Capitalism 101: Market Think

“Mixed Drive for Autovehicles.”

“Mixed Drive for Autovehicles.”

“Be it known that I, Henri Pieper, a subject of the King of Belgium, residing at 18 Rue des Bayards, in Liege, Belgium, have invented new and useful Improvements in Mixed Drives for Autovehicles…The invention…comprises an internal combustion or similar engine, a dynamo motor direct connected therewith, and a storage battery or accumulator in circuit with the dynamo motor, these elements being cooperatively related so that the dynamo motor may be run as a motor by the electrical energy stored in the accumulator to start the engine or to furnish a portion of the power delivered by the set, or may be run as a generator by the engine, when the power of the latter is in excess of that demanded of the set, and caused to store energy in the accumulator.”

Henri Pieper, quoted in Hybrid Cars, March 1, 2009

This is one of those choice little fragments of information that should become the set piece for any introductory study of capitalist economics. It’s so rich it’s hard to figure out what to say. It’s a good way to start deflating the myth of capitalist innovation and the market.

The hybrid car is still not common a hundred years after it was patented because there was so little profit it. It didn’t matter if it was or was not a good idea, a practical idea, or even an ingenious idea, or a visionary idea. The market takes up the innovation only money can be made.

The market doesn’t drive innovation, it drives profitable innovation. That’s why the idea that the market can fix the energy problem, to cite only one example, is so misleading. As the president makes clear, the government has to push and nudge and often shove the market to make it move in any reasonable direction.

About Ray Watkins

I was born in Baton Rouge, Louisiana, at Our Lady of the Lake Hospital. I grew up in Houston, as a part of what we only half-jokingly call the Cajun Diaspora. At a certain point during the Regan administration, I had to leave, so I served in the Peace Corps, Philippines, from 1987-89. I didn't want to return to the United States just yet, so I moved to Paris, France, where I lived for three years or so. I then moved back to Austin, Texas, where I had received my Masters Degree, and (eventually) began a Ph.D., which I completed in 1999. I spent a year at Temple University and then accepted a position at Eastern Illinois University where I worked until May of 2006. I now work exclusively on line (although that may change) for Johns Hopkins, the Art Institute Online, and I can be reached most easily via email: raywatkins [that 'at' symbol]

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