ABSTRACT OF PAPER
Title: Market structure and technological progress from Schumpeter’s entrepreneur to endogenous growth theories
Author: SZMRECSÁNYI Tamás, ALCOUFFE Alain
The classical economists were well aware that technological progress is closely related to market structure and competition. Adam Smith and Karl Marx, in particular, were very interested in the origins of new technology—or sources of innovation—as well as in the effects of technological change whereas Ricardo changed his mind about machines in a famous revision of his Principles. Smith linked division of labor (hence, productivity advances) to the size of the market, introducing some endogenous character to technological progress (Rosenberg, 1965). Karl Marx went further and argued “that technological advance generates new specialized skills at the interface between science and production—notably the various types of engineering. The new specialists are able to interpret the needs of the entrepreneur to the scientists, and economic demands begin to affect the orientation of science. Schumpeter developed further these ideas in his study of innovation” and gave a formal account of how competition in the free-enterprise economy leads to a sustained demand for ‘innovations’ (Cooper, 1972). New technologies are essentially a source of monopolistic advantage to the entrepreneur who commands them (Schumpeter, 1912). Curiously enough the burst of interest for monopolistic markets in the 30’s did not lead to many studies on their links with technological advances. Despite the various tributes paid to his achievements, Schumpeter’s ideas failed to pervade mainstream economics whereas he obscured his initial message in subsequent books which dealt with the relationship between market structures and technological advances (Schumpeter 1939 and 1942). Therefore the theory of growth in the second half of the 20th century took as basic assumptions that technology is freely available and that technological progress is exogenous. Nevertheless during the 50’s and the 60’s, applied industrial economists as well as economists of science and technology kept alive the concern about the relationship between market structure and behavior on the one hand and technological advances on the other one (P. W. S. Andrews, Joe Bain, P. Sylos Labini, Nathan Rosenberg). Another strand of researches was simultaneously interested in technology in the framework of development studies (F. Perroux, C. Cooper, 1972, 1974). Our paper will present in a history of economics perspective the various views on technological progress held by economists during the XXth century from Schumpeter’s seminal work till the seemingly end of the divide represented by the Aghion Howitt Schumpeterian model of endogenous growth. It focuses on P. Sylos Labini’s trajectory as he was a former student of J. Schumpeter, J. Robinson, P. W. S. Andrews and because the long span of time during which his work extends covers the second half of the XXth century..
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