You can remove one of the three to get innovation, the question becomes then of the quality and rate of such endeavors. Between democracy, freedom and capitalism. that's the right concoction where you get things really moving. But like I said, it is possible to get innovation removing one, just would you get the same stuff or less by removing one of the legs of this three legged stool? Reward for such strides towards innovation are also asked under each scenario.

This was my problem with the libertarians who constantly scream "freedom" or "liberty."  Yet what do they mean by that?  Pure freedom as having the ability to do whatever you want?  The term "Democracy" has been bandied about to mean all sorts of things from voting rights to putting workers in control of a company.  I would like some clarification here by the definition being used for Democracy.  But still, it's the weekend, I just got home from a nice wedding and feeling to get the juices flowing.

Lets start with democracy. Now I'm assuming here you mean a real pluralistic voting environment where the average person can choose whom to vote for.  Well, you have countries like Singapore which had essentially a one-party state under Lee Kwan Yu.  There is also the Peoples Republic of China, Korea under the military juntas, Nazi Germany, the list goes on and on.  But in each situation, you had companies or folks coming up with new products or innovations on established ones.  Still, were they able to reap the fruits of their labor?  In many instances, surprisingly yes, one could make money or get a better home.  So long as you don't challenge the party in power, they don't care (see the PRC).  Of course we then get to the next leg, Freedom.

Freedom, I'm speculating here (and please correct me if I'm wrong) meaning civil rights like freedom of movement, speech, etc.  Well once more, you have instances where innovation has come even with the removal of freedom.  Scientists, in the past and especially those deemed "enemies of the state" held in capitivity, created things for their overseers.  The Russians used captured Nazi scientists, after the war and still under the "protection" of the KGB (or was it still called the NKVD??) to advance the USSR's rocket program.  The scientists working on North Korea's rocket program have neither Democracy nor Freedom, yet they are on the cusp of launching the Taipong Dong 2 missile into orbit.  In the Peoples Republic of China, one does not have many of the freedoms we take for granted, yet you have many new products coming out of that place (not to mention newly minted billionaires!).

This brings us to the last leg, capitalism. Now let me get classical here and go with it meaning a market based system where one is financially compensated for services rendered or products produced. Or for this argument, are those innovating getting paid or getting a piece of the action?  Many scientists or have come up with products we use every day either also been entrapaneurs who started up businesses selling us those products, or employees in research & development for a company.  Now they could get a royalty, but many don't, they just get a pay check and hopefully a bonus.  But what if we removed financial compensation from this?  Would we get innovation?

The average tinkerer may not be thinking about money when they're designing that gadget in their garage.  Indeed, you've had many where the science of the product and not the economics were more important.  But still, that inventor who had spent years in his garage or basement coming up with something, when they finished and showed it to a friend who said "that's cool, I'd definantly would use it" was probably thinking $$$ soon afterwards.  But say we lived in a system where you invented something and the state just took it and at most all you got was a plaque commemorating your discovery, but then the state took your thing and made money off of it.  The incentive may not be so great to come up with something.

Still, you have had inventors where it was not the money.  During times of war you have had engineers come up with rifles or bombs while working for their armies.  Sergei Simonov was one who helped come up with new guns for the Red Army during WW2. There was no financial incentive here, nor could he hope after the war for royalties.   But nevermind war items, in centrally-planned economies where free markets are discouraged, you've had scientists coming up with products.  In the former Eastern Bloc, because not all Western technology could be easily procured, scientists had to come up with ways to reverse engineer much of the technology, like a CMOS memory chip.  East Germany had companies like VEB Robotron who routinely came up with products.

Of course we're leaving out the big economic white elephant in this discussion.  Innovation does not come cheap.  Whether it is a tinkerer in the garage utilizing his time and money, or a centrally-planned Industrierverband Fahrzeugbau, you can't ignore costs.  To me this where the capitalism part really comes in, because in such systems you need the money to continue with research or even operate the enterprise.  You can plan, of course, in a centrally-planned system, but variables can change.  Set the price all you want on a commodity with a finite resource, but eventually pressure will build and costs will have to go up.  The German Democratic Republic (GDR), like many of their Socialist bretheren, used to eat up a lot of the costs up front to maintain the appearance of stable prices.  But we all saw what happened in the long run.  In the end you need a market to better guage price/costs or things will get out of control. 

So could you have innovation without Democracy or Freedom or Capitalism?  The answer is yes, but the costs are in this author's opinion, too high.