Innovation apologetics

[Rakesh Bhandari]

To understand how the market generates innovations or a continuous
structural morphogenesis of the economy is only half the problem. Consider
the following problems: Why (or whether) innovations come in swarms; what
their relation is to cyclical behavior;  whether the innovation induced,
albeit only potential, new equilibrium of higher real wages, higher
consumption and output will not be realized due to a lack of effective
demand since as fewer inputs are now required per unit of output there may
be a lowered demand for labor and hence consumption demand; whether in the
face of such excess capacity, sufficient innovatory investment will be
forthcoming to pull the economy out of its downturn (recall Brenner's
theory of the rigidities that may prevent such innovatory
investment--repetitive investment can be of no help if excess capacity has
already built up).  It's a matter of learning difference equations and
chaos theory to follow Schumpeter's student (and teacher) Richard Goodwin
who seemed less interested in triumphalist propaganda for the market.
Perhaps that why complicated thinkers like Goodwin and Moses Finley left
the country in the wake of McCarthyism.

yours, rakesh