But, erm, Willy?

Too few understand that what besets capitalism is unknowable risk – the risk of transformative new technologies, the risk of making epic business mistakes, or the risk of there being no demand for the goods and services a business produces. The task of government is to mitigate those risks – funding new technologies and actively using the tools of financial, fiscal and monetary policy to ensure there are rewards from innovation and investing. The paradox of successful capitalism is that, one way or another, risk has to be socialised.

If the risks are unknowable then how can those clever technocrats in government plan what to invest in?

If we really are fumbling in the dark then we cannot have planning, can we? We have to have the experimentation of the free market.

7 comments on “But, erm, Willy?

  1. I suggest that what he means is that any lunatic idea with noisy political backing, ie wind-farms, should be bank-rolled by the taxpayer so that the rent-seeking sector can make money without regard to the feasibility of the enterprise.

  2. But capitalists willingly take on these risks. So wur Willy is proposing a solution to something that isn’t a problem. Bravo!

  3. “The paradox of successful capitalism is that, one way or another, risk has to be socialised.”

    An illuminating comment. The risk already is socialised – and by choice too – via markets. Innovation and investment already occurs. People pool their resources in one way or another. Or does none of this count in Willy-world? It doesn’t *need* forced collectivism managed by people prone to political whims and significantly detached from the real world.

    I get the impression Willy sees ‘capitalism’ when what he is looking at is corporatism.

  4. So to deal with the risks of technological revolution, the state should fund new technologies, …..which would presumably increase the risk….

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