Technological Revolutions and Financial Capital
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Technological Revolutions and Financial Capital

The Dynamics of Bubbles and Golden Ages

Carlota Perez

Technological Revolutions and Financial Capital presents a novel interpretation of the good and bad times in the economy, taking a long-term perspective and linking technology and finance in an original and convincing way.
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Chapter 3: The Social Shaping of Technological Revolutions

Carlota Perez


If technological revolutions remained as forces of change in the economic sphere and society adapted gradually and easily to the new products and means of transport and communication the whole process could be described simply as the form taken by ‘progress’ and technology could be treated as an exogenous variable. Such changes, however, are far from smooth. Societies are profoundly shaken and shaped by each technological revolution and, in turn, the technological potential is shaped and steered as a result of intense social, political and ideological confrontations and compromises. It is precisely this systemic character that makes the whole question of technical change so crucial in understanding capitalist development. A. From Technological Innovations to Institutional Revolutions The notion of ‘creative destruction’, very much influenced by Nietzsche, was a significant element in the European Zeitgeist of the early twentieth century, as the nature of progress by innovation. Much in the same spirit as that of the Renaissance, it was seen as Mankind’s noble and pleasurable duty to invent,23 to break the forces of inertia that threatened to chain and enslave society in a cult of status quo. It was the German economist Werner Sombart, in his Krieg und Kapitalismus, who first used the term ‘the creative spirit of destruction’ in economics.24 Today we usually credit Schumpeter with the notion of ‘creative destruction’ as the way to describe the contradictory nature of technological revolutions.25 In fact, he understood innovation, be it new products, new processes or simply new ways of doing...

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