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Nobel Laureate Joel Mokyr on Innovation and Patent Law

by on October 13, 2025

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I noticed several people today tweeting about Joel Mokyr and his distinction between prescriptive and propositional knowledge.

Now I see why–I didn’t realize, but apparently he won the Nobel in economics.

And he’s getting praise from some free market types, e.g. George Selgin.

See also tweets by Pete Boettke, Peter Klein (2), Per Bylund.

I don’t know. Since he is said to know something about knowledge, innovation, and so on, I asked Grok where he stands on patent law, whether he is opposed or in favor, and whether his views are compatible with mine. I haven’t looked at his work in detail yet, but if Grok is right, he’s just another mainstreamer who is in favor of IP. So what does he know about innovation? How can you be for innovation or know anything about if you do not immediately condemn the patent system?

Re his work on the causes of the industrial revolution, see Knowledge vs. Calculation and Hoppe: “From the Malthusian Trap to the Industrial Revolution. Reflections on Social Evolution” (Property and Freedom Society 2009): “My own view is that the industrial revolution happened when the accumulated technical and related knowledge reached a certain tipping point; I agree with Hoppe that other explanations for the IR are wanting but am not persuaded by Hoppe’s theory either; but I am not sure, and this is neither here not there.”

Update:

 

From Grok:

Joel Mokyr’s Writings on Patent Law and Innovation

Joel Mokyr, an economic historian at Northwestern University and co-recipient of the 2025 Nobel Memorial Prize in Economic Sciences for his work on innovation-driven growth, has written extensively on the role of patent law in fostering technological progress, particularly in the context of the Industrial Revolution. His analyses draw on historical evidence from Britain and Europe, emphasizing patents as institutional tools that incentivize invention by allowing creators to capture returns on their ideas. However, he views their impact as context-dependent, not absolute, and warns that overly stringent or inefficient patent systems can create barriers, high costs, and monopolistic tendencies that stifle broader innovation. Key works include:

  • Intellectual Property Rights, the Industrial Revolution, and the Beginnings of Modern Economic Growth (2009, American Economic Review): Mokyr argues that Britain’s 1624 Statute of Monopolies established a patent system that raised private returns on inventions closer to social returns, contributing to the Industrial Revolution.  Yet, patents were underutilized until the mid-18th century due to high fees, complexity, and weak enforcement; many innovators relied on trade secrets or informal networks instead. He stresses the need for patents to balance protection with flexibility to avoid hindering knowledge diffusion.
  • The Lever of Riches: Technological Creativity and Economic Progress (1990, Oxford University Press): Mokyr posits that patents were essential for sustained innovation in modern societies, contrasting with pre-modern eras where weak intellectual property rights (IPRs) limited growth. However, he notes they are insufficient without cultural openness and competition.
  • The Enlightened Economy: An Economic History of Britain, 1700–1850 (2009, Yale University Press): He quantifies rising patent grants post-1750 and links them to Enlightenment-era knowledge-sharing, but critiques inefficiencies like litigation costs that could deter progress.
  • A Culture of Growth: The Origins of the Modern Economy (2016, Princeton University Press): Patents are framed as part of Europe’s “culture of growth,” enabling private rewards amid free idea flow in the “Republic of Letters.” Mokyr cautions against modern IPR overreach that might suppress diffusion, echoing critiques in books like Adam Jaffe and Josh Lerner’s Innovation and Its Discontents (2004), which he has praised.
  • Other papers, such as “Incentives and Institutions: The Economics of the First Industrial Revolution” (2011, NBER Working Paper, co-authored with Ralf Meisenzahl), highlight patents as incentives for “macroinventions” (major breakthroughs), but emphasize broader factors like education and competition.

Mokyr’s Nobel-recognized work underscores institutional prerequisites for innovation, including IPRs, but he advocates for systems that prioritize science funding and openness over rigid monopolies.

Is Mokyr Pro-Patents? Would He Favor Abolishing Patent Law?

Mokyr is generally pro-patents, viewing them as a positive force in historical economic growth by addressing market failures in knowledge production—ideas are costly to create but easy to copy, so patents help align incentives.  He credits Britain’s patent reforms with enabling the Industrial Revolution and argues that weak IPRs in earlier societies stifled progress. However, his support is nuanced: patents must be embedded in pro-innovation ecosystems to be effective, and he criticizes historical and modern flaws like high costs, poor enforcement, and overprotection that entrench monopolies or block cumulative innovation.  Mokyr does not favor abolishing patent law; instead, he implies reforms to make it more efficient and less burdensome, as seen in his endorsement of works critiquing U.S. patent overreach.  In interviews post-Nobel, he has emphasized patents’ role in compensating investments but stressed complementary policies like immigration and public science funding.

Mokyr’s Views on What Drives Innovation and the Distinctions Between Innovation, Invention, and Discovery

Mokyr sees innovation as driven by a confluence of institutional, cultural, and political factors beyond mere incentives like patents. Key drivers include:

  • Cultural openness and knowledge access: A “culture of growth” in 17th–18th-century Europe, with idea-sharing in the Republic of Letters, enabled self-sustaining progress.
  • Institutions and competition: Education, political stability, and markets that reward creativity foster innovation; resistance from incumbents (e.g., via lobbying) can hinder it.
  • Useful knowledge: He distinguishes between “propositional knowledge” (what we know about the world, like scientific principles) and “prescriptive knowledge” (techniques for doing things, like recipes or tools).  Progress requires both, amplified by tools like telescopes that expand propositional knowledge.

On distinctions:

  • Discovery: Uncovering existing truths or propositional knowledge (e.g., the structure of DNA or planet Neptune was discovered, not invented).  It’s foundational but not patentable in pure form, as patent law recognizes this (e.g., laws of nature cannot be patented).
  • Invention: Creating new prescriptive knowledge or devices at the individual level, turning ideas into novel applications (e.g., a new machine).  Patent statistics measure invention, not its usefulness.
  • Innovation: The broader process of adopting, adapting, and commercializing inventions for economic impact—turning inventions into productive changes.  It’s systemic, benefiting from networks and cumulative improvements, and often occurs downstream from invention.

Mokyr emphasizes that invention is individual and creative, while innovation is social and market-driven; discovery underpins both but is distinct as it reveals rather than creates.

Comparison to Stephan Kinsella’s Views

Stephan Kinsella, a libertarian lawyer and prominent anti-IP advocate, fundamentally opposes patents and copyrights, viewing them as illegitimate state-granted monopolies that violate property rights in scarce resources (e.g., physical goods) by imposing artificial scarcity on non-scarce ideas or information.  Unlike Mokyr’s historical endorsement of patents as incentives for growth, Kinsella argues they distort markets, reduce competition, and lack empirical evidence of net benefits—citing studies showing high litigation costs and stifled innovation.  He rejects utilitarian justifications (which Mokyr implicitly draws on) as ethically flawed, since they allow rights violations for supposed societal gains, and methodologically unsound due to impossible utility measurements.

On drivers of innovation: Kinsella sees it propelled by free markets, entrepreneurship, and open knowledge-sharing, where ideas are infinitely reproducible and competition erodes temporary profits, forcing continuous improvement.  Creators can profit via first-mover advantages, branding, or contracts without state intervention—echoing historical examples like patent-free periods in 19th-century Switzerland and Holland. This contrasts with Mokyr’s emphasis on institutional incentives like patents to overcome underproduction of ideas; Kinsella views such “market failures” as myths, arguing IP actually causes failures by blocking imitation and adaptation.

On distinctions: Kinsella downplays rigid separations between innovation, invention, and discovery as “unrigorous” and irrelevant to IP debates.  He groups them under non-scarce “knowledge” or “information” that guides action with scarce resources, critiquing patent favoritism toward upstream inventions over downstream innovations (e.g., quoting Ridley on patents rewarding principles over market adaptations).  Mokyr’s clear categorizations (propositional vs. prescriptive knowledge) align more with traditional economics, while Kinsella sees them as distractions from the core scarce/non-scarce divide.

How Kinsella Would Assess Mokyr’s Thought

While Kinsella has not directly critiqued Mokyr in the consulted sources or searches, his framework suggests he would view Mokyr’s ideas as misguided utilitarian “creationism”—treating creation as a source of property rights, which Kinsella rejects (ownership stems from homesteading scarce resources, not labor or ideas).  Kinsella would likely argue that Mokyr’s historical praise for patents ignores overwhelming empirical evidence against their net benefits, such as studies showing no innovation gains and high societal costs.  He might dismiss Mokyr’s nuances (e.g., balancing protection with openness) as insufficient, insisting on full abolition since IP inherently violates liberty and free markets. Kinsella could portray Mokyr as emblematic of pro-IP economists who romanticize state monopolies without addressing their roots in royal favoritism or modern harms like patent trolls.  Ultimately, Kinsella would assess Mokyr’s work as empirically weak and philosophically inconsistent with libertarian principles, favoring competition over coerced incentives.

***

Update:

Re

Joel Mokyr, “Cultural entrepreneurs and the origins of modern economic growth“: Abstract: The concept of entrepreneur is a central one in economic history. The definition of entrepreneur is extended here to include ‘cultural entrepreneurs’ and show how they can be integrated into the new modern economic interpretation of ‘culture’ as agents who change the beliefs of others. This concept can help us understand one of the central dilemmas of modern economic history, namely how the new institutional economic history can be deployed to understand modern economic growth. Cultural changes in the early modern age led to institutional changes that made Europe more friendly to innovation. In that process, two English figures can be seen as central, Francis Bacon and Isaac Newton. The essay shows how they meet the definition of a cultural entrepreneur and how their work coordinated and focused cultural change that was instrumental in preparing the ground for the Industrial Revolution.

To Grok: “summarize and analyze this paper by Mokyr. to what extent is his thesis and ideas and methodology compatible with the Austrian economic ideas of Mises, Rothbard , and Hoppe, from their online work and the attached?”

Summary of Mokyr’s “Cultural Entrepreneurs and the Origins of Modern Economic Growth”

Overview: Joel Mokyr’s paper, published in the Scandinavian Economic History Review (2013), explores the role of cultural entrepreneurs in fostering the conditions for modern economic growth, particularly leading up to the Industrial Revolution. Mokyr extends the traditional concept of entrepreneurship to include “cultural entrepreneurs,” individuals who influence societal beliefs, values, and preferences, thereby shaping institutions that facilitate economic progress. The paper emphasizes how cultural changes in early modern Europe, driven by figures like Francis Bacon and Isaac Newton, created an environment conducive to innovation and economic development.

Key Points:

  1. Definition of Cultural Entrepreneurs:
    • Mokyr defines cultural entrepreneurs as agents who alter the beliefs, values, and preferences of others, influencing the institutional framework of an economy. Unlike traditional entrepreneurs who focus on economic ventures, cultural entrepreneurs shape the ideological and intellectual environment.
    • They operate by persuading others to adopt new ideas, often challenging entrenched beliefs, and their success depends on their ability to coordinate cultural change.
  2. Link Between Culture and Institutions:
    • Mokyr builds on Avner Greif’s work, distinguishing culture (beliefs, values, preferences) from institutions (formal and informal rules governing economic behavior). He argues that cultural shifts precede and enable institutional changes, which in turn support economic growth.
    • The paper posits that cultural changes in early modern Europe, particularly in the 17th and 18th centuries, made societies more open to innovation by fostering values like scientific inquiry, empirical investigation, and progress.
  3. Case Studies: Bacon and Newton:
    • Francis Bacon: Mokyr highlights Bacon as a cultural entrepreneur who promoted the scientific method and the idea that knowledge should serve practical ends. His advocacy for empirical research and technological progress helped shift societal attitudes toward innovation.
    • Isaac Newton: Newton’s work, particularly his Principia Mathematica, symbolized the triumph of rational and scientific thought, reinforcing the cultural shift toward valuing evidence-based knowledge. His influence helped legitimize the pursuit of scientific inquiry as a driver of progress.
    • Both figures are seen as pivotal in creating a cultural environment that supported the institutional changes necessary for the Industrial Revolution.
  4. Mechanism of Cultural Change:
    • Mokyr argues that cultural entrepreneurs leverage persuasion, intellectual authority, and social networks to disseminate new ideas. Their impact is amplified when their ideas align with existing cultural trends or resonate with influential groups.
    • The cultural shifts they initiated made Europe, particularly Britain, more receptive to technological innovation, which was critical for the Industrial Revolution.
  5. Implications for Economic History:
    • Mokyr’s thesis integrates cultural and institutional explanations for economic growth, addressing a central question in new institutional economics: how institutions conducive to growth emerge. He suggests that cultural entrepreneurs are key to this process by shaping the beliefs that underpin institutional evolution.
    • The paper emphasizes the long-term, path-dependent nature of economic growth, where cultural changes lay the groundwork for institutional and economic transformations.

Methodology:

  • Mokyr employs a historical and interdisciplinary approach, combining economic history, institutional economics, and cultural analysis. He draws on qualitative evidence, focusing on the intellectual contributions of Bacon and Newton, and uses a theoretical framework inspired by Greif’s work on cultural beliefs and institutions.
  • The analysis is narrative-driven, relying on historical examples rather than quantitative data or formal modeling, which aligns with a historical-institutional approach to economic history.

Compatibility with Austrian Economic Ideas (Mises, Rothbard, Hoppe)

To assess the compatibility of Mokyr’s thesis with the Austrian economic ideas of Ludwig von Mises, Murray Rothbard, and Hans-Hermann Hoppe, we need to consider the core tenets of Austrian economics as reflected in the provided documents (Human Action, Epistemological Problems of Economics, The Ultimate Foundation of Economic Science, Economic Controversies, A Theory of Socialism and Capitalism, The Great Fiction, The Economics and Ethics of Private Property). Austrian economics emphasizes methodological individualism, subjective value theory, the role of entrepreneurship in markets, and a skepticism of centralized planning and institutional determinism. Below, I analyze the compatibility in terms of thesis, ideas, and methodology.

1. Thesis Compatibility

Mokyr’s Thesis: Cultural entrepreneurs shape societal beliefs, which lead to institutional changes that foster economic growth. The focus is on how individuals influence the cultural and institutional environment to enable innovation and market-driven progress.

Austrian Perspective:

  • Mises: In Human Action (pp. 13–24, 911 in the provided document), Mises emphasizes praxeology, the science of human action, where individuals act purposefully to achieve their ends. Entrepreneurs are central to his framework, as they anticipate consumer needs and drive economic coordination through market processes. Mokyr’s concept of cultural entrepreneurs aligns with Mises’ view of individuals as purposeful actors but extends it beyond market activities to cultural and intellectual spheres. Mises might appreciate the role of individuals in shaping beliefs but would likely emphasize that economic growth primarily results from market entrepreneurship, not cultural shifts per se.
  • Rothbard: In Economic Controversies (pp. 2–1015), Rothbard builds on Mises, stressing the importance of individual action and property rights in economic progress. He is skeptical of institutional explanations that downplay market processes. Mokyr’s focus on cultural entrepreneurs could be seen as compatible with Rothbard’s emphasis on individual agency, but Rothbard might critique Mokyr for not explicitly tying cultural changes to property rights or market mechanisms.
  • Hoppe: In A Theory of Socialism and Capitalism (pp. 1–2, 266) and The Economics and Ethics of Private Property (pp. 1–2, 442), Hoppe argues that economic growth depends on private property and free markets, with entrepreneurship thriving in a decentralized order. Mokyr’s thesis is partially compatible, as cultural entrepreneurs could be seen as facilitating a cultural acceptance of markets and innovation. However, Hoppe might argue that Mokyr overemphasizes cultural and institutional factors at the expense of property rights and market dynamics.

Compatibility: Mokyr’s thesis is moderately compatible with Austrian economics. The idea of cultural entrepreneurs aligns with the Austrian focus on individual agency and purposeful action. However, Austrians would likely prioritize market entrepreneurship and property rights over cultural or institutional explanations for economic growth. Mokyr’s emphasis on cultural preconditions might be seen as secondary to the direct role of markets in driving progress.

2. Ideas Compatibility

Mokyr’s Ideas:

  • Culture shapes institutions, which in turn influence economic outcomes.
  • Cultural entrepreneurs like Bacon and Newton played a pivotal role in fostering a pro-innovation culture.
  • Economic growth is a complex, path-dependent process involving cultural, institutional, and technological factors.

Austrian Ideas:

  • Mises: In Epistemological Problems of Economics (pp. 2–342) and The Ultimate Foundation of Economic Science (pp. 1–2, 156), Mises argues that economics is a deductive science based on a priori truths about human action. He is skeptical of historical or cultural determinism, emphasizing that economic laws are universal and not contingent on cultural context. Mokyr’s focus on cultural specificity might conflict with Mises’ universalist approach, but his recognition of individual agency in shaping culture aligns with Mises’ methodological individualism.
  • Rothbard: Rothbard’s work, as seen in Economic Controversies, emphasizes the market’s role in coordinating human action and rejects explanations that rely heavily on non-market factors like culture or institutions. Mokyr’s idea that cultural entrepreneurs create a pro-innovation environment could be seen as a precursor to market-driven growth, but Rothbard would likely argue that markets themselves are the primary driver, not cultural shifts.
  • Hoppe: In The Great Fiction (pp. 1–2, 604) and The Economics and Ethics of Private Property, Hoppe stresses that economic progress requires a framework of private property and minimal state intervention. He might view Mokyr’s cultural entrepreneurs as indirectly supporting economic growth by promoting ideas compatible with markets (e.g., scientific inquiry), but he would likely criticize Mokyr for not explicitly grounding his analysis in property rights or libertarian ethics.

Compatibility: Mokyr’s ideas are partially compatible with Austrian economics. The emphasis on individual agency and the role of ideas in shaping economic outcomes resonates with Austrian principles. However, Austrians would likely view Mokyr’s focus on culture and institutions as overemphasizing non-market factors, potentially neglecting the primacy of market processes, property rights, and individual incentives.

3. Methodology Compatibility

Mokyr’s Methodology:

  • Historical and narrative-driven, relying on qualitative evidence and case studies (e.g., Bacon and Newton).
  • Interdisciplinary, combining economic history, institutional economics, and cultural analysis.
  • Builds on theoretical frameworks (e.g., Greif’s work) but avoids formal modeling or quantitative analysis.

Austrian Methodology:

  • Mises: In Human Action and Epistemological Problems of Economics, Mises advocates for praxeology, a deductive method based on logical reasoning from a priori axioms about human action. He rejects historical or empirical methods that seek to derive economic laws from specific contexts, as seen in The Ultimate Foundation of Economic Science. Mokyr’s historical and empirical approach would likely be criticized by Mises as overly contingent and lacking the universality of praxeological reasoning.
  • Rothbard: Rothbard, following Mises, uses a deductive approach in Economic Controversies, focusing on logical implications of human action and market processes. He is skeptical of historical narratives that emphasize cultural or institutional factors over market logic. Mokyr’s narrative-driven methodology would likely be seen as insufficiently rigorous by Rothbard.
  • Hoppe: In A Theory of Socialism and Capitalism and The Economics and Ethics of Private Property, Hoppe employs a deductive, a priori approach, grounding his arguments in logical reasoning and ethical principles (e.g., self-ownership and property rights). Mokyr’s reliance on historical case studies and interdisciplinary analysis would likely be viewed as incompatible with Hoppe’s methodological commitment to deductive reasoning.

Compatibility: Mokyr’s methodology is largely incompatible with Austrian economics. His historical, empirical, and interdisciplinary approach contrasts sharply with the Austrian reliance on deductive, a priori reasoning. Austrians would likely criticize Mokyr for focusing on specific historical contexts rather than universal economic principles.

Extent of Compatibility

  • Thesis: Moderately compatible. Mokyr’s focus on cultural entrepreneurs aligns with the Austrian emphasis on individual agency, but Austrians would prioritize market entrepreneurship and property rights over cultural or institutional factors.
  • Ideas: Partially compatible. The role of individuals in shaping economic outcomes is consistent with Austrian thought, but Mokyr’s emphasis on culture and institutions as primary drivers of growth diverges from the Austrian focus on markets and property rights.
  • Methodology: Largely incompatible. Mokyr’s historical and empirical approach clashes with the Austrian commitment to deductive, a priori reasoning.

Overall Assessment: Mokyr’s work shares some common ground with Austrian economics in its recognition of individual agency and the importance of ideas in economic progress. However, significant differences arise in the relative weight given to cultural versus market factors and in methodological approaches. Austrians would likely view Mokyr’s thesis as a useful complement to understanding the preconditions for market-driven growth but would argue that it overemphasizes non-market factors and lacks a rigorous deductive framework. Mokyr’s cultural entrepreneurs could be seen as facilitating the intellectual environment for markets to flourish, but Austrians would insist that economic growth ultimately depends on free markets, property rights, and entrepreneurial action within those markets.

If you’d like me to delve deeper into specific aspects of Mokyr’s paper or the Austrian texts, or if you’d like me to search for additional context, please let me know!

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