Cardwell’s Law (named for British historian Donald Cardwell): every society, when left on its own, will be technologically creative for only short periods. I explore the implications for Silicon Valley and for entrepreneurs.
Joel Mokyr on Creative Forces and Cardwell’s Law
The engine of economic growth is, was, and will always be technological creativity. Of course, other things are necessary for an economy to grow–capital accumulation, skills, motivation, well-functioning markets, and so on. But all other factors tend to have short-lived effects. They can increase income, but they tend to burn out after a while. Technology is the only thing that does not run into diminishing returns. There are no known limits to the human ability to control and manipulate the forces of nature.
[…] Technological progress, even in civilian technology, is often made in tooth and claw. Without the pressure of competing neighboring states, societies may lose their cutting edge. Closed large empires, such as China, Russia, and the Ottoman state, though not entirely impervious to progress, could not sustain their creativity in the long run. In Western Europe, political fragmentation and the “states system” prevented such stagnation. […]
The threat that a new idea would be adopted by a rival nation and that innovative subjects would migrate elsewhere if ill treated was a powerful incentive to overcome the inevitable opposition to progress from conservative circles or vested interests. […]
A stronger version of this theory relies on what I have called “Cardwell’s Law,” after the British historian Donald Cardwell. This law states essentially that every society, when left on its own, will be technologically creative for only short periods. Sooner or later the forces of conservatism, the “if-it-ain’t-broke-don’t-fix-it,” the “if- God-had-wanted-us-to-fly-he-would-have-given-us-wings,” and the “not-invented-here-so-it-can’t-possibly-work” people take over and manage through a variety of legal and institutional channels to slow down and if possible stop technological creativity altogether. Technological leaders like 17th-century Holland or early 1 9th-century Britain lost their edge and eventually became followers.
I want to explore two implications, one for Silicon Valley and one for entrepreneurs.
Implications for Silicon Valley: I think Silicon Valley remains “a nicely furnished room in a house that’s burning down, the state of California.” I think California’s government has become very complacent what’s required to focus technology innovation and will face increasing competitive pressures from other lower tax business friendly US states and other countries. For evidence see this report from the Manhattan Institute, “The Great California Exodus: A Closer Look“, by Tom Gray and Robert Scardamalia. It documents a migration of 3.4 million residents out of the state since 1990.
Implications for Entrepreneurs: don’t be afraid to attack well established and much larger firms that have become sclerotic. See for example remarks by Sequoia Capital’s Jim Goetz at TechCrunch’s Disrupt Conference in mid-September: “It’s shocking we don’t see more engineers and entrepreneurs interested in enterprise. There are fewer competitors and they are large, slow and flatfooted.”
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