Tag: free-market ideology

Capitalism and Innovation

Innovation is at the heart of capitalism

We have been constantly told this for so long that it is now an assumption that has become an accepted fact. On the other hand, government is slow-footed, clumsy, bureaucratic, rule bound and the antithesis of innovative. This is the flip side of the capitalism is innovative story. One famously turned into a much quoted phrase by President Reagan, “Government is not the solution to our problem, it is the problem.”1

So, when you see this image  from the Charles Koch Institute you do not need to be too clever to know that this fits into this narrative.2  Markets drive innovation. Technology becomes more powerful and prices fall as products reach the mass market.

What does government have to do with these technologies?

The first satellite based phone call was made in 1962 featuring VP Johnson and the Chairman of AT&T Fred Kappel. NASA, a government agency put the satellite up and AT&T provided other parts of the technology. From today’s perspective this might appear to be a joint project between government and private industry. That would be a mistake. The AT&T of that time was a government regulated national behemoth that held a monopoly on telecommunications. Thus it did not suffer the risk aversion that makes it impossible for capitalist corporations to invest in projects that will not turn a profit within a few years at the outside.3

iPhone and the State

see Mazzucato, Mariana. The Entrepreneurial State, p 116.

Apple is one of our cultural darlings. Noted and notorious for its creativity and sense of style. But all of the basic technologies that they first applied to develop the iPod and then the iPhone are the fruits of government-funded research. LCD screens, click wheels, multi-touch screens, the internet, GPS, Siri, and more…..4


Risk and Capitalism

For all of the chest beating about the bold risks taken by capitalists, the capitalist time horizon is very short when compared to the many years of work that have gone into almost every significant scientific and technological advance. Without extensive government investment in activities that deliver longer term success, the capitalist system will simply eat its seed corn until it is gone. This is so not just for scientific and technological development, but also for education, health, environment, and infrastructure. Capitalism is not structured to fund any of these necessary activities without government action to protect these areas of human endeavor.


  1. 1st inaugural address 1983 []
  2. Unfortunately I have not been able to find the original page this appeared on. The original Koch website economicfreedom.org no longer exists []
  3. This is not to argue for the return of our telecommunications sector to this regulated monopoly or oligopoly state. The important fact is that AT&T was sufficiently protected from the short term quarter to quarter focus that now dominates the capitalist world that it maintained a national system of research labs, Bell Labs, that did much fundamental research. []
  4. see Mazzucato, Mariana. The Entrepreneurial State: Debunking Public vs. Private Sector Myths. Revised edition. New York, NY: PublicAffairs, 2015. []

Delusions of American Life

Delusion – fixed false belief that is resistant to reason or confrontation with actual fact.

Every society creates delusions, myths and stories, that explain where it came from and how it works. These are so engrained in the culture that they form a central base for how members interpret their relationship to the environment and to family, neighbors, and society at large. These delusions are taught to us by our parents, extended families, schools, religions, government, and corporations. Mass media reinforce them continuously. The rich and corporations understand this quite well and seek to exploit our need to understand our place in society and how that society works. They support and, as required create, delusions that shield or justify their activities and the gains from those activities.

This series, Delusions of American Life, seeks to describe important delusions, contrast them with the facts surrounding them and explore how these delusions fit into a pattern that sustains the organization of our society in its present form.

Free-market capitalism (neoliberalism) is at the center of our delusions

The free-market (neoliberal) ideology has dominated every aspect of American life for the past 40 years and more. It is a truly global ideology that is supported by global corporate and financial interests, implemented by many governments, some at the direction of local government and in many other cases driven by World Bank and other financial institutions’ policies.The mass media and education system reinforce free-market thinking in a comprehensive manner. Our culture is interpenetrated by the underlying concepts and rhetoric. 

Therefore we start with this topic and recommend it to you. Understanding what the claims of free-market capitalism are and developing a critical point of view will arm you for many of the other topics.

The Delusions

Included are discussions of the following topics (many forthcoming):

  • Free Market (Neoliberal) Ideology
  • US Economy – structure and results
  • Education
  • Environment
  • American Empire
  • The Family
  • Healthcare
  • Infrastructure
  • Justice and the Judicial System – Incarcerated America and the War on Drugs
  • Political System – big money – big dysfunction
  • Racism
  • Security State