Technology and Social Change

Lecture 3: Ancient Societies and Technology

Bogdan G. Popescu
bgpopescu@tec.mx

Tecnológico de Monterrey

Part 1: Motivating Puzzles

Why No Sustained Growth in Ancient Societies?

Rome had concrete, roads, aqueducts — then centuries of stagnation

China invented paper, printing, gunpowder — yet no industrial revolution

Mesopotamia created writing, mathematics — empires still collapsed

For ~10,000 years, most humans lived near subsistence

The “modern breakthrough” is only ~250 years old

The Long Stagnation: GDP Per Capita

Population Growth: Another View of Stagnation


Guiding Questions for Today

How did political institutions emerge from forager bands?

Why do some societies innovate while others suppress technology?

What role do factor prices play in directing change?

Can we predict which societies develop growth-promoting institutions?

Learning Objectives

By the end of this lecture, you should be able to:

  1. Define institutions; distinguish formal vs informal constraints
  2. Explain Boix’s producer–looter model of state formation
  3. Apply Allen’s induced innovation hypothesis to cases
  4. Compare Mesopotamia, Rome, and Han China
  5. Evaluate critiques and propose empirical tests

Roadmap

Part 1: Motivation and objectives

Part 2: Core theoretical framework (Boix + Allen + North)

Part 3: Comparative evidence (Mesopotamia, Rome, China)

Part 4: Critiques, alternatives, discussion

So What? Why Theory Matters

Ancient societies achieved remarkable innovations yet stagnated

We need theoretical tools to explain this puzzle

Next: frameworks from Boix, Allen, and North that link geography, institutions, factor prices, and innovation

Part 2: Core Theoretical Framework

What Are Institutions? (North, 1990)

“Humanly devised constraints that structure political, economic, and social interaction”

Formal rules: constitutions, laws, property rights

Informal constraints: customs, traditions, norms, taboos

Enforcement: courts, social sanctions, reputation

Institutions reduce uncertainty and transaction costs

Two Institutional Archetypes (Acemoglu & Robinson, 2012)

Inclusive

  • Broad property-rights protection
  • Participation and contestation
  • Rewards innovation (“creative destruction”)

Extractive

  • Power concentrated in elites
  • Extraction from many to few
  • Suppresses creative destruction

The Boix Model: Producers vs Looters (2015)

Forager societies: egalitarian, mobile, low storage

Agriculture creates localized productivity clusters

New surplus becomes storable and defensible

Two strategies emerge: produce or loot

State emerges as protection racket or coordination device

The Producer-Looter Pathways

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flowchart LR
    A["Agricultural<br/>Transition"] --> B["Fixed, Storable<br/>Surplus"]
    B --> C["Predation<br/>Becomes Viable"]
    C --> D{"Produce<br/>or Loot?"}
    D -->|Produce| E["Demand for<br/>Protection"]
    D -->|Loot| F["Raiding &<br/>Extraction"]
    E --> G["State<br/>Emerges"]
    F --> G

Agriculture changed the payoff structure, not human nature (Boix, 2015)

Archaeological Evidence: Heights as Inequality Proxy

The Boix Causal Chain

Geography / Climate → Agricultural potential

Agricultural potential → Spatial concentration of productivity

Concentration → Producer–looter dynamics

Dynamics → State formation + institutional type

Institutions → Innovation incentives → Economic performance

Boix Causal Framework

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flowchart LR
    A["Geography<br/>& Ecology"] --> B["Surplus<br/>Concentration"]
    B --> C["Predation Risk<br/>(Producer-Looter)"]
    C --> D["State &<br/>Institutions"]
    D --> E["Security &<br/>Property Rights"]
    E --> F["Innovation<br/>Incentives"]
    F --> G["Development<br/>Outcome"]

Geography operates through institutions, not directly (Boix, 2015)

Factor Prices and Innovation (Allen, 2009)

Innovation is not random — it responds to incentives

Inventors and firms economize on expensive factors

High wages → labor-saving innovation

Cheap energy → energy-intensive production becomes viable

Factor prices shaped by geography, institutions, and trade

Allen’s Induced Innovation Mechanism

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flowchart TD
    A["Relative<br/>Factor Prices"] --> B["Labor<br/>(Wages)"]
    A --> C["Capital<br/>(Interest)"]
    A --> D["Energy<br/>(Fuel Cost)"]
    B --> E["Innovation Direction:<br/>Economize Expensive Factors"]
    C --> E
    D --> E
    E --> F["High Wages:<br/>Labor-Saving Machines"]
    E --> G["High Capital:<br/>Labor-Intensive Methods"]
    E --> H["High Energy:<br/>Energy-Saving Tech"]

Same technology: rational in one context, irrational in another

Allen’s High-Wage Economy Thesis

Synthesizing Boix and Allen

Boix: institutions emerge from material conditions + bargaining

Allen: factor prices direct technological change

Synthesis: Institutions → Factor prices → Innovation → Growth

Extractive institutions distort price signals (forced labor, slavery)

Inclusive institutions allow market-determined prices

Integrated Boix-Allen Framework

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flowchart LR

A["Geography<br/>& Climate"] --> B["Agricultural<br/>Potential"]
B --> C["Producer–Looter<br/>Dynamics"]
C --> D["Institutions<br/>(Type)"]

subgraph BOIX["Boix: Institutional Structure"]
direction TB
D --> E["Labor Systems<br/>Slavery?"]
D --> F["Property Rights<br/>Secure?"]
D --> G["Market Access<br/>Open?"]
end

E --> H
F --> H
G --> H

subgraph ALLEN["Allen: Prices → Technology"]
direction TB
H["Factor Prices"] --> I["Innovation Direction"]
I --> J["Economic Performance"]
end

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Extractive institutions + cheap/coerced labor → weak mechanization

State Capacity: Necessary but Not Sufficient

States can promote innovation: infrastructure, property rights

States can suppress innovation: heavy taxation, extraction

High capacity + inclusive institutions → growth

High capacity + extractive institutions → sophisticated extraction

Low capacity → limited ability to do either

Vocabulary Check

Term Definition Source
Institutions Rules of the game North (1990)
Extractive Power concentrated; extraction Acemoglu & Robinson (2012)
Inclusive Broad participation; property rights Acemoglu & Robinson (2012)
Induced innovation Tech responds to factor prices Allen (2009)
State capacity Ability to implement policy —

Exercise 1: Apply the Producer-Looter Model

Prompt: Pick a modern developing country you know well.

  1. Where are the “productive clusters” located?
  1. Who are the modern “looters” and how do they extract?
  1. Does the state protect producers or enable extraction?
  1. What does Boix’s model predict about institutional change?

Time: 5 minutes — discuss in pairs, then share

So What? Testing the Framework

We now have a theoretical toolkit: Boix + Allen + North

Does the evidence support it?

Next: test the framework against three ancient societies with very different geographies and outcomes

Part 3: Comparative Evidence

Three Ancient Societies, Three Paths

Mesopotamia: early state formation, centralization cycles

Rome: engineering prowess, institutional sophistication

Han China: bureaucratic state, sustained innovation

Same broad era — different geographies and outcomes

What explains the variation?

Three Societies Compared

Dimension Mesopotamia Rome Han China
Period ~3500–500 BCE 509 BCE–476 CE 206 BCE–220 CE
Geography Tigris / Euphrates Mediterranean Yellow / Yangzi
Core institutions Temple → Palace Republic → Empire Bureaucracy
Labor regime Corvée + slavery Massive slavery Peasantry + corvée
Key innovations Writing, irrigation Roads, concrete Paper, iron casting
Outcome Cycles of rise/fall Rise then decline Long stability

Different paths, same stagnation outcome — why?

Mesopotamia: Between the Rivers

Tigris and Euphrates: unpredictable flooding

Irrigation required collective action and coordination

High agricultural productivity concentration

Surrounded by pastoral / nomadic populations (potential looters)

Classic Boix setup: productive clusters vulnerable to predation

The Fertile Crescent: productive river valleys surrounded by arid steppe and desert. Source: Semhur / Wikimedia Commons (CC BY-SA 3.0).

Mesopotamian Institutions and Innovation

Temple economy → Palace-centered kingship (lugal)

Cycles: city autonomy → empire → collapse → repeat

Hammurabi’s Code: contracts, property, standardized punishment

Innovation: writing (cuneiform), mathematics, metallurgy

Key pattern: innovation primarily state-directed

Rome: From Republic to Empire

Early Republic: relatively inclusive for citizens

Expansion → slaves + wealth concentration + land consolidation

Empire: increasingly extractive; weaker non-elite protections

High state capacity persists for centuries

Late Empire: administrative strain, fragmentation

The Roman Paradox

Engineering feats: aqueducts, roads, concrete, heating

Agricultural improvements: plows, presses, storage

Dense trade networks across the Mediterranean

Yet: limited labor-saving mechanization

Per-capita income stagnates then declines

Pont du Gard, Roman aqueduct (1st c. CE). They could build this — but didn’t build labor-saving machines. Photo: Benh LIEU SONG / Wikimedia Commons (CC BY-SA 3.0).

Why Rome Didn’t Mechanize (Allen’s Logic)

Massive slavery → very cheap labor

Allen: cheap labor → low returns to labor-saving machinery

Around 15-20% of Italy’s population enslaved at peak

Why build a water mill when slaves grind grain cheaply?

Elite cultural attitudes reinforced economic incentives

Factor Prices: Why Institutions Matter for Innovation

Exercise 2: The Roman Counterfactual

Prompt: Imagine Rome had abolished slavery in 100 CE.

  1. How would factor prices have changed?
  1. What innovations would Allen’s model predict?
  1. Would institutional change alone have been sufficient?
  1. What other conditions would need to hold?

Time: 5 minutes — discuss in pairs, then share

Han China: Bureaucratic Capacity

Unified empire with sophisticated bureaucracy

Meritocratic elements (recruitment mixes recommendation + early examinations; fully competitive exam system develops later, esp. Sui/Tang/Song)

State investment: roads, canals, frontier defense

Confucian ideology: stability, hierarchy, education

More nuanced than simple extractive/inclusive binary

Chinese Innovation Under the Han

Paper (~100 CE): transforms bureaucracy and education

Iron casting: often superior to Roman wrought iron

Agricultural tech: iron plows, rotation improvements

Water control: large-scale canal systems

Yet China also didn’t industrialize — why?

The Needham Question

Joseph Needham: why no Chinese Industrial Revolution?

Institutional: unified empire, limited interstate competition

Factor-price (Allen): abundant labor → weak mechanization incentives

Geographic (Pomeranz): coal located far from industry

No consensus — active scholarly debate continues

Common Pattern Across All Three Cases

Despite different paths, all reached similar stagnation

Mesopotamia: extractive temple/palace + coerced labor

Rome: slavery → suppressed wages → weak mechanization

China: abundant labor + institutional barriers to diffusion

The Boix-Allen framework explains both achievements and limits

Path Dependence and Institutional Lock-In

Institutions persist: elites defend beneficial equilibria

Extractive institutions create beneficiaries who block change

Change requires shifting bargaining power, often via shocks

“Critical junctures” (war, plague) open windows for reform

So What? Is the Framework Too Neat?

Boix and Allen explain the broad pattern convincingly

But three cases with the same outcome could be over-fit

Next: critiques that challenge the framework and sharpen our thinking

Part 4: Critiques & Discussion

Critique 1: Geographic Determinism?

Critique: Boix overweights geography

If geography → institutions → outcomes, is geography destiny?

Response: geography shapes parameters, not outcomes

Same geography can yield different institutions

But: contingency may be underspecified in the model

Critique 2: Culture and Ideas

Mokyr (2016): Enlightenment ideas enabled sustained innovation

Weber (1905): ethics and values shaped capitalism

Critique: Boix/Allen framework is too materialist

Counter: culture may be shaped by material incentives

Roman disdain for mechanics: cultural cause or economic effect?

Critique 3: Reverse Causation

Do institutions cause growth — or does growth enable institutions?

Selection bias: successful cases attract more scholarly attention

Need exogenous variation to establish causality

Colonial institutions as quasi-natural experiment (Acemoglu et al., 2001)

Critique 4: Oversimplification

Extractive/inclusive binary can be too simplistic

China: bureaucratic + meritocratic elements (hybrid)

Rome: institutional quality varies over time and region

Need richer typologies for institutions and innovation regimes

What Would Change My Mind?

Sustained growth under clearly extractive institutions

Stagnation despite inclusive institutions + favorable factor prices

Cultural change repeatedly preceding material change (robustly)

Successful institutional reform ignoring factor-price context

Archaeological evidence contradicting inequality–agriculture link

Exercise 3: Evaluate the Strongest Critique

Prompt: Which of the four critiques do you find most compelling?

  1. State your choice and give one supporting reason
  1. Identify one piece of evidence that would strengthen it
  1. How might Boix or Allen respond?

Time: 5 minutes — discuss in groups of three, then share

Setting Up the Modern Breakthrough

Pre-modern world: limited sustained per-capita growth

Medieval Europe: political fragmentation + rising wages

Industrial Revolution from a rare combination of conditions

Allen: Britain’s factor prices made mechanization profitable

Geography, institutions, and factor prices interact

Discussion Questions

Can institutions be reformed by design, or must conditions shift?

Is the US today more extractive or inclusive than in 1950?

What would Boix/Allen predict about AI and automation?

Are there “developmental states” that contradict this framework?

Key Readings

Boix, C. (2015). Political order and inequality. Cambridge University Press.

Allen, R. C. (2011). Global economic history: A very short introduction. Oxford University Press.

Allen, R. C. (2009). The British industrial revolution in global perspective. Cambridge University Press.

Acemoglu, D., & Robinson, J. A. (2012). Why nations fail: The origins of power, prosperity, and poverty. Crown.

North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge University Press.

Extended Reading List

North, D. C., Wallis, J. J., & Weingast, B. R. (2009). Violence and social orders: A conceptual framework for interpreting recorded human history. Cambridge University Press.

Scheidel, W. (2019). Escape from Rome: The failure of empire and the road to prosperity. Princeton University Press.

Mokyr, J. (2016). A culture of growth: The origins of the modern economy. Princeton University Press.

Pomeranz, K. (2000). The great divergence: China, Europe, and the making of the modern world economy. Princeton University Press.

Tilly, C. (1990). Coercion, capital, and European states, AD 990-1990. Blackwell.

Scott, J. C. (2017). Against the grain: A deep history of the earliest states. Yale University Press.