From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Jan 24 2006 - 17:07:15 EST
Jerry, Perhaps I expressed myself badly - I meant to suggest that Jenkins might be attacking Adam Smith's (rather than Marx's) notion of the monopolists conspiring to rig prices and block competitors - implying thereby that, in reality, oligopolies do not necessarily stand in the way of product innovation, so that big business can be good business, progressive, and indeed egalitarian, to the extent that it provides new products available to even low-income consumers. Who could have a quarrel with that? But the dispute in economics as far as I know is not really about that, it is more about the extent to which new innovations can be *generally applied* under oligopolistic conditions. In his book about IPS, Michael Perelman for example suggests that IPS can restrict the general application of inventions, or at any rate shape the path of technological development in ways which are hardly desirable. Thus, e.g. in computing, technologically superior solutions and systems might not become standard, simply because they conflict with business priorities. A technostructure might thus develop, in which the use of some technologies is dependent on the use of other technologies, even although from a technical or social point of view, better choices could have been made at an earlier stage of design. Chris Freeman and Fransisco Louca (As Time Goes By, Oxford UP, 2001) describe in some detail the emergence of the car industry, and comment as follows: "Utterback (1993) has shown that the pattern of evolution displayed in the twentieth century by the US automobile industry was characteristic of several other industries, both before and since, such as typewriters, bicycles, sewing machines, televisions, and semi-conductors. An early radical product innovation leads to many new entrants and to several competing designs. Process innovations and the scaling up of production then lead to the emergence of a dominant robust design, the erosion of profit margins, and a process of mergers and bankruptcies, ending with an oligopolistic structure of a few firms. Incremental innovations then tend to prevail in both product and process; 'lock-in' to a dominant paradigm is regarded simply as 'common sense'." (p. 278-279). No doubt there are great benefits deriving from e.g. Microsoft applications being an industry standard, but presumably that is more because it provides a standard as such, rather than its intrinsic technical superiority (which many dispute). To my knowledge, Marx never argued that markets were intrinsically all bad, that is more a latter-day Marxist idea originating from the Bolshevik revolution. Such an argument might also lead to the idea we would be better off with "grow your own" subsistence feudalism and barter, which is practically impossible in large areas of the world anyway, or to a Luddite banning of markets. Nor did Marx argue that money is the root of all evil, or that capitalism is always reactionary, and never progressive. I take Marx's argument to be that, in the long run, the growth of market economy ineluctably leads to its own nemesis, calling new allocative methods into being to correct the maldistribution of resources that result from market functioning. Meantime, market trade might obviously allocate resources well in some settings, and not in others, but Marx's real critique concerns much more: *in whose interest* do the markets function anyway? And here, it is typical of an ideology that it portrays a sectional interest as a general interest and vice versa, meaning that you have to look at the specifics of markets to understand the real interests involved. Those that benefit from a market will defend it, obviously, those that do not, will attack it. A more balanced view of markets would acknowledge they can create both great personal freedom and brutal exploitation, i.e. precisely that markets provide no particular morality of their own, anymore than that they can cancel out the sectional interests of social classes and nations. I think this is one reason why modern moral controversy focuses obsessively on the setting of limits for acceptable behaviour and the imperative of "social cohesion". The genie has got out of the bottle and cannot get back in. Jurriaan
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