Why Our Knowledge Economy Can Survive the New Age of Pestilence

• Published in: MIT Sloan management review Vol. 62; no. 1; pp. 22 - 24
• Main Author: Mokyr, Joel
• Format: Journal Article
• Language: English
• Published: Cambridge Massachusetts Institute of Technology, Cambridge, MA 01.10.2020
• Subjects: Coronaviruses; COVID-19; Economic growth; Economic impact; Knowledge; Knowledge economy; Pandemics; Prosperity; United States > US; Europe; Germany
• ISSN: 1532-9194

Knowledge, once acquired, cannot easily be reversed. In theory, of course, knowledge can be lost when everyone who possesses it dies and there are no stored-up copies in books or models. If important knowledge is sufficiently diffused and accessible, however, it becomes increasingly unlikely that any invention will ever be "lost." Hence, although wars and natural catastrophes can disrupt markets, commercial life, and the international economy, they rarely cause much erosion of the knowledge base that made an economy prosperous and productive in the first place. Market economies and the international division of labor, once disrupted, can be repaired fairly quickly and economies can bounce back--if the suitable institutions such as law and order, peace, and effective contract enforcement are in place.