Many have now formed their opinions about the 2025 Nobel Economics Prize and how its focus signals to the world, the criticality of the economics of innovation and growth. However, what was also curious was the quip by the 2025 Laureate Joel Mokyr (one of the three winners) that ‘economic historians don’t win the prize’.
The discipline often undervalues the slow, evidentiary craft of archival work. Yet, when the world grows noisy, amid disruptions by Artificial Intelligence, inequality, fiscal overhangs and geopolitical shocks, policy debates turn to long-run narratives that economic historians assemble.
Growth as social technology first
Mokyr’s central lesson, sharpened by the pedagogy of scholars such as Carnegie Mellon economic historian David Hounshell, is that modern growth is a social technology before it is a mechanical one. The achievement of the Industrial Enlightenment did not rest on a single genius or gadget; it relied on civic machinery that made useful knowledge travel — printers, coffee houses, learned societies, dissenting congregations and guilds that were sometimes cartels but often repositories of tacit know-how. Apprenticeships, shop-floor heuristics and rule-of-thumb engineering formed the codebase of progress. Where guilds faced contestable markets and porous cities, they incubated capability. Where they ossified, they throttled entry. In sum, Schumpeter’s creative destruction works only when the social plumbing allows new ideas to displace entrenched privilege.
This is where the contributions of Mokyr’s fellow Laureates, Philippe Aghion and Peter Howitt, complement rather than contradict Mokyr’s narrative. Their Schumpeterian growth framework provides dynamic microfoundations: innovation rents attract entrepreneurs; incumbents litigate and lobby; and policy can either harden moats or protect the process that makes churn productive. The engine misfires when experimentation is costly and entry blocked; it hums when institutions tilt toward contestability and diffusion. Mokyr shows how societies built a working engine. Aghion and Howitt show how to keep tuning it under pressure.
The quip about Nobels persists because the field sometimes treats history (in fact the economics Nobel itself was an afterthought) as an anecdote rather than a mechanism. Archival material can, however, illuminate incentives more vividly than elaborate regressions adorned with robustness checks and identification strategies. And as a literal claim, Mokyr’s line is likely to be wrong. Other scholars have won the prize building on economic history. Douglass North and Robert Fogel were honoured for placing institutions and counterfactuals at the core of economics. Claudia Goldin received the prize for a sweeping historical account of women’s labour markets. Simon Kuznets’ national accounting was inseparable from historical measurement. Their work demonstrates that economic history is no sideshow. It is the lab where rules, culture and technology are tested as drivers (or brakes) on growth.
What grips the world now
Consider three current anxieties. First, Artificial Intelligence (AI) and jobs. Mokyr’s work cautions that technology shocks rarely act as one-for-one job killers. They reprice competencies and reorganise tasks. The social question is transition management: who bears the cost of moving from old tasks to new ones? Here the Aghion-Howitt injunction to protect process rather than incumbents becomes policy-relevant fast. Portable benefits, credible skills bridges, interoperability and data portability in digital markets. All of these protect workers and entry, not the last generation of firms.
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Second, high public debt. History also sobers exuberance and fatalism alike. The Dutch and British states that populate Mokyr’s studies did not become credible borrowers through austerity alone. They built civic capacity — tax systems, representative institutions, enforceable contracts — that enabled a rollover of obligations and the financing of long projects. In an era of swollen balance sheets, that lesson is not antiquarian. Fiscal sustainability is institutional, not merely arithmetic.
Third, inequality. Guild history also clarifies how privilege often hides behind claims of quality control and safety. The counter is not iconoclasm but contestability. Lower the costs of entry and diffusion so insiders’ rents are bid down by capability, not pedigree. In digital markets, this maps to pro-competitive procurement, open standards, and limits on self-preferencing. These are perhaps modern analogues of the coffee house and the cheap pamphlet.
Digitisation itself invites a reality check. Sussex economic historian Nick Crafts’ revisions to the British Industrial Revolution show that general purpose technologies (steam, ICT, AI) appear late in macro data because they require complementary investments and firm reorganisation. Meanwhile, Jared Diamond’s wider lens (geography, ecology, diffusion barriers) offers a further reminder — technology is embedded in landscapes and path dependencies. Together, the history bench is a vaccine against both euphoria and despair. It directs attention to institutions, complementarities, and time.
As a documentation
Why, then, does Mokyr’s quip still feel true? Because prizes, like productivity statistics, are lagging indicators. The frontier of research may periodically swing toward identification strategies, but the problems that preoccupy the public (automation, debt, social mobility, geopolitical realignment) are historical in essence. They demand causal stories that unfold over decades, with actors who learn, bargain, and sometimes entrench. That is economic history’s comparative advantage. It documents how societies learn to argue productively and build forums and rules where better ideas defeat old power.
The deeper point, therefore, is not about medals but about machinery. The question is whether societies are protecting the engine — the open, critical, experimental process that moves ideas from discovery to diffusion — or leaning toward merely the owners of the last engine.
History’s answer is blunt: prosperity is the exception. It must be argued for, institutionally and incessantly.
Chirantan Chatterjee is Professor of Development Economics, Innovation and Global Health at U-Sussex
Published – October 29, 2025 12:08 am IST
