Hello Comrades, I hope you are doing well today.
I would like to ask what is the relation between entrepreneurship and innovation in the economy, and in terms of what a company itself may develop—from a Marxist perspective. Also, what influences the leaders of companies to make decisions related to or bolstering innovation?
This is related to coursework in a Chinese university, so the more detailed the better!
Innovation serves growth which is a long term profit maximization. Once the company has defeated competition for the foreseeable future, it switches short term profit maximization (gouging prices, squeezing labor, planned obsolescence, squeezing suppliers). Once a monopoly or cartel has risen in a certain sector, innovation is usually ignored if not gutted, since there’s no reason to spend resources boosting long term growth.
Once bank capital and industrial capital merge in the monopoly mode of production, entrepreneurship is basically a servant of finance capital. Today this takes the form of Venture Capital where innovative companies are indebted to if not owned by large trusts of finance capital. The goal of entrepreneurship becomes not one of growth, but creating property to sell to a VC firm which is itself owned by numerous investment firms like BlackRock.
Otherwise natural forms of innovation occur when a problem needs to be solved, or a current process can be cheapened through efficiency gains. Capital will select only the profitable innovations.
One important note about techincal progress and innovation that Marx noticed and i rarily seen mentioned, is that contrary to most widespread myth of economical progress following innovation, it is actually in the other way - innovation follows the needs created by the economy. Marx observed that while analysing the industrial revolution, but it was also clear for the earlier epochs (just it happened usually way slower then) - this is also an explanation why progress was so fast in the last two centuries and why today some things are still improving in blinding tempo, but some are stagnating.
Of course it’s because the driving force in capitalism - profits, and because what comrade Kaffe wrote about development of capitalism itself, it looked different when the capitalism itself was a fresh progressive force, and entirely different when an entrenched mono and oligopolies are stiffling innovation with patents, copyright, buying inventions, industrial sabotage etc.
WRT innovation following the economic need, that’s sort of universal and logical. It wouldn’t make sense for the startup Google to begin writing a search algorithm for the Internet if there’s no Internet. The development of the Internet created new possibilities but then created brand new problems: how we going to find all this new content?
WRT capitalism’s different natures at different times, this is NOT STRESSED ENOUGH by leftists! In the early days of capitalism, it was a massively progressive, innovative and yes, even positive force in the world! It no longer is. What changed? What changed was exactly what you said: when it’s goal was to supplant the old system and establish a new one (aka revolutionary), it was a positive force. Now that it’s goal is to specifically STOP any and all revolutionary changes globally, it became a negative force.
The key is technology. As technology moves humanity from scarcity to abundance, in each area, one after the other, we have two choices: 1) accept this and allow ALL people access to the things or 2) build artificial scarcity (paywalls, patents, military conquests, coups, etc) so that this new abundance can be monopolized and controlled. This is the very heart of what is being fought against.
The important thing here is not just that capitalism changed from a positive to a negative force in the world, but to also note that so will socialism. Socialism, after it fully supplants capitalism, will fight against changes towards communism. It will betray its own objective. Indeed, all socialist projects already have this tendency. The struggle will always continue.
