Commenter Vince asks: "Why would you invest in innovation in an ideal market, since anyone can copy your innovation (perfect information) and you would not profit from working out your ideas."
Why indeed? Why did Einstein develop the theory of Relativity or Feynman the theory of Quantum Electrodynamics? If it was to get stinkin' rich and be able to exploit the labor of others, they failed miserably.
Why do most employees of companies, not the shareholders and senior executives, actually create the innovations that make the shareholders and executives rich?
Why indeed does anyone but the tiny percentage of those in the capitalist ruling class do anything at all except mindlessly follow the orders of their lords and masters?
People are motivated by all sorts of things, and economic advantage is only one of those motivations. Economic advantage is a powerful motivation, and I don't think, as perhaps some other communists might think, that it needs to be completely eliminated, but neither should we assume it's the only, or even the most important, human motivation.
People will innovate because they want to become famous, because they themselves want to actualize that innovation, or just because innovation is wicked cool: many people have an incredible feeling when they create something new, even if it's something they themselves will never use.
Economic motivation works best, I think, to move people to capture the producer surplus or avoid a producer deficit. If, perhaps, there are more people whose "first choice" is to become a philosopher than there is a social need for philosophers, we want to convince the least efficient philosophers to give up their first choice for their second (or third, etc.) choice when the alternative has more social utility. We also want to convince at least some people who would be really efficient philosophers to become philosophers, even if their first choice isn't philosophy. Since the most efficient producers of any commodity gain an small but persistent economic advantage relative to the socially necessary abstract labor time of a commodity, economic advantage can serve as a motivation here.
Tuesday, September 18, 2012
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Innovate. I hate that word. We even have to innovate the grammar we use to talk about innovation (mostly to hide the fact we don't actually have any new ideas).
ReplyDeleteBut consider software. Usually Software does not need much start-up capital so we find a large amount of hobby groups collaborating over the internet and producing decent software under the open software model simply because they enjoy it. Or game modders who produce new content for games just for recognition in their virtual community. Or illegal file shares going to huge trouble to pirate or hack games.
Indeed during the early days of the information revolution, software was given away free because of the culture during the late 60's and 70's. The guys who invented the spreadsheet gave it away free until Bill Gates swiped it and made billions.
So I don't think the financial carrot is necessary to motivate people to innovate or invent or create. Most writers write because they want to; most painters paint without any expectation of financial rewards. In some cases when financial rewards are offered (commissions, book advances etc), the work actually suffers because of deadlines and pressure.
Even the supermen in the Ayn Rand books don't work purely for financial profit, but because they are exceptional and cannot help themselves. Profit is their just reward, not the motivation. In Atlas Shrugged her revolutionary capitalists were portrayed as making great personal sacrifices by striking and leaving their work.
I think Marx wanted to free people from unnecessary economic labor so they could innovate and self-actualize. I've long considered most corporations parasites because they try to leech every bit of creativity possible from their staff to increase their profits. This leaves staff exhausted or even worse - content ! - at the end of their working day, fit only for the couch, their dreams put off until tomorrow.
May I republish your comment?
DeleteAye. Work away.
DeleteI never saw innovation as a problem for communism. As you and the observer point out, people are naturally interested in innovating for many reasons. Incidentally, I share the observers dislike of the word, mostly due to the vile corporate bullshit and exploitation it now smacks of.
ReplyDeleteThe issues to my mind are the more practical problems and the human propensity to find the path of least resistance. While every geek with a compiler might be eager to develop amazing new programs for all kinds of things, I can't see too many being willing to code solutions to entirely mundane problems, maintaince and the like. There is comparitavely little incentive of the emotional/gratification kind for this sort of work.
Also, giving people the option of perpetual leisure, I wonder how many people would have the commitment and perseverance to subject themseleves to the years of hard work necessary to first master a disipline. Say Phsyics or Chemistry for example. I can easily see them applying that mastery for their own pleasure once it has been aquired. I wonder though if an easy out might make the learning process too unattractive to retain students long enough to produce people with degree/masters level knowledge of a subject.
Motivations like not wanting to spend your life dispensing fries at Mcdonald's is powerful motivation indeed, and useful when facing into some laborious assignment or project that you would rather loose appendages than complete.
It is fine to say that painters will paint, but will geologists create mathematical models that require years of interdisiplinary work to generate. Some will, certainly, but I wonder if we might not end up with a world nearly overflowing with lazy ingoramuses (okay, admittedly not too dissimilar to the current state of affairs) and a very small number of highly educated people, which in turn would make passing on the knowledge to the next generation more problematic. Perhaps becoming something of an apprentiship system. The upshot being that the number of people capable of innovating might drop precipitously.
This might not be the way things would go at all but I think it is a reasonable concern.
Bob, your concerns are not misplaced. But keep in mind that there's a real sense in the world, which I see even in my professors and instructors, that innovation is absolutely impossible without laissez faire capitalism. Even the more leftist-ish professors who support some socialist measures see the fundamental tradeoff as between innovation and justice. As theObserver and I note, that tradeoff is not entirely valid.
ReplyDeleteMotivations like not wanting to spend your life dispensing fries at Mcdonald's is powerful motivation indeed, and useful when facing into some laborious assignment or project that you would rather loose appendages than complete.
Keep in mind that for quite a large segment of the population, spending their lives dispensing fries at McDonald's is what our society requires of them, not what society hopes them to avoid. The narrative, "Study hard, do your work, pick a useful subject, otherwise you'll be slinging fries," is less a motivational tool (if it is at all) than it is a narrative justifying low pay, low status, and political inferiority for those we coerce into these types of jobs.
I see even in my professors and instructors, that innovation is absolutely impossible without laissez faire capitalism.
ReplyDeleteI'd wholeheartedly agree that this simply not true. I'd even agree that innovation is not even predominately done for monetary reward.
The narrative, "Study hard, do your work, pick a useful subject, otherwise you'll be slinging fries," is less a motivational tool (if it is at all) than it is a narrative justifying low pay, low status, and political inferiority for those we coerce into these types of jobs.
Not so sure about this. I personally don't give a fig about narritives. Too often they are a notion that suggests some kind of purposely designed intent on the part of some myterious group of powerful people. I don't see any evidence for that. At best, people who have profitted from these circumstances having evolved natually might try to propogate a status quo but I would be highly sceptical of even this. I just don't think they need to.
I personally don't want to spend my time serving fries in McD's for a pittance. For me this serves as motivation to invest effort in obtaining more options. Loosely put this is ambition. The desire to reach higher the base line.
I think a piitance is paid because the number of people capable of the task is nearly equal to the whole adult population. The level of skill and education required to do it is very low. If you don't want the job there is an army of people just as capable (mostly due to the unskilled nature of the work) who will do it. The competition for these jobs, which require little or no prior investment by the prospective employee, is fierce. As a consequence under our current economic system employers can pay very little. It may not be fair but I think there is a sensible logic behind the why of it under the current system. In opposition to the idea of narrative as some kind of propoganda like attempt at molding culture for monetary gain. Low status is entirely a cultural thing. A common fact of human cultures since the dawn of civilisation. An unavilable consquence of our primate past. As to political inferiority I'm not sure what you mean. Does a software developer have more political power than a McDonalds worker. If so, how do you mean?
In general I think people who work in McDonalds do so because the limited places in better jobs are taken (not available to them). The reasons for that may be entirely unfair but I don't think there is any kind of socital engineering at work.
"Not so sure about this. I personally don't give a fig about narritives. Too often they are a notion that suggests some kind of purposely designed intent on the part of some myterious group of powerful people. I don't see any evidence for that. At best, people who have profitted from these circumstances having evolved natually might try to propogate a status quo but I would be highly sceptical of even this. I just don't think they need to. "
ReplyDeleteI think there is evidence of powerful people purposing towards a narrative. They are called the IMF, World Bank, World Trade Organization etc and the narrative is globalisation and free markets.
Part of the dogma of the free markets is that innovation starts from below and works upwards. Thomas L Friedman came up with the idea after witnessing a Vietnamese woman offering to take his weight for a dollar. According to Friedman "globalization emerges from below, from the street level, from people's very souls and from their very deepest aspiration's ... It starts with a lady in Hanoi, crouched on the sidewalk, offering up a bathroom scale as her ticket to the Fast World."
In Friedman's fantasy, this lady would eventually collect enough dollars to buy a laptop, and then become a member of the international Electronic Herd - his term for the new ecommerce merchants trading on the internet and independent of geographies and local circumstances. In reality she is more likely to die poor after a lifetime of weighing up choices such as daily food vs saving for medicine or new footwear.
Free markets are controlled at the top, not the bottom, by organizations like the World Bank, IMF etc. America with its protective tariffs on industries like steel and agriculture, forced developing countries to allow open access to their markets. These countries were just colonies 30/40 years ago and they did not have the necessary time to either create a stable democracy or stable institutions capable to dealing with the rapid flux of capital. The results were forced borrowing from the IMF, crippling debt and the loss of sovereignty because capital that quickly flows in, can just as quickly flow out.
The rules are stacked in favour of those in power. The Asian crash of 1997 was caused by America forcing counties to open their markets for foreign capital. The resulting crash affected countries as far away as Brazil. Then the IMF stepped in forcing further cuts to state funded social democratic programs, privatizations, further borrowing, more debts, and more deregulations. Brazil was forced to borrow 42 billion to prop up its currency, which crashed anyway. We are witnessing an even bigger crash in Europe at the moment and an attempt to demolish its post-WW2 culture of social democracy.
"The hidden hand of the market will never work without a hidden fist, McDonalds cannot flourish without McDonnell Douglas designer of the US Air Force F-15. And the hidden fist that keeps the world safe for Silicon Valleys technologies to flourish is called the US Army, Navy and Marine corps...With all due respect to Silicon Valley, ideas and technology don't just win and spread on their own."
ReplyDeleteFriedman again. States must be forced to convert and open their markets to competition for the good of their citizens because without the evils of state interference, the worthy and just individuals can bubble to the top of natural hierarchy through the grace and will of the free market. It’s through these virtuous wealth creators that workers can enjoy cheep barely legal food on McD and workers can earn a living barely above the cost of living.
So I think the evidence is overwhelming that they are narratives and agendas here. At the individual level, you can see the affects of the semi-religious free market dogma everywhere. Walk into a book store and you’ll find shelves full of self-help books on positive thinking and becoming rich. Walk into a gym and you’ll see motivation posters like ‘create and meet your goals’, ‘You create yourself’. Walk into a university and you’ll see ‘realize your potential’. All this emphasis on self-creation is the free market narrative at work. Self-actualization through work and consumption. It places the responsibility of self-creation purely on the individual and ignores external circumstances. Even religion in American has moved from the teachings of the improvised Christ to become ‘God loves you and has a plan for your happiness’. This is a form of Gnosticism, not Christianity and is arguable a coping mechanism for the pressures of self-creation i.e. gods great master plan. Then we have economic migration where entire countries like Latvia are missing a generation of youth who were forced to migrate; families suffer because workers in Dublin are forced to commute to the UK to work; communities suffer because who has time to put down roots when they have to move for another job in a year or two ?
Final word on innovation: Don’t underestimate social pressure. Some guy who plays world of warcraft 24/7 is less like to score with the hot chick than the guy working his way through law school.
• Quotes and information on Friedman are taken from “How Mumbo Jumbo conquered the world” by Francis Wheen, which I have just finished reading
(Sorry for the long comment. Guess I felt like a rant on a Sunday night)
No need to apologize, TO. Your comments, at any length, are always perspicacious and interesting.
ReplyDelete