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Can the "Commies" Innovate?

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innovationThe headlines about the economic fortunes of the 1% and the associated political maneuvering to influence and manipulate our world view are disturbingly reminiscent of those in the early-twentieth century when mega-corporations called "trusts" ruled the day. This is exactly what French economist Thomas Piketty's recent wildly best-selling book, Capital in the Twenty-First Century, tells us is happening again, but this time on our watch. Piketty narrates the dark story of high-efficiency capitalism and what happens when resources are concentrated and powerful groups take control of the market and the supply chain. It's an indictment of the state of our world that's set off both controversy and celebration. Many young and dispossessed people are inspired by Piketty's neo-Marxian call for equality while those of us who have found our way through the Capitalist jungle are defending the benefits of a laissez-faire economy.

Recently, some high-profile political and business leaders have assured us that that China and Russia are places not conducive to innovation. This is something on the order of Cold War Version 2.0. But even back in the day it would have been unimaginable to suggest that the so-called "commies" can't innovate. The Soviets, for example, were admired for their technological ingenuity and the intellectual prowess that drove large scale growth so quickly after the Second World War. They were undone by their military adventurism and their inability to create a sufficiently adaptable economic system for the emerging global economy. As for China, they have a history of innovation that remains unrivaled by any civilization ancient or modern: compass, gunpowder, papermaking, printing, banking, furnace, iron, irrigation and an endless list of what we still take to be the essential elements of a modern society.

I grew up during the Cold War, when we were conscripted as children into the space race and driven to develop superior scientific and design acumen because we knew we were so far behind: Sputnik, material science, holography, space stations, the plasma propulsion engine and yes the nuclear submarine and intercontinental ballistic missile. The Hunt for Red October became a best-seller because it was entirely plausible that the "commies" possessed innovative technologies that we did not. Now here we are, 25 years after the fall of the Berlin Wall, and in a bout of collective amnesia, we're saying that China and Russia are hostile to creativity and we have nothing to fear but fear itself.

In his May commencement speech at the U.S. Air Force Academy, Vice President Joe Biden said, "I challenge you, name me one innovative project, one innovative change, one innovative product that has come out of China." Perhaps he missed the executive briefing on recent breakthroughs in biotechnology, chemical engineering and software systems development.

On numerous occasions, former Secretary of State Condoleezza Rice has noted that the US will remain the number one economic power in the world for the foreseeable future because creativity and innovation are suppressed in China. Given the number of doctorates earned by brilliant Chinese nationals at top US and European universities and the massive migration of research and development centers by the world's top companies to China these reproaches appear to be out of touch and misplaced.

This is simply underestimating the game plan of the other players. There is a dangerous kind of arrogance in assuming that you have all the best cards. Any hand overplayed can be trumped.

Sure, capitalism is a great system. Arguably the best to date. But where do we go from here? Any cursory view of history reveals that all sustainable economic systems need to grow and morph into better and new forms. In other words, even capitalism is in need of some innovation. Purebred ideologies are detrimental to innovation because they discourage alternative ideas that drive hybrid forms of thinking and the new practices and products they produce. Opposing beliefs, when engaged constructively, extend beyond simple combinations to create something entirely new.

While it's easy to disagree with some of the premises and conclusions of Professor Piketty, he has started a much needed dynamic conversation about the function and future of our economic system. Instead of redressing old wounds, it may be more productive to use his insurrection as an opportunity to consider innovative alternatives. But that would require that we acknowledge that "commies" can indeed innovate, eh, comrade?