Evolving Technology and Market Structure: Studies in Schumpeterian Economics.
This volume comprises fifteen papers, including an introduction, plus six comments from the second International Congress of the J. A. Schumpeter Society held in Sienna, Italy, in June 1988. The papers are of unusually uniform quality for such a volume and the fact that their interpretive milieu is the research agenda of Schumpeterian dynamics generates analytical coherence. Still, the various authors do not hesitate to identify and seek to improve upon Schumpeter's own ideas, and future work will have to distinguish between Schumpeter's own substantive analyses and the general Schumpeterian research agenda. The first three papers assess Schumpeter's most striking ideas concerning economic dynamics and instability. Christopher Freeman focuses on technological innovation and its relationship to business cycles. including the Kondratiev long wave. Richard Goodwin covers some of the same ground, focusing on Schumpeter's use of and departure from Walras's general equilibrium model. Hyman Minsky examines Schumpeter's ideas, in part in relation of Keynes's, on finance, credit, and money, emphasizing that money is both endogenous and nonneutral and that analysis needs to distinguish between entrepreneurs who are innovators in product and process and those who are innovators in finance--a quite Veblenian distinction.
The remaining papers largely deal with case studies of various types, by time, industry, and country or area, though several, especially those by William Lazonick, Kenichi Imai, Paul A. David and Julie Ann Bunn, and, especially, the concluding essay by Giovanni Dosi, attempt larger theoretical generalizations. Among the case studies are those on the Latin American intellectual tradition (by Raphael Valentino), electricity supply (Paul A. David and Julie Ann Bunn), international pharmaceuticals (Henry G. Grabowski), joint R&D in the Japanese computer industry (Ryuhei Wakasugi), the Japanese power loom industry (Ryoshin Minami and Fumio Makino), Bell Labs and telecommunications (Edward E. Zajac), the diffusion of microprocessor technology in the United Kingdom (David Simpson), Italian patent experience (Franco Malerba and Luigi Orsenigo), and a sixteen-country cross-national study of the textile industry (Cristiano Antonelli, Pascal Petit, and Gabriel Tahar). Both types of papers make contributions to the development of economic dynamics in the Schumpeterian tradition.
Together the several contributions affirm the importance of, first, technological innovation, diffusion, interdependence, regimes and trajectories as well as the cumulative nature of technological change in, part in relation to gateway technologies; second the historical, cultural, structural and processual factors in the genesis, form, and direction taken by technology; third, the many forms which entrepreneurship may take; fourth, the difference between theories which explain the origins and development of technology and those which explain its consequences; and fifth, the importance of historical (including statistical) studies, along-side those of theory, for understanding what actually goes on in economic development. Technology and entrepreneurship are both dependent and independent variables in an extraordinary complex process of economic change.
No unified theory of technologically and entrepreneurially driven dynamics is either sought or achieved in the volume, though the distinctive Schumpeterian perspective is clarified (especially by Lazonic and Dosi) and a great deal of substantive material is marshalled in amplification of that perspective. Economists do not often give a privileged status to case studies, yet these are rich with insight as to how technology and business operates in the real world in different economies. (The several case studies of Japan are particularly instructive, given that country's aggressive and co-ordinated assault on the world economy.)
Schumpeter himself sought a determinate systemic evolutionary general equilibrium model encompassing economic and social history. The essays in this volume are convincing evidence that a meaningful understanding of economic dynamics driven by technology and entrepreneurship can be attained without the confining, if elegance producing, restraints of deterministic equilibrium techniques--though the latter can be used in aid of the former, without overwhelming it.
Finally, several contributions to the volume underscore the Veblenian distinction between making goods and making money. Technology and the ability to produce can be derailed by the entrepreneurial use of funds for financial speculation and manipulation. But there is much more to the theory of technology than the Veblenian dichotomy, as suggestive as it is.
This is a rich and rewarding book and it is highly recommended reading.
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|Author:||Samuels, Warren J.|
|Publication:||Southern Economic Journal|
|Article Type:||Book Review|
|Date:||Apr 1, 1992|
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