Entrepreneurship, knowledge and employment

Why Schumpeter did not consider patents?

Guichardaz Rémy, University of Strasbourg BETA
Pénin Julien, University of Strasbourg BETA

The entire work of Schumpeter deals with the dynamics of capitalism and the central concept to explain this is innovation. Yet, despite this central concern about innovation, imitation, etc., Schumpeter has never been interested by the patent system. Even worst, at the exception of local mentions, mainly in chapter VIII of Capitalism, Socialism and Democracy (1942), the concept is never mentioned in his work. The objective of this paper is to understand why. Why did the author who is considered as the pioneer, the father of the socio-economic analysis of innovation did not pay attention to patents whereas this concept occupies a central place today in innovation studies? This absence of patents is all the more puzzling that Schumpeter did place market power at the heart of the innovation dynamics. Blaug (2005), in the only paper we know which examines the question of the absence of intellectual property rights (IPR) in the work of Schumpeter, argued that this is because IPR, as an explicit concept only emerged in the 1970s. Yet, this explanation, if valid for the general concept of IPR, does not apply to patents. Indeed, even though patents were not central, they were not unknown. Patents have been the topic of major controversies in the 19th century. Schumpeter having a passion for historical questions could not ignore these debates. This is all the more unlikely that Machlup, who was one of his good friends, did publish a paper about these controversies (Machlup and Penrose, 1950). Furthermore, as raised by Blaug, “Edward Chamberlin, teaching at the same university as Schumpeter (Harvard) included a section on patents and trade-marks in Chapter 4 of his Theory of Monopolistic Competition (1933)”. We argue in this paper that, although Schumpeter knew patents and accepted their existence, his vision of the economic dynamics and the entrepreneurial process led him to place patents only at the margin of innovation.

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Keywords: Schumpeter Patents Evolutionary Economics

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