I’m part way through William Rosen’s [amazon_link id=”1845951352″ target=”_blank” ]The Most Powerful idea in the World: A Story of Steam, Industry and Invention[/amazon_link]. It’s an enjoyable read, although I’m not learning anything new, as someone who has already read plenty about the Industrial Revolution. The book covers the same terrain as classics of economic history such as Joel Mokyr’s [amazon_link id=”0691120137″ target=”_blank” ]The Gifts of Athena[/amazon_link] and more recent [amazon_link id=”0140278176″ target=”_blank” ]The Enlightened Economy[/amazon_link], and Greg Clark’s [amazon_link id=”0691141282″ target=”_blank” ]A Farewell to Alms[/amazon_link].

However, one novelty is the claim made in a footnote that “a number of international economists” use the production of sulphuric acid as a proxy for the level of development. I’m familiar with the use of electricity consumption as a measure of economic activity – Friedrich Schneider and Dominik Este use it as one approach in their estimates of the scale of the underground economy. A bit of searching this morning has found the claim about sulphuric acid made in one commodities market blog post endlessly copied around the internet, and the following New Scientist article from 1988 attributing the claim to a classic chemicals textbook (Industrial Chemicals by Faith, Keyes and Clark) but noting that the relationship between economic output and sulphuric acid production had broken around 1983 in Britain. Intriguingly, this is the time when UK GDP decoupled from the material weight of the economy in general, as noted in my 1996 book, [amazon_link id=”0262032597″ target=”_blank” ]The Weightless World[/amazon_link].

[amazon_image id=”1845951352″ link=”true” target=”_blank” size=”medium” ]The Most Powerful Idea in the World: A Story of Steam, Industry and Invention[/amazon_image]

Quotation of the day comes from Robert Solow, in his introduction to the forthcoming new edition of [amazon_link id=”0230575978″ target=”_blank” ]Manias, Panics and Crashes: A History of Financial Crises[/amazon_link] by Charles Kindleberger and Robert Aliber. He writes: “Large quantities of liquid capital sloshing around the world should raise the possibility that they will overflow the container.” A thumbnail diagnosis of the recent Great Financial Crisis.

[amazon_image id=”0230575978″ link=”true” target=”_blank” size=”medium” ]Manias, Panics and Crashes: A History of Financial Crises[/amazon_image]

A while ago I posted about a 1956 book by sociologist C Wright Mills, [amazon_link id=”0195133544″ target=”_blank” ]The Power Elite[/amazon_link]. It was the persistence of unearned banking bonuses that made it seem so relevant at the time, but recent events in the UK are a reminder that the media are – and always have been – in the nexus of power in every country.

An article by John Nichols in the current issue of The Nation considers the market power of News International in the United States, bringing to mind Timothy Wu’s excellent recent book on concentration in media markets, [amazon_link id=”B004DUMW4A” target=”_blank” ]The Master Switch[/amazon_link]. It would be interesting, too, to go back to some of the classics looking at the elite – in the UK, it would be Anthony Sampson’s [amazon_link id=”0719565669″ target=”_blank” ]Who Run’s This Place: An Anatomy of Britain in the 21st Century[/amazon_link], and Robert Peston’s [amazon_link id=”B002V0921A” target=”_blank” ]Who Runs Britain?[/amazon_link], which focuses on the financial sector.

All in all, with both the big banks and a major international media company in turmoil, not to mention the travails of Silvio Berlusconi in Italy, bringing together political and media power in his own person and now at the latest epicentre of the financial crisis, it’s a fascinating time for social scientists to ponder questions of power. (I write this as both a social scientist and a minor member myself of Britain’s power elite.)

[amazon_image id=”0195133544″ link=”true” target=”_blank” size=”medium” ]The Power Elite[/amazon_image]

I’ve started reading William Rosen’s history of how innovation came to be, [amazon_link id=”1845951352″ target=”_blank” ]The Most Powerful Idea in the World: The Story of Steam, Industry and invention.[/amazon_link] It’s a readable canter through the history of the science of steam, culminating in the steam engines of Savery, Newcomen, and James Watt – and through that specific story, a history as well of the invention of invention. Having grown up in Lancashire, with parents and aunties and uncles working in what was left (by the 1970s) of the traditional cotton industry, I’m a complete addict when it comes to anything about the Industrial Revolution.

This being an English summer’s day, it’s bucketing with rain in London. I was particularly struck by a quotation early in the book from Evangelista Torricelli, a Florentine scientist of the 17th century, and discoverer of atmospheric pressure. No, I’d never heard of him before either.

Anyway, he said: “We live submerged at the bottom of an ocean of air.” What a fantastic image – especially now we know what the Earth looks like from space.

[amazon_image id=”1845951352″ link=”true” target=”_blank” size=”medium” ]The Most Powerful Idea in the World: A Story of Steam, Industry and Invention[/amazon_image]

Machiavelli’s [amazon_link id=”0140449159″ target=”_blank” ]The Prince[/amazon_link] has a new rival. It’s The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics by Bruce Bueno De Mesquita and Alastair Smith, to be published in October. Public spirit has no place in politics for these two eminent political scientists: “Our starting point is that any leader worth her salt wants as much power as she can get, and to keep it for as long as possible.” There is no clear distinction between dictators and democrats, they argue, only a difference of degree. And that is the size of the coalition on which they rely to stay in power.

The authors categorize the population of any entity – nation state, city, corporation, university – into three groups: all those who have a nominal say in selecting a leader (the whole adult population in both the UK and North Korea); those whose vote actually counts (the whole adult population in a democracy but only Communist Party members in China); and the minimum coalition needed to win the vote in this latter group (‘the essentials’). The key determinant of the form of governance is the size of these groups. And the key political task of the leader is to reward the essentials enough to keep them loyal. This is why democratic governments spend on public goods: it is too expensive to give private rewards to a large electorate. But dictators will reward their supporters directly, and never mind the people.

This obviously seems a highly cynical analysis, and after finishing the book it hadn’t changed my view that democratic politicians are usually motivated by genuinely high motives as well as low politics. However, the book does a good job of demonstrating how well the three-dimensional framework explains governance and outcomes in a wide range of organisations. Just think about executive pay and banking bonuses for example. Individual shareholders are nominal owners but have no real influence. Big shareholders have some say over boardroom decisions. But the real power lies with just a handful of board members. Surprise, surprise, CEOs keep them sweet with rocketing pay and bonuses. Another neat example is provided by the IOC and FIFA. An IOC vote on the location of the Olympics depends on just 58 votes (a winning number out of the 115 person body); FIFA decisions on just 13. The book notes estimates that buying an IOC vote costs about $100,000-200,000, and a FIFA vote $800,000.

The authors draw some firm conclusions from their analysis. For example, aid donors should never give money, or forgive debts, in advance of democratization; it will only go straight into the bank accounts or pet projects of the corrupt few. Comparing countries similar in key ways – income per capita, geography, culture, size – they show convincingly that the democrats spend on public goods but the dictators spend on their cronies. This conclusion obviously ties in with an increasingly prominent theme in the development economics literature.

Less persuasive is the book’s argument that sooner or later every society will get to a point where the number of essential supporters becomes large enough to move its governance from the dictatorship towards the democracy end of the spectrum. It doesn’t set out these dynamics clearly, although sometimes a disastrous economy which is becoming too poor to plunder can be the trigger for reform. Change depends on increasing the number of ‘essentials’. To continue with the IOC example, the authors’ suggestion for reform is that all former Olympic athletes should be allowed to vote on decisions about future games. That would obviously make a huge difference – but how is the IOC to be persuaded to do so?

There is an intriguing hint that new technologies – much hyped for their part in the Arab Spring – could make a big difference. The book dismisses the formality of elections as a democratic tool, because they are so easy to rig. More important is free speech and assembly. I would have liked to see the later chapters explore in more detail how the process works, and why Twitter revolutions have succeeded in some polities but not others.

However, wanting more rather than less of a book is a good sign. This is a fantastically thought-provoking read. I found myself not wanting to agree but actually, for the most part, being convinced that the cynical analysis is the true one.