The Three Monk Story

Before exploring the three monk story lets us explore the two forms of innovation, continuous and drastic or rather drastic and continuous.

In his Theory of Economic Development, Schumpeter (1934) presented the working of a capitalistic economy as an evolutionary process, where the business cycle results from the introduction and integration of innovations. The cycle is initiated, or triggered, by a major innovation or a drastic innovation. The initial innovation (or cluster of such innovations) is then followed by a massive diffusion of smaller innovations that exploit directly or indirectly the profit potential “announced” by the initial radical change such innovations can be termed as continuous innovations. These further adjustments typically take place during the expansion of activity when uncertainty is reduced. When the novelty is exhausted the economic system tends toward a new equilibrium position with a higher level of welfare than the previous one. The industrial transformation that takes place during the cycle encourages firms to use new forms of production technologies, organizational structures, etc., and ill-adapted firms are eliminated.

Rosenberg (1976, 1982) expressed the composition of the two types of innovation in several of his path-breaking works. Although he did not deny the contribution of major innovation to economic development and growth, he claimed that revolutionary innovation is in fact materialized through a sequence of gradual and cumulative development steps. He presented a famous example of the car industry to argue that, although the private automobile was certainly one of the great driving forces of the industrialization in the early 20^th century, it was not really (economically) present when few mechanical toys (the first automobiles) terrified horses in the countryside. The revolution was only effective once Ford’s chain production reduced costs and prices of car manufacture and made the automobile available to millions, gas stations sprung up along the highways and the whole suburban lifestyle developed.

In the three monk cartoon three methods were introduced to fetch water from the river downhill to the monastery uphill.

Method 1 : In this method one monk goes downhill with two bucket at two sides of a stick, the tool arrangement looks something like below with monk being represented by the arrow.

 

In this approach one monk goes downhill with this arrangement, fetches the water and climbs up. So each time a monk carries two bucket of water down as well as uphill. Let the effort in this case be ‘E’.

Method 2 : In this method two monks go down the hill with one bucket by holding the bucket hung in the middle of the stick at the two ends, the tool arrangement looks something like below.

 

Where the arrows represents the monks. In this arrangement each monk share the effort of lifting one bucket equally. So definitely it is an improvement over the previous method. So if E’ be the effort of a monk in this method then we can say

E’ = E/4

As only one bucket is moved in this arrangement at a time and the effort is shared in between.

Method 3: In this method a system of pulley and rope was used by the monks to fetch the water. The method involved all three of them. The arrangement can be roughly drawn as below

             




                                                                                                                     

Where M represents the Monastery. In this arrangement one monk fetches the water from the river and attaches the bucket to the rope. Second monk then pulls the rope up the hill and de attaches the bucket from the rope, the third monk then takes the bucket to the monastery empties it and returns with an empty bucket to monk 2. Due to inclusion of pulley the effort put in by any of the monks is reduced significantly than any of the three methods. So if E’’ represents the effort put in by either of the monks then we can say

E’’ < E’ < E

Analysis:

In light of drastic vs. continuous innovation we can evaluate three methods as.

Method 1: Method 1 being the initial state of the economy where an innovation exists and is being exploited. In this particular case the innovation being the stick tool used by the monk to fetch the water. In method 1 the  tool enables the monk to carry 2 buckets of water at a time.
 By simple physics we can say that if W be the weight of two buckets then the monk represented by the arrow will have to apply 2W effort to hold the tool. If d is the distance then in each round total work done by the worker/monk WD = 2Wd  Besides this tool is useful only for one monk/worker as only one can work using this at a time.

Method 2 represents a gradual or continuous innovation as this method is a fine refinement of method 1 only where the tool is modified a bit to reduce the effort. The improvement of this over previous method is in making the tool usable for two workers at a time.
Again if W is the weight of the bucket then each monks have to apply W/2 effort to hold the tool. If d is the total distance then in each round total work done by any of the worker is WD = Wd/2, which is an improvement as compared to previous method. Also with this tool two workers can work at a time so an increase in utilization.


Method 3 on the other hand side is a path break from both the existing methods and hence is a drastic innovation. In method 3 the process is completely changed with introduction of new methods and tools. Method 3 drastically reduces the effort put in by the monks in the work.

Method 3 is significantly different from the two previous methods. 

Firstly in this method three workers/monks are involved so better utilization. 

Secondly looking from the effort perspective it can be observed that the effort also varies from worker to worker. Considering the worker downhill let's us say W1, his work is to fetch water from the river and hook the bucket to the rope, so let us say the distance moved by worker is d' (d' << d) the work done W1D = Wd'. Worker uphill pulling the rope say W2 will apply W/2 effort to pull the bucket because of the pulley system. So the work done by him is W2D = Wd''/2 again d'' < d, as he just have to pull the bucket uphill not carry it into the monastery. For worker 3 W3 the work is to carry the filled bucket from W2 to the monastery, so work done by him is W3D = Wd''' again d''' << d as the distance between W2 and monastery is quite less then the  total distance between river and monastery. 

Thirdly in this model work can be assigned based on workers' capabilities i.e. difficult work can be given to more capable worker as in this case W2 is assigned little difficult work.

Ankur Shree

Roll: 220, IM : 19

Section: ‘A’