Technological Developments and Markets

Because the market system enables entrepreneurs and investors who develop new technology to reap financial rewards from their risk of capital, it may seem that the primary result of this activity is that some people who have spare capital accumulate more. But in spite of the fact that the profits derived from in benefits accruing to different groups of people has been narrowed in the long term.

This tendency can be seen in various well-known technological developments. For example, before the printing press was introduced centuries ago, few people had access to written materials, much less to scribes and private secretaries to produce and transcribe documents. Since printed materials have become widely available, however, people without special position or the even more efficient medium of electronic mail have greatly extended the power of distant communication.

This kind of gradual diffusion of benefits across society is not an accident of these particular technological developments, but rather the result of a general tendency of the market system. Entrepreneurs and investors often are unable to maximize financial success without expanding their market, and this involves structuring their prices to the down, it tends to diffuse access to new technology across society as a result.