Re: Of Coase

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Schumpter is relevant here because he insists (following Marx) that
innovation makes the existing price system irrelevant --  to the extent
that it is really innovative.

On Fri, Jul 18, 2003 at 02:12:55PM -0400, Max B. Sawicky wrote:
> 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.
>
> mbs
>
>
>
>
> but Coase would be subject to the "Austrian" school and the Marxian school's
> critique that the neoclassical economics that Coase pursues is fundamentally
> static and thus ignores the role of "entrepreneurs" and innovation.
>
> I don't believe in the innovation argument, BTW, because there's nothing
> that says that innovation is automatically good (since, e.g., the new Ponzi
> schemes that are thought up almost every day are examples of innovation) and
> there's nothing that says that governments, grass-roots democratic groups,
> etc., can't innovate.
> Jim

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx