From: Billy Brown (bbrown@conemsco.com)
Date: Mon Jan 25 1999 - 09:26:49 MST
jeff churchill wrote:
> I haven't been following this particular thread so i don't know the
> context that was taken out of, but i have to ask... do you think that
> advances are held back regularly to increase profits? Would a certain
> technology thus be slowed in its progress towards its limiting factors?
> Would that possibly mean that capitalism is NOT the ideal way
> to achieve progress? (I've always hoped we could do better anyway.)
Well, any system is going to have to let those who pay for an invention make
enough money from it to pay for the R&D - otherwise, how do they pay for the
next round of research? I suspect what you are actually concerned about is
companies holding up new products so they can make more money charging high
prices for the old ones.
This is actually a very stupid thing for a company to do. If you have real
competition, your competitors will bring out their own version of the new
product and gain market share. If you don't, then you are creating a
financial incentive for someone to begin competing with you (if you sell an
outdated product at a high price, you make it very easy for someone new to
enter the market with a better product and/or price). In any industry with
significant technological progress this is a strategy which is rarely
attempted, and usually has disastrous results.
The only cases I can think of where this sort of thing was done long-term
are those where the government forbids competition. Even then, the monopoly
usually breaks down eventually - some unrelated industry springs up that can
provide the same service a different way, and for a lower price. The
history of railroads, trucking, and air freight is an interesting example of
this theme.
Billy Brown, MCSE+I
bbrown@conemsco.com
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