Competitive advantage from innovation is temporary and forces constant reinvestment

Evidence

The first companies that manage to increase labor productivity, and therefore relative surplus value, can lower prices to gain competitive advantage without reducing profits. They will capture new market shares, sidelining competitors. Alternatively, by maintaining the same prices, entrepreneurs will make supernormal profits that ensure further economic advantage. In fact, the additional capital obtained can be reinvested in other technological innovations for new conquests. However, it is not certain that the advantageous situation will last forever. Competitors will soon catch up by adopting similar innovations, and before long, all producers will be able to create a similar commodity in less time. The race for innovation and the tendency to lower prices cannot be stopped. To maintain their competitive edge, winning companies must reinvest profits in new production cycles. The winners concentrate capital and expand, engulfing smaller fish. — Clara E. Mattei, Escape from Capitalism, 125

Categorization

• XREF: This is the mechanism by which capitalist competition becomes impersonal compulsion — the structural logic underpinning the previous passage. — connects to: Competition among capitals and commodified labor drive rapid technological development — Alex Callinicos, Against Postmodernism: A Marxist…, 163; Profit motivated technology’s growth before science did — Jean-François Lyotard, The Postmodern Condition: A Report on…, 338; Contentious innovation is incremental and endures mainly when it yields real advantage. — Charles Tilly, Regimes and Repertoires, 274