From Physics to Daily Life

12Innovation and Big Data

Edwin Morley-Fletcher

A succession of paradigm shifts has accompanied the varying perceptions of wealth in economics. Starting from those who thought that wealth resided in agriculture, moving then to those who saw wealth as correlative to the division of labour, and further to those who posited it as corresponding to profits, in opposition to rents and wages, as industrialization became, for some, synonymous with exploitation. Marginalism redirected economics away from this connection, positing wealth as the outcome of perfect competition, where profits would wane. Economies of scale were then left as the only factor of increasing returns operating as the engine of economic growth. This pleased at the same time free-traders, empire builders, and socialists and communists, who were both striving to transform the whole of society into a single factory. Schumpeter's ‘creative destruction’, followed, on the one hand, by Frank Knight's and John Maynard Keynes' distinction between risk and uncertainty, showed a different reading of capitalism, while on the other hand socialism's demise appeared to originate from having pursued accumulation without disruptive innovation. The sudden shock incurred since 2008 by globalization and free flows of capitals proved financial stability to be still an inherently uncertain precondition for securing further growth and a larger diffusion of wealth. Since 1990 knowledge had, however, begun to be theoretically perceived ...