Abstract
In modern industrial societies innovativeness is seen as a source of economic growth and welfare increases. Following this assessment economic research presently focusses almost exclusively on the question of how to elicit innovations. Yet innovative economic activities have always also meant losses, sometimes even hardship, to some members of society, and incalculable risks. The present paper tries to develop a more balanced picture by acknowledging these less pleasant implications. Whether, and under what conditions, the permissive regime which modern societies have adopted towards innovations can be justified is discussed within the framework of a contractarian approach.
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I am indebted to J. Irving-Lessmann, W. Kerber, M. Leder, M. Lehmann-Waffenschmidt, G. von Wangenheim, and an anonymous referee of this journal for helpful comments. An earlier version of paper has been presented at the Public Choice Society Meeting 1992 in New Orleans and has been awarded the William-Kapp-Prize 1992 by the European Association for Evolutionary Political Economy.
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Witt, U. Innovations, externalities and the problem of economic progress. Public Choice 89, 113–130 (1996). https://doi.org/10.1007/BF00114282
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DOI: https://doi.org/10.1007/BF00114282