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50 Things That Shaped The Modern Economy

In 2016, the BBC has produced a podcast about modern economic history. Following the paradigmatic title “50 things that shaped the modern economy”, every episode focuses on one element that affects how we live today. It is truly fascinating to imagine how the world would look like without each of those developments. Interestingly enough, most of the “things” are actual human inventions.

Below is the full list from the BBC with links to the respective episode:

  1. The Diesel engine: a more efficient way of transport than steam engine or internal combustion engines at the time of its invention
  2. The Haber Bosch process: a chemical process to create fertilizer from air
  3. The shipping container: gains in efficiency via standardization
  4. Concrete: as a simple and versatile construction material
  5. The iPhone: even if fairly new, smartphones have become the ultimate device that assists in a myriad of everyday tasks
  6. The barcode: increasing efficiency in retail via barcode scanning, allowing efficient checkout even when the store is stocking a large number of items.
  7. Banking
  8. The lightbulb
  9. M-Pesa: a micro-payment service via SMS that is very popular in various African countries
  10. The compiler
  11. The Billy bookcase
  12. Antibiotics
  13. Paper
  14. Insurance
  15. Google
  16. The clock
  17. The disposable razor
  18. The robot
  19. Public key cryptography: enabling secure communication without exposing secret keys
  20. The battery
  21. The gramophone
  22. TV dinner
  23. The contraceptive pill
  24. The elevator
  25. Air conditioning
  26. Cuneiform
  27. Video games
  28. Intellectual property
  29. Passports
  30. The tally stick
  31. The index fund
  32. The infant formula
  33. Tax havens
  34. Barbed wire
  35. The department store: cathedrals of commerce in which customers could pick products from shelves without the assistance of store clerks; coincided with more freedom for women
  36. Leaded petrol: already criticized before and during its introduction for the known danger of lead poisioning, which raises an interesting question - how much pollution is the price worth paying for technical progress? (for instance by making cars more powerful, as engines could use higher compression ratios)
  37. The dynamo: as an alternative to the steam engine. Factories based on steam engines were extremely centralized and inflexible, as the whole factory was arranged around this steam engine. With dynamos, electric power becomes a commodity and factories could be de-centralized: Single machines become more independent of the central powering device.
  38. The limited liability copy: a legal body that is independent of its owners, managers or employees - essentially a helpful fiction. It fostered investments as investors were not held liable with their own fortune for losses of the company, which essentially reduced the cost of oversight.
  39. Paper money: with its value not coming from the preciousness of a substance, but from the guarantee of the value by a central authority
  40. Seller feedback: prerequisite of a trust economy in which ordinary people offer goods/services via eBay, Uber or AirBnB. Trust is an essential component for any market, but it is so basic that it is often overlooked.
  41. Plastic: universal material, used in ubiquitous manner in everyday life (try not touching any plastic for a day - it’s impossible!). Today seen as a cheap replacement for other goods and higher awareness for lack of biodegradability and its effect on ocean pollution.
  42. Market research: moving from a producer-led economy (making something, then convincing people to buy this) to a consumer-led approach to business (find out people might buy, then make it).
  43. Radar: as the backbone of the aviation industry - nowadays a commodity for both passengers and cargo. (Directly after WW2, commercial aviation worked on pre-submitted flight plans and ad-hoc coordination between planes, but crashes occured.)
  44. The s-bend: extremely simple yet crucial part of modern sanitation, providing an airtight seal for flushing toilets. Sanitation is an example for positive externalities (it reduces the risk of diseases), but leads to collective action problems when it’s comparatively expensive.
  45. Double-entry bookkeeping: helping to minimize errors when trading or when enterprises become more complex. Developed in Renaissance Venice, probably based on ancient Asian systems of bookkeeping. Value of correct book keeping as a trust device can be shown in the Enron or the Parmalat scandal: the difference between the value before and after the scandal was mainly based on the assumption of correct book keeping.
  46. Management consulting: modern cliché is that management consulting is either meaningless or common sense, but it actually promoted a systematic scientific approach to management.
  47. The property register: even informal property rights create incentives to cultivate/use one’s own land instead of needing to be afraid of free-riders.
  48. The welfare state: political device to reduce inequalities (to a desired level). The government (and not the family or a private insurance) should protect from the basic risks of life.
  49. The cold chain: global architecture of agriculture - consider the example of bananas that can be found on grocery store shelves across the globe, regardless of the local climate and despite their very particular ripening cycle.
  50. The plough: more efficient use of limited lands, by bringing nutrients to the surface while letting moisture sink deeper to protect if from the sun; enabling more efficient farming and division of labor instead of subsistence farming.
  51. The 51st thing…: Credit cards: credit is essential part of economy, but depended on personal relations to establish trust in getting paid. Credit cards work as a centralized trusting device where it’s impossible to have personal judgments of trustworthiness between each buyer/seller.
  52. Alternative candidates for the 51st thing:
    1. Glass: necessary for microscopes and telescopes that changed our view of the world, also an essential part of fibre-optic cables that form the backbone of the Internet and modern communication.
    2. GPS: connection to satellites allows everyday products to find the position on the globe.
    3. Irrigation: transforming agricultural techniques, but also interesting as it raises the question who gets how much water (see Elinor Ostrom’s work on the tragedy of the commons)
    4. Pencil: as an example how a modest item is built on global supply chains, with its components sourced from different regions around the globe
    5. Spreadsheets: in particular popular in their digital form, as calculations are carried out automatically instead of requiring accountants to crunch numbers manually
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