Why the world stopped standing still

In plain terms

1300–1700

In England and Sweden incomes rise and fall, but over four centuries there is almost no lasting growth, despite important inventions.

18th–19th centuries

Craft workers resist the machines that threaten them. John Kay, inventor of the flying shuttle, is harassed by weavers; the Luddite riots follow in 1811–1816. Meanwhile, starting in Britain, growth becomes what the committee calls “the new normal”.

1987–88

Aghion, a first-year assistant professor at MIT, meets Howitt, visiting from the University of Western Ontario. They build their model that academic year.

1992

Aghion and Howitt publish “A model of growth through creative destruction”. Mokyr’s books The Lever of Riches (1990), The Gifts of Athena (2002) and A Culture of Growth (2016) set out the historical case.

2025

The prize. Mokyr had told his students he was “more likely to be elected pope than to win the Nobel prize in economics — and I am Jewish, by the way.” To the Nobel Prize’s interviewer he said: “I’m an economic historian. We don’t win Nobel Prizes.”

2026

Aghion’s Nobel lecture, “The Economics of Creative Destruction”, is published in the American Economic Review in July.

Say it accurately

“The Nobel committee has shown that economic growth is always good.”

The committee says growth has lifted vast numbers of people out of poverty, and that it means more than money: medicines, safer cars, better food. It also says that “sustained growth is not synonymous with sustainable growth”, and lists the harms that call for policy: climate change, pollution, antibiotic resistance, increasing inequality and the unsustainable use of natural resources. In his banquet speech Mokyr granted that creative destruction can “enrich the rich and impoverish the poor, and cause unprecedented environmental degradation”, and said of its critics, “They have a point.”

“This proves the free market should be left alone.” Or the reverse: “This proves the state must steer innovation.”

Aghion and Howitt’s model finds two forces pulling opposite ways. A firm does not count the value its invention keeps giving after a rival overtakes it, so it may research too little. But a firm that takes a market with a product only slightly better gains more than society does, so it may research too much. Which wins varies from market to market. Their later work finds that both too much and too little concentration harm innovation, and the committee suggests that some firms may now be too dominant. What the laureates ask for is mixed: open competition and easy entry for new firms, support for research, and protection for displaced workers. Aghion spoke of “competition and industrial policy combined”.

“Creative destruction means the losers had it coming.”

The model says nothing about desert. The firm that is overtaken may have been the best of its day, and its workers did nothing wrong. The committee calls the gain at a rival’s expense “business stealing”, adding that it is “of course not stealing in the legal sense”; it is not a verdict on the loser either. The committee says it is important “to support people who are affected”, and Aghion commends the Danish “flexicurity” system as “a good way to reconcile creative destruction with protection”. Wesley met an older form of the slur. Visiting the London poor in their underground rooms and garrets in February 1753, he found “not one of them unemployed who was able to crawl about the room”, and wrote: “So wickedly, devilishly false is that common objection, ‘They are poor only because they are idle.’”

“Technology will save us.” Or the reverse: “Machines will take all the work.”

The laureates’ first lesson, says the committee, is that growth “cannot be taken for granted”: stagnation was the norm for most of history, and measured productivity growth has slowed in recent decades. Mokyr argues that the harms of technology tend to prompt the search for remedies, but the committee adds that this “often requires well-designed policies”. The committee thinks AI could speed the growth of useful knowledge; it also notes others’ warnings about automation and the future of work. Neither outcome is settled by this prize.

“Three economists discovered creative destruction and won the Nobel Prize for it.”

The idea goes back at least to Joseph Schumpeter, who set it out in 1942; Mokyr’s banquet speech said all three laureates are indebted to him. Paul Romer, Gene Grossman, Elhanan Helpman and others built related growth models at the same time. What Aghion and Howitt added was the first model of the whole economy in which creative destruction keeps growth going rather than ending it. Strictly, this is not a Nobel Prize at all: it is not one of the five that Nobel’s will founded, but a prize in his memory set up by Sweden’s central bank in 1968 and presented with them.

For preaching

• A hundred times richer Instance

  Deuteronomy 8:11–18 · Mark 10:23–25

  Moses warns that the danger comes after the wilderness, “when you have eaten and are full, and have built fine houses and lived in them”, lest you say, “My power and the might of my hand has gotten me this wealth” (Deuteronomy 8:12, 17, WEB). In 1789 Wesley reported exactly this among his own people. Many Methodists were, twenty to forty years after joining, “twenty, thirty, yea, a hundred times richer” than before, and “nine in ten of these decreased in grace, in the same proportion as they increased in wealth”. The early Methodists are a real case of the sequence Moses describes, attested by the man who knew them best.

• Field to field Instance

  Isaiah 5:8 · Micah 2:1–2

  “Woe to those who join house to house, who lay field to field, until there is no room” (Isaiah 5:8, WEB). In 1773 Wesley described land “which was some years ago divided between ten or twenty little farmers” now “engrossed by one great farmer”, and the market towns going short of pork, poultry and eggs. That is Isaiah’s charge, met in eighteenth-century England. The laureates’ warning that over-dominant firms choke innovation is a separate, economic argument. It can stand beside the prophet’s; it does not prove him right, nor he it.

• The silversmiths of Ephesus Likeness

  Acts 19:23–41

  Demetrius gathers the craftsmen: “Sirs, you know that by this business we have our wealth” (Acts 19:25, WEB), and the city fills with confusion. Mokyr’s history is full of such scenes: a Nuremberg council siding with its metal turners against an improved lathe, weavers who harassed John Kay. The likeness is real enough to preach, and a preacher can feel for the craftsmen as well as for Paul. But it proves nothing, and it fails at the centre: what threatened Ephesus was the gospel, not a better product, and Luke is not weighing the craftsmen’s livelihoods at all.

• Leave the corners of the field Likeness

  Leviticus 19:9–10 · Deuteronomy 24:19–22 · Ruth 2

  Israel’s law did not stop the harvest. It required that something be left in the field: “You shall leave them for the poor and for the foreigner. I am Yahweh your God” (Leviticus 19:10, WEB). The laureates likewise do not want growth stopped, but they insist that those it displaces be caught; the committee suggests protecting workers rather than jobs. Use the picture and no more. Gleaning was a command grounded in God’s name, not a policy chosen because it raises the growth rate.

On the Wesleyan shelf

• The Use of Money (sermon on Luke 16:9)

  Wesley’s “Gain all you can” comes with a demand to improve. He scorns “how men run on in the same dull track with their forefathers”, and tells Christians to learn “from the experience of others, or from your own experience, reading, and reflection, to do everything you have to do better to-day than you did yesterday” (§I.8). That is close to the culture of useful knowledge Mokyr describes. But the same sermon sets a limit that creative destruction does not respect: “we cannot study to ruin our neighbour’s trade, in order to advance our own” (§I.3). Building a better product is not the same as studying a rival’s ruin, but in the model the ruin follows all the same. Wesley does not resolve that tension, and a sermon should not pretend to.

• Causes of the Inefficacy of Christianity (sermon on Jeremiah 8:22; Dublin, 2 July 1789)

  Late in life Wesley faced a paradox about his own movement. “The Methodists grow more and more self-indulgent, because they grow rich” (§16). Then: “wherever true Christianity spreads, it must cause diligence and frugality, which, in the natural course of things, must beget riches! And riches naturally beget pride, love of the world, and every temper that is destructive of Christianity” (§17). His only remedy is the third rule: “Do you gain all you can, and save all you can? Then you must, in the nature of things, grow rich”, and so must give all you can (§18). He lived in the decades just before Britain’s growth became the norm. He did not tell Methodists to stop working or saving; he feared what riches do to the people who prosper.

• Thoughts on the Present Scarcity of Provisions (Lewisham, 20 January 1773)

  Wesley begins with what he has seen in every corner of the land, people eating what the dogs had left, and asks why. “Because they have nothing to do. The plain reason why they have no meat is, because they have no work” (§I.1). His remedy starts in the same place: “Find them work, and you will find them meat” (§II.1). That meets the laureates’ concern for the displaced. Where he differs is the diagnosis. He blamed dear food, from distilling, luxury, taxes and the “monopolizing of farms” (§I.6), and said nothing of new machines; his cures included banning distilling outright and capping the size of farms. His economics was a pastor’s, built on what he saw; his insistence that the hungry are owed work is the part that keeps.