William Baumol, who strikes me as one of the leading contenders for a Nobel in the near future, has written a surprising amount of interesting economic history. Many economic historians see innovation – the expansion of ideas and the diffusion of products containing those ideas, generally driven by entrepreneurs – as critical for growth. But we find it very difficult to see any reason why the “spirit of innovation” or the net amount of cleverness in society is varying over time. Indeed, great inventions, as undeveloped ideas, occur almost everywhere at almost all times. The steam engine of Heron of Alexandria, which was used for parlor tricks like opening temple doors and little else, is surely the most famous example of a great idea, undeveloped.
Why, then, do entrepreneurs develop ideas and cause products to diffuse widely at some times in history and not at others? Schumpeter gave five roles…
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Utopia, you are standing in it! 
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