Neo‐Marshellian Equilibrium Versus Schumpeterian Creative Destruction: Its Impact on Business Research and Economic Policy

8 Pages Posted: 19 Mar 2013

See all articles by Bruce A. Kirchhoff

Bruce A. Kirchhoff

New Jersey Institute of Technology

Jonathan D. Linton

University of Ottawa - Telfer School of Management

Steven T. Walsh

University of New Mexico - Robert O. Anderson Schools of Management

Date Written: April 2013

Abstract

A cold war exists in faculties of business and economics. It is fought between the neo‐Marshellians that advocate the elegant simplifying assumption of equilibrium and the Schumpeterians that believe that economic growth is driven by the recognition of new opportunities and the capture of associated benefits through innovation. This fundamental disagreement is referred to as a cold war because the battles are fought indirectly with discussions of wealth transfer (instead of wealth creation), big firms versus small firms (instead of innovative firms versus noninnovative), and stability and managed earnings versus Sarbanes–Oxley and full disclosure. This note points out that this conflict does in fact exist and then provides a review of the literature and support for the Schumpeterian position as it relates to small business and associated economic policy. The literature is provided by one of the pioneers in this field, Professor Bruce Kirchhoff, as his last direct contribution to the field that he championed for decades.

Suggested Citation

Kirchhoff, Bruce A. and Linton, Jonathan D. and Walsh, Steven T., Neo‐Marshellian Equilibrium Versus Schumpeterian Creative Destruction: Its Impact on Business Research and Economic Policy (April 2013). Journal of Small Business Management, Vol. 51, Issue 2, pp. 159-166, 2013. Available at SSRN: https://ssrn.com/abstract=2235464 or http://dx.doi.org/10.1111/jsbm.12018

Bruce A. Kirchhoff

New Jersey Institute of Technology ( email )

323 Martin Luther King Blvd.
Newark, NJ 07102
United States
973-596-5658 (Phone)
973-596-3074 (Fax)

Jonathan D. Linton

University of Ottawa - Telfer School of Management

136 Jean-Jacques Lussier Street
Ottawa, Ontario K1N 6N5
Canada

Steven T. Walsh

University of New Mexico - Robert O. Anderson Schools of Management

Albuquerque, NM 87131
United States

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