A Research Forum for Technology Commercialization and Economic Logistics

The IC² Institute, the University of Texas, Austin, is a major research facility in the US for the study of high technology capitalism. Even at the time of its creation in the late 1970s, in the face of double digit inflation and near economic stagnation - - at a time when the academic community used to deride the capitalist system - - IC² founder Dr. G. Kozmetsky and researchers at the Institute believed in the creative force of high technology and the eventual resurgence of the capitalist economy. Dr. Thore has published a series of studies of the capitalist system and the commercialization of high technology. Some of these publications are listed below.

From the Foreword to the book: 

"In his book 'Jurassic Park' (and in the movie based on the book), Michael Crichton describes a crazed professor who through techniques of genetic engineering manages to recreate the dinosaurs and giant ferns of 65 million years past. Once the giant Tyrannosaurus Rex is brought to life, a powerful dynamics sets in: evolution. The prehistoric world embarks on a collision course with man."

"Researching his book, Crichton had been reading up on paleontology and on the mathematical theory of evolution, catastrophes, and chaos. Crichton explains some of the twists of nonlinear mathematics that are rewriting not only thermodynamics, physics, and chemistry (that all grapple with evolving and turbulent processes) but also paleontology, genetics, medicine and even anthropology."

"Collapse and chaos is not limited to prehistoric animal kingdoms and ancient civilizations. The collapse of the Soviet Union and the political and economic chaos in its aftermath demonstrate that modern civilizations are just as vulnerable."

"This book aims at reexamining some main portions of the discipline of economics from the point of view of economic change and creativity. There are two aspects to this perspective. First, diversity and complexity. The range of different kinds of high technology products available to consumers and producers increases rapidly. Each product is the result of a long and complex production hierarchy. As these hierarchies grow, they deliver ever more diversified and complex high tech goods. Other hierarchies fall by the wayside. What will the new technologies of multimedia and interactive television look like? We do not know yet. Powerful new corporations will emerge. Others will crumble."

"Second, self-organization and evolution. Living organisms spontaneously establish patterns and order. So does the economy. Some of the patterns of the economic world used to be large vertically integrated corporations and multinational corporations - - the corporate dinosaurs of the 1960s and 1970s. This structure is now falling apart ... New industrial patterns are emerging: small narrowly specialized corporations, like Symbol Technologies making the fonts for computer printers, or IG Labs making genetic test kits. It is in these startups that the jobs of the future will be created."

"I shall argue that the U.S. economy is currently experiencing a turbulent "phase transition", moving from one phase of capitalism to the next. New species of corporations and markets, and economic institutions are emerging. Out of the present chaos, a new and higher order of capitalism is crystallizing."

"What will the future bring? As the many-splendored engine of capitalism gets into gear, there is no limit to the technological diversity and beauty that the economic goods of the future will bring. The instrument of change is technological creativity, the inventive human mind calling on the God-given creative powers deposited deep within her. But only those commercial products that fit into the self-organizing pattern of capitalism will succeed. Those that do not belong will fail."

See also The Capitalist System at the Turn of the Millennium - Past and Prospects, a video recorded at the IC² Institute, The University of Texas at Austin on April 13, 2000.

Comparing the performance of capitalist firms with state enterprises in the totalitarian economy

K.C.Land, C.A.K. Lovell and S. Thore, "Productive Efficiency under Capitalism and State Socialism: An Empirical Inquiry Using Chance-Constrained Data Envelopment Analysis," Technological Forecasting and Social Change, Vol. 46, 1994, pp. 139-152.

K.I. Spenner,  O. Suhomlinova, S. Thore, K. Land and D. Jones, "Strong legacies and weak markets: Bulgarian state-owned enterprises during early transition," American Sociological Review, Vol. 63:4, August 1998, pp. 599 – 617.

The idea of using DEA to rank the performance of entire nations was originally proposed by IC² research fellows K. Land and S. Thore in their work comparing the economic performance of Western nations with that of countries behind the iron curtain. As C.A.K. Lovell joined the research team, the methods of chance-constrained DEA were developed to deal with the differing nature of uncertainty in capitalist countries and under state socialism. The first joint publication  "Productive Efficiency under Capitalism and State Socialism: The Chance-Constrained Programming Approach," had a dramatic birth. The paper was scheduled for presentation at the 47th Congress of the International Institute of Public Finance in Leningrad in the early fall of 1991, but as the old Soviet Union crumbled the entire congress was cancelled (and Leningrad eventually became Petersburg again). The proceedings of the conference were published the following year, see P. Pestieau, editor, Public Finance in a World of Transition, Proceedings of the 47th Congress of the International Institute of Public Finance, St. Petersburg 1991, supplement to Public Finance, Vol.47, 1992, pp. 109-121. 

K.C.Land, C.A.K. Lovell and S. Thore, "Productive Efficiency under Capitalism and State Socialism: An Empirical Inquiry Using Chance-Constrained Data Envelopment Analysis," Technological Forecasting and Social Change, Vol. 46, 1994, pp. 139-152.

From the introduction to the paper:  "In the current economic debate, it is often argued that a prime concern of the U.S. should be to improve its "competitiveness." What, precisely, is the competitiveness of a nation and how can it be measured? There exists no consensus among economists on this matter. In contrast to terms like productivity, or terms of trade, which have relatively clear and accepted definitions, the term competitiveness has many dimensions, and is invoked in many different economic contexts. But one idea seems to be common to these various interpretations: the idea of a "race" in the international marketplace where some nations are forging ahead, pushing forward a frontier of maximal performance, while others are falling behind."

"The mathematical technique of Data Envelopment Analysis (DEA) was developed precisely to effect a comparison and ranking of the performance of entities or decision making units when (1) their performance is measured by several criteria rather than a single criterion, and when (2) it is desired to rank their actual performance (their competitiveness) in relationship to the envelope spanned by the most efficient units."

Using data published by the U.S. Council for Competitiveness, we use DEA to measure the competitiveness of seven advanced industrialized nations (the so-called G-7 nations) during a 21-year period (1972-1992), from which we obtain the following findings: (i) Italy and Japan systematically outperform the other countries ; the U.S. belongs to a second tier also comprising France, Germany, and the U.K.; Canada obtains the lowest scores. Furthermore, all countries tended to maintain their relative rankings over time, so that no significant gains or losses in relative competitiveness positions can be identified. (ii) The competitiveness ratings of all seven nations have been systematically falling over time, i.e. their performance has been systematically declining over the said twenty-one-year period."

"One school of economic thought that recently has gained some prominence, states that the very concept of the competitiveness of a nation is meaningless and should be accorded no attention for the formulation of national policy. This unfortunate idea was able to gain some ground since there are many dimensions to the concept of competitiveness. We hope that our work will dispel these notions and return the concept of competitiveness to the academic respectability that it deserves - and that, for the policy-maker, competitiveness policy becomes once again a viable enterprise."

To download a pdf version of this paper, click here.

Abstract:  The authors, who earlier have applied data envelopment analysis (DEA) to rank the economic performance of nations, propose to extend the calculations to take account of social variables such as education , health, and welfare policy as well. An empirical application is presented, rating 72 developed and developing countries by their the economic and social performance during the time period 1970 to 1985. For each country the efficiency rating and also a measure of returns of scale -- increasing, constant, or decreasing returns to scale (RTS) are calculated. The frequency of alternate optima, leaving the returns of scale indeterminate, is examined. For nations with increasing RTS, continued long-run growth of both GNP and social performance is indicated. For countries with decreasing RTS, a slowing down of both GNP and social performance is indicated. The data for countries exhibiting constant RTS is further investigated using more detailed RTS analysis tools and, for some of these countries, we show how the constant RTS characterization can be highly sensitive to changes in the data.