Why has capitalism produced economic growth that so vastly dwarfs the
growth record of other economic systems, past and present? Why have
living standards in countries from America to Germany to Japan risen
exponentially over the past century? William Baumol rejects the
conventional view that capitalism benefits society through price
competition--that is, products and services become less costly as
firms vie for consumers. Where most others have seen this as the
driving force behind growth, he sees something different--a compound
of systematic innovation activity within the firm, an arms race in
which no firm in an innovating industry dares to fall behind the
others in new products and processes, and inter-firm collaboration in
the creation and use of innovations. While giving price competition
due credit, Baumol stresses that large firms use innovation as a prime
competitive weapon. However, as he explains it, firms do not wish to
risk too much innovation, because it is costly, and can be made
obsolete by rival innovation. So firms have split the difference
through the sale of technology licenses and participation in
technology-sharing compacts that pay huge dividends to the economy as
a whole--and thereby made innovation a routine feature of economic
life. This process, in Baumol's view, accounts for the unparalleled
growth of modern capitalist economies. Drawing on extensive research
and years of consulting work for many large global firms, Baumol shows
in this original work that the capitalist growth process, at least in
societies where the rule of law prevails, comes far closer to the
requirements of economic efficiency than is typically understood.
Resounding with rare intellectual force, this book marks a milestone
in the comprehension of the accomplishments of our free-market
economic system--a new understanding that, suggests the author,
promises to benefit many countries that lack the advantages of this
immense innovation machine.
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Produktdetaljer
ISBN
9781400851638
Publisert
2014
Utgiver
Vendor
Princeton University Press
Språk
Product language
Engelsk
Format
Product format
Digital bok
Forfatter