ABSTRACT
Modern political economic systems are complex, both in structure and operation. This chapter discusses a central one: the institutions and processes supporting technical advance in modern capitalist countries and in particular the US Economists from Marx to Schumpeter have touted rapid innovation as the hallmark and the principal virtueof capitalism. Evolutionary processes in general and technical change in capitalist countries in particular, are inherently wasteful, at least with the vision of hindsight. Historians and economists studying technical change in capitalist countries have recognized a wide variety of means through which firm’s appropriate returns to their investments in innovation. The institutional structure of the capitalist innovation engine contains far more than private enterprise. The capitalist innovation system indeed involves, in a central way, profit oriented business enterprises in competition, each guided by its own perceptions of what the market will take, and funded in the capitalist mode.
