… is from pages 264-265 of Matt Ridley’s excellent 2020 book, How Innovation Works: And Why It Flourishes in Freedom:
One of the peculiar features of history is that empires are bad at innovating. Though they have wealthy and educated elites, imperial regimes tend to preside over gradual declines in inventiveness, which contribute to their eventual undoing. The Egyptian, Persian, Roman, Byzantine, Han, Aztec, Inca, Hapsburg, Ming, Ottoman, Russian and British empires all bear this out. As time goes by and the central power ossifies, technology tends to stagnate, elites tend to resist novelty and funds get diverted into luxury, war or corruption, rather than enterprise. This despite empires being effectively giant ‘single markets’ for ideas to spread within. Italy’s most fertile inventive period was in the Renaissance, when it was the small city states, run by merchants, that drove innovation: in Genoa, Florence, Venice, Luca, Siena and Milan. Fragmented politics proved better than united ones.
DBx: Or put somewhat differently: Innovation that raises the living standards of the masses is not a function of the state’s wealth, reach, power, or glory. Nor is such innovation the result of conscious planning by the state.
Instead, innovation that raises the living standards of the masses requires respect for bourgeois virtues, a socio-legal system that prevents the state from being used to predate too harshly on the fruits of innovation, and the resulting competitive market system in which innovations can be introduced without the permission of elites and then tested in the market according to consumers’ willingness to buy.