Knowledge, Technology, and Economic Growth: Joel Mokyr, Nobel Laureate
By Ran Abramitzky, Stanford University, and Mauricio Drelichman, University of British Columbia
Published October 25, 2025, on VoxEU
Joel Mokyr, a distinguished economic historian from Northwestern University, has been awarded the 2025 Nobel Prize in Economic Sciences alongside Philippe Aghion and Peter Howitt for his groundbreaking work on innovation-driven economic growth. The Nobel committee recognized Mokyr “for having identified the prerequisites for sustained growth through technological progress.” This article, authored by two of his former students and fellow scholars, explores how his extensive research has profoundly reshaped our understanding of industrialisation’s history, the mechanics of technological advances, and the intellectual and societal forces behind long-term economic growth.
The Miracle of Modern Economic Growth
Modern economic growth stands as one of the most remarkable achievements in human history. Over the past two centuries, technological innovations have dramatically increased living standards, successfully overcoming the Malthusian trap that had entrenched humanity in subsistence-level existence for millennia. Understanding the forces driving this sustained expansion of wealth and productivity lies at the heart of endogenous growth theory, to which Nobel laureates Paul Romer, Philippe Aghion, and Peter Howitt have made significant contributions.
Joel Mokyr’s work critically complements these theories by delving into the origins of the Industrial Revolution—the transformative event that sparked the modern growth era. His scholarship offers an indispensable and nuanced account of the complex processes, technologies, and social dynamics that enabled sustained economic advancement.
Mokyr: A Philosopher of the Industrial Revolution
Joel Mokyr has authored thirteen seminal books (with two forthcoming), a five-volume encyclopedia, and over one hundred scholarly articles, which collectively provide a meticulous analysis of the Industrial Revolution’s evolution. His research spans the entire range of factors involved, from the detailed study of machine design and production processes to the broader intellectual, political, and cultural changes reshaping societies. Mokyr’s unique ability to integrate economic theory with historical detail has earned him respect across disciplines, uniting historians and economists alike.
Two of his former students, now academic scholars themselves, highlight key milestones of his research.
Dissecting Technological Change: The Lever of Riches
In his 1990 book, The Lever of Riches, Mokyr addressed a critical gap in understanding technological progress. Traditionally, economists measured technical change indirectly—as a residual factor explaining growth beyond the inputs of labor and capital—without delving into the actual inventions and innovations driving this change.
Mokyr instead opened this “black box” by tracing inventions from ancient times through the Industrial Revolution, offering a taxonomy distinguishing between two types of innovations:
- Macro-inventions: Radical breakthroughs that transform entire industries or societal functions (e.g., the steam engine, smallpox vaccination, and the hot air balloon).
- Micro-inventions: Incremental improvements that make macro-inventions economically viable and widely adopted (e.g., James Watt’s separate condenser for steam engines, and Henry Cort’s puddling process for iron production).
He described the Industrial Revolution as a unique clustering of macro-inventions that accelerated further micro-inventions, highlighting Britain’s comparative advantage in developing the latter as a key component of its industrial leadership.
Defining the Industrial Revolution’s Nature
Mokyr’s 1993 work, The British Industrial Revolution: An Economic Perspective, settled longstanding debates about whether the Industrial Revolution was a sudden or gradual transformation. Using a simple economic model, Mokyr demonstrated how rapid technological advances in a growing industrial sector could take decades to become visible in overall economic data, seamlessly reconciling perspectives on the Revolution’s timing and scale.
In his trademark wit, Mokyr countered arguments that contemporaries lived through the Industrial Revolution unnoticed by noting that ancient Romans similarly never remarked on their own era as “Classical Antiquity.”
The Role of Knowledge: Propositional and Prescriptive
A pivotal question investigated by Mokyr is why clusters of transformational inventions did not emerge earlier in history or in other regions despite periods of notable technical progress. In his 2002 book, The Gifts of Athena, Mokyr introduced a fundamental distinction between two kinds of knowledge:
- Propositional knowledge: Understanding why things work—the underlying scientific principles.
- Prescriptive knowledge: Knowing how to make things—practical technical know-how.
Before industrialisation, limited propositional knowledge meant inventors largely relied on costly trial and error, without grasping why their inventions succeeded. Social divides between intellectuals (“savants”) and craftsmen (“fabricants”) further impeded the exchange of ideas necessary for faster advancement.
The Industrial Revolution marked the emergence of positive feedback loops between propositional and prescriptive knowledge—scientific inquiry informed practical invention, and practical challenges stimulated further theoretical insights.
The Timeless Lesson: Openness and Intellectual Freedom
The overarching message of Mokyr’s vast body of work resonates with contemporary relevance: sustained economic progress hinges critically on open intellectual inquiry, the free exchange of ideas, and the vigorous defense of scientific principles. This insight carries important implications for today’s societies, where maintaining an environment that fosters innovation and the spread of knowledge remains essential for continued growth and prosperity.
Joel Mokyr’s scholarship not only deepens our understanding of the past but also illuminates the path ahead for innovation and economic development. His Nobel Prize recognition honors a legacy that bridges history and economics, theory and empirics, and intellect and industry—a legacy that reshapes how we comprehend the engines of growth driving human progress.
