Economics professor Jeremiah Dittmar began thinking about the great revolutions in information technology while studying at the University of California–Berkeley in 2005 and living in northern California, home to the corporate kings of tech. What, he wanted to know, were the origins of a knowledge-based economy, and what spawned the rise of a new class of individual, one who was literate and upwardly mobile?
He landed on the printing press, that technological pioneer of mass production invented by Johannes Gutenberg around 1450. Says Dittar, “It arguably provides the closest historical parallel to the emergence of the Internet.”
He will present his research in an upcoming article, “Ideas, Technology, and Economic Change: The Impact of the Printing Press” (Quarterly Journal of Economics, forthcoming November 2012). The National Science Foundation awarded him a $163,257 grant to support additional research.
Dittmar has identified important changes in European capitalism during the High Renaissance. He is looking at how print technology spread across the continent’s cities and trans- formed local economies. Using a database of more than 200 European cities that adopted the printing press, he has been able to show what books were published and when. The technology, he explains, expanded in “concentric circles, as printers set out from Mainz to establish presses in other cities.”
Religious texts initially fueled the production of print media followed by commercial interests. “Print media spread new ideas about counting and business practice that revolutionized the leading sector of the economy of Renaissance Europe—the mercantile and trading sector,” he says. This led to the “development of numeracy, the emergence of business education, and the adoption of innovations, like double-entry bookkeeping.” Merchants engaged in large-scale and long-distance trade, which enabled the calculation of interest rates, profit shares, and exchange rates.
“Starting in the 1480s,” says Dittmar, “European presses produced a stream of commercial arithmetics, the first printed mathematics textbooks, designed for students preparing for careers in business.” In addition, merchant manuals combined accounting and mathematics with business advice, including tables that simplified the calculation of interest on tariffs and loans and other costs.
Dittmar has correlated the availability and affordability of print materials with the rise of our knowledge-based economy. “Printers’ workshops brought scholars, merchants, craftsmen, and mechanics together for the first time in a commercial environment, eroding a previous separation between town and gown,” he says.
Movable-type print technologies also had a significant effect on urban development. “Cities that adopted the printing press in the late 1400s,” he writes, “enjoyed no growth advantages prior to adoption, but grew at least 20 percentage points—and as much as 60 percentage points— more than similar cities that did not [adopt] over the period 1500–1600.”
Today, there’s discussion in both academic and mass media circles about how the Internet will lead to the death of distance, an economic theory that suggests the ease and speed of electronic communication makes location and the distance between us irrelevant. Dittmar points out that a similar discussion emerged in the late 1400s with the advent of the printing press. Many historians speculated then about an imminent “future in which the importance of location would be eroded.”
Economists have been unable to identify any impact of the printing press at the macroeconomic level and find no evidence of its influence in terms of aggregate productivity per person. “The absence of any effect is a puzzle,” Dittmar says. And economists confront similar puzzles today in the study of contemporary information technology.
Dittmar’s findings challenge modern assumptions. “The printing press did not lead to a death of distance,” he says. In fact, it fostered face-to-face interactions and vital community and regional connections and contributed to the growth of modern capitalism.
Ultimately, Dittmar’s study challenges the theory that economies around the world were stagnant until the Indus- trial Revolution. “Thinking about the diffusion and impact of print media in European history should help [economists] ground and focus our questions about contemporary revolutions in information technology and their impact on where people and economic activity will be located in the future.”