Yves here. Satyajit Das examines economic historian Carl Benedikt Frey’s new book How Progress Ends as well as his 2019 The Technology Trap. He finds that both offer extremely informative historical detail but make less-than-convincing arguments about technology and progress (which as Das stresses, are not the same thing). Do be sure to read this article; Das has worked in some particularly fine deadpan.
By Satyajit Das, a former banker and author of numerous works on derivatives and several general titles: Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006 and 2010), Extreme Money: The Masters of the Universe and the Cult of Risk (2011), A Banquet of Consequences RELOADED (2021) and Fortune’s Fool: Australia’s Choices (2022). His latest book is on ecotourism and man’s relationship with wild animals – Wild Quests (2024)
How Progress Ends: Technology, Innovation, and the Fate of Nations (Princeton University Press, 2025) is somewhat mis-named. Undoubtedly selected by publishers, editors, marketeers, and publicists, some of whom may have read the text, it seeks to maximise the shock impact and sales. In actuality, the book is a history of innovation with a focus on how different political and economic environments encourage or retard development and adoption of new technologies.
Well-credentialed economic historian Carl Benedikt Frey has covered some of this ground before in his 2019 The Technology Trap: Capital, Labor, and Power in the Age of Automation (Princeton University Press). The similar subject matter traversed in the two books results in disconcerting and unfortunate repetition, even of some examples and anecdotes.
The Technology Trap was a history of technological progress, its preconditions, and consequences. Frey distinguished between replacement technologies, which render jobs and skills redundant and enabling technologies, which make people more productive at existing tasks or create new jobs. One finding was that around half all jobs, at least in the US, could potentially be automated using available technologies. These were mainly low-income jobs not requiring high educational levels. The change, the argument suggested, would not be rapid.
How Progress Ends extends the earlier analysis with a different bifurcation. It differentiates between phases of innovation. The first, the exploration phase is where novel technologies emerge through experimentation, competition, and trial-and-error. This phase thrives in decentralized environments. The second, the exploitation phase, is where technologies are scaled up requiring different disciplines. Bureaucratic, centralised process are more efficient in maximising the use of technologies, lowering costs and allowing access.
Frey argues that there is a recurring cycle where over long periods of time, technological advances slow due to the inherent tension between the phases. Why Progress Stops suggests that stagnation results from bureaucratic structures, sometime appropriate for the exploitation of previous technologies but unsuited to newer ideas. He argues that economic and technological progress is not inevitable and stagnation, instead, may be the norm. He finds support in the failure of computing and the internet to deliver the expected progress and prosperity in advanced economies. He draws attention to the concerted efforts of major technology firms to stifle competition and create monopoly powers.
In a concession to topicality and the need of appropriate keywords for search engines, Why Progress Stops has some coverage in the latter half of the book on AI. Frey’s view, which is shared by many observers, is that it will not be revolutionary but may allow a shift to more centralisation, greater bureaucracy, and usher in an unparalleled surveillance society. In a nod to modern non-fiction publishing convention, there is a list of anodyne policy prescriptions to be filled at your local pharmacy: balance bureaucracy and decentralisation, encourage competition and adapt to change.
The strength of Why Progress Stops is, as befits an economic historian, the underlying literature research, undoubtedly by unpaid students acting as research assistants, and detailed coverage of a variety of settings including America, Europe, Russia, Japan, and China.
Interestingly, there is little coverage of developments in India and Africa. There is no mention of India’s use of digital technology in the form of Aadhaar Card, a 12-digit, biometric-based unique ID for citizens/residents, which is linked to a variety of government services and usable for many financial and other transaction purposes. While it has raised privacy concerns, it has benefitted a variety of previously disenfranchised citizen and may even lower corruption. There is no mention of the use of digital money, based on mobile phones, pioneered in Africa, which has empowered similar groups.
While the coverage of history is excellent, the over-arching arguments of and conclusions drawn in Why Progress Stops are less convincing.
The conflation of technology and progress is unfortunate. Innovation may not be synonymous with progress as the weaponisation of technology for armaments and state surveillance highlights. There is an undertone that technology is always a natural good. It parallels Silicon Valley’s unrivalled belief that everything they do serves humanity. In the eponymous satirical TV show, every start up founder always begins a funding pitch with the line that he is committed to making the world a better place.
Non-economic improvements are not considered. The focus on technology inadvertently denigrates other form of innovation, It is arguable that Bismarck and Beveridge’s welfare initiatives, social technologies if you like, to fight want, disease, ignorance, squalor, and idleness are significant in human progress. Brazil’s Bolsa Família (Family Grant), introduced by President Luiz Inácio Lula da Silva in 2003, now one of the world’s largest conditional cash transfer programs, has done more to reduce poverty, inequality, facilitate development and encourage human capital building than many technologies.
There is a certain naivety in Why Progress Stops about the political economy of technological change. Frey rarely addresses the outcomes of technological change in any depth. One important question is how incoming technologies, such as automation, robotics, and AI, affect aggregate employment levels, specific jobs, and income levels. Most creators are interested in the financial rewards. Corporations are seeking profit rather than innovation or public benefits. Individuals just want better lives, which has increasingly been subverted into often pointless and meaningless consumption. Governments aim for stability and re-election. Technology is simply another arena in which these tensions play out.
There is a tacit assumption that these forces can be channelled into flawed democratic processes. Frey in The Technology Trap referred to an old joke by Wassily Leontief about adoption of technologies: “If horses could have joined the Democratic party and voted, what happened on farms might have been different”. Darren Acemoglu and Pascual Restrepo thought that the difference was that humans have a comparative advantage over horses in novel, complex tasks. If significant, this would allow levels of employment and labour’s share of income to remain stable despite rapid automation. Given the rapid advance of technology and the growing threat to the jobs and wages of many, political and social implications of innovation are crucial as the rise of populism highlights.
There is a lengthy list of the sovereigns who retarded technological progress to maintain the stability of society and their regimes. Frey cites examples such as the Emperor Tiberius, who had an inventor executed fearing the possibility that his discovery might put people out of work and cause angry workmen to rebel, and Emperor Vespasian who worried about the effects of a new machine: “how will it be possible for me to feed the population?” Yet, the author does not explores this issue in the detail it perhaps deserves.
Several influences on innovation are underestimated. Discoveries are frequently by chance. Alexander Fleming’s discovery of penicillin and, more recently, the impetus to mRNA techniques provided by Covid19 illustrate this. Human agency, whether on the part of inventors or policymakers, is overstated. As Professor Marvel, the Wizard of Oz, states: “why anybody can have a brain. That’s a very mediocre commodity. Every pusillanimous creature that crawls on the Earth or slinks through slimy seas has a brain”.
Frey mentions, in passing, the influence of size of economies and geography. They may be more important than acknowledged. Japan and China illustrate the importance of a large and highly competitive domestic market in creating export champions. The success of China’s special economic zones was assisted by their proximity to the Asian Tiger economies looking for low-cost labour and ethnic affinities among Asia Chinese “bamboo network”.
There is scant recognition of the trade in ideas. The coverage of post WW2 US technology transfer to some European and East Asian allies misses key points. It was self-serving given America’s needs for bulwarks against the threat of communism and repaid by way of access to bases, which would prove useful during the Vietnam war. Over time, the transfers have reversed with Western pharmaceutical firms increasingly reliant on advances in China.
The book does not give adequate importance to the role of immigration. The move of many Jewish scientists after the rise to power of National Socialism damaged Europe and gave the US, which had hitherto lagged the Old Continent, an important advantage. Even a cursory look through the key senior employees of major technology firms finds a high representation of talented Chinese, Russians, and Indians whose contribution to US innovation is significant. As many of these individuals were trained in their countries of origins, their immigration robbed their home countries of skills but benefitted the US, which did not bear the costs of their training and education.
Despite frequent references to Silicon Valley (now less a centre of innovation than for channelling capital), there is little exploration of changes in how innovation is funded and its consequences. The rise of venture capital, directing money flows, is now crucial to what is funded and how success is measured. It may help explain lacklustre recent innovation. Financiers favour tried and tested business models which either cannibalise existing products or are focused on selling items to feed consumerism.
Financialisaton in the West may also be important in explaining differences between countries. In the later 1990s, I visited a semi-conductor foundry in Taiwan. Leaving the technical buildings, the CEO took a short cut through the company’s financial departments. In contrast to the Star Trek like interior of the production facility, I found myself in a Dickensian environment of paper files and numerous clerical staff beavering away. Responding to my puzzled query as to why these functions had not been computerised, my host simply laughed stating that he did not consider the financial and accounting functions to be important and deserving of the investment required.
Frey’s narrative is US-centric, although Why Progress Stops is less so than his earlier book. But the coverage of anything outside of America often feels cursory. Scholars often have limited first-hand practical knowledge of their subject matter. The highly nuanced nature of certain countries means that a lack of local language skills and deep immersion in these alien environments makes them reliant on published research and second-hand accounts. It creates cultural misunderstandings.
There may be a misreading of Chinese interest in technology. The Middle Kingdom is intensely proud of its history and innovations, which Frey records. It also regards as anything outside China as less important. Little has changed since the Chinese Emperor dismissed British opportunities to trade: “strange and costly objects do not interest me…as your Ambassador can see for himself, we possess all things.” The following centuries of humiliation are seared into the Chinese leadership’s psyche shaping many decisions, including those regarding technology.
An allied misunderstanding is China’s priorities. The focus is keeping the country together, maintaining the primacy of the Communist Party (which Frey acknowledges), and improving the life of Chinese, which they have been successful in doing. Individuality and personal freedoms are not paramount. Success is seen and measured differently. It is also a risk averse culture where emphasis on the exploitation stage of innovations, something which the Japanese and Korean mastered, is seen as an acceptable development path.
As an ancient civilisation, India shares some of these pre-occupations. Prime Minister Modi’s assertion that Indians invented flight (the monkey God Hanuman’s flying to Srik Lanka) and plastic surgery (the Indian god Ganesh’s Elephant head) highlights a sense of superiority even where the evidence is dubious. This is reinforced by decades of relative isolation when the West denied it assistance and technology due to close relationship with Russia during the Cold War.
The role of culture is underestimated. American red-claw-and-tooth capitalism and the prospect of untold riches has proved a powerful driver of innovation. In contrast, Asian reticence of self-promotion and deference to age, knowledge and superiors plays a part in the different types and pace of technological change. Asians, perhaps because of their histories, favour order and stability over Western, particularly American, dynamic chaos.
Denigration of a laggard Europe is justified. But it fails to recognise the fact that it is difficult to co-ordinate actions within the EU, whose main function, now frequently ignored, was to prevent the destructive wars that had preceded its formation. In addition, European caution in trying to fully evaluate the consequences of new technologies including the effects on privacy and society are important although they may not to American tastes.
Frey does raise an important question: does history of technologies provide a guide to the future? The author believes that at a minimum the past will provide useful guidance although he admits that the challenge is to convince the reader of this proposition. History is full of errors in this regard. American fears of Soviet advances, most obviously around the Sputnik scare, proved political usefully but incorrect. Concerns about Japan overtaking America, history records, was premature.
There may be a strong cyclical element in many things including innovation. At different points in time, nations like China, Britain, Europe, the US, and Japan have been significant centres of technological change. There is a significant random element, where a specific confluence of factors shapes the trajectory. It is unlikely that the future will be different. It certainly will not be predictable. The fact that few investors make money from inventions even where the technology triumphs is a testament to that.
Unfortunately, the desperate need for certainty drive what John Kenneth Galbraith identified: “Between human beings there is a type of intercourse which proceeds not from knowledge, or even lack of knowledge, but from failure to know what isn’t known.” One could add that it suggests a failure to know what cannot be known.
Why Progress Stops is a very useful work for those looking to understand the complex history of technological change, at least primarily from an American perspective. The questions raised and matters probed are interesting but the Book’s broader generalisations are less defendable.
© 2025 Satyajit Das All Rights Reserved
A version of this piece was published in the New Indian Express
