Almost as if he could read my mind, Barkley submits questions which I have been struggling to articulate. > 4) If it happens, it will be Schumpeterian and >clearly led by the computer/info tech technology cluster. > 5) The more serious issue remains the incredible >inequalities that seem to be going on with this whole wave >of technology. If this continues even with a long wave >upswing (that might or might not happen), what then? >Barkley Rosser Barkley argues that this technology cluster should primarily be analyzed simply as a employment-generating and investment-inducing carrier of an upcoming long wave, not in terms of the disruptive effects it has already had and will have on the existing industrial structure. I think this distinction is important, and it seems that much neo-Schumpeterian economics has given too much emphasis to "endogeneous" innovation and imperfect competition in Schumpeter's analysis (Robert Kuttner provides a quick summary in the Virtue of Markets) and forgotten or at least not analyzed the positive functionality which the master attributed to recessions (and even the douche of depressions!)--though Michael Perelman has often emphasized this in his provocative and accessible works (*The End of Economics*, 1996). Emphasized instead is the carrier effect: this is the mistake--dare I say--Paul David makes in his widely circulated paper comparing the dynamo and the computer which gives little analytical attention to the disruptions and devaluations a real Schumpeterian technological revolution requires. (Indeed one could argue that a recession is required in order to wipe out those firms in branches which are not based on the carrier technologies, thus giving further market power to those firms whose growth will stimulate and be stimulated by the new technological nodes; this is to say that disruptive recessions are not only effects of new technologies, as Schumpeter emphasized, but preconditions for their diffusion--see for example Guglielmo Carchedi in Frontiers of Political Economy). But if we are to look at nodes only in terms of their carrier wave effects--as Barkely seems to be insisting-- Francois Chesnais has suggested the conditions a technology cluster would reasonably have to meet in order to produce a long-wave carrier effect: "The industries which represent nodes in technology are not necessarily identical with those that have the heaviest investment-inducing and employment creating effects, and of course visa-versa. [was it Doug who recently noted that overall high tech industries have lost 1,000,000 jobs since 1987--rb]. This is a point on which there is a lack of clarity in Schumpeter." I think this is to say that a technological node does not necessarily have to stimulate the upward long wave effects of increasing absolute employment and real wages. Sylvia Ostry and Richard Nelson agree that to attribute a "carrier effect" to what is doubtless a technological node or cluster in the Schumpeterian sense is to fall prey to technological fetishism. This is not to answer Barkley's questions, but it is to agree that they are most important ones. Rakesh
