asked James I (1603–1625), Elizabeth’s successor, for a
patent. James I also refused, on the same grounds as
Elizabeth. Both feared that the mechanization of stocking
production would be politically destabilizing. It would throw
people out of work, create unemployment and political
instability, and threaten royal power. The stocking frame
was an innovation that promised huge productivity
increases, but it also promised creative destruction.
T HE REACTION TO L EE’S brilliant invention illustrates a key
idea of this book. The fear of creative destruction is the
main reason why there was no sustained increase in living
standards between the Neolithic and Industrial revolutions.
Technological innovation makes human societies
prosperous, but also involves the replacement of the old
with the new, and the destruction of the economic privileges
and political power of certain people. For sustained
economic growth we need new technologies, new ways of
doing things, and more often than not they will come from
newcomers such as Lee. It may make society prosperous,
but the process of creative destruction that it initiates
threatens the livelihood of those who work with old
technologies, such as the hand-knitters who would have
found themselves unemployed by Lee’s technology. More
important, major innovations such as Lee’s stocking frame
machine also threaten to reshape political power.
Ultimately it was not concern about the fate of those who
might become unemployed as a result of Lee’s machine
that led Elizabeth I and James I to oppose his patent; it was
their fear that they would become political losers—their
concern that those displaced by the invention would create
political instability and threaten their own power. As we saw
with the Luddites (this page–this page), it is often possible
to bypass the resistance of workers such as hand-knitters.
But the elite, especially when their political power is
threatened, form a more formidable barrier to innovation.
The fact that they have much to lose from creative
destruction means not only that they will not be the ones
introducing new innovations but also that they will often
resist and try to stop such innovations. Thus society needs
newcomers to introduce the most radical innovations, and