Nancy Koehn Discusses The Evolution of Capitalism

Question: What forces have shaped humanity most?

Nancy Koehn: A number of forces have shaped our moment.  Joseph Schumpeter, a very articulate student of capitalism who taught at Harvard in the mid 20th century once said that stabilized capitalism is a contradiction in terms.  Change is ever present with us.  And even within that … in that postulate if you will, or that truism, we are living in a moment of mega change.  And as a historian of capitalism and of entrepreneurship, I think of at least …  there are at least three enormous …  There are at least three moments of great change in the last 300 or 400 years of industrial … 300 years of industrialization.  One at the middle of the 18th century in Britain, which really created the possibility of industrialization through technological improvements like the spinning Jenny and the steam engine.  A second one in the late 19th century, built on innovations like the railroad and the telegraph that built big business, that created the 20th century that created consumer societies not just in this country, but all around the world.  And then our moment which dwarfs both of those moments.  Now citizens, and managers, and politicians living through those past epics thought they were living in times of dizzying change.  You know in times when people had no attention spans, and when people were “toing and froing”, and getting and spending to quote Wordsworth.  And you can say that same thing about our age, but our age is bigger.  It’s bigger.  The change is deeper, it’s broader, and the drivers are wider in scope.  

Question: What has changed?


Nancy Koehn: What are those drivers?  They are first, let’s start with the basics of any kind of change – demographic change. We have enormous demographic change now unfolding around the world both in terms of the places where the population growth is increasing rapidly, the places where it’s not growing, and what that means for the aid distribution; and what that means to live a quality and length of life for billions of people.  So demographic change and its environmental … and its marital companion, its bedfellow, environmental change.  No other generation, no other epic in history has witnessed the kind of environmental change on the scale that we are now witnessing it.  No set of people has ever come close to what might be the production, possibility, frontier of mother earth, and we are close.  Huge technological change.  You know it began with the PC.  Or perhaps it began with the mainframe back in the 1940s, or the PC in the 1980s, and now the Internet.  And corresponding breakthroughs in digital technology, in biopharmaceutical technology, biology.  These kind of … these kind of forces have now unleashed and accelerating in terms of their power are unprecedented.  

Question: How have we changed as a society?

Nancy Koehn: We also have great social transition.  Not just in this country where we’ve seen what was the nuclear family really just metamorphosed …  We’ve seen the nuclear family really change – like, you know, from a caterpillar to a butterfly if you will, or from a butterfly to a caterpillar – change completely in a couple of generations what constitutes family.  How many people are in the family?   How do you keep a family together?  Where does a family live?  The basic nuts and bolts of our living units have changed and are changing.  And again that’s happening in the United States.  It’s happening in Europe.  It’s happening in Japan.  And what took two or three generations of massive social change and efforts on the part of women and men in this country is going to take less in a generation in places like China.  Because as those countries have leapfrogged …  As those countries have leapfrogged through technological innovations that took this country and European countries a couple of decades to develop and diffuse in those places, China will do in a relative nanosecond.  So social change is everywhere.  It’s broad reaching.  It’s profound.

Question: How have we changed psychologically?

I think finally we’re living in a moment of great psychic change.  There’s a very articulate, elegant historian named … a French historian who wrote in the early decades of the 20th century.  And he wrote about sensibilité.  He wrote about the sensibility of an age.  Over the overwhelming, collective issues.  What was the ethos?  What was the …?  How was it related to practical material life?  If … were alive today, he’d be writing about fear.  Because when historians come to write about this age in grand terms like sensibility, they’ll write about anxiety and fear as the overwhelming, collective emotions around the world.  And in a global world – a world knit more tightly together by many, many orders of magnitude than it’s ever been.  All of those changes add up to just, again, an extraordinary moment of great, I think, challenge, and of great possibility.  And I think emotionally of much, much more fear than exaltation or hope.

Recorded On: 6/12/07

Nancy Koehn discusses the next stage of economic progress.

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