chapter  3
21 Pages

Big Steel, Invention, and Innovation

The view attributed to Schumpeter, that large firms with substantial market power have both greater incentives and more ample resources for research and innovation, has become part of popular mythology and an article of faith among many economists as well. Ostensibly, Schumpeter felt "that firms had to be protected by some degree of monopoly-to have some room to maneuver ... " in order to bring about massive innovations. Presumably, he implied "that more concentration would increase innovation and progress."'