I recently read Knowledge and Wealth of Nations: A Story of Economic Discovery. This book by economics journalist David Warsh is ostensibly about endogenous growth theory; in particular the work of Paul Romer, a mathematical economist. To be concise Romer’s research involved the construction of a mathematical model which showed how the ecosystem of knowledge as it has emerged over the past few centuries has resulted in technological innovation. This innovation is the engine for the increased efficiency, economic productivity, which has resulted in the escape from the Malthusian Trap.
Warsh’s narrative is in actuality a fascinating survey of the discipline of economics from Adam Smith to the contemporary period. In many ways it is a worth heir to Robert Heilbroner’s Worldly Philosophers. But while Heilbroner’s story ended with the rise of positivist economics and its mathematical handmaids, Knowledge and Wealth of Nations comes close to being an apologia for these strands of economic thought, which now reign ascendant. Unfortunately, the very important role that mathematical models play in the work of the principals of Warsh’s narrative, especially Romer, means that the exposition can never reach completion. The verbal dish is rendered stale by the very argumentation within the text which seems to make it seem trivial window dressing to the formal meat, which due to the technical sophistication assumed by any astute examiner lays behind the exposition presented before you. In short, it is rather difficult to conceptualize exactly how Romer’s ideas different from Alfred Marshall’s vague verbal allusions to the power of spillover effects in catalyzing innovation. One simply has to trust that the math does exist which fleshes out the details of difference and maintain the faith.