2025 Economics Nobel: What the Industrial Revolution Teaches About Patent Policy
Patent – Patently-O 2025-10-23
Summary:
by Dennis Crouch
Economic historian Joel Mokyr recently received the 2025 Nobel Prize in Economics (shared with Philippe Aghion and Peter Howitt) for reshaping our understanding of why historic sustained technological progress and economic growth emerged in Europe in the 1700s. For patent law scholars and practitioners, Mokyr's work offers critical historical perspective on a question that echoes through modern IP policy debates: what institutional arrangements best promote innovation? His historic answer from the Industrial Revolution push against any patent-centric narrative, but still argue that knowledge dissemination is the key factor.
Mokyr's central insight is that the explosion of sustained economic growth beginning around 1750 resulted from an unprecedented accumulation and circulation of what he terms "useful knowledge." Joel Mokyr, Intellectual Property Rights, the Industrial Revolution, and the Beginnings of Modern Economic Growth, 99 Am. Econ. Rev. 349 (2009). This useful knowledge encompasses both propositional knowledge (understanding laws of nature and scientific principles) and prescriptive knowledge (understanding how to do things through practical techniques and skills). What made the Industrial Revolution revolutionary was not simply the existence of clever inventions, but rather the creation of positive feedback loops between scientific understanding and practical application, amplified by new institutions and cultural norms that encouraged the wide dissemination of both types of knowledge.