The Next Fifty Things That Made the Modern Economy
The Next Fifty Things That Made the Modern Economy

The Next Fifty Things That Made the Modern Economy

Table of Contents

1 The Pencil

‘I am taken from a mine, and shut up in a wooden case, from which I am never released, and yet I am used by almost everybody.’ (Location 95)

Tags: riddle

Note: .riddle

this book is about inventions that might change the way you see that world. (Location 102)

‘Ink is the cosmetic that ideas will wear when they go out in public. Graphite is their dirty truth.’ (Location 110)

Updated: Jul 10, 2020


2 Bricks

‘I found Rome a city of bricks and left it a city of marble.’ That is supposed to have been the boast of Caesar Augustus, (Location 176)

Tags: rome

Note: .rome

As for the shape, building is much more straightforward if the width is half the length. (Location 214)

Tags: bricks

Note: .bricks width is usually half the length

3 The Factory

the Longhua Science and Technology Park in Shenzhen, China – better known as ‘Foxconn City’ – employs at least 230,000 workers, and by some estimates 450,000, to make Apple’s iPhones and many other products.16 These are staggering numbers for a single site: the entire McDonald’s franchise worldwide employs fewer than 2 million. (Location 288)

Tags: factory

Note: .factory

4 The Postage Stamp

Updated: Jul 19, 2020

It should be remembered, that in few departments have important reforms been effected by those trained up in practical familiarity with their details. The men to detect blemishes and defects are among those who have not, by long familiarity, been made insensible to them.’ (Location 320)

What were the problems Hill identified? Back then, you didn’t pay to send a letter. You paid to receive one. The pricing formula was complicated and usually prohibitively expensive. If the postman knocked on your door in Birmingham, say, with a three-page letter from London, he’d let you read it only if you coughed up two shillings and threepence. (Location 339)

Tags: newsletter, post

Note: .post .newsletter people used to pay to receive rather than send letters

You and I might agree that if you sent me an envelope addressed ‘Tim Harford’, that would signify you were well; if you addressed it ‘Mr. T. Harford’, I would understand you needed help. When the postman knocked, I would inspect the envelope, and refuse to pay. (Location 347)

Tags: code, post

Note: .post .code

It took just three years for postage stamps to be introduced in Switzerland and Brazil; a little longer in America; by 1860, ninety countries had them.18 Hill had shown that the fortune at the bottom of the pyramid was there to be mined. (Location 371)

Tags: stamps, postage

Note: .postage .stamps Stamps were first introduced in the uk

5 Bicycles

Yes, the bicycle has long been a liberating technology for the economically downtrodden. In its early days, it was much cheaper than a horse, yet offered the same range and freedom. The geneticist Steve Jones has argued that the invention of the bicycle was the most important event in recent human evolution, because it finally made it easy to meet, marry and mate with someone who lived outside one’s immediate community. (Location 431)

Tags: bicycle

Note: .bicycle the bike allowed people to meet others outside their local community far more easily

As we seem to stand on the brink of an age of self-driving cars, many people expect that the vehicle of the future will not be owned, but rented, with the click of a smartphone app. If so, the vehicle of the future is here: globally well over a thousand bike-share schemes and tens of millions of dockless, easy-to-rent bikes are now thought to be in circulation, with numbers growing fast. (Location 453)

Tags: sharingeconomy

Note: .sharingeconomy

Why was the French government interested in preserving food? For the same reason DARPA was interested in vehicles that could navigate themselves across deserts: with a view to winning wars. (Location 554)

Tags: war

Note: .war war encourages innovation

military needs spur innovations that transform the economy. From GPS to ARPANET, which became the internet, Silicon Valley is built on technologies first funded by the US Department of Defense. (Location 560)

Tags: war

Note: .war

We economists can confidently tell you some ingredients for an innovation ecosystem, such as making businesses easy to set up and encouraging links with academic research. (Location 576)

auctions come into their own when nobody is quite sure of the value of what is being sold. Second-hand products sold on eBay are an obvious example, but there are many others – a permit to drill for oil in unexplored terrain; a painting by Leonardo da Vinci; a licence to use radio spectrum to provide mobile phone services (Location 653)

Tags: auctions

Note: .auctions auctions are suitable when people arent quite sure of the value of the goods


book Extraordinary Popular Delusions and the Madness of Crowds (Location 695)

Tags: toread

Note: .toread

‘trickle-down’ theory of fashion: people tend to emulate those they consider to be above them on the social scale. (Location 773)

Economists talk about the ‘consumer surplus’ produced by a product – that’s the enjoyment the product produces, less the money you have to give up to afford it. Does it matter if that enjoyment comes from your appreciation of a product’s qualities, or your fond beliefs about the brand? In other words: if you confidently misidentify Camels as Lucky Strikes in a blind taste-test, should we take less seriously the enjoyment you say you get from Lucky Strikes? (Location 855)

Note: Does it matter where youe enjoyment of a brand comes from?

The China National Tobacco Corporation is the country’s most profitable company, and it sells 98 per cent of cigarettes. It’s state-owned, and contributes up to a tenth of government revenues. (Location 870)

Tags: cigarettes, china

Note: .china .cigarettes

According to one study, just 10 per cent of smokers in China are aware that brands labelled ‘light-’ and ‘low-tar’ are no less harmful to your health than other cigarettes. (Location 878)

Tags: cigarettes, china

Note: .china .cigarettes

(The story goes that the Sears Roebuck catalogue had slightly smaller pages than Montgomery Ward’s – with the intention that a tidy-minded housewife would naturally stack the two with the Sears catalogue on top.) (Location 998)

A curious ritual takes place each year in Japan. It’s called ‘Kurisumasu ni wa kentakkii’ – ‘Kentucky for Christmas’ – the habit of eating Kentucky Fried Chicken on 24 December. The affair began as an inspired bit of marketing, when KFC noticed in the 1970s that expatriates who craved Christmas turkey were turning to fried chicken as the closest available substitute. Now it has become a popular Japanese tradition; there are queues around the block, and customers will pre-order their chicken as early as October.1 Christmas, of course, is not a religious holiday in Japan, where only a tiny minority of the population is Christian. But ‘Kurisumasu ni wa kentakkii’ demonstrates how easily commercial interests can hijack religious festivals – from Diwali in India to Passover and Rosh Hashanah in Israel, but most notoriously, Christmas in America. (Location 1174)

Tags: japan

Note: .japan


Credit cards had to overcome a chicken-and-egg problem: retailers didn’t want to go to the trouble of accepting them unless lots of customers demanded it, while customers couldn’t be bothered signing up for the cards unless plenty of retailers would accept them. To overcome the inertia, in 1958 Bank of America took the bold step of simply mailing a plastic credit card to every single Bank of America customer in Fresno, California – 60,000 of them. Each card had a credit limit of $500, no questions asked – closer to $5000 in today’s terms. The audacious move was known as the Fresno Drop, and it was quickly emulated, despite the obvious – and expected – losses from delinquent loans and outright fraud by criminals who simply stole the cards out of people’s mailboxes.3 The banks swallowed the losses, and by the end of 1960, Bank of America alone had a million credit cards in circulation. (Location 1342)

Tags: creditcards

Note: .creditcards to start the bannk sent a preapproved credit card to 60000 customers

when President Clinton cut tax breaks for executive pay, he exempted performance-related rewards. Clinton adviser Robert Reich, who opposed the exemption, explains what happened: ‘It just shifted executive pay from salaries to stock options.’10 Over Clinton’s term in office, the value of options granted to employees at top American companies grew tenfold.11 A rising stock market meant even a horoscope-consulting CEO would have been quids in. The gap between bosses’ and workers’ pay ballooned. A Clinton-era congressman says the law ‘deserves pride of place in the Museum of Unintended Consequences’. (Location 1429)

Tags: ceo

Note: .ceo

in 1952, this would not be simple. To give a sense of the challenge, consider a dilemma faced by the Coca-Cola company. A Coke had cost a nickel – five cents – for decades. Coca-Cola would have liked to increase the price by a cent or two, but it couldn’t. Why? Their 400,000 vending machines took only nickels, and redesigning them to take two different denominations of coin would be ‘a logistical nightmare’. In 1953 Coca-Cola tried instead to persuade President Eisenhower, in all seriousness, to introduce a 7.5 cent coin. (Location 1480)

Tags: systemschange, coke

Note: .coke .systemschange

people found price surges infuriating. This was true even in scenarios where the logic was obvious, as with a higher price for snow shovels after a snowstorm. (Location 1515)

Tags: pricing

Note: .pricing


Much like barcodes, RFID tags could be used to quickly identify an object. But unlike barcodes, they could be scanned automatically, without the need for line of sight. Some RFID tags could be read from several feet away; some could be scanned, albeit imperfectly, in batches. Some could be rewritten as well as read, or remotely disabled. And they could store much more data than a humble barcode, enabling an object to be identified not just as a particular type of comfort-fit size-medium jeans, but as a unique pair made in a certain place on a certain day. (Location 1707)

The American taxpayer puts up the billion-odd dollars a year it takes to keep GPS going, and that’s very kind of them. But is it wise for the rest of the world to rely on their continued largesse? In fact, GPS isn’t the only global navigational satellite system. There’s a Russian one, too, called GLONASS – though it isn’t as good. China and the European Union have well-advanced projects, called Beidou and Galileo. Japan and India are working on systems, too. (Location 1848)

Tags: gps

Note: .gps


appetite for porn helped to drive demand for faster connections – better modems and higher bandwidth. It spurred innovation in other areas, too: online porn providers were pioneers in web technologies such as video file compression and user-friendly payment systems, and also in business models, such as affiliate marketing programmes.18 All these ideas went on to find much wider uses, and as the internet expanded it gradually became less for porn, and more for all that other stuff. (Location 2146)

Tags: innovation, porn

Note: .porn .innovation porn sites influenced better file compression,online payments, affiliate programs

Black markets change incentives in other ways. Your competitors can’t take you to court, so why not use whatever means necessary to establish a local monopoly? Mob violence may have spiked after prohibition; that belief was certainly one reason why prohibition was repealed.16 Every shipment of illegal goods carries some risk, so why not save space by making your product more potent? (Location 2209)

Tags: blackmarket

Note: .blackmarket when goods are illegal you cant use the law to enforce rules, so you use violence

‘bootleggers and Baptists’.24 The idea is that regulations are often supported by a surprising alliance of noble-minded moralists and profit-driven cynics. Think about bans on cannabis. Who supports them? The ‘Baptists’ are anyone who thinks cannabis is wrong; the ‘bootleggers’ are the rational criminals who profit from illicit dope, along with anyone else with an economic interest in anti-drugs laws, such as the bureaucrats paid to enforce them. (Location 2224)

Tags: blackmarket

Note: .blackmarket


human civilisation is based less on raw intelligence than on a highly developed ability to learn from each other.19 Over the generations our ancestors accumulated useful ideas by trial and error, and the next generation simply copied them. (Location 2378)

Tags: learning

Note: .learning learn from others

For years, economic policy wonks have been sounding the alarm about a slow-burn crisis in the pension system.8 The problem is demographic. Half a century ago, in the OECD – a club of rich nations – the average 65-year-old woman could expect to live about 15 more years. Today, she can expect at least 20.9 Meanwhile, families have shrunk from 2.7 children to 1.7: the pipeline of future workers is drying up. (Location 2406)

Tags: pensions

Note: .pensions people are living longer and having less kids

pension promises can prove expensive to keep. Ponder the case of John Janeway, who fought in the US Civil War. His military pension included benefits for a surviving spouse when he died. When Janeway was 81, he married an 18-year-old. The army was still paying Gertrude Janeway her widow’s pension in 2003, nearly 140 years after the war ended. (Location 2419)

Tags: pension

Note: .pension

if QWERTY really was designed to be slow, how come the most popular pair of letters in English, T–H, are adjacent and right under the index fingers? (Location 2464)

Tags: qwerty

Note: .qwerty

The QWERTY layout was designed for the convenience of telegraph operators transcribing Morse code – that’s why, for example, the Z is next to the S and the E, because Z and SE are indistinguishable in American Morse code. The telegraph receiver would hover over those letters, waiting for context to make everything clear. (Location 2467)

Tags: qwerty

Note: .qwerty

The US Navy conducted a study in the 1940s demonstrating that the Dvorak was vastly superior: training typists to use the Dvorak layout would pay for itself many times over. So why didn’t we all switch to Dvorak? The problem lay in coordinating the switch. QWERTY had been the universal layout since before August Dvorak was born. Most typists trained on it. Any employer investing in a costly typewriter would naturally choose the layout that most typists could use. Economies of scale kicked in: QWERTY typewriters became cheaper to produce, and thus cheaper to buy. Everyone trained on QWERTY; every office used it. Dvorak keyboards never stood a chance. So now we start to see why this case matters. For a leading economic historian, Paul David, QWERTY is the quintessential example of something economists call ‘lock-in’. Paul David argued that we get locked into standards like QWERTY all the time. (Location 2482)

Tags: lockin, qwerty

Note: .qwerty .lockin

Consider the famous Navy study that demonstrated the superiority of the Dvorak keyboard. Two economists, Stan Liebowitz and Stephen Margolis, unearthed that study, and concluded it was badly flawed. They also raised an eyebrow at the name of the man who supervised it – the Navy’s leading time-and-motion expert, one Lieutenant-Commander … August Dvorak. (Location 2495)

Tags: qwerty

Note: .qwerty

The citizens of Henan province in central China could tell you. They live downstream of the Banqiao dam, which was built in the 1950s, and immediately showed signs of cracking. After reinforcement it was dubbed ‘the Iron Dam’ and declared unbreakable. In August 1975, it broke. Locals describe the event as ‘the coming of the river dragon’. It was a wave several metres high and, eventually, 12 kilometres wide. Tens of thousands of people died – some estimates suggest almost a quarter of a million. (Location 2598)

Tags: dam

Note: .dam


Still, for the first 90 per cent of Earth’s history, there was no fire at all. (Location 2667)

Tags: fire

Note: .fire

Greg Ip has applied this analysis to the financial crisis of 2007–08. Policymakers had got so good at extinguishing minor crises that people became overconfident, and took silly risks – such as betting the ranch on subprime mortgages. And when a crisis came along that couldn’t be stamped out, those bad bets fuelled a global conflagration. (Location 2709)

It was 27 August 1859. The whales had been saved, and the world was about to change. (Location 2721)

Tags: oil

Note: .oil

is arguably the most important single price in the world. In 1973, when some Arab states declared an embargo on sales to several rich nations, prices surged from $3 to $12 a barrel in just six months. A global recession followed. It wasn’t the last: US recessions followed price spikes in 1978, 1990 and 2001. (Location 2736)

Tags: recession, oil

Note: .oil .recession

Daniel Yergin’s magisterial history of oil, The Prize, (Location 2741)

Tags: toread

Note: .toread

Made head of the Royal Navy in 1911, Churchill had to decide whether the British empire would meet the challenge of an expansionist Germany with new battleships powered by safe, secure Welsh coal, or by oil from faraway Persia – modern-day Iran. Why would anyone rely on such an insecure source? Because oil-fired battleships would accelerate faster, sustain a higher speed, required fewer men to deal with the fuel, and would have more capacity for guns and ammunition. Oil was simply a better fuel than coal. Churchill’s ‘fateful plunge’ in April 1912 reflected the same logic that has governed our dependence on oil – and shaped global politics – ever since.8 After Churchill’s decision, the British Treasury bought a majority stake in the Anglo-Persian oil company – the ancestor of BP. In 1951, the government of Iran nationalised (Location 2742)

Tags: churchill, bp, oil

Note: .oil .bp .churchill churchill made a strategic decision to have oil powered ships rather than coal. This oil came from persia. The uk made an investment In a company to secure suy

Why is it a problem to have lots of oil? When you export it, that pushes up the value of your currency – which makes everything other than oil cheap to import, and prohibitively expensive to produce at home. That means it’s hard to develop other economic sectors, such as manufacturing or complex services. Meanwhile politicians often focus on monopolising the oil, for themselves and their allies. Dictatorships are not uncommon. There is money – for some – but such economies are thin and brittle. (Location 2757)

Tags: oil

Note: .oil exporting oil pushes up the value of your currency, making it cheap to import goods and hard to develop other sectors such as manufacturing

machines that move around need to carry their own source of power with them, the lighter the better. A kilogram of petrol stores as much energy as 60 kilograms of batteries,13 and has the convenient property of disappearing after use. Empty batteries, alas, are just as heavy as full ones. (Location 2763)

Tags: batties, oil

Note: .oil .batties oil is a dense ennergy source

William Cavendish was the president of the Horticultural Society.9 Wardian cases destroyed Brazil’s rubber industry. With prices high, the British Foreign Office sent an enterprising amateur botanist to the Amazon to sneak out some rubber seeds. They germinated in Kew, and seedlings were shipped to East Asia. Brazil couldn’t compete with colonial plantations. (Location 2893)

Tags: uk, rubber, brazil

Note: .brazil .rubber .uk the uk used the boxes to transport plants to colonies where they could grow their own rubber

are shrink-wrapped cucumbers really so silly? They stay fresh for 14 days, against just three days without the wrapping.19 Which is worse: the gram-and-a-half of plastic wrap, or the waste of cucumbers going off before being eaten? Suddenly it’s not so obvious. (Location 2967)

Tags: plastic

Note: .plastic shrink wrapped cucumbers last for 2 weeks whilst those which are not last for 3 days

According to a UK government report, only 3 per cent of food is wasted before it gets to stores – in developing countries that figure can be 50 per cent, and that difference is partly due to how the food is packaged. (Location 2976)

China’s fast-growing economy was exporting lots of manufactured goods. And because those ships would otherwise return empty, it was cheap to load them with waste for China to recycle. (Location 3005)

Tags: china

Note: .china use the boats that export goods to import waste from other cpuntries

For each kind of waste – glass bottles, plastic coffee cups – what we should do is coolly compare the costs and benefits of recycling against other options. Well-designed landfills are nowadays pretty safe, and we can harness the methane they produce for electricity.21 Modern waste incinerators can be a clean-ish source of power. (Location 3048)

Tags: recycling

Note: .recycling we should weigh up the best option for each type of waste

Borlaug produced new kinds of ‘dwarf’ wheat that resisted rust, yielded well, and – crucially – had short stems, so they didn’t topple over in the wind. Through further tests, he worked out how to maximise their yield – how far apart to plant them, how deep, with how much fertiliser, and how much to irrigate. (Location 3095)

Tags: crops

Note: .crops

Malthus had underestimated how, as people get richer, they tend to want fewer kids, so populations grow more slowly: 1968, the year that Paul Ehrlich made his dire predictions, was also the year in which population growth peaked. Malthus also underestimated – well, Norman Borlaug. Over the years, human ingenuity has meant that food yields have kept pace. (Location 3113)

Tags: population

Note: .population as populations get richer they have less kids. We have also seen huge advances in food growing practices

In the 1930s an American aeronautical engineer named T. P. Wright carefully observed aeroplane factories at work. He published research demonstrating that the more often a particular type of aeroplane was assembled, the quicker and cheaper the next unit became. Workers would gain experience, specialised tools would be developed, and ways to save time and material would be discovered. Wright reckoned that every time accumulated production doubled, unit costs would fall by 15 per cent. He called this phenomenon ‘the learning curve’. (Location 3163)

Tags: learningcurve

Note: .learningcurve when accumulated production doubles the unit cost decreases by 15%. People get more skilled and the tools get better

any new product needs somehow to get through the expensive early stages. Solar PV cells needed to be heavily subsidised at first – as they were in Germany for environmental reasons. More recently China has been willing to manufacture large quantities in order to master the technology – leading President Obama’s US administration to complain that rather than being too expensive, imported solar panels had become unfairly cheap. (Location 3178)

Tags: solar, learningcurve

Note: .learningcurve .solar products need to find a way through the expensive stage, like via subsidies

The ultra-low interest rates of recent years have also helped drag solar PV into the mainstream of the energy system; these low rates make it attractive to borrow and install solar panels that will then last for decades, generating electricity at almost no further cost beyond a little cleaning and maintenance. (Location 3181)

Tags: solar

Note: .solar low interest rates also help get products through the learning curve. Customers can borrow money if they know they will make it back over time

the learning curve tells us that the ultimate triumph of solar PV seems likely: it is getting cheaper as it gets more popular, and more popular as it gets cheaper. (Location 3196)

Tags: solar, learningcurve

Note: .learningcurve .solar


data is like oil in that the crude, unrefined stuff is not much use to anyone. You have to process it to get something valuable: diesel, to put in an engine; insights, to inform a decision. (Location 3209)

Tags: oil, data

Note: .data .oil like oil,data needs to be processed to be useful

Tickets were often stolen, so railway companies found an ingenious way to link them to the person who’d bought them: a ‘punch photograph’. Conductors used a hole-punch to select from a range of physical descriptors: as Hollerith recalled, ‘light hair, dark eyes, large nose etc.’10 If a dark-haired, small-nosed scoundrel stole your ticket, he wouldn’t get far. (Location 3238)

Tags: tickets, punchcards

Note: .punchcards .tickets

Hollerith’s Tabulating Machine Company did a roaring trade. You may have heard of the firm that, through mergers, it eventually became: IBM remained a market leader as punched cards gave way to magnetic storage, and tabulating machines to programmable computers. It was still on the list of the world’s ten biggest companies a few years ago. (Location 3259)

Tags: punchcards, ibm

Note: .ibm .punchcards

sometimes automation creates jobs and sometimes it destroys them. The point is that automation reshapes the workplace in much subtler ways than ‘a robot took my job’. (Location 3376)

Tags: auutomation

Note: .auutomation auutomation reshapes the workforce, like excel did with accounting clerks

Planet was founded in 2010 and has the world’s largest private fleet of satellites – around 140 of them as of the summer of 2019, taking 800,000 photographs a day – covering anywhere on the globe, once every 24 hours. They can’t match the sophisticated imaging of a large satellite, but they make up for that by being able to provide better coverage – more photographs of more places within any given time frame. (Location 3504)

Tags: satellites

Note: .satellites

George Boole, professor of mathematics at Queen’s College, Cork, in Ireland, published The Laws of Thought. Boole’s book turned logical propositions into mathematical operations: TRUE, FALSE, AND, OR, NOT, which suggested the prospect of turning thought itself into a step-by-step algorithmic process. (Location 3642)

Updated: Aug 03, 2020

a lesson in human nature: people whose careers depend on a system, no matter how inefficient it might be, won’t necessarily welcome a total outsider turning up with a meticulously argued diagnosis of its faults and proposal for improvements. (Location 328)

Tags: inertia, incentives

Note: .incentives .inertia