Capitalism Hindering Innovation

In his article, “How Corruption is Strangling US Innovation,” James Allworth delineates why for the most part, capitalism’s sole beneficiaries are incumbent firms. It is these incumbent firms such as “NADA and Comcast” that hinder the innovative efforts of up-and-coming organizations/companies, by establishing “ridiculous regulations that new entrants must contend with.” These dominant firms thwart the efforts of small, but rising companies because it does not suit their interests to allow the competitor to come in and run off with their current customers, who will most presumably prefer the innovation, offered by the developing company to the incumbent’s conventional, pre-existing product/service that lacks innovation. People are drawn to innovation, so naturally with innovation in place, dominant firms eventually lose their dominance due to the competition of innovation. Hence, it is for their very survival that these large, incumbent firms impose such “ridiculous regulations” making the “new entrants lives very difficult.” Throughout the duration of Unit 2, we’ve encountered such a concept. It is the concept of capitalism, specifically the competition and innovation components of it that we’ve stumbled upon in this article that relate back to our major course concept: capitalism. It is here, in this article that we are able to actually see the viciously competitive nature of capitalism play out as the article traces the cutthroat actions, in this case regulations, a firm is willing to undergo in order to keep the competition of innovation at bay. Innovation, mostly always results in wealth for the up-and-coming contender. This is why innovation is so hazardous to pre-existing companies. Once a particular form of innovation has caught on, rest assure that in no time the pre-existing company will die off and be sent into oblivion. This is great for capitalism but bad for the capitalist, who will find himself in a constant, never-ending race against innovation.