“As a result,” he writes, “throughout the Institutional Revolution numerous circumstances would have existed where the old institutional apparatus was inappropriate for the new order of things. This mismatch would have acted as a brake on economic growth…. [T]echnical innovations by themselves created institutional problems at the same time they solved engineering ones. Because the institutions took time to adjust, the full benefits of the technical changes took a long time to be felt.”

Jeff Jarvis originally shared this post:

A post inspired by a fascinating book, The Institutional Revolution. And what it teaches today. A snippet from it (full post with links below):

I’m fascinated with Allen’s examination of society’s institutions — as organizations and as sets of rules — as they adapt to or are made extinct by new technologies. He points out that the transition to modern democratic institutions and bureaucracies was slow and syncopated. “As a result,” he writes, “throughout the Institutional Revolution numerous circumstances would have existed where the old institutional apparatus was inappropriate for the new order of things. This mismatch would have acted as a brake on economic growth…. [T]echnical innovations by themselves created institutional problems at the same time they solved engineering ones. Because the institutions took time to adjust, the full benefits of the technical changes took a long time to be felt.”

Sound familiar? Allen does not attempt to extrapolate to today — and perhaps I should not. But he does suggest that “an institutional reexamination of the Industrial Revolution” could “help modern economists in their policy recommendations on matter of current economic growth and development.” (Or a lack thereof.)

I wonder how inadequate — or doomed — our institutions are today in the face of new and disruptive technologies, including — to echo Allen — profound new means of measuring behavior (which upends, for example, advertising, not to mention tracking government performance through its data). It’s that kind of question that gets me in the most trouble with people I’ll call institutionalists, who defend legacy institutions — journalism, media gatekeepers, the academy, government, et al — against the disruption I sometimes welcome. See, for example, Andrew Keen. But I’m not killing these institutions, merely asking uncomfortable questions about the continued viability — without, of course, any answer to the question: What will follow them?

* Is the institution of journalism adequate to our new needs and knowledge?
* Was copyright as an institution made obsolete when copying cost nothing?
* Are modern politics incurably corrupted by money? (To answer that question, listen to this episode of This American Life.)
* Are our schools designed to turn out managers in the industrial age — human widgets made to make widgets, all the same — instead of the innovators we need, who are more likely to succeed?
* Is the firm — or at least part of its raison d’être — outmoded by the ecosystem?
* What is to become of the untrusted bank? Surely it cannot survive as an oxymoron.
* Can our capital markets still reward only growth when technology produces efficiency instead?
* Haven’t our health-care institutions foundered completely attempting to deal with the cost of their success: greater longevity and thus more ailments to treat?
* What becomes of our notion of nations when we can find, form, and act as publics around their borders?
* Whither capitalism? . . . .

The (continuing) institutional revolution « BuzzMachine

I just read a fascinating book by Douglas W. Allen, The Institutional Revolution, which attempts to explain England's transition from its apparently illogical early-modern institutions — aristocra…