A．monopoly power creates an environment supportive of i……
TEXT E
There is widespread belief
that the emergence of giant industries has been accomplished by an equivalent
surge in industrial research. A recent study of important inventions made since
the turn of the century reveals that more than half were the product of
individual inventors working alone, independent of organized industrial
research. While industrial laboratories contributed such important products as
nylon and transistors, independent inventors developed air conditioning, the
automatic transmission, the jet engine, the helicopter, insulin, and
streptomycin. Still other inventions, such as stainless steel, television,
silicons, and plexiglass were developed through the combined efforts of
individuals and laboratory teams.
Despite these findings, we are
urged to support monopoly power on the grounds that such power creates an
environment supportive of innovation. We are told that the independent inventor,
along with the small firm, cannot afford to undertake the important research
needed to improve our standard of living while protecting our diminishing
resources; that only the prodigious assets of the giant corporation or
conglomerate can afford the kind of expenditures that can produce the
technological advances vital to economic progress. But when we examine
expenditures for research, we find that of the more than $ 35 billion spent each
year in
this country, almost two- thirds is spent by the federal government.
More than half of this government expenditure is funneled into military research
and product development, accounting for the enormous increase in spending in
such industries as nuclear energy, aircraft, missiles, and electronics. There
are those who consider it questionable that these defense - linked research
projects will account for an improvement in the standard of living or,
alternately, do much to protect our diminishing resources.
Recent history has demonstrated that we may have to alter our longstanding
conception of the process actuated by competition. The price variable, once
perceived as the dominant aspect of the competitive process is now subordinate
to the competition of the new product, the new business structure, and the new
technology. While it can be assumed that in a highly competitive industry not
dominated by a single corporation ,investment in innovation - a risky and
expensive budget item - might meet resistance from management and stockholders
who might be more concerned with cost -cutting, efficient organization, and
large advertising budgets, it would be an egregious error to assume that the
monopolistic producer should be equated with bountiful expenditures for
research. Large - scale enterprises tend to operate more comfortably in stable
and secure circumstances, and their managerial bureaucracies tend to promote the
status quo and resist the threat implicit in change. Furthermore, the firm with
a small share of the market will aggressively pursue new techniques and
different products, since with little vested interest in capital equipment or
plant it is not deterred from investment in innovation. In some cases, where
inter -industry competition is reduced or even entirely eliminated, the
industrial giants may seek to avoid capital loss resulting from obsolescence by
deliberately obstructing technological progress.
The
conglomerates are not, however, completely exempt from strong competitive
pressures; there are in- stances in which they, too, must compete, as against
another industrial Goliath, and then their weapons may include large
expenditures for innovation.
It is the author’s belief, as expressed or implied in the passage, that ______.
A．monopoly power creates an environment supportive of innovation
B．governmental protection for military research will do much to protect our dwindling resources
C．industrial giants, with their managerial bureaucracies, respond more quickly to technological change
D．firms with a small share of the market will aggressively pursue innovations because they are not locked into old capital equipment
