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Innovation and Dynamism. Interaction between Systems and Technical Progress

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  • J. Kornai

Abstract

Literature on post-socialist transformation usually deals with the political, economic and social sides of it. But the relative advantages of capitalist and socialist systems in terms of the incentives for entrepreneurship and innovation process attracted less attention. It is well known that every revolutionary new product (for civilian use) has been brought about by the capitalist system and that the socialist system was capable at most of developing new military products. Innovation has deeply transformed our daily lives but many people, while deeming all these changes favorable, seldom discern the causal relation between the capitalist system and rapid technical progress. The usual syllabus of microeconomics does not enlighten students on this important virtue of capitalism, neither is it adequately emphasized in the statements of leading politicians. The article analyzes how far the radical difference between socialist and capitalist innovation can be explained by the innate tendencies and basic attributes of the two systems and provides strong arguments in favor of capitalism.

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  • J. Kornai, 2012. "Innovation and Dynamism. Interaction between Systems and Technical Progress," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 4.
    • Handle: RePEc:nos:voprec:y:2012:id:786
    DOI: 10.32609/0042-8736-2012-4-4-31
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    1. J. Kornai & E. Maskin & G. Roland, 2004. "Understanding the Soft Budget Constraint," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 11.
    2. Eric J. Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," Tinbergen Institute Discussion Papers 04-114/3, Tinbergen Institute.
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    Cited by:

    1. Iciar Dominguez Lacasa & Alexander Giebler & Slavo Radošević, 2017. "Technological capabilities in Central and Eastern Europe: an analysis based on priority patents," Scientometrics, Springer;Akadémiai Kiadó, vol. 111(1), pages 83-102, April.
    2. Lukasz Arendt & Wojciech Grabowski, 2017. "Innovations, ICT and ICT-driven labour productivity in Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(4), pages 723-758, October.
    3. Alexander Brem & Pierre Wolfram, 2017. "Organisation of new product development in Asia and Europe: results from Western multinationals R&D sites in Germany, India, and China," Review of Managerial Science, Springer, vol. 11(1), pages 159-190, January.
    4. Jadranka Švarc & Marina Dabić, 2019. "The Croatian path from socialism to European membership through the lens of technology transfer policies," The Journal of Technology Transfer, Springer, vol. 44(5), pages 1476-1504, October.
    5. Matoshi, Ruzhdi & Mulaj, Isa, 2020. "Resurgence of transition economics: Brexit as an expected example, experience and lesson," MPRA Paper 107852, University Library of Munich, Germany.

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