We have the knowledge to build a better world. But is that enough?

“The grand, leading principle, towards which every argument unfolded in these pages directly converges, is the absolute and essential importance of human development in its richest diversity.” — Wilhelm von Humboldt

Knowledge, especially when shared and collectively held, is essential to human flourishing — as Humboldt emphasizes in the [quote above], which was relayed by John Stuart Mill in the epigraph to On Liberty.

Knowledge is not an end in itself. It is an instrument for achieving society’s diverse objectives. Collective knowledge can enable a society to reach greater material comfort, both by improving its capacity to produce goods and services and by facilitating adaptation to its changing circumstances. Social knowledge is also desirable because it allows the building of better norms and institutions — for more peaceful coexistence of peoples and communities and for ensuring that other types of collective knowledge are put to good use.

It is thanks to our collective knowledge that we are so much healthier than our ancestors. Today, citizens of all Western nations, except the U.S., have a life expectancy at birth of over 80 (compared to less than 30 in Britain in the 19th century). Even on the poorest continent, Africa, the average life expectancy at birth is now 63 years, despite lack of clean water in some places and endemic shortages of health care facilities and hospitals across much of the continent. This is because scientists and doctors now understand how infectious diseases work. We have access to antibiotics that can prevent deadly infections. We have developed public health methods that produce and distribute vaccinations, offer guidance on avoiding dangerous or unhealthy substances, and ensure sanitary conditions.

The last examples reiterate that by “knowledge” I do not just mean scientific information that can be used for making better tools and products. Understanding that you should wash your hands, or that sewage and drinking water shouldn’t mix, is useful collective knowledge. So is recognizing that people can participate in politics and do not have to be subject to the will of an all-powerful monarch or ironfisted general. How to navigate social relations in increasingly complex human communities is also very useful collective knowledge. My expansive definition of knowledge follows Friedrich Hayek, who stressed, “The growth of knowledge and the growth of civilization are the same only if we interpret knowledge to include all the human adaptations to environment in which past experience has been incorporated.”

Instrumental useful knowledge — deployed for achieving various objectives — must thus include ways of dealing with our constantly evolving social life and learning how to interact with institutions and technologies. A lot of this information is tacit, concerns our social relations, and is context-specific. That makes it not less but more important.

An illustration of this type of collective knowledge is the polder model, which describes Dutch society in the Middle Ages. The Netherlands became remarkably prosperous, with low levels of inequality, strong cooperative norms supported by civic participation in decision-making, and a political culture that sought broad consensus for collective decisions. These were features rarely observed in other European societies during the Middle Ages. Several economic historians have argued that they were particularly well suited to the conditions that the Dutch faced, because their communities and agricultural lands were on polders — low-lying land under constant threat of being overrun by rising tides and overflowing rivers. Investment in public works, especially dikes, was crucial and required all hands on deck. These conditions also created a tendency for the community to agree on the most important challenges to their security and livelihood, laying the groundwork for a more cooperative approach to collective choices. The need to grapple with such threats underpinned the unique norms and institutions of Dutch society.

How did the Dutch come up with these adaptations? There were no models to copy. Even if they carefully studied the institutions and norms of France or Germany, they wouldn’t have learned the foundations of the polder model, since French or German economic and geographic conditions were entirely different. The only plausible answer is that the Dutch themselves had to experiment and learn from their own experience over time. This learning was no less critical for Dutch society than understanding techniques of production.

Yet humans have been known to misuse all sorts of knowledge, both scientific and social. Spectacular advances in the understanding of the atom and atomic forces led to nuclear weapons and ultimately to the two atom bombs, Little Boy and Fat Man, that killed hundreds of thousands in Hiroshima and Nagasaki. Fritz Haber’s discovery of how to effectively convert atmospheric nitrogen into ammonia was a turning point in the 20th century. It enabled the mass production of synthetic fertilizers we now depend on to feed the expanding population of the globe. It also led to the production of more powerful explosives. Related ideas were put to work to create chemical weapons for both Allied and Central Powers in World War I, including by Haber himself.

How can we be sure that collective knowledge is good for human objectives, whatever they are? There is no surefire recipe. But we need communities that are cohesive enough — but not too restrictive of their members’ behaviors and thoughts — to enable the sharing of that knowledge. The desirability of collective knowledge is also amplified when this knowledge is embedded within an institutional context and society-wide moral principles that ensure it will be used for the common good, not to the detriment of most people.

There are two major reasons why collective knowledge may be a mixed blessing for a society. First, it can be used in a manner that benefits only a few people at the expense of many. Second, there may be deep disagreements about which objectives we should try to satisfy with our expanded knowledge. Better institutions help with both of these challenges, because they build new pathways for sharing the gains and for better mediation and compromise between groups that disagree.

We can see both roles of institutions in the history of the Industrial Revolution. The breakthroughs in production technology that started in the middle of the 18th century in Britain unleashed the Industrial Revolution.

As a result, we live richer, healthier, and more comfortable lives than people 300 years ago. But early industrialization created huge inequalities. Workers in the first decades of the 19th century worked very long hours in unhealthy, disciplinarian factories for low wages, even in occupations, such as weaving, that had previously enjoyed high earnings and high status. They could not have imagined that the productivity gains achieved with industrial machinery would result in higher wages.

Community — together with its norms — plays a critical role in defining how societies adapt to and use knowledge. New knowledge can be coupled with a broad commitment to helping the less well-off and with institutions that can steer technology in a more equitable direction and redistribute some of the gains.

Nearly a century after industrialization began, there was still little evidence of widely shared gains. But as Simon Johnson and I document in Power and Progress, that changed in the middle of the 19th century — because workers organized, Britain democratized, and technology began to evolve in a more pro-worker direction. What made this possible was not machinery alone but the institutional context surrounding it — a context capable of reform and responsiveness to social demands. Although Britain was still far from being a full democracy and labor unions remained banned until the 1870s, the country was no longer a monarchy, and ideas of popular participation were already accepted.

This made it increasingly difficult to exclude the middle class from the political process and to repress the nascent labor movement — though elites did try. That institutional context was critical for industrialization and technological advances to ultimately become beneficial for most people in the country. (But only in the country, not for most people around the world, some of whom suffered mightily as industrial machinery, new transportation and communication techniques, and better weapons enabled Britain to expand its colonial empire.)

The problem of mixed objectives is no less central. We may have better collective knowledge — for example, the knowledge to develop online networks and social media. But how do we use them? Certain communities may prefer to allow unfettered access to social media, including for children, because they believe the benefits of better communication and connection outweigh the costs. Others may worry about the mental health consequences of social media. If society were to adopt a uniform policy, some communities would be better off and some others would suffer. The right institutional structure could help. In this case, communities themselves could be empowered to make their own decisions or find compromises.

Community — together with its norms — plays a critical role in defining how societies adapt to and use knowledge. New knowledge can be coupled with a broad commitment to helping the less well-off and with institutions that can steer technology in a more equitable direction and redistribute some of the gains. When this happens, any negative effects of the deployment of collective knowledge are more likely to be contained, and paths for generating better outcomes and shared prosperity from this knowledge are more likely to be built. The right kind of institutional structure is critical for this process. If institutions enable communities to make their own decisions, this can also help build collective knowledge and apply it in ways that are best suited to each community’s norms and preferences.

This article is featured on Big Think.