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Joseph Allois Schumpeter
: American Economist, Spring96, Vol. 40 Issue 1, p5, 9p
Scherer, F.M.
My research program as an economist has emphasized two intersecting themes: the causes and consequences of technological innovations; and how business firms' behavior varies with the structural environment (e.g., competitive, oligopolistic, or monopolistic) within which they operate. In commencing this agenda I was powerfully influenced by the writings of Joseph A. Schumpeter (whose death coincided with my senior year in high school). Although the insights I have attained were often at odds with Schumpeter's teaching, I continue both substantively and methodologically to be a Schumpeterian.
Blundering into Economics
How I came to be a Schumpeterian economist and indeed an economist at all is a chronicle of accidents. My formal graduate studies in economics commenced only when I was 29 years of age--at the close of life's third decade, which, Schumpeter insisted, is the most creative period in the typical economist's career.
I was born in 1932 and grew up in Ottawa, a central Illinois farming and glass-producing community whose population was approximately 16,000. My father sold coal and ice at retail--commodities with relatively low income elasticities, so we were not traumatized by the Great Depression. (My maternal grandfather, however, was forced to liquidate his department store and become an insurance salesman). My childhood hero was Thomas Alva Edison, and if I had distinct career hopes in my early years, it was to become an inventor-chemist. Half of grade school and all of high school were spent in local Catholic schools, strong on Latin and English, weak on mathematics.
My father had attended the University of Michigan and was elected senior class president. I chose to follow his footsteps. Much of my time was taken up by extracurricular activities,leading among other things to the hoped-for repetition of a Scherer family class presidency. But somehow an intellectual seed was planted in my dormant soil. Chemistry bored me, so for a while, having been editor of my high school newspaper and a part-time reporter for Ottawa's daily newspaper, I turned to journalism. But I am not a night person, and my work on the Michigan Daily student newspaper, requiring frenzied page-closing activity until 2 a.m. two or three nights a week, led me to consider alternative career paths. Since it was expected that I would ultimately take over the family business, studying business administration seemed the obvious step. But my fraternity brothers--an extraordinarily intelligent and studious lot--persuaded me that an economics major was equally useful but much more interesting intellectually. So I blundered into economics.
Several experiences in Michigan's economics department nurtured the seed. The geometric model-building approach pursued in my intermediate micro-theory course was for me a new and strange way of analyzing human behavior, and at first, I found it very difficult. Consultations with the course's teacher were of little help, so I timidly approached Professor Kenneth Boulding, the author of Economic Analysis, one of the textbooks we were using. Boulding's kindly, patient guidance led me to appreciate the power of economic theory and the quality of an extraordinary human being. I was encouraged also by taking his course on the Economics of Agriculture, especially when he appended to my term paper, "A Report on Agricultural Policy to the President of the United States," a note, "I nominate you for Secretary of Agriculture." Boulding had each of his students conduct the class for an hour. Any interest I might have had in being a teacher was quelled when I observed that a good third of my classmates were asleep during my lecture. Another formative experience was the Comparative Economic Systems course I took with Professor Z. Clark Dickinson. My term paper, "Social and Individual Motivation in the Soviet Union," kindled a life-long fascination with how economic and noneconomic incentives affected individual and organizational performance. That interest was reinforced by electing courses in Michigan's psychology department, including a course on the psychology of management.
By far my most formative experience, however, was the senior honors seminar offered by Shorey Peterson. We read widely in and discussed the classics. Schumpeter's Capitalism, Socialism, and Democracy (1942) captivated me. His assertion that technological changes were the principal source of economic growth seemed wholly plausible, given my prior fascination with inventors and chemistry, and an exciting break from the statics of price theory. Equally stimulating to me as a prairie-bred "aginer" was his argument that giant monopolistic corporations were the most powerful engines of technological advance, and that, in stressing the beneficence of competitive market structures, neoclassical economists and policy-makers had overlooked the main wellspring of economic progress and backed the wrong policy horses. As the seminar proceeded, the U.S. Congress passed the Atomic Energy Act of 1954, clearing the way for private-sector development of nuclear power. My honors thesis, on "The Atomic Energy Patent Laws and Economic Progress," applied monopolistic competition theory to the economics of technological innovation and explored the role that patent grants play in encouraging high-cost, high-risk innovations. It was the beginning of my career. Yet that was far from evident at the time.
Initially, Uncle Sam had other plans. It was almost impossible for college students who had enjoyed Korean war draft deferments to escape post-baccalaureate military service, especially in my home town, where my aunt's hard-nosed husband chaired the draft board. So I was inducted into the Army in 1954 and, after basic training, was selected to attend Counter-Intelligence Corps school in Baltimore. A three-day pass allowed me to visit friends at Harvard Law School and attend a class taught by the person after whom Professor Kingsfield in the hit movie, "The Paper Chase," was modelled. The unalloyed nitpickingness of that class quenched any simmering thoughts of becoming a lawyer. Because "CIC" trainees were considered an elite group, we were allowed to request our next duty theaters. Most of us who were unmarried elected Europe and were sent to Germany. The married members of our class almost all chose the Continental United States and were sent to Korea. For a smalltown kid from Illinois, military duty in Germany was a marvelous eye-opener, ending forever my predilection as a Chicago Tribune-bred isolationist. I was fortunate to be sent to the Army Language School in Oberammergau, where I learned to speak German fluently. Two months later I was assigned to an Iron Curtain border outpost in Coburg, where on Christmas eve of 1955 I met Barbara Silbermann, who two years later became my long-suffering (thus far, nearly four decades) spouse.
Meandering Through Graduate School
Having ruled out law school, I applied for graduate studies in business administration and, after appealing an initial rejection, was accepted into the Harvard Business School (HBS). There the lightning of chance struck again--repeatedly.
During the 1957 summer break between academic years, I returned to Ottawa to work for the interstate trucking branch of the family business, whose head was my favorite uncle. Over the years I had worked part-time in a variety of jobs for Scherer Freight Lines, but now I was considered mature enough to become sales representative for the central Illinois territory. My selling efforts were successful, but I also learned something important. Under Interstate Commerce Commission regulation, all common carrier trucking companies charged the same rates, and the quality of their service on any given route was largely indistinguishable. With competition on key dimensions stalemated, rivals sought other ways of getting ahead. Investigating why competitors were securing most of the freight from some leading local shippers whose owners were friends of my family, I discovered that the rivals' sales staff were plying decision-making traffic managers with gifts of liquor, golf excursions, and the services of prostitutes. I discussed the matter with my uncle Alex Scherer, a thoroughly moral individual who assured me that no matter what the consequences were, we would never use prostitutes to solicit business. Yet the experience set me to wondering whether I wanted to be in an industry where the dimensions of competition were so thoroughly suppressed by governmental regulation.
Upon my return to Boston in September 1957, my first assignment in the mandatory second-year Business Policy course was to write a paper on my career aspirations. Ruling out life as a trucking company executive was an easy decision. Given my long-standing interest in technological innovation, I decided that if I went into business at all, it would be with a high-technology company. But for the first time, the idea of being a scholar entered my mind. Almost simultaneously, the head of the Business School's doctoral program invited me to pursue a Doctorate in Business Administration (DBA). The soil had been prepared, and now the seed began to take root.
One of the options I elected during my second year at HBS was General Georges Doriot's course called simply "Manufacturing." Doriot, who moonlighted as president of the first U.S. high-technology venture capital firm, American Research and Development Corporation, required us to form groups of roughly nine, which conducted two field projects with companies and wrote a major "topic report" (some of which helped Doriot identify new lines in which ARDC would invest). Our group developed a cost accounting system for a small manufacturer of electronic sensors, researched new markets for a job-shop lithographer, and wrote a monograph, Patents and the Corporation (1958), which we subsequently self-published in two editions. The monograph was my idea, inspired by the Wall Street Journal's prediction that dire consequences for technological progress would follow antitrust consent decrees accepted by AT&T and IBM in January 1956, under which tens of thousands of patents were subjected to wide-open compulsory licensing at zero royalty rates. Members of our group fanned out across the nation, querying R&D executives and patent attorneys of 22 companies about the role patents played in their research and development investment decisions and the impact patent compulsory licensing actions had on investment incentives. We secured mail questionnaires exploring the same questions from 69 companies, analyzed statistically how patenting trends for companies subjected to compulsory licensing differed from those of other U.S. corporations, and read extensively in the literature on the management and economics of R&D. Much to our surprise, we found patents to be unimportant in the investment decision-making of most companies. This discovery has been reaffirmed in studies by Taylor and Silberston (1973), Mansfield (1986), and Levin et al. (1987), among others.
While our student group was conducting preliminary interviews for the patent study and I was contemplating Harvard's DBA program, the Soviet Union in October 1957 launched its first satellite, Sputnik I. Citizens of the United States were shocked. We were palpably behind in space technology, and we appeared also to be lagging in missile technology.
What had gone wrong? And around the Harvard Business School, the question echoed, how had the American business system failed? To secure answers, the Business School initiated a Weapons Acquisition Research Project, headed by Professor Paul W. Cherington, an air transport expert. I was invited to join as research assistant and, given my preconditioning, did so enthusiastically, simultaneously progressing toward the DBA degree. Returning to Ottawa during the Christmas break, I dreaded telling my father that I planned to become a scholar rather than joining the family businesses. Much to my astonishment, he replied, "I think that's a good idea." The transition from student to full-time researcher was swift, since at the time I received my MBA in June 1958, my wife and I had exhausted our finances and were expecting our first child (Tom) that month. Starting work the Monday after my last examination was a necessity.
Our research team, which included economist M. J. Peck, a former Navy supply captain, the erstwhile chief counsel to Lyndon Johnson's Senate Democratic Policy Committee, and (as consultant) economist David Novick of the RAND Corporation, prepared twelve book-length historical case studies of weapon systems development programs and seven shorter case studies of civilian sector research and development projects. (The case studies, alas, have not been published, although some circulate in Samidzat.) For me, conducting interviews at companies and government agencies, being immersed in the complex details of real-world R&D projects, some ongoing, and struggling to make sense of what we learned, was the most exciting and formative leaming experience of my professional career. The project's work assignments turned out to follow the inverted pyramid principle. Peck, with the second4owest seniority of the project team, and I, as junior member, wrote a majority of the case studies. Peck and I together wrote the first book analyzing and integrating our findings, The Weapons Acquisition Process: An Economic Analysis (1962). I was sole author of the project's other major published work, The Weapons Acquisition Process: Economic Incentives (1964), which also served as my doctoral dissertation. It is not excessively immodest to say that both books are still considered classics.
As I worked with "Joe" Peck, who was trained at Harvard's economics department, I realized that I really wanted to be an economist, not a DBA-holding professor of business administration. My DBA program advisor, John Lintner, suggested that I contact Wassily Leontief, who taught the second-year graduate theory sequence in the economics department. I called him, and what took place next has probably never happened again at Harvard. He invited me to tea at his home, and before I knew it, I was enrolled in his 1960-61 theory course. I simultaneously continued my weapons research and honed my mathematical skills through Barbara Bergmann's course on mathematics for economists. A formal transfer to the economics Ph.D. program followed in the fall of 1961.
During the 1961-62 academic year, I struggled to complete my Ph.D. course requirements, among other things taking my first graduate industrial organization course (taught by visitor Jesse Markham) while making final revisions on the book with Joe Peck, who had left Harvard to take a position with Robert McNamara in the Pentagon. Two weeks after passing my general examinations in the fall of 1962, I handed in the draft of my dissertation--the second book from our project. Richard Heflebower, who replaced Markham as visiting professor of industrial organization, chaired a hastily assembled thesis committee. My approach to the theory of contractor behavior had been influenced by the writings of Herbert Simon and colleagues, so I modelled companies as managerial utility maximizers and not as profit maximizers. Heflebower suggested that by incorporating a "user cost" function to capture the long-run consequences of short-run cost choices, the problem could be reformulated as one of long-run profit maximization. The power of this change influenced my subsequent thinking about the objectives of modern corporations. The theoretical article (1964) emerging from my dissertation was probably the first fully worked-out mathematical treatment of principal-agent contracting relationships, although the "principal-agent" terminology had not yet been invented, so it is seldom recognized as a part of that literature.
Teaching and Further Career Choices
Thus, after many false starts and swerves, I became a full-fledged member of the economics profession in 1963, at the ripe old age of 31. For my first "real" job, I followed Jesse Markham to Princeton. My first teaching assignment was the microeconomic analysis course for second-year Woodrow Wilson school masters candidates. Excepting the miserable hour in Ken Boulding's course, I had never taught. I had no idea what one had to do to motivate students, and I assumed that graduate students in a public administration program would share my love for economics. I spent the first nine hours of class writing equations of general equilibrium on the blackboard. The theoretical pitch modulated only slightly thereafter. It was a disaster. The students complained bitterly, -and I was fired from the Woodrow Wilson faculty. Since my appointment was joint, I retreated to a refuge in the economics department. My first assignment there was to share the teaching of microeconomic principles with W. Arthur Lewis. In addition to being an outstanding economist (who eventually won the Nobel Prize), Arthur was a marvelous teacher of both students and teachers. From him I began to learn how to teach (a lesson continued in industrial organization courses co-taught with Jesse Markham) and also, through our weekly teaching staff seminars, filled in many of the serious gaps in my knowledge left by too swift a progression through graduate studies in economics. One result of that experience was a pedagogical paper on general equilibrium theory published in the American Economist (1966).
Although I continued to teach microeconomic principles and my applied field specialty, industrial organization, my favorite course at Princeton was one I inherited from colleague Robert Kuenne, on the economics of national security. At Harvard I had participated in Thomas Schelling's seminar on game-theoretic models of international conflict. The first half of my Princeton national security course extended what I had learned at Schelling's feet, exploring the rationale of deterrence, compellence, escalation, and arms races. The second half taught what I had gained from my research on the economics of military research, development, and contracting. It was an exciting time to offer such a course. The Vietnam war was escalating, and the theoretical concepts we explored in class were being played out week-by-week in the real world.
My own view of the world had evolved over time into that of a thoughtful peacenik. Brainwashed in my youth by the Chicago Tribune, I went to Michigan as a Fortress America isolationist. I recall giving a speech in class one day expositing those views and provoking a classmate to remark in wonder, "You really believe that stuff, don't you?" The first twinges of doubt intruded when I took a political science course at Michigan on international politics, using a book by Hans Morgenthau as text. A more decisive step came during my Army service in Germany. At a training session, we were shown a film on U.S. tactical doctrine for repelling a feared Soviet invasion into western Germany. As Soviet troops stormed through the Fulda gap and the (less well known) Neustadt-Coburg gap (my duty station), tactical nuclear weapons would be fired at the confined military hordes. The simulated motion pictures were so beautifully antiseptic, yet I could not avoid exclaiming, "My God, don't they know there are 100,000 civilians living in this valley?" From that time on, I was distrustful of military doctrine. I became even more distrustful at Harvard. From our research on weapons programs our team learned that the United States did not in fact lag behind the Soviets in missile technology, yet presidential candidate John F. Kennedy made the alleged "missile gap" a key talking point of his election campaign. Torn by doubts, I questioned in the preface of my 1964 book the basic efficiency-enhancing goal of the Weapons Acquisition Research Project:
Given the pervasive pressures for added arms spending, however, it seems likely that efficiency gains would lead more to increases in our already formidable arsenal than to the reallocation of resources into applications yielding greater social benefit. An efficiency-induced increase in U.S. military strength would in turn, if recent history can be extrapolated, spur the Soviet bloc to intensified efforts in forging new and more powerful countervailing weapons. And I believe that continuation of this arms race will not reduce and probably will increase the already grave risk of nuclear war due to accident, escalation, miscalculation, or madness. Why then, I asked, did I write the book? I am not proud of what seem to be my principal motives - intellectual fascination with a complex and challenging problem, the desire to be recognized for proposing an improved analysis of and solution to the problem, and the well-known need in academic circles to publish or perish. . . The scientist, by tradition reserving judgment on the moral implications of his work, will continue to publish, and perhaps we shall all perish.
Senior Business School faculty members tried to dissuade me from publishing these thoughts, but I was adamant. Their advice was correct in one sense; I became a pariah in Pentagon circles. But if a choice must be made, it is better to state one's beliefs honestly than to be a major factotum in the Defense Department.
Despite these beliefs, I tried hard to teach my national security economics course objectively, assigning readings that represented all the widely differing viewpoints. I believe I succeeded; one student from the course's second iteration became a RAND Corporation analyst (who later collaborated with Daniel Ellsberg in disseminating the Pentagon Papers) and another a professional peacenik.
In the fall of 1965, with a zero probability of tenure at Princeton, I faced another, perhaps more crucial, career choice. I had come to believe that controlling the spread of nuclear weapons was the most important problem confronting humanity. James Schlesinger of the RAND Corporation (later Secretary of Defense) invited me to join him and work on arms control problems. We spent a day by the swimming pool of a Washington motel talking about what we might do together. At the end of the day, I decided that I could not accept Jim's proposal. For him, the probability to be minimized was Russian and Chinese cheating on arms control agreements; for me, the probability of unabated nuclear weapons spread. If we could not agree on the objective function, we were unlikely to work together fruitfully. From this came another decision. Curbing the arms race was vitally important, but the probability that my exertions would have any impact was infinitesimal. The classic industrial organization problems of monopoly, regulation, and antitrust were vastly less important. But there was a high probability that I could have some influence on their solution, so I would concentrate my professional efforts on them. Since then, I have worked only sporadically and casually on questions of weapons, war, and peace. Despite occasional regrets, I cannot say that I reached the wrong decision.
My three years at Princeton were highly productive in terms of new research. From essentially completed work on weapons research, development, and contracting, I turned in new, more Schumpeterian directions. One branch was theoretical. From our weapons project research, Joe Peck and I had discovered that within certain limits, progress toward completing R&D projects could be accelerated by investing more resources. There was a time-cost tradeoff. From our case studies, we saw also that the intensity of competition among rivals racing toward similar R&D results affected how the tradeoff was resolved, with more intense competition seeming to induce more rapid progress. At Princeton I turned in earnest to modelling this problem theoretically. From the successful completion of that effort came what I still consider to be my most significant contribution (Scherer 1967), initiating a research tradition in which there have been scores of subsequent articles, mostly by other scholars. See Reinganum (1989). The other research branch was empirical. I put together a large data base on 448 U.S. corporations' size, growth, profitability, market shares, R&D employment, and patenting. With those data, I was able to conduct the most thorough tests to that date of Schumpeterian hypotheses concerning the most favorable industrial environment for rapid technological progress. See Scherer (1965). The results suggested that Schumpeter's assertions in Capitalism, Socialism, and Democracy were more wrong than right. Giant monopolistic corporations were not uniquely efficacious engines of technological advance.
Although these contributions were sufficient to win an associate professorship with tenure at my undergraduate alma mater, the University of Michigan, I was not satisfied with my professional progress. My work on weapons acquisition, the theory of R&D rivalry, and structural influences on R&D was of interest to only a small fraction of economists in my chosen specialty, industrial organization. I needed to write something that would be received more broadly. Dissatisfied with existing industrial organization textbooks, I decided to write a new kind of text. The role model for my effort was the treatise by my Princeton colleague, Richard Musgrave, The Theory of Public Finance (1959). Work was begun during a terminal sabbatical semester at Princeton in the spring of 1966 and culminated in the publication of Industrial Market Structure and Economic Performance in 1970. The effort was more successful than I could have imagined. More than 100,000 copies were sold over the course of the book's three editions. Many budding industrial organization economists were introduced to the field by it before the book was overtaken by changes in fashion. It had three distinguishing characteristics. It was encyclopedic, attempting to encompass and footnote most of the important theoretical and empirical contributions to the field of industrial organization. This trait repelled many students, but pleased others. Second, unlike previous textbooks, it was avowedly behaviorist, assembling a rich theoretical apparatus (mostly geometric) to explain what happened in real-world industries. Third, although this point is denied by some who appear not to have read the book, it makes market structure explicitly endogenous--i.e., resulting not only from scale economies and chance but from the strategies chosen by finns vying for position in the marketplace.
Research Philosophy
Much of my research since 1970 has continued to pursue from diverse angles Schum-peterian paradigms. However, it has been Schumpeterian in another sense too. In his monumental History of Economic Analysis (1954, p. 12), Schumpeter asserts:
What distinguishes the 'scientific' economist from all other people who think, talk, and write about economic topics is a command of techniques that we class under three heads: history, statistics, and 'theory.' These three together make up what we shall call Economic Analysis.
Schumpeter went on to say that if he were forced to choose only one of the three, he would choose economic history. But there is no need to choose. My own strong belief is that one must command and use all three to do economics well. Although it is hard to combine the three in individual articles, this is evident in my articles viewed as a collection (e.g., Scherer 1984) and also within my principal research books. My two books on weapons acquisition, the three editions of my industrial organization text, a completely new (1996) text, my study of scale economies (Scherer et al., 1975), my book with David Ravenscraft on mergers (1987), and my book on international high-technology competition (1992) all blend historical research, often done through on-the-site field interviewing, with econometric analysis and systematic theorizing. I have chosen this methodological approach not because Schumpeter advocated it, but because in my bones I have always sensed that it was right. The three-pronged approach is visible in Patents and the Corporation and the first Weapons Acquisition Process volume, both written before I became familiar as a Ph.D. student preparing for qualifying examinations with Schumpeter's History of Economic Analysis. In this approach, I have departed grievously from Wassily Leontief's definition, in one of his 1961 lectures on economic theory, of an industrial organization economist as "a person who has never been inside a factory."
It is no doubt a sign of encroaching senescence when scholars scold about the divergence between how research is currently done and their own methodological ideals. I claim no immunity to the syndrome. I love economic theory--geometric, algebraic, and numerical. I have witnessed few things more beautiful during my career than a series of lectures at the University of Michigan by Hugo Sonnenschein (now president of the University of Chicago) "proving" the existence of competitive general equilibrium using a fixed point theorem attributable to Kakutani--unless it was the lecture on the theory of random walks by Professor Kakutani himself at Swarthmore College during the 1980s. Yet I believe there is in industrial organization economics a distressing imbalance between theorizing on the one hand and historical and statistical research on the other.
In my first published attempt to disclaim on matters methodological (1986), I recounted the history of Johannes Kepler. Convinced that the Copernican view of the heliocentric universe was correct, but lacking rigorous theoretical support, Kepler constructed numerous mathematical models. But none corresponded with well-known evidence on the way the planets moved across the earth's field of view, because Kepler assumed incorrectly that the planetary orbits were circular. Not until Kepler joined Tycho Brahe in Prague in 1600 and (later) obta'lned access to Brahe's unprecedently detailed astronomical observations did he realize that the of orbits were elliptical, not circular. Once he had the right data, he derived his famous laws of motion, which (combined with the results of Galileo's experimentation) led to the Newtonian system. Those who sit at their desks constructing industrial organization models without the essential supporting evidence, I argued, are like Kepler, fitting circular orbits within circular orbits. A long footnote recited similar examples form the histories of nuclear physics and microbiology.
We economists like to think of our science as akin to physics in its mathematical rigor. Quite by accident, while pursuing some research on stochastic processes, I obtained in 1995 a detailed description of the research being done by tenured and tenure-track members of the Harvard University physics department, ranked that same year in a National Research Council survey as the top physics department in the United States. Analysis of the research summaries indicated that ten of the 41 active faculty members were working exclusively on theoretical inquiries, six on a combination of theory and experimentation, and 25 on essentially experimental projects (which, of course, might have implications for theory). This set me to wondering: how does the pattern in physics compare with what one might find in my own economics specialty? To find out, I examined all the articles published in volume 12 (1994) of the International Journal of Industrial Organization--a high-quality journal in whose founding I played an indirect role. Of the 31 articles, five were exclusively empirical-statistical, one was a mixture of theory and econometrics, one was a case study, and 24 consisted of theory alone with no more than anecdotal real-world foundations. Thus, Harvard physics research and research in the economics of industrial organization, at least as reflected in the not atypical IJIO, are almost mirror images of one another--physics preponderantly empirical, industrial organization preponderantly theoretical.
This, I am persuaded, is not a good basis for improved understanding of economic phenomena. The situation persists because it is hard to conduct well-controlled experiments in economics; because analyzing data from "natural" experiments is time-consuming, costly, and prone to the confounding of effects; and because one can generate tenure- and plaudits-winning articles much more rapidly through purely theoretical research than through empirical grubbing.
I have devoted much more of my career to statistical and historical grubbing than to theorizing. Since my first dismal experience at Princeton, I have also tried, with decent success, to teach as well as I was able, among other things not allowing the temptations of Washington and conferences at exotic locations but inconvenient dates to interfere with teaching obligations. (My sole full-time plunge into the business of government was as chief economist of the Federal Trade Commission from 1974 to 1976--a time when the FTC was at its activist zenith. It was a memorable and gratifying experience, but it was frustrating later to see the Reagan Administration dismantle much of what we struggled to accomplish.) All this has been hard work--perhaps too hard. It has been hard among other things on family life. My wife Barbara and my three children--Tom (an environmental consultant), Karen (a mother of six, artist, and musician), and Christina (a molecular biologist)--have received short shrift. That I regret, but all have borne my frequent absences from the hearth and even my several job changes with reasonably good humor. We are united among other things by a love of music--for my wife, teaching piano professionally; for my children, occasional performance on the clarinet, violin, or piano; for me, listening (especially to J. S. Bach, Mozart, and Haydn).
When my Business Policy paper assignment in 1957 triggered the first recognition that I might become a scholar, my maximum aspirations from such a career were slight. I have accomplished much more than I could have expected. And although there have been intervals of depression (usually cured by listening to Brahms symphonies played very loud), life in academia has been good. In hindsight, I would not trade it for anything, and certainly not for the standard Harvard Business School ideal, in Samuel Johnson's words, of "wealth beyond the dreams of avarice."
Levin, Richard; Alvin Klevorick, Richard R. Nelson, and Sidney Winter. 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, no. 3:783-831.
Mansfield, Edwin. 1986. "Patents and Innovation: An Empirical Study." Management Science, (32):173-181.
Richard Musgrave. 1959. The Theory of Public Finance. New York: McGraw-Hill.
Peck, M. J., and F. M. Scherer. 1962. The Weapons Acquisition Process: An Economic Analysis. Boston: Harvard Business School Division of Research.
Ravenscraft, David J., and F. M. Scherer. 1987. Mergers, Sell-offs, and Economic Efficiency. Washington: Brookings.
Reinganum, Jennifer. 1989. "The Timing of Innovation," in Richard Schmalensee and Robert D. Willig, eds., Handbook of Industrial Organization, vol. I. Amsterdam: North-Holland: 849-908.
Scherer, F. M., and eight others. 1958, 1959. Patents and the Corporation. Boston: privately published.
Scherer, F. M. 1964. The Weapons Acquisition Process: Economic Incentives. Boston: Harvard Business School Division of Research.
-----, 1964. "The Theory of Contractual Incentives for Cost Reduction," Quarterly Journal of Economics, (78):257-279.
-----, 1965. "Firm Size, Market Structure, Opportunity, and the Output of Patented Inventions," American Economic Review, (60):10971123.
-----, 1966. "General Equilibrium and Economic Efficiency," The American Economist, (10):1-17.
-----, 1967. "Research and Development Resource Allocation under Rivalry," Quarterly Journal of Economics, (81):358-394.
-----, 1970. Industrial Market Structure and Economic Performance. Chicago: Rand McNally.
-----, 1984. Innovation and Growth: Schumpeterian Perspectives. Cambridge: MIT Press.
-----, 1986. "On the Current State of Knowledge in Industrial Organization," in H. W. de Jong and W. G. Shepherd, eds., Mainstreams in Industrial Organization, Book I. Dordrecht: Kluwer: 5-22.
-----, 1992. International High-Technology Competition. Cambridge: Harvard University Press.
-----, 1996. Industry Structure, Strategy, and Public Policy. New York: Harper Collins.
-----, Alan Beckenstein, Erich Kaufer, and R. Dennis Murphy. 1975. The Economics of Multi-Plant Operation: An International Comparisons Study. Cambridge: Harvard University Press.
Schumpeter, Joseph A. 1942. Capitalism, Socialism, and Democracy. New York: Harper.
-----. 1954. History of Economic Analysis. New York: Oxford University Press.
Taylor, C. T., and Z. A. Silberston. 1973. The Economic Impact of the Patent System. Cambridge: Cambridge University Press.

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