Tuesday, April 22, 2014

Corporate State Capitalism

Did you know that every important component in the iPhone was originally developed with funding from the US government?  Not just the iPhone of course.  Google, pharmaceuticals, GPS, commercial aviation, satellite communications.  Just about every advanced technology that you could think of that sets the US apart from the rest of the world in terms of our economic strength finds it's root in the state sector.

Economist Marianna Mazucotti goes into more detail in this Ted talk, and those that have read my blog for a while know that I learned this long ago from Noam Chomsky.  Chomsky goes into further interesting detail in this lecture from 1997.  He says that pretty much everyone understood following the end of WWII that state support of the economy was vital, and if we took it away with the end of the war we should expect to plunge straight back into the Depression we had just emerged from.  Think about these facts the next time you hear someone talk about how Steve Jobs is the perfect example of the kind of innovation that is possible if only we'd get government out of the way.


Chad said...

The gov't (and you got roped right into the lie) didn't create a single thing Jon. The individual or group of individuals who worked for the gov't created those things. Gov't took credit sure because they funded the think tank or people, but they created zero. We benefit only from gov't spending our money to allow individuals to have free reign and access to unlimited resources. The same exact thing would have been accomplished if Gov't would have handed a company the same dollars to accomplish the same things.

Gov't has never, will never and can not ever create anything - individual people do.

Jon said...

You're right about one thing. It is people that create things. Capitalism doesn't create, nor does socialism, nor does government. These are just different economic arrangements that incentivize people to go out and create.

The myth is that people have lots of success creating under a free market capitalist arrangement and when government subverts that arrangement this only makes thing worse. But if we're going to look at facts we're going to have to admit that people functioning under a government arrangement that violates free market capitalist prescriptions, this arrangement has produced a lot of success.

Chad said...

We don't live in a true free market - never have. It always has been subverted by gov't, big money, the Right and Left. The tug o war occurs when one group wants to keep more and one group wants to take more - the harder one group pulls on the rope causes the other side to pull just as hard.

That is fact, what we can't judge because there was no other baseline - is what the level of success might have been if the gov't gave the same resources and money to a free market company responsible for paying people, incentivizing good performance and new inventions.

You claim it to be a success without giving it any thought of what might have been accomplished if equal resources were given to a private company.

At the end of the day however - the reality is that the Gov't created zero and still has created zero - they found individuals outside the military - gave them unlimited resources, but claimed all discoveries as their own. Most likely retarding the actual invention and technology advances that would have happened outside of gov't if given the chance. Gov't - actually the military - had singular purpose to develop war assisting technology - what come of it was just a side bar. They wanted to improve the war machine - a laser beam focus on just that goal.

Gov't probably slowed tech advances by decades is my guess.

Jon said...

Of course we don't live in a free market because nobody in the world lives in a free market. Where is there a free market? I've said this many times as you know, so there's no reason to tell me.

Capital doesn't require a free market and doesn't actually want a free market. The point here though is that there's always been capital available do develop technologies. When you look out at the track record (capital independent of government vs government provided capital) the later is pretty impressive. Did you watch the TedX talked I linked to? Even today it's government money that leads to the real innovations in health. Private money tweaks existing products, often simply for the purpose of extending patents. They aren't doing as much real game changing development.

You ask what the success would have been if equal resources were given to private companies. Plenty of resources from the government were given to private companies, and those companies have done significant things. That's my whole point. When the capital going to companies is coming from investors seeking profit, well that has produced some innovations, but contrast with capital going to companies based on government seeking the public good. The later has been huge, and there's no denying it.

Again, look at the TedX talk. It's not like there wasn't capital in Europe, but the real economic leaders of our world today are all in the US, and they all derive their leadership position from government provided resources that led to innovations. So we can contrast what profit seeking capital did with public good seeking capital, and the results definitely put to bed the myth that government shouldn't be involved. That which has had government involvement has been the most successful.

This does NOT mean that people didn't do the work or that profit seeking companies didn't do the work. That has nothing to do with the point.