Policy Innovation Blog

The dreaded 'innovation and toilets' trope

Stian Westlake - 11.01.2013

The Economist has put a toilet on the front page of its innovation issue. I get it - toilets are useful. They're ubiquitous. Sanitation has saved millions of lives.

And they're shorthand for the argument that innovation is slowing down. Indoor plumbing, so the argument goes, is far more indispensable than smartphones or Facebook. Given the choice, people would rather sacrifice their iPhone than their loo. Therefore the inventions of the early twentieth century are better than those of the present day. Therefore innovation is slowing down. Therefore... PANIC!

The toilets trope came to light in Robert Gordon's alarmist NBER paper last year predicting an innovation slowdown. Guardian subeditors dug out a toilet pic to illustrate my recent piece on the pace of innovation. And today, they made it to front cover of the Economist, which featured a great, detailed analysis of the innovation slowdown debate (like me, the Economist thinks the slowdown is a myth).

The problem is, this metaphor is wrong, for at least three reasons.

• First of all, there's evidence that it's factually wrong:  Kevin Kelly, a writer, recently pointed out that in Western China, people build houses without indoor toilets but pay for mobile phones. At least some people think connectivity is a bigger deal than, er, convenience.  
• Secondly, "I would rather do without A than B" is not the same as "A is more valuable than B". I'd give up most things rather than go without food for a month (it's likely I'd die if I tried). I'm sure you would too. But food represents only 11% of the average British person's monthly expenditure. The things that we'd give up before we give up food cost eight times what food does. (I've made this point in a previous blog post.) 
• But perhaps what gets me most about the Toilets Argument for the innovation slowdown is how incredibly unhistorical it is. It supposes that a present day observer can instinctively compare the relative merit of new technologies and much older ones. A bit of historical perspective shows that this is very, very hard to do.

It took decades for electricity to become a widespread and transformative innovation, as economic historian Paul David pointed out. Adam Smith wrote a book about the economy in the first flourishings of the Industrial Revolution, but scarcely mentions steam engines (not through ignorance either: as Tim Worstall likes to point out, Smith hired James Watt to fix Glasgow University's steam engine).

All this suggests that humans aren't very good at assessing the relative importance of new and old things. Today's innovations are controversial, modish, disposable. Yesterday's are indispensable, transformative, foundational. Douglas Adams quipped that this is especially true the older we get (and perhaps it's no surprise that many of the innovation-stagnationists are men over 50). There's nothing inherently wrong with this attitude, but it means our instincts are a poor guide to the pace of innovation.