Technological retrogression and persistent poverty

The chapter discusses how the phenomenon of technological retrogression is linked to the persistence of poverty and presents a methodology through which this process - important but infrequently discussed - can be studied. Primary producers may be geographically and/or economically locked into production systems forcing them to abandon high productive technology and adopt low technology versions. The paradoxical situation of surviving by producing less, becomes a poverty trap. Technological retrogression, the resurrection of artisanal technology, some of which is ancient and low-productive, results in poverty and broken dreams of improved living conditions. Progressive and retrogressive economic dynamics existing simultaneously produce unprecedented social inequality. Joseph Schumpeter explains how progressive economic dynamics are set in motion by technological change. He shows technological advance leading to prosperity by forming virtuous spirals of economic growth, whereas the present chapter - when a technology reaches diminishing returns - shows how poverty is reinforced through vicious spirals of decline. This process may be called 'Schumpeterian dynamics in reverse'. Our obsession with progress, in particular technological progress, prevents us from recognising the importance of retrogressions and decline. Building blocks of the theory of technological retrogression are our empirical findings in primary production: the concept of diminishing returns as found in classical economic theory and in evolutionary analyses of lock-in.