Re: Of Coase

["Devine, James" <jdevine@xxxxxxx>]

Max:
>What would the critics say to Coase's dictum
that you can buy innovation or rent entrepreneurs?

>I suppose innovation is hard to price, hence the
market for it is deficient.  For inability to sell
innovation, entrepreneurs (and venture capital) are born.
This would be accentuated insofar as there is innovation
without social purpose that drains effort and capital
from useful innovation.  Either way, the power is still
with capital.<

I guess you could say that each case of "entrepreneurship" is such a unique item that the market for such would be so "thin" that there would be no price. Looked at another way, trying to sell an innovation would either be totally academic (since innovations _qua_ innovations have to be put into practice) or would undermine its uniqueness and therefore the entrepreneur's profits. Now, someone could buy a partially-revealed innovation as a "pig in a poke," but then that person would be the entrepreneur ("risk-taker"), not just a purchaser of an innovation.

As I said before, innovation isn't necessarily good. The nature of innovation under capitalism is socially irresponsible, either ignoring external costs and benefits or (more actively) seeking to internalize external benefits (e.g., public spaces) for private profit or to externalize internal costs (e.g., pollution). It's not all producing new goodies, while much of what is called "innovation" is government-subsidized -- or is simply imitation driven by competition. 

"Innovation" would be very different with a socialist-democratic system.

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Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine