative destruction The 4th Kondratieff: Car manufactures Looking at the # of car manufacturers. Around 1910there were about 350 car companies in the US. In Europe/France there were about 150. In Germany, there were about 80. Nowadays, we don't have that many car companies. This is another example of a wave. There are opportunities that come with these waves that go up and down. This evolutionary trajectory can be studied with analytical tools very similar to how biologists study biological evolution. So some people call this organizational ecology. Companies can born and die similar to how species are born and can die. 6 What is needed to trigger a great surge? 1) We need tech change. 2) We need social change. Let's start with tech change - what are the characteristics tech needs to have to trigger a surge? See Perez quote and 4 conditions. Carlota Perez (1983): What is needed to trigger a great surge? 1‐ Technology This quantum jump in productivity can be seen as a technological revolution… fulfilling the following conditions: • Unlimited supply for all practical purposes; • Clearly perceived low-and descending- relative cost; • Potential all-pervasiveness; • A capacity to reduce the costs of capital, labour and products as well as to change them qualitatively. Source: Perez, C. (1983). Structural change and assimilation of new technologies in the economic and social systems. Futures, 15(5), 357–375. Some technologies do not fulfill all these conditions, like space science. While they're important, they're not potentially all-pervasive. - unlimited supply for all practical purposes (if we had a tech built on gold, we wouldn't be able to make 100% gold mobile phones since there isn't enough gold) - low, descending-relative cost (this is so that everyone can use it and this happens through long periods of continuous technological innovation; think of Moore's Law; if tech doesnt become cheaper and cheaper, we can't sell it to everyone) -potential all-pervasiveness (needs to be a general purpose like, unlike X-rays; electricity, on the other hand, can be used for many purposes; society defines purpose) - reduce the costs of capital, labor, and products (input and output of productivity needs to be transformed; moderanization of society) The second thing needed to trigger change is social change. It all starts with the exhaustion of a pervading paradigm which leads to an economic/social pressure for change. Things don't work anymore, there is no growth. This leads to a surge for new technological possibilities, which then aim at the construction of a new paradigm of a new paradigm. But at the same time,it meets some kind of inertia of the old socio-institutional framework. E.g. politicians or the labor market - want the change, but there is also resistant because creative destruction is still destructive. Over time, the new way of doing things is better understood, adopted, and shaped by the people. This leads to new socio-political processes as well as a new socio-institutional framework, which leads to the reFor the deployment of new tech system, there launch of economic growth and the deployment of new are several processes of change and adaption. technological potential. (on slide, right top) (e.g. rule 3 led to the creation of a driver's license and DMW because cars were all over the place) Nowadays we take DMV-like institutions for granted. What is needed to trigger a great surge? “The deployment of each technology system involves 2a‐ Social Change several interconnected processes…: 1. The development of surrounding services (required infrastructure, specialized suppliers, distributors, maintenance services, etc.) 2. The "cultural" adaptation to the logic of the interconnected technologies involved (among engineers, managers, sales and service people, consumers, etc.) 3. The setting up of the institutional facilitators (rules and regulations, specialized training and education, etc.)” Source: Perez, C. (2004). Technological Revolutions, Paradigm Shifts and SocioInstitutional Change. In E. Reinert (Ed.), Globalization, Economic Development and Inequality: An alternative Perspective (pp. 217– 242). Cheltenham: Edward Elgar. What is needed to trigger a great surge? 2b‐ Social Adjustment Carlota Perez (2006), “Re-specialisation and the deployment of the ICT paradigm: An essay on the present challenges of globalisation”, p. 33 - 48. Prof Perez says we can distinguish two phases. 1) the Installation period of the long wave of the great period, 2) the deployment period of the great surge. They often have to do with financial bubbles; basically, at the beginning while you have the old paradigm, you still battle the old paradigm, but during that time as well, many people get very impressed by the new possibilities that suddenly arise. Examples: Silicon Valley. People get greedy and want to invest --> invest too much --> financial bubbles People want to get more out of the technology than they can get in a short time. Eventually, bubbles burst. Then, we can deploy this paradigm in a realistic manner. Eventually, the tech fulfills promises and more, but not as fast as greedy investors would like....
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