INNOVATIONS, EXTERNALITIES AND THE PROBLEM OF ECONOMIC PROGRESS

In modem industrial societies innovativeness is seen as a source of ec onomic growth and welfare increases. Following this assessment economi c research presently focusses almost exclusively on the question of ho w to elicit innovations. Yet innovative economic activities have alway s also meant losses, sometimes even hardship, to some members of socie ty, and incalculable risks. The present paper tries to develop a more balanced picture by acknowledging these less pleasant implications. Wh ether, and under what conditions, the permissive regime which modem so cieties have adopted towards innovations can be justified is discussed within the framework of a contractarian approach.