secured only on the monopoly level. In this case innovation is typically
not the result of outsiders but is endogenous to the firm.

It is also the large corporation that draws attention to Schumpeter's
gloomy expectations for dynamic capitalism. The socialist future of
Schumpeter's drama rests wholly on extraordinary factors. The large
corporation, by taking over the entrepreneurial function, not only makes
the entrepreneur obsolete but undermines the sociological and ideological
functions of capitalist society. The drama proceeds at an indeterminate
pace, with the death sentence given a century-long "short run."

Nowhere are the consequences of the elimination of the entrepreneurial
function from society more evident than in the decline of the former
socialist countries. It was in the former Soviet Union that Schumpeter's
predictions came true. The elimination of the sociological and ideological
function of the entrepreneur undermined the ability of the system to
reproduce itself. In the West, both the function and the ideological
foundation of entrepreneurship not only survived but thrived in the late
twentieth century.

Entrepreneurship and Dynamic Capitalism: The Economics of
Business Firm Formation and Growth, by Professor Bruce A. Kirchhoff
, examines the importance of the early Schumpeter for modem
economic development. This study is one of the first and finest attempts
to bridge our understanding of the importance of entrepreneurship within
the context of general equilibrium theory and empirical evidence of the
importance of new firm formation. Kirchhoff calls for nothing less than
the reexamination of our commitment to general equilibrium theory in
favor of evolutionary economics.

Zoltan J. Acs

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