Innovation and Economic Progress in the Ancient World

In the topic of the economic history of Greece and Rome, there is this interesting paper: "Technical Innovation and Economic Progress in the Ancient World" [gated] the paper was written by M. I. Finley. He makes a very interesting argument about innovation, or better, the lack of it. A piece:

... Tocqueville, whose 1831 notebooks are filled with the theme that 'slavery is even more prejudicial to the masters than to the slaves', because, as a leading Louisville merchant said to him, "it deprives us of the energy and spirit of enterprise that characterizes the States that have no slaves." Greek and Roman slavery functioned in a different context, to be sure, both internally and externally, and comparisons must be made with caution and reserve. But this particular one seems to me to be valid and necessary. (p. 44-5)  . . . 

The ancient world had only two solutions to the disequilibrium brought about by a serious increase in population. One was to reduce the population by sending it out. The other was to bring in additional means, in the form of booty and tribute from conquests. Both are stop-gaps, not solutions, and therefore proof of an incapacity to raise productivity sufficiently, or, indeed, significantly. For a relatively brief time Rome offered the illusion of an escape from this dilemma. Having acquired large, sparsely occupied areas, she proceeded to a rapid internal colonization (in Spain and Gaul, for example). The illusion came to an end in the first century. Some historians think that there followed a stable equilibrium, Gibbon's golden age of the Antonines, but it is unnecessary to debate the question. Barbarian pressures now began to place new demands on the empire. That challenge the economy and the political organization could not meet in the west. (p. 45).

The paper was written in 1965. 

What drives taxi drivers?

Wikimedia Commons 

We find that passengers with inferior information about optimal routes are taken on detours of almost double length, while lack of information on the local tariff system increases the likelihood of manipulated bills by about fifteen percentage-points. Passengers’ income seems to have no effect on fraud.

From a new published paper by Balafoutas et al (The Review of Economic Studies, December, 2012). 

The authors explain:

 By letting a triple of passengers – each in a different role – ask for the same service at practically the same time we were able to control for a variety of unforeseeable factors, such as traffic jams. Given the data on the exact length of a route and the information on the local taxi tariff system, we have then been able to identify the amount of overcharging by charging more than justified by the chosen route.

And:

Overall, we have found that 46% of passengers were taken on detours that accounted for at least 5% of the shortest possible route. The overall average detour was 10%, or roughly 1.3 km of the average total length of 12.7 km. Overcharging through manipulating fares was observed in only 11% of possible cases. Recall that overcharging – once detected – is typically much easier to verify than overtreatment, because there are always possible excuses for taking a detour. Thus, the expected material costs of being detected (e.g., the risk of being fined or losing one’s license) are probably higher for a taxi driver in the overcharging than in the overtreatment dimension, making the latter more attractive.

We knew that all along, but it is interesting to see some numbers. 

The researchers use GPS technology.

My favorites are some taxi drivers in Ghana, who usually say they know the location of your destination, but after a long time they start asking pedestrians for directions. They are awesome!