capitalism fails the future

from Martin Wolf's review of Mariana Mazzucato's The Entrepreneurial State in the Financial Times, evidence to strengthen the argument that if we had a Socialist World Government we'd have a colony on Mars by now and manned missions to the moons of Jupiter... and that there's literally no future in late capitalism

"... innovation depends on bold entrepreneurship. But the entity that takes the boldest risks and achieves the biggest breakthroughs is not the private sector; it is the much-maligned state....  The US National Science Foundation funded the algorithm that drove Google’s search engine. Early funding for Apple came from the US government’s Small Business Investment Company. Moreover, “All the technologies which make the iPhone ‘smart’ are also state-funded ... the internet, wireless networks, the global positioning system, microelectronics, touchscreen displays and the latest voice-activated SIRI personal assistant.” Apple put this together, brilliantly. But it was gathering the fruit of seven decades of state-supported innovation.

"Why is the state’s role so important? The answer lies in the huge uncertainties, time spans and costs associated with fundamental, science-based innovation. Private companies cannot and will not bear these costs, partly because they cannot be sure to reap the fruits and partly because these fruits lie so far in the future.

"Indeed, the more competitive and finance-driven the economy, the less the private sector will be willing to bear such risks. Buying back shares is apparently a far more attractive way of using surplus cash than spending on fundamental innovation. The days of AT&T’s path-breaking Bell Labs are long gone. In any case, the private sector could not have created the internet or GPS. Only the US military had the resources to do so.

"... The state is also an active entrepreneur, taking risks and, of course, accepting the inevitable failures.

"... policy makers increasingly believe the myth that the state is only an obstacle, thereby depriving innovation of support and humanity of its best prospects for prosperity. Indeed, the scorn heaped on government also deprives it of the will and capacity to take entrepreneurial risks.
...  government has also increasingly accepted that it funds the risks, while the private sector reaps the rewards. What is emerging, then, is not a truly symbiotic ecosystem of innovation, but a parasitic one, in which the most lossmaking elements are socialised, while the profitmaking ones are largely privatised"

Reference to Bell Labs reminded me that my argument in the Laurie Spiegel piece was that, being a monopoly, Bell Telephone was able to achieve the heft of a small nation-state -- it therefore had the far-sighted, long-term mentality that lent itself to long-term research, pure research without thought of immediate commercial benefit.  Competitive capitalism fosters short-termism and short-sight.

(via Carl Neville the Impostume)