Abstract
Mainly protective and reactive, current government financial intervention is contrasted with its more immediately post-war investment in technology boosting Research and Development. Investment that ushered in a technological revolution which, absent effective competition from other, recently war-torn, advanced economies enabled the financing of The Great Society program of enhanced welfare benefits, and from which R&D many major private corporations still benefit enormously. Government investment more usually characteristic, especially in the absence of competition, of socialist economies, which was largely scaled back by economic neo-liberals. Particularly unfortunate timing, coinciding as it did with the recovery of previously war-torn, largely government funded, competitors. Facts which invite comparison between the potential benefits of non-competitive government funded, and therefore essentially socialist, and privately funded and competitive, essentially capitalist, economies.
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Notes
- 1.
See Leffler, M.R. 2012. Cold War Lessons for the GOP. The Nation., November 12, p. 17.
- 2.
Economic neo-liberals ostensibly oppose all government intervention in the economy as a restriction of “freedom” as they define or interpret it as the Freedom of capitalists To maximize their profits by ignoring the environmental, health, and social consequences of their exploitation of the environment and workforce. A definition which, of course, fails to consider the Freedom of the general public, and workers, From the life and property threatening effects of sea level rise, increasing cyclones or hurricanes, flooding, drought, and other catastrophic weather events resulting from the effects of anthropogenic global climate change, pollution by industrial toxins, and the dangers emanating from inadequate protection of health and safety in the workplace. Nor does it consider freedom from extreme poverty and other effects of low wages and unemployment, and the inability of a government to provide healthcare, education and basic housing and food, and thus freedom from preventable disease, preventable ignorance, homelessness, and starvation, for the poor as a consequence of giving corporations and the economic elite, tax breaks, and so on. Furthermore, and equally significantly in the above context, restriction of government investment in technological R&D helps ensure that so far from the financial and numerous other benefits of technological innovation being, at least potentially, publically available to some extent to all, they be largely focused upon, if not entirely restricted to, benefiting those already extremely wealthy individuals and corporations with the financial capacity who/which, absent government investment, are free to monopolize the benefits of technological development to their own advantage. A strategy which, by rejecting the massive resources available to government, tends, and contra neo-liberal ideology, to hold back, rather than accelerate, the rate of aggregated technological advancement !
- 3.
Presumably explicable not only by the desire of the wealthy, whose economic interests’ neo-liberalism largely reflects, to protect their assets, but also by the authoritarian personality type of so many economic neo-liberals.
- 4.
Nor do the travails that first beset the Japanese economy in the 1990s provide a counter example to the wisdom of such investment in technology, as the stock market crash there, so far from being the result of an overextension of credit to consumers (or demand side stimulus) was the consequence of an overextension of credit to Japanese corporations (supply side stimulus) and subsequent attempts to check the asset price bubble it fueled by a sharp rise in inter-bank lending rates.
- 5.
To explicate it more precisely, and from a slightly different perspective, in a competitive capitalist system, assuming risks are comparable, investment will flow to where it can obtain the greatest return, which is to say to where it is most productive in the narrow, economic, sense of maximizing the ratio of the value of outputs or products as a proportion of the cost of inputs such as demand stimulating wages and benefits and so on. The gap between output and demand thus becoming ever greater as one moves from less competitive to more competitive economies. Thus to switch investments from the less productive to the more productive, or in other words from the less economically efficient to the more economically efficient, in pursuit of maximum profitability, by thus widening the gap between economic supply and demand, as one is bound to do in an entirely profit driven, competitive capitalist system, merely exacerbates the problem of overproduction.
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Glynn, S. (2020). From Crony Capitalism to Strategic Research and Development Investment, and Back Again. In: The Economic Logic of Late Capitalism and the Inevitable Triumph of Socialism. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-52667-2_14
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DOI: https://doi.org/10.1007/978-3-030-52667-2_14
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