Page 14 - The Atlas of Economic Complexity

MAPPING PATHS TO PROSPERITY | 15

W hat are things made out of? One way atomic cocktail, and who together with their colleagues at

the toothpaste factory, can deposit it into a product that we
of describing the economic world
is to say that things are made with
can use.
machines, raw materials and labor.
We owe to Adam Smith the idea that the division of labor
Another way is to emphasize that
is the secret of the wealth of nations. In a modern reinter-
pretation of this idea, the division of labor is what allows
products are made with knowledge.
Consider toothpaste. Is toothpaste
be able to hold individually. We rely on dentists, plumbers,
just some paste in a tube? Or do
lawyers, meteorologists and car mechanics to sustain our
the paste and the tube allow us to
standard of living, because few of us know how to fill cavi-
access knowledge about the properties of sodium fluoride us to access a quantity of knowledge that none of us would
on teeth and about how to achieve its synthesis? The true ties, repair leaks, write contracts, predict the weather or fix
value of a tube of toothpaste, in other words, is that it mani- our cars. Many of us, however, can get our cavities filled, our
fests knowledge about the chemicals that facilitate brush- cars repaired and our weather predicted. Markets and orga-
ing, and that kill the germs that cause bad breath, cavities nizations allow the knowledge that is held by few to reach
and gum disease. many. In other words, they make us collectively wiser.
When we think of products in these terms, markets take The amount of knowledge embedded in a society, how-
on a different meaning. Markets allow us to access the vast ever, does not depend mainly on how much knowledge each
amounts of knowledge that are scattered among the people individual holds. It depends, instead, on the diversity of
of the world. Toothpaste embeds our knowledge about the knowledge across individuals and on their ability to com-
chemicals that prevent tooth decay, just like cars embody bine this knowledge, and make use of it, through complex
our knowledge of mechanical engineering, metallurgy, elec- webs of interaction. A hunter-gatherer in the Arctic must
tronics and design. Computers package knowledge about in- know a lot of things to survive. Without the knowledge em-
formation theory, electronics, plastics and graphics, whereas bedded in an Inuit, most of us would die in the Arctic, as has
apples embody thousands of years of plant domestication been demonstrated by the number of Westerners who have
as well as knowledge about logistics, refrigeration, pest con- tried and failed. Yet, the total amount of knowledge embed-
trol, food safety and the preservation of fresh produce. ded in a hunter-gatherer society is not very different from
Products are vehicles for knowledge, but embedding that which is embedded in each one of its members. The se-
knowledge in products requires people who possess a work- cret of modern societies is not that each person holds much
ing understanding of that knowledge. Most of us can be ig- more productive knowledge than those in a more traditional
norant about how to synthesize sodium fluoride because society. The secret to modernity is that we collectively use
we can rely on the few people who know how to create this large volumes of knowledge, while each one of us holds only