Is the decline of the genius due to cheaper information transmission?

This year's winners of the Economics "Nobel" followed up on pioneering work done by a previous Nobelist, Ronald Coase, of whose Big Ideas had to do with why firms exist instead of every individual making market transactions with all others. A firm is a planned collective where some people give orders and most people carry them out. Making sure that this all works out OK is costly. If you just entered into a free-market contract with everyone else you had to interact with, you wouldn't need to spend so much monitoring them -- their part of the deal would be clearly spelled out in the contract, unlike the vague "job description" of someone who works in a firm.

But Coase saw that even using the market carried its own costs, called transactions costs. For example, if the tasks you needed someone to do weren't so predictable, you would have to keep re-writing the terms of the contract in the free market. That could waste lots of your time and eat up money if you had to pay fees to lawyers who re-wrote the contract. In this case, it could be less costly to hire that person as a worker for your firm and pay them not for micro-specific tasks but to simply show up and do what their manager says. This allows greater flexibility in having that worker do what you need them to do.

So, the basic idea is that if it costs too much to use the free market, firms will develop and have lots of tasks done "in-house." If it didn't cost anything to use the free market, firms would start shrinking by outsourcing various tasks to independent contractors who they wouldn't have to micro-manage. Here is a straightforward and lively podcast about the nature of the firm from EconTalk.

I think we see something similar in scientific and artistic accomplishment. In some eras, there are geniuses -- individuals who excel at all manner of intellectual tasks -- and in others there are legions of specialists working together. At first you might think the analogy is to free trade: when there are substantial barriers to trade, you won't specialize so much in what you produce because you can't exploit your comparative advantage and because the division of labor is limited by the extent of the market. During Descartes' day, this argument would go, there were something like high trade barriers between him and other intellectuals, so Descartes and his contemporaries would lean more in the generalist direction. Now that those barriers are diminished, intellectuals can specialize much more narrowly, and so we don't have geniuses but research teams.

The main barriers to "trading" your output with someone else -- I'll take geometry and you take algebra -- were communication costs. I don't mean just the language barrier, since you can decide on a lingua franca like Latin or English. But being able to bounce your ideas off of other people, give feedback to them, and so on, surely proceeded much more slowly when communication was sent by primitive vs. advanced post systems, let alone when it is sent by telegraph, telephone, or email.

Do these seem like the typical trade barriers? Not really. When we talk about more free vs. less free trade, we're talking more about tariffs, embargoes, and whatnot. If the main reason that Newton couldn't instantly communicate with Leibniz was that there was an aroused populace and a bunch of lawmakers who required him to give up one of his fingers each time he received an article from Leibniz, then the trade analogy would be apt.

Instead, the barrier seems more like a transaction cost, just as you would have to make by meeting with a contractor, communicating back and forth about what the terms of the contract will be, and so on. "OK, I'll take this part of the project, and you work on that other part. We'll keep in touch and update our responsibilities as the project unfolds." How an intellectual work will develop is incredibly unpredictable, so these two free-market transactors are going to have to interact very frequently and keep changing their picture of what each one is going to do until the next interaction.

If the problem looks more like one of transaction costs than of trade barriers, then we should look to Coase's idea about why firms exist. In the 17th C., the constant back-and-forth would have proven too costly, not just financially (before postage, telephones, and email were widespread and cheap) but also in terms of time waiting to hear back, which you could spend doing your own thing. So, rather than contract an intellectual task out to someone else, you'd move it "in-house" and work on it yourself. You'd be a one-person intellectual firm. (As far as I can tell, Coase's idea about the firm just applies to bundling tasks together in an operation, not necessarily a bunch of individual people.)

But if the transaction costs were trivial, as they became during the Industrial Revolution and as they have plummeted even further during the Internet Age, you'd feel the relief of crossing off that task from the long list of shit you already have to do, and let someone else take care of it, provided you take care of something they need done. Geniuses no longer make sense because specialization is made possible by cheap communication.

Lastly, there's one idea we can cross off the list of possible explanations -- that geniuses only flourish while there's "low-hanging fruit," so that one person could pick fruit from a number of different trees. Once that's gone, intellectuals have to pick the fruit at the top of the trees, and that requires spending most of your life climbing a single tree rather than dilly-dallying around the entire orchard. The simple answer is that there is no such thing as low-hanging fruit. If it were so low-hanging, why did it take the appearance of someone with a 3000 IQ like Newton to pick it? So-called basic calculus could not have been discovered by schoolchildren in math class. If it were so low-hanging, why didn't it repeatedly smack all previous mathematicians in the face as they were wandering around the orchard? Quite obviously, geometry, algebra, calculus, etc., are stratospherically high-hanging fruit.

The true function of the low-hanging fruit story is to massage our egos when we realize that we're in an intellectually stagnant or even backward time -- it can't be that we're stupid or lacking imagination... it's just that... well, all that baby stuff like differential geometry's pretty much been taken care of, leaving little left for us would-be geniuses to solve. That story sounds fine and pretty during a period of slow growth, but we keep seeing those periods interrupted by revolutions. After Euclid wrote The Elements, what was there left to do in geometry? Indeed, his book was the main textbook for centuries until people took geometry in different directions -- and that wasn't low-hanging non-Euclidean fruit either.

Also, this account isn't as rosy as it may sound -- like, great, we don't have to rely on geniuses anymore! The trouble is that when a bunch of ideas are bouncing around in a single person's brain, compared to the loss-y process of bouncing your ideas off of someone else, you can see the larger pattern more easily. It's true that even Newton will need to chat with others, but there does seem to be a critical threshold of how much work you're doing by yourself. Above that threshold, the big work is done by geniuses -- and it's a lot more important than when it's done by hives of specialists. Our contemporary research team arrangement hasn't yielded anything like Archimedes, Newton, Gauss, Einstein, or von Neumann.

Still, the sciences aren't doing so bad -- the loss of geniuses is even worse in the arts. There, the tasks that make up an intellectual project are even more poorly defined and unpredictable. For one thing, there's not really a problem you're trying to crack but rather an impression or viewpoint you're trying to convey to an audience. And the end-result is much more of a gestalt thing. Darwin's Origin of the Species would've been a more difficult read if a committee of biologists investigated and wrote up separate chapters of it, but you'd still walk away with the same knowledge. But imagine a committee of composers each responsible for separate movements of a piece of music. How it all hangs together is far more important in art, making the cost of teamwork prohibitive.

Now in our age of cheap communication, artists form "circles" or "movements" where the tasks are contracted out to lots of members and followers, not unlike research teams in science. Again, it's not as though Shakespeare and Bach never talked to anyone else, but most of their work was done in-house rather than spread out across a clique of specialists. Here there are also very real costs of contracting, aside from just communication -- an artistic circle, movement, or whatever, requires that its adherents waste a bunch of time and brainpower drawing up a manifesto. How different is that from a contract between a plumber and someone with a clogged toilet? If you're Michelangelo, you don't have to set down a more-or-less binding agreement about where the project is headed -- you make those continual re-adjustments yourself as you go along.

In case you think I'm making this whole thing up, look at the two recent cases of mathematicians who solved long-standing Big Problems. Andrew Wiles basically locked himself in a room for several years in order to prove Fermat's Last Theorem, and Grigori Perelman lives nearly isolated from the outside world but still managed to prove the Poincare Conjecture. I'm not nearly as au courant on the arts, but I'll bet that the exceptions amidst the stinking stew of contemporary literature, music, and visual art are those who insulate themselves from the world of circles, movements, and manifestos. That certainly seems true for film-makers -- most of Stanley Kubrick's or David Lynch's movies are better than the doctrinaire hive junk, for example. Art buffs, feel free to leave comments on this question.