Opportunity Costs and Hidden Inventions

Given the proliferation of new products and innovations in recent years, some of which threaten large and profitable companies like Google and Microsoft, it is hard to understand the persistent belief that valuable inventions are being hidden. If an economic system based on the pursuit of profit caused valuable inventions to be hidden, then significant technological advancements should have been plentiful in socialist economies where profit didn’t guide economic activity. However, history shows us otherwise. Excellent products and innovations that people in capitalist countries take for granted are often unavailable in socialist economies for the mass population.

For example, the advent of artificial intelligence (AI) poses a potential threat to established tech companies in various sectors. Notably, traditional automotive manufacturers like Ford and General Motors face significant challenges from new AI-driven companies such as Tesla, which integrates advanced AI in its vehicles for autonomous driving features and better battery management systems. This example underscores how AI can disrupt traditional industries and pose a threat to well-established companies that are slow to adapt to technological advances.