Document Type
Article
Publication Date
2007
Journal
Antitrust Law Journal
Volume
74
Issue
3
Abstract
The relationship between competition and innovation is the subject of a familiar controversy in economics, between the Schumpeterian view that monopolies favor innovation and the opposite view, often associated with Kenneth Arrow, that competition favors innovation. Taking their cue from this debate, some commentators reserve judgment as to whether antitrust enforcement is good for innovation. Such misgivings are unnecessary. The modern economic learning about the connection between competition and innovation helps clarify the types of firm conduct and industry settings where antitrust interventions are most likely to foster innovation. Measured against this standard, contemporary competition policy holds up well. Today's antitrust institutions support innovation by targeting types of industries and practices where antitrust enforcement would enhance research and development incentives the most. It is time to move beyond the on-the-one-hand Schumpeter, on-the-other-hand Arrow debate and embrace antitrust as essential for fostering innovation.
Recommended Citation
Jonathan Baker,
Beyond Schumpeter vs. Arrow: How Antitrust Fosters Innovation,
74
Antitrust Law Journal
(2007).
Available at:
https://digitalcommons.wcl.american.edu/facsch_lawrev/1136