… is from page 13 of William Baumol’s 2002 volume, The Free-Market Innovation Machine:
For the bulk of the population of earlier periods of history, bare survival was the critical problem, and it left only minimal resources for investment in education and productive capacity. Only the productive surpluses that innovation began to make possible, first in agriculture and mining and then in manufacturing, made feasible the enormous increases in investment in inanimate and in human capital that are widely judged to have contributed greatly to economic growth.
But what makes innovation itself possible? See (what I judge to be) the complementary explanations of Deirdre McCloskey and Anton Howes. (I thank Walter Grinder for alerting me to the work of Howes.)
