Capitalism was not an inevitable historical evolution, but a unique combination of a particular emphasis on the value of individuals and individual property rights. During the past three centuries, as McCloskey has estimated it, individuals in the Western world have become richer by a factor of 30. Schumpeter wrote what was intended to be history of it in terms of economic ‘cycles’, but was weak on the causality of these because he did not give enough importance to institutions. However, in the form of changing property rights, these are the key to the origin and development of capitalism. The wealth that this generated came from technological innovation, but the pace of this slowed after World War I, and after a brief resurgence due to the Second World War, it was progressively replaced by innovations in finance. Capitalism’s power to generate real wealth was eroded from within, and Schumpeter’s prediction of its replacement by socialism became increasingly plausible.
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J. Stanley Metcalfe and Ronnie Ramlogan
The chapter provides the background on the economics of this book, on the ‘sharing economy’ and how Uber can be assessed as an economic agent. This book understands markets as open-ended undetermined series of exchanges between a potentially unlimited number of agents. These agents engage voluntarily in the different market processes without knowing more than the other agents but judging their own beliefs, preferences and costs subjectively. Agents use the market processes in order to learn about other agents’ beliefs, preferences and costs. Market processes are cooperative actions. Whatever might be labelled the sharing economy relies on these market processes and does not in any way fundamentally change them. The sharing economy is not different from the traditional economy; to the contrary, it applies and broadens the application of market processes and individual actions. However, the role that technology plays is important. With the development of online networking, e- and online payment methods as well as individual online mobility, many business models gain scale and scope. Technology often makes it possible to diminish costs of participating in a market process, to learn quickly or gather information in a timely manner as well as to scale up some market processes. Uber, in due entrepreneurial spirit, seized this opportunity and turned it into a successful business model.
Philip McCann and Raquel Ortega-Argilés
The chapter reviews the literature on the nature, role and links between R & D, innovation and productivity. The authors examine innovation from the perspective of the resource-based view of the firm, and discuss how non-spatial approaches explain the ways in which the characteristics of knowledge and technological regimes shape the evolution of the firm’s innovative behaviour. The analysis then moves on to set the insights of these non-geographical approaches squarely in the context of economic geography allowing for a discussion on the spatial effects of the prevailing technological regimes on urban and regional economic systems.