50 Things That Made The Modern Economy

The plough was a simple yet transformative technology. It was the plough that kick-started civilisation in the first place – that, ultimately, made our modern economy possible. But the plough did more than create the underpinning of civilisation – with all its benefits and inequities. Different types of plough led to different types of civilisation. Presenter: Tim Harford Producer: Ben Crighton (Photo: Farmer ploughing field, Credit: Shutterstock)

The global supply chain that keeps perishable goods at controlled temperatures has revolutionised the food industry. It widened our choice of food and improved our nutrition. It enabled the rise of the supermarket. And that, in turn, transformed the labour market: less need for frequent shopping frees up women to work. As low-income countries get wealthier, fridges are among the first things people buy: in China, it took just a decade to get from a quarter of households having fridges to nearly nine in ten. Presenter: Tim Harford Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Fully loaded shelves, Credit: Shutterstock)

The same basic idea links every welfare state: that the ultimate responsibility for ensuring people don’t starve on the street should lie not with family, or charity, or private insurers, but with government. This idea is not without its enemies. It is possible, after all, to mother too much. Every parent instinctively knows that there’s a balance: protect, but don’t mollycoddle; nurture resilience, not dependence. And if overprotective parenting stunts personal growth, might too-generous welfare states stunt economic growth? Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Frances Perkins, Credit: Getty Images)

Ensuring property rights for the world's poor could unlock trillions in ‘dead capital’. According to Peruvian economist Hernando de Soto, the value of extralegal property globally exceeds 10 trillion dollars. Nobody has ever disputed that property rights matter for investment: experts point to a direct correlation between a nation’s wealth and having an adequate property rights system. This is because real estate is a form of capital and capital raises economic productivity and thus creates wealth. Mr de Soto's understanding – that title frees up credit, turning ‘dead capital’ into ‘live capital’ – has prompted governments in other countries to undertake large-scale property-titling campaigns. Voting for the 51st Thing has now closed. The winning “thing” will be revealed on Saturday 28 October 2017. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Hernando de Soto, Credit: Getty Images)

The extra “thing” – what should it be? Shortlist: the credit card, glass, GPS, irrigation, the pencil and the spreadsheet. Voting for the 51st Thing has now closed. The winning “thing” will be revealed on Saturday 28 October 2017. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Montage of pencil, credit card, glass, spreadsheet, GPS, irrigation, Credit: Getty Images/Shutterstock)

Managers often have a bad reputation. What should we make of the people who tell managers how to manage? That question has often been raised over the years, with a sceptical tone. The management consultancy industry battles a stereotype of charging exhorbitant fees for advice that, on close inspection, turns out to be either meaningless or common sense. Managers who bring in consultants are often accused of being blinded by jargon, implicitly admitting their own incompetence, or seeking someone else to blame for unpopular decisions. Still, it’s lucrative. Globally, consulting firms charge their clients a total of about $125bn. Voting for the 51st Thing has now closed. The winning “thing” will be revealed on Saturday 28 October 2017. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Business team present, Credit: Shutterstock)

Luca Pacioli was a renaissance man – he was a conjuror, a master of chess, a lover of puzzles, a Franciscan Friar, and a professor of mathematics. But today he’s celebrated as the most famous accountant who ever lived, the father of double-entry bookkeeping. Before the Venetian style of bookkeeping caught on, accounts were rather basic. An early medieval merchant was little more than a travelling salesman. He had no need to keep accounts – he could simply check whether his purse was full or empty. But as the commercial enterprises of the Italian city states grew larger, more complex and more dependent on financial instruments such as loans and currency trades, the need for a more careful reckoning became painfully clear. In 1494 Pacioli wrote the definitive book on double-entry bookkeeping. It’s regarded by many as the most influential work in the history of capitalism. And as the industrial revolution unfolded, the ideas that Pacioli had set out came to be viewed as an essential part of business life; the sy

If you live in a city with modern sanitation, it’s hard to imagine daily life being permeated with the suffocating stench of human excrement. For that, we have a number of people to thank – not least a London watchmaker called Alexander Cumming. Cumming’s world-changing invention owed nothing to precision engineering. In 1775, he patented the S-bend. It was a bit of pipe with a curve in it and it became the missing ingredient to create the flushing toilet – and, with it, public sanitation as we know it. Roll-out was slow, but it was a vision of how public sanitation could be – clean, and smell-free – if only government would fund it. More than two centuries later, two and a half billion people still remain without improved sanitation, and improved sanitation itself is a low bar. We still haven’t reliably managed to solve the problem of collective action – of getting those who exercise power or have responsibility to organise themselves. Producer: Ben Crighton Editors: Richard Vadon and Richard Knight

How the high-tech ‘death ray’ led to the invention of radar. The story begins in the 1930s, when British Air Ministry officials were worried about falling behind Nazi Germany in the technological arms race. They correctly predicted that the next war would be dominated by air power. To address the problem, Britain launched a number of projects in hopes of mitigating the threat — including a prize for developing a high-tech ‘death ray’ that could zap a sheep at a hundred paces. But even though the project failed to develop such a weapon, it did result in something potentially far more useful that was able to detect planes and submarines – radar. And it was an invention that was crucial in the development of the commercial aviation industry. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Abstract radar with targets, Credit: Andrey VP/Shutterstock)

US car makers had it good. As quickly as they could manufacture cars, people bought them. By 1914, that was changing. In higher price brackets, especially, purchasers and dealerships were becoming choosier. One commentator warned that the retailers could no longer sell what their own judgement dictated – they must sell what the consumer wanted. That commentator was Charles Coolidge Parlin, widely recognised as the man who invented the very idea of market research. The invention of market research marks an early step in a broader shift from a “producer-led” to “consumer-led” approach to business – from making something then trying to persuade people to buy it, to trying to find out what people might buy and then making it. One century later, the market research profession is huge: in the United States alone, it employs around half a million people. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Market research, Credit: Bildagentur Zoonar GmbH/Shutterstock)

A couple of decades after Leo Baekeland invented the first fully synthetic plastic – Bakelite – plastics were pouring out of labs around the world. There was polystyrene, often used for packaging; nylon, popularised by stockings; polyethylene, the stuff of plastic bags. As the Second World War stretched natural resources, production of plastics ramped up to fill the gap. And when the war ended, exciting new products like Tupperware hit the consumer market. These days, plastics are everywhere. We make so much plastic, it takes about eight percent of oil production – half for raw material, half for energy. And despite its image problem, and growing evidence of environmental problems, plastic production is set to double in the next 20 years. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Plastic bottle tops, Credit: Taweesak Thiprod/Shutterstock)

Why should we get into a stranger’s car – or buy a stranger’s laser pointer? In 1997, eBay introduced a feature that helped solve the problem: Seller Feedback. Jim Griffith was eBay’s first customer service representative; at the time, he says “no-one had ever seen anything like [it]”. The idea of both parties rating each other after a transaction has now become ubiquitous. You buy something online – you rate the seller, the seller rates you. Or you use a ride-sharing service, like Uber – you rate the driver, the driver rates you. And a few positive reviews set our mind at ease about a stranger. Jim Griffith is not sure eBay would have grown without it. Online matching platforms would still exist, of course – but perhaps they’d be more like hitch-hiking today: a niche pursuit for the unusually adventurous, not a mainstream activity that’s transforming whole sectors of the economy. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Hand touching stars, Credit: Cherezoff/Shuttersto

A young Venetian merchant named Marco Polo wrote a remarkable book chronicling his travels in China around 750 years ago. The Book of the Marvels of the World was full of strange foreign customs Marco claimed to have seen. One, in particular, was so extraordinary, Mr Polo could barely contain himself: “tell it how I might,” he wrote, “you never would be satisfied that I was keeping within truth and reason”. Marco Polo was one of the first Europeans to witness an invention that remains at the very foundation of the modern economy: paper money. Tim Harford tells the gripping story of one of the most successful, and important, innovations of all human history: currency which derives value not from the preciousness of the substance of which it is made, but trust in the government which issues it. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Ancient Russian money, Credit: RomanR/Shutterstock)

Nicholas Murray Butler was one of the great thinkers of his age: philosopher; Nobel Peace Prize-winner; president of Columbia University. When in 1911 Butler was asked to name the most important innovation of the industrial era, his answer was somewhat surprising. “The greatest single discovery of modern times,” he said, “is the limited liability corporation”. Tim Harford explains why Nicholas Murray Butler might well have been right. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: LLC. Credit: Getty Images)

You might think electricity had an immediate and transformative impact on economic productivity. But you would be wrong. Thirty years after the invention of the useable light bulb, almost all American factories still relied on steam. Factory owners simply couldn’t see the advantage of electric power when their steam systems – in which they had invested a great deal of capital – worked just fine. Simply replacing a steam engine with an electric dynamo did little to improve efficiency. But the thing about a revolutionary technology is that it changes everything. And changing everything takes imagination. Instead of replacing their steam engines with electric dynamos, company bosses needed to re-design the whole factory. Only then would electric power leave steam behind. As Tim Harford explains, the same lag has applied to subsequent technological leaps – including computers. That revolution might be just beginning. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Dynamo AC exciter

In the 1920s lead was added to petrol. It made cars more powerful and was, according to its advocates, a “gift”. But lead is a gift which poisons people; something figured out as long ago as Roman times. There’s some evidence that as countries get richer, they tend initially to get dirtier and later clean up. Economists call this the “environmental Kuznets curve”. It took the United States until the 1970s to tax lead in petrol, then finally ban it, as the country moved down the far side of the environmental Kuznets curve. But as Tim Harford explains in this astonishing story, the consequences of the Kuznets curve aren’t always only economic. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Petrol Nozzle, Credit: Khaled Desouki/AFP/Getty Images)

Flamboyant American retailer Harry Gordon Selfridge introduced Londoners to a whole new shopping experience, one honed in the department stores of late-19th century America. He swept away previous shopkeepers’ customs of keeping shopper and merchandise apart to one where “just looking” was positively encouraged. In the full-page newspaper adverts Selfridge took out when his eponymous department store opened in London in the early 1900s, he compared the “pleasures of shopping” to those of “sight-seeing”. He installed the largest plate glass windows in the world – and created, behind them, the most sumptuous shop window displays. His adverts pointedly made clear that the “whole British public” would be welcome – “no cards of admission are required”. Recognising that his female customers offered profitable opportunities that competitors were neglecting, one of his quietly revolutionary moves was the introduction of a ladies’ lavatory. Selfridge saw that women might want to stay in town all day, without having to

In 1876 John Warne Gates described the new product he hoped to sell as “lighter than air, stronger than whiskey, cheaper than dust”. We simply call it barbed wire. The advertisements of the time touted it this fence as “The Greatest Discovery Of The Age”. That might seem hyperbolic, even making allowances for the fact that the advertisers didn’t know that Alexander Graham Bell was just about to be awarded a patent for the telephone. But – as Tim Harford explains – while modern minds naturally think of the telephone as transformative, barbed wire wreaked huge changes in America, and much more quickly. Producer: Ben Crighton Editors: Richard Knight and Richard Vadon (Image: Barbed wire and sun, Credit: Getty Images)

The economist Gabriel Zucman is the inventor of an ingenious way to estimate the amount of wealth hidden in the offshore banking system. In theory, if you add up the assets and liabilities reported by every global financial centre, the books should balance. But they don’t. Each individual centre tends to report more liabilities than assets. Zucman crunched the numbers and found that, globally, total liabilities were eight percent higher than total assets. That suggests at least eight percent of the world’s wealth is illegally unreported. Other methods have come up with even higher estimates. As Tim Harford explains, that makes the tax haven a very significant feature of the modern economy. Editors: Richard Knight and Richard Vadon Producer: Ben Crighton (Image: Huts along tropical beach, Credit: DonLand/Shutterstock)

Not every baby has a mother who can breastfeed. Indeed, not every baby has a mother. In the early 1800s, only two in three babies who weren’t breastfed lived to see their first birthday. Many were given “pap”, a bread-and-water mush, from hard-to-clean receptacles that teemed with bacteria. But in 1865 Justus von Liebig invented Soluble Food for Babies – a powder comprising cow’s milk, wheat flour, malt flour and potassium bicarbonate. It was the first commercial substitute for breastmilk and, as Tim Harford explains, it has helped shape the modern workplace. Editors: Richard Knight and Richard Vadon Producer: Ben Crighton (Image: Baby lying down drinking from bottle, Credit: Lopolo/Shutterstock)