Ingredients and Recipes

Abstract

In this chapter we consider policy implications arising from our analysis. We shall deal with this aspect in four stages. Firstly, we shall consider the role of technological change in creating information problems. Secondly, we shall consider the implications of technological change for the operation of capital, labour and product markets by the firm. Thirdly, we shall briefly assess alternative institutional forms in terms of their ability to facilitate or inhibit the adjustment of these markets in conditions of rapid technological change. Finally, we shall discuss some implications for macroeconomic analysis and economic analysis in general. Our purpose will be to examine the implications of economic organisation for economic policy, particularly in small economies.

In capitalist reality as distinguished from its textbook picture, it is not (price) competition which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization … competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and outputs of the existing firms but at their foundations and their very lives.

Joseph Schumpeter, Capitalism, Socialism and Democracy

The innovator makes enemies of all who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new. Their support is lukewarm partly from fear of their adversaries, who have the existing laws on their side, and partly because men are generally incredulous, never really trusting new things unless they have tested them by experience.

Niccolo Machiavelli, The Prince