12 Pages Posted: 15 Oct 2008
Date Written: October 1, 2008
Joseph Schumpeter's vision of competition saw it as a destructive process in which effort, assets and fortunes were continuously destroyed by innovation. One possible implication is that antitrust's attention on short-run price and output issues is myopic: what seems at first glance to be a monopolistic exclusionary practice might really be an innovative enterprise with enormous payoffs in the long run. While this may be the case, three qualifications are critical. First, one must not confuse the prospect of innovation with the scope of the intellectual property laws; their excesses and special interest capture cast serious doubt on the proposition that they are any better at fostering innovation than antitrust is. Second, for many antitrust practices positive innovation effects are difficult to foresee even on Schumpeter's own expansive and nonmathematical terms. Third, many antitrust violations serve to restrain rather than promote innovation.
Keywords: Antitrust, Monopoly, Innovation, Schumpeter, Patents
JEL Classification: K00, K2, K21, L40, L41, O31
Suggested Citation: Suggested Citation
Hovenkamp, Herbert J., Schumpeterian Competition and Antitrust (October 1, 2008). U Iowa Legal Studies Research Paper No. 08-43. Available at SSRN: https://ssrn.com/abstract=1275986 or http://dx.doi.org/10.2139/ssrn.1275986