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Now as for the Elves apparent lack of technological development, I don't think they ran out of ideas, rather that they had no desire for it. For them "progress" has no value in itself and the reason they didn't invent things like guns, PC:s and internal combustion engines is probably because they felt the world would be a better place without such things. I think the difference is explained in HoME X (or elsewhere). When an Elf sees a beautiful thing he loves it for what it is and is content. When a man sees a beautiful thing however his enjoyment of it is fleeting as it soon reminds him of something else that he desires - something better. Therefore he is never content with what he has and always looks ahead for the next best thing. If he sees a tree, he sees timber; if he gets some money, he wants some more. I don't think capitalism would go down as well with the Elves (not trying to suggest they're communists either) as it does with Men.

Anyway, as Tolkien's Arda ages poorly, mountains, forests and streams go from fair and magical to drab and mundane. Therefore the Elves wanted to retain the status quo as far as possible. This is what the rings of power were meant to do I believe: to put nature in a stasis so that the weariness of the world would not affect it. Of course, Sauron had other ideas.