Capitalism can work well when it’s coupled into a virtuous circle of funding R&D to create new products and services to increase income to put back into more R&D.
At the moment it seems that a lot of companies are just trying to seek ever increasing rent extraction on existing products rather than investing in trying to innovate and relying on high barriers to entry to keep competition out.
I don’t know why this is getting down voted. With regulation and healthy competition, this is what happens. When antitrust regulation is weak, R&D and innovation stops and rent seeking takes its place.
If you look at the history of capitalism you could observe the stage where capitalism does put profits into R&D is temporary. Eventually capitalists reach enough power that lets them generate profts without significant reinvestment and instead spend them on luxury goods. Happened in the late 19th/early 20th century. It’s happening now as well. In-between that there was a massive state intervention that took significant economic power from capitalist class and put it into the state. The period when capitalism worked well for the majority was a deviation from the mean. Relevant.
Capitalism can work well when it’s coupled into a virtuous circle of funding R&D to create new products and services to increase income to put back into more R&D.
At the moment it seems that a lot of companies are just trying to seek ever increasing rent extraction on existing products rather than investing in trying to innovate and relying on high barriers to entry to keep competition out.
I don’t know why this is getting down voted. With regulation and healthy competition, this is what happens. When antitrust regulation is weak, R&D and innovation stops and rent seeking takes its place.
If you look at the history of capitalism you could observe the stage where capitalism does put profits into R&D is temporary. Eventually capitalists reach enough power that lets them generate profts without significant reinvestment and instead spend them on luxury goods. Happened in the late 19th/early 20th century. It’s happening now as well. In-between that there was a massive state intervention that took significant economic power from capitalist class and put it into the state. The period when capitalism worked well for the majority was a deviation from the mean. Relevant.