The Digital Revolution and the State | #7 | Venture Capital in the 21st Century

The digital revolution was pioneered by the mission-driven State, and has evolved considerably since. Janeway considers the impact of the digital revolution, and how it might have led to the puzzle of productivity growth slowdown. This includes large increases in industrial concentration, rising inequality, overall decline in business dynamism, increased globalization and financialization, and its attendant fragility, and political polarization. The digital revolution, enabled by the State and speculation, has fed back to transform the market economy and the State's ability to offset the consequences of its own disruptions.

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In this eight-part series, Bill Janeway investigates the relationship between #venturecapital and technological #innovation, and the interdependent roles of entrepreneurial firms, the mission-driven State and financial speculation in the overall innovation system.

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Now you know why in 1960 USA was on the top since than continuous decline

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Adding some clarifications to the content discussed, it is urgent to point out that two countries took man to outer space during the last century, but only one of them still took man to the moon and gave the world the Internet and cell phones.

The “success” of Stalin - the man who used to boast of having taken the U.S.S.R "from the plow to the atomic bomb in just one generation" - compared to Gorbachev's failure shows that a socialist economy is unable to function with a minimum of efficiency without requiring a massive dose of political violence. In an attempt to reform a decadent regime, Gorbachev proceeded more quickly with the process of political openness in the hope of removing the predictable resistance that the Soviet bureaucracy would create to economic reform measures, as was fully proven by the failed coup attempt. in the USSR in August 1991 - which ended up precipitating the final crisis of socialism and the dissolution of the USSR itself. Having restored several freedoms (creed, expression, organization, party, etc.) that had been abolished in his country since the time of Vladimir Lenin, Gorbachev's opening process can be defined as a kind of attempt to "deleninize" the U.S.S.R.

While Gorbachev went ahead with his policy of "one step forward" (towards capitalism) and two steps back (back to socialism), his Chinese parallel - Deng Xiaoping - adopted a logic diametrically opposed to that of Gorbachev: he prioritized the achievement of economic prosperity (adopting capitalism in practice) precisely to delay any attempt at political opening, as was evident with the acceleration of the economy. reforms after the Tiananmen Square massacre.

It is important to note that it was Karl Marx himself who, in his Contribution to the Critique of Political Economy, discerned the scenario in which the conditions for a social revolution process are formed, describing it as follows:

“At a certain stage in its development, the material productive forces of society contradict existing production relations or - which is just their legal expression - with the property relations in which they have operated until then. From the forms of development of the productive forces, these relations are transformed into fetters of them. So, it is a time of social revolution. '*

By rejecting the pursuit of profit maximization as an instrument to stimulate innovation, socialist countries ended up condemning themselves to obsolescence. Thus, they lost the chance to incorporate the productivity gains made possible by technological progress. That is why the capitalist countries managed to provide a greater rise in the standard of living of their population, even without pursuing the egalitarian ideal. Therefore, until the “final crisis of socialism” (to paraphrase K. Marx's own definitions once again), it was only a matter of time. But religious fanatics do not give up on their faith, even against the indisputable proof of the facts, which completely refute it!

What has always happened to human society since the time of chipped stone is that technological development does not require human beings to dedicate themselves to certain activities, which start to be carried out in a more intensive way, with increased productivity of decline in the contingent of hand. -employed labor, eliminating certain jobs with the aid of the developed technology. But the jobs eliminated are offset by the increased employment of labor in more technologically developed sectors.

This is basically what happened when the advent of the Industrial Revolution helped to increase the productivity of the extractive and agricultural sector - notably from the advent of agro-industry - while reducing the need for the employment of human labor in these sectors, which makes up the primary sector of the economy. At the same time, the Industrial Revolution moved the economically active population to the secondary sector of the economy (handicrafts, industry and manufacturing).

This process was first noticed by the Austrian economist Joseph Alois Schumepeter, who defined it as a kind of "creative destruction" - that is: technological progress destroys job opportunities in some sectors, but also creates new opportunities in other sectors!

The problem is that Schumpeter was a pessimist, who detested the Soviet regime, but strongly believed that he embodied the "future of humanity". Schumpeter did not realize that he had found the key to explain why capitalism does not self-destruct in an immense crisis of overproduction, as K. Marx predicted it would happen: instead, it evolves, creating the conditions for the overcoming of technological civilization. industrial and the subsequent advent of a technological civilization of a post-industrial character, in the same way as the Industrial Revolution had already done with the agricultural or pre-industrial civilization.

Therefore, we can conclude that from the invention of the first chipped stone tools to artificial intelligence and space travel, human history is not driven by a notorious and highly questionable "class struggle", but by technological progress: since it discovered how handling fire and producing tools, including the wheel, human evolution has become more technological and less biological, unlike other animals. The main reason for this phenomenon is that, with the help of the technology we have created, the human race has gradually become less subject to the limitations imposed by nature. It was by obstructing this mechanism of human evolution - disregarding the importance of maximizing profit in an industrial technological society - that the so-called "socialist mode of production" proved unable not only to compete with capitalism, but even to survive. Therefore, it is easy to deduce that this is a mere question of TIME until the so-called "21st century socialism" in Venezuela ends up following the same path as its counterpart of the last century. However, if there are still economic reforms, it is possible that it will survive for some time.

To paraphrase Marx once again, it can be said with certainty that socialism is a system full of contradictions, which bears the germ of its own destruction: it is the system that digs its own grave!

* Reproduced according to MARX, K. Preface to the Contribution to the Critique of Political Economy, organized by Florestan Fernandes and published under the title K. Marx: Teoria e processo histórico da revolução social, In Marx & Engels, Great Social Scientists Collection, História, vol. 36. São Paulo: Ática, 1983. p. 232. Edição comemorativa do centenário da morte de Karl Marx.

Obs .: Adaptation made from a text of my authorship published in issue nº 72 of the Magazine of the Brazilian Association of Intellectual Property - RABPI in September 2014.