Corporatism Stifles InnovationJames Hall Is Facebook a shining star of innovation? Or is it the product of a society, which has given up on working towards a successful economy, whereby a prosperous middle class partakes in the engine of continued and shared affluence? Conversely, is IBM an innovated inventor, or is it a dinosaur of a previous era? However you answer such questions, Edmund Phelps in an opinion article, Corporatism not capitalism is to blame for inequality argues that tangible innovation is in decline. The causation runs the other way: losses of dynamism have tended to sharpen wealth inequality because it hits workers of modest means more than it hurts the wealthy. Developing new products is labour-intensive. So is producing the capital goods needed to make them. These jobs disappear when innovation stalls. Mass Flourishing is meant to be Edmund Phelpss chef doeuvre, the capstone to a half century of research into the sources of national wealth. A decline in the pace of innovation threatens prosperity, in the U.S. and everywhere else. The main cause of this decline, according to Phelps, is corporatismthe inevitable tendency of businesses, workers, and other interests to band together to protect what they have. In modern economies, he says, corporations, unions, and other interests turn government into an agency for forestalling change and preserving the status quo. The noted economic expert and academic Robert J. Shiller, in his article,Why Innovation Is Still Capitalisms Star, provides a critique of Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change. Jared Bernstein does not agree as stated in a response to Professor Shiller in Does the Government Stifle Innovation? I Dont See It (To the Contrary). Well, that viewpoint sure sounds like Obamas infamous endorsement of a government corporatism model, If youve got a business you didnt build that. Somebody else made that happen. When examining the way corporate transnational businesses operate in the real world, their lack of internal in-house innovation is notorious. These gigantic corporatist carnivores excel at mergers and acquisitions in the quest of monopolization of markets. In these endeavors, their best friend is government cronyism and favoritism. The essay, Blaming Capitalism for Corporatism, makes an important point. Here within dwells the essential dilemma, defining the genuine Public Good. Government often acts according to Mr. Bernsteins idea of progress, especially in technological terms. Focus on the notion economically important and the language filter that translates into a benefit for the Corporatocracy matrix. From machine tools, to railroads, transistors, radar, lasers, computing, the internet, GPS, fracking, biotech, nanotechfrom the days of the Revolutionary War to todaythe federal government has supported innovation often well before private capital would risk the investment. Corporatism invents methods of greater control and market dominance for select elitist beneficiaries. When government provides seed money to fund research projects, pure science is seldom the objective. As examined in the essay, How Government Did (and Didnt) Invent the Internet, Harry McCracken writes: (Im even prepared to believe that if the Internet hadnt been invented at DARPA, the private sector would have stepped in and done the job. But well never know for sure, since it was invented at DARPA.) Thus, the paradox most people are unable to see beyond the guise of so called progress. Is government involvement, or outright development, of transhumanist futuristic technology a valid form of innovation or is it the terminal scourge of central planning and a controlled economy? Surely, under such a system, the Mass Flourishing of sharing the wealth will no longer be an issue among the useless eaters designated for extinction. Original article archived here James Hall is a reformed, former political operative. This pundits formal instruction in History, Philosophy and Political Science served as training for activism, on the staff of several politicians and in many campaigns. A believer in authentic Public Service, independent business interests were pursued in the private sector. Speculation in markets, and international business investments, allowed for extensive travel and a world view for commerce. Hall is the publisher of BREAKING ALL THE RULES. Contact batr@batr.org 