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The Code Economy: A Forty-Thousand Year History. By Philip E. Auerswald . Oxford: Oxford University Press, 2017. vi + 298 pp. Figures, references, notes, index. Cloth, $29.95. ISBN: 978-0-19-022676-3.

Published online by Cambridge University Press:  10 October 2017

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Abstract

Type
Book Reviews
Copyright
Copyright © The President and Fellows of Harvard College 2017 

A fascinating mix of economics and business, The Code Economy: A Forty-Thousand Year History by Philip E. Auerswald is an important book for understanding today's—and tomorrow's—economy and where it has come from. Auerswald, an associate professor of public policy at George Mason University, provides a sweeping forty-thousand-year history of human productivity, from the simple to the complex, in this rather ambitious volume. Having written three books with historian David Lewis, arguing a primitive form of proto-MNEs existed in the ancient world and covering thousands of years of history, I came to this tome with an open mind. I am glad I did.

In this very readable book, the author asks, “What do Stone Age axes, Toll House cookies, and Burning Man have in common?” He argues that they are all examples of code in action. This takes a bit of explaining, but ultimately he won me over.

At the heart of the book is the question “What is ‘code’?” Auerswald argues that code is the DNA of human civilization as it has evolved from Neolithic simplicity to modern complexity. It is the “how” of progress. It is how ideas become things, how ingredients become cookies. It is how cities are created and how industries develop. He calls this progression from the simple to today's rather complex software “the advance of code” and focuses on how abstract concepts—code—are turned into actual things. Taking the reader over many millennia, he argues persuasively that each major stage in the advance of code has brought a shift in the structure of society that has challenged human beings to reinvent not only how we work, but also who we are. This resonates with the considerable shifts that seem to be taking place at the edges of today's economy. As a parent of a child just starting university, I wonder what he should study so that he can be relevant for decades to come.

Auerswald asserts that we cannot “understand the dynamics of the economy—its past or its future—without an understanding of code” (p. 7). He seeks to rebalance the way economics is currently taught, focusing on “code and production” as well as “choice and consumption” (p. 8). He offers up three key ideas: the creation and refinement of code is an essential human activity; progress in developing code is what drives the economy; and these developments produce not just new products, but new ways of seeing and experiencing the world. Following these ideas, he divides the book into three sections: “The Advance of Code,” which examines the past and how code has evolved; “Code Economics,” which explores economic studies; and “The Human Advantage,” which looks at the relationship between code and human experience.

The “Advance of Code” is a fun set of chapters to read. Auerswald writes well with colorful anecdotes sprinkled throughout to engage the reader's interest. More fundamentally, this section illustrates the importance of the advance of code. Chiseled axes, writing, culinary recipes, and the evolution of cities are all highlighted as convincing examples of how code, given Auerswald's broad conceptualization of the concept, has been central to the growing complexity and accomplishments of humanity.

The second section, “Code Economics,” takes a different look at economics than many readers will be accustomed to. Auerswald argues that economists have largely overlooked the part of economics that focused on code and production. His story begins with economists’ first attempts to understand the impact of mechanization on humanity during the Industrial Revolution. As the processes of production became more complex at the dawn of the twentieth century, it was social scientists who first studied how firms learn and develop. This inquiry developed in the fields of management science and operations research, now major departments in most business schools. It was only later, Auerswald argues, that economists came to appreciate “how the encoding of widely agreed upon practices into standardized platforms supports the evolution of economic activity from simplicity toward complexity” (p. 133).

The final section, “The Human Advantage,” was the one that left me the most perplexed and uncertain—not unsurprisingly, as it tries to peer into an uncertain future. As the development of human society that Auerswald outlines marches forward, all is not well received by everyone. Along with this development comes disruption. As code evolves so does work, and sometimes the jobs attached to the old versions of work cease to exist. He outlines the example of how Lyonnaise silk weavers destroyed an early model of Jacquard's famous automated loom in the early 1800s, and a decade later, textile workers in England rioted when machines ended their work; these workers were the first Luddites. This very human concern continues into the present. In fact, in today's United States, jobs are the burning issue of the day. While politicians are busy erecting physical, economic, and immigration walls to keep jobs, Auerswald suggests a larger and more fundamental question: As code advances in its next major stage, involving artificial intelligence and machine learning, will there be any jobs left to protect? After reading the third section, I was slightly less worried than I had been before picking up this book. In this section, Auerswald suggests some compelling thoughts on the way forward. Here he provides an investigation of value creation in our current economy—and a surprisingly useful guide to our economic future. After exploring a historical record spanning centuries, he optimistically makes the case that the advance of code has consistently tended to humanize work and thus led to general, broadly shared benefits.

In other words, if you do not see a place for yourself in the code economy, don't despair. “To be human is to think critically. To collaborate. To communicate. To be creative,” concludes Auerswald (p. 236). Humans will always be better than machines at one thing—being human. Here's hoping . . .