Michael Byers
I recently watched Free Solo, the great movie about rock climber Alex Honnold’s free solo (no aids, no ropes, no protection at all) climb of El Capitan in Yosemite National Park. Among many other things, it got me thinking about economic growth.
The abilities of contemporary rock climbers are far beyond those of climbers just a generation ago. The Wikipedia history of El Capitan starts with a 47-day climb in 1958—which used pitons, ropes, and all sorts of equipment—and continues through development of routes and techniques to Alex’s three-hour romp up the face.
Why weren’t such climbs done long ago? There is essentially no technology involved. OK, Honnold wears modern climbing boots, which have very sticky rubber. But that’s about it. And reasonably sticky rubber has been around for a hundred years or so too.
There is nothing technological that stopped human beings from climbing in much this way centuries ago. Honnold, transported to 1890, might not have free soloed El Capitan without his current boots, but he would have climbed a lot more big walls than anyone else.
Clearly, there has been an explosion in human ability to climb rocks, just as there has been in human productivity, or our knowledge of how to do things, in more prosaic and more economic activities.
In studying economic growth, we (and especially those of us in Silicon Valley) focus way too much on gadgets and too little on simple human knowledge. Southwest Airlines’ ability to get an airliner back in the air in half the time it took in the 1970s (and still does at many larger airlines) is as much about an increase in productivity as it is about installing the latest gadget. Growth is about the knowledge of how to do things, knowledge that is only sometimes embodied in machines. Free Solo is a great example of the expansion of ability, driven purely by advances in knowledge, untethered from machines.
How did it happen? The radical improvements in rock climbing that led to Honnold’s achievement display the same patterns as economic growth theorists tell us about.
Knowledge externalities: When one person learns how to do something, and when he or she can and does communicate that knowledge to others, the others can quickly benefit from that knowledge, and the group advances.
Honnold, like Isaac Newton, climbed on the shoulders of giants. Just how do you get up El Capitan? There are now many established routes—successions of incredibly tiny holes, cracks, and ledges in a 3,000-foot face of rock that experienced climbers figured out how to stitch together. Honnold didn’t have to figure all that out, as he chose an established route.
Likewise, nobody in 1958 had any idea that you could hang by your thumbs and fingers to exploit little pieces of rock. This knowledge, demonstrated in the movie, emerged from the community of rock climbers and boulderers over time. Honnold is incredibly good at it, but he learned from others.
Knowledge transmission: Everyone is all upset about intellectual property (IP) these days, but nobody patents rock-climbing techniques. (There is some patentable technology in the devices people use to climb with ropes, and that has enabled free climbing, but it’s really not central.) The knowledge gets produced, which is costly to the individual producing it, and then passed on, where it is much easier to learn than it is to innovate, and the whole group gets better.
A debate rages in economics: Are we at the end of growth? Have we run out of ideas? I think not.
Once a piece of knowledge is produced, it is in society’s interest to pass it on as quickly as possible. We tend to forget this in today’s IP kerfuffles with tech and with China, and people seem to think it’s vitally important to keep secrets. But restrictions on IP, including patents, are, in the short run, harmful. The patent and IP protection system accepts this immediate harm—slowing adoption while the innovator gets to earn some rents—to give people an incentive to produce new knowledge. But lots and lots of productivity-increasing knowledge—most, I would hazard—is created as new handholds, or new routes, or new economics papers are: for free. There are other social institutions that promote the creation and dissemination of knowledge, and rock climbing is full of them: Honnold got fame and some fortune from his innovations, but he didn’t have to patent anything to do it.
Group size and the cost of transmitting information: The key insight of modern growth theory is that, in the process described above, the larger the group studying any problem, the faster the knowledge advances. If 1,000 people are figuring out how to climb, and all of their good ideas disseminate through the group, each member of the group gets to use new ideas more quickly than if there are 100 people doing it.
Our economic models don’t pay enough attention to the dissemination question. They tend to assume that producing new knowledge is costly, but then using it is free. Most new ideas are bad, so the process of sifting through new ideas, figuring out which are good and bad, and refining them is a lot of what a group does, and all that learning takes time and effort. Academics, who spend a lot of time reading hard papers, writing referee reports and comments that distill the ideas, throwing most new ideas out, and distilling again to teach, see this every day.
The film makes it clear that the world of rock climbing has expanded vastly since the 1950s. Bouldering is a weekend recreation for millions. Mountain climbing in the ’50s was a pastime for a small handful. No surprise, then, that the rate of knowledge creation is higher.
The size of the group is limited also by its ability to communicate. I locate the beginning of growth and the scientific revolution with Johannes Gutenberg (whose big idea, movable type, was also unpatented, and therefore quickly improved upon and copied). Printing means that if you run a costly experiment, you can share that with a much larger group, and a much larger group can discuss and refine the idea. If you can only share it by word of mouth or handwritten note, few will learn of it and be able to use it.
Similarly, rock climbing is much more advanced than before because of technology—the technology of communication. Each new idea in rock climbing is accessible quickly all over the world. Without that large group of interested people, this communal knowledge would not have advanced so far.
Which gives me hope, in the end, for economic growth. A debate rages in economics: Are we at the end of growth? Have we run out of ideas? I think not. With the internet, we have reduced the cost of communication even more drastically than Gutenberg did. The group of people studying any problem is much larger, the number of problems that can be effectively studied by groups of efficient scale has grown, and the fraction of the human population that can work together on any one problem has exploded.
At least the possibility is there. It still took 200 years to get from Gutenberg to the scientific revolution, and lots can go wrong along the way.
John H. Cochrane is a senior fellow at the Hoover Institution at Stanford University and distinguished senior fellow at Chicago Booth. This essay is adapted from a post on his blog, The Grumpy Economist.
The emphasis should be on new companies, ideas, and products that allow the country to own the high end of the value chain.
Democracy and Innovation Could Set India on a Different Development Path
Chicago Booth’s Raghuram G. Rajan describes a path forward for India’s economy.
Raghuram Rajan: Your Doctor Could Be in India
Capitalisn’t hosts Bethany McLean and Luigi Zingales spell out what a changing antitrust landscape could mean for us all.
Capitalisn’t: The Evolution of Antitrust—From Brandeis to BidenYour Privacy
We want to demonstrate our commitment to your privacy. Please review Chicago Booth's privacy notice, which provides information explaining how and why we collect particular information when you visit our website.