Innovation is inevitable, but it’s only good under capitalism — the alternative wrecks it, which ensures conflict.
Tudoreanu and Kotz 20 — Mihnea Tudoreanu, Professor in the Economics department at University of Massachusetts, Amherst, holds a Ph.D. and M.A. Economics from the University of Massachusetts, Amherst, holds a B.S. Economics and Mathematics from St. Lawrence University, and David M. Kotz, Professor Emeritus in the Department of Economics at the University of Massachusetts, Senor Research Fellow at the Political Economy Research Institute, Distinguished Professor at the School of Economics and Co-Director of the Department of Political Economy at the Shanghai University of Finance and Economics, holds a Ph.D. in Economics from the University of California, Berkeley, holds a M.A. in Economics from Yale University, holds a B.A. in Physics from Harvard College, 2020 (“Stable Jobs or iPhones? The Dilemma of Innovation in Socialism,” Review of Radical Political Economics, Volume 00, Number 0, Available Online at https://sci-hub.se/https://doi.org/10.1177/0486613420947825, Accessed 04-11-2022, p. 5-6)
One of the advantages for innovation in DPS is that it can effectively take into account social and environmental costs, including the jobs lost or disrupted by the introduction of a new technology.8 But this can also be problematic, in that it is likely to make innovation slower in socialism than in capitalism. Democratic majorities are not immune to some of the same factors that caused Soviet managers to be technologically conservative.
On the one hand, DPS should not suffer from taut planning, unrealistic plan targets imposed from the top down, or an incentive structure that discourages risk-taking by trying out new technologies. But on the other hand, innovation is always disruptive in any kind of economic system. As old technologies are superseded, product lines become obsolete and production processes are changed, and as a result certain kinds of jobs are no longer needed. Even with an employment guarantee, the loss of one’s job may have to involve retraining, changing careers, or moving across the country. So, it is reasonable to expect that workers will resist new technologies.9 Yet at the same time, in their capacity as consumers, they will demand new and better products.
This is the “Stable jobs or iPhones?” dilemma. We can prioritize cutting-edge consumer products, or we can prioritize stable employment, but perhaps not both.10 In DPS, the people will be able to decide between one and the other, on a case-by-case basis, so that some innovations will be pursued, others will be scrapped because of their disruptive effects, and some will be introduced at a deliberately slow pace. Meanwhile, capitalism always comes down in favor of the iPhones despite the conflict with stable jobs. Since socialism will not always do this, it is likely that socialism will have more job security but fewer cutting-edge consumer products than capitalism.
If there is an international rivalry between socialism and capitalism, the citizens of the two kinds of societies will be able to compare their lifestyles with those in the other economic system. Workers living under capitalism may be attracted by the stable jobs, shorter working hours, democratic workplaces, and social benefits provided by socialism. However, those living under socialism will likely also be attracted by the rapid introduction of new consumer goods under capitalism. Moreover, as long as the speed of innovation in socialism is lower than that in capitalism, the “consumer gap” with capitalism would grow over time.
This may not be considered a problem for socialism if most of the population value stable jobs more than iPhones, but there would likely be a minority who do not. If the consumer gap is large enough, and/or that dissenting minority has an overriding preference for new consumer goods, then we have a category of people with a material interest in supporting capitalism, which values a new technology over job stability, even though they are part of the working class.
A common response to the flaws of Soviet socialism has been to propose other models of socialism that would not have those flaws. But the trade-off between job security and innovation is not one that can be easily eliminated within socialism. It is not due to the overly centralized or undemocratic nature of Soviet socialism
Furthermore, there is a military aspect to the innovation problem. Innovations that aid the military are also likely to have a disruptive effect on employment, as in the case of consumer-oriented innovations. This is a problem because it might put DPS at a military disadvantage with respect to capitalism, which would hurt the socialist side in international relations even if no military conflict takes place. If one side knows it would lose any war that did take place, then that side will act timidly and avoid even nonviolent confrontation, so as to avoid provoking the other side into war. For both sides to stand a good chance of success in a peaceful rivalry, they must be more or less evenly matched militarily, so that neither feels that it can do whatever it wants with impunity or that it must tread lightly to avoid confrontation.
The Cold War was a multifaceted struggle between two different systems. Any future socialist economic order will most likely face capitalism in a somewhat similar struggle. Can such a struggle be won by socialism without matching capitalism’s rate of technological development? That is the question.