Paul Romer on Human Progress

The biggest question of all, the one that’s always interested me, is what drives progress. So technology is clearly a part of that, and that’s what I worked on in the early part of my career, but it’s very clear that there’s something that I would call rules that have to coevolve with [technologies], so that every new technology we get like internal combustion engines, you’ve got to have rules about stopping at stop lights or don’t block the box that make sure to use those technologies in a way which is beneficial. So the key is to understand the coevolution of technologies and rules.  And, then I think you have to split rules into something like laws, which are the things that economists typically pay attention to where change in laws comes through a political process, but where there’s also this other dimension of the rules, which is instantiated in our norms.  Our norms do change over time, and we need to understand how the norms influence the laws, and the laws influence the norms, and how those together can influence either development of new technologies or the spread of technologies.

Instead of just having a better institution for the nation as a whole to pass new laws, you think about creating new, in biological terms - superorganisms - that can bring people together and have those superorganisms compete with each other. I think this is what the capitalist market system did in creating businesses as superorganisms that compete with each other very intensely. I’m suggesting that I think in political jurisdictions, we could have more competition below the level of the nation if we empowered cities to adopt independent policies and compete for people, compete for providing a high quality of life, and then that competition plays out partly with mobility of people but partly with copying what the most successful cities are doing.