Graphical argument and game theory can elucidate, more effectively than mathematical general equilibrium theory, the Promethean economics of how market capitalist economies explore and exploit the space of technological possibilities. The first step is to understand why supply curves can slope down, which can result in the non-production of goods and services that are technologically available. The consumer goods space, for example, consists of active and potential industries, largely depending on whether there is a critical mass of demand. Invention can add goods to the consumer goods space, but goods can become newly available without invention, simply due to increased market size or intensification of and division of labor. Goods can be classified as (a) natural vs. man-made and (b) consumable vs. higher-order, yielding a typology of (a) foraging goods that are natural and consumable, (b) raw materials, (c) consumer products, and (d) intermediate goods (man-made and non-consumable). Adding roundaboutness and higher-order goods to the picture makes the technology space a graph-theoretic landscape of active and potential industries, with production functions linking nodes in the network in complex ways. Market size and/or division of labor can fuel productivity growth through activating upstream industries without fundamental invention. Effective market size depends in part on institutions, which may fail to achieve efficiency in basic product and factor markets, but also in the less well-recognized specialization problem that arises when specializing is in the social but not the individual interest, due to the way specializing damages an individual's or organization's bargaining position and terms of trade. Contracts, reputation, habit and moral virtue are among the factors that might solve prisoner's dilemma games to facilitate and trade, driving a more complete exploitation of the technology space, and raising productivity. A wide range of policy dilemmas, e.g., relating to IP and competition policy, arise at the economic frontier, which don't lend themselves to one-size-fits-all solutions, and finding the efficient policy frequently depends on understanding the technologies involved and the resulting economic possibilities and incentives. This gives rise to a valuable role for technocratic planning if it can be done well.
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