Book Review

Comparative/World

Joseph Schumpeter casts a long shadow. Although an influential economist and historian in his own lifetime, the impact of his thought is now perhaps even more pervasive than at the time of his death in 1950, and perhaps nowhere is his influence greater than at Harvard, where he spent the last eighteen years of his active life. Certainly, Schumpeter's notion of the "creative destruction" of capitalism—an incessant, market-driven process whereby new, superior products, processes, and organizations replace old ones—has struck a responsive chord there. This book, the product of a three-year collaboration centered on the Harvard Business School, is a consequence of its continuing resonance. Its fourteen chapters, written by a total of eight different authors under the editorial direction of the distinguished business historian Thomas K. McCraw, have been "field tested" on the entire Harvard MBA cohort that commenced study in January 1996.	1
The book's organization clearly reflects its case-study origins. Four countries have been chosen to illustrate the wide varieties of successful capitalistic development since the middle of the eighteenth century: Britain, Germany, the United States, and Japan. Each country provides two business case studies, which have been selected to exemplify distinctive national characteristics that have endured through time, indeed through three "Industrial Revolutions," from steam technology to the "information economy." For Britain, the studies are of Wedgwood and Bentley, potters, and Rolls-Royce, engineers; for Germany, Thyssen, steel and engineering, and Deutsche Bank; for America, Ford and General Motors in automobiles and IBM in data processing; for Japan, Toyota Motors in automobiles and 7-Eleven in retailing. The overarching Schumpeterian insight that links these disparate studies together is that, no matter how different the technological and economic environments might be, growth comes from an entrepreneur spotting opportunities and finding the means to realize his vision. (All the main protagonists in these case studies are male, although female family members often played a non-trivial business role. Indeed, given the sizes of the companies involved, it is remarkable how many remained dominated by the founders' families for up to a century or more: Wedgwood, Thyssen, Ford, IBM, and Toyota.) Further thematic linkage is provided by long-term overviews of the development of each of the four countries and by introductory and concluding chapters by McCraw.	2
Much care and thought has gone into the preparation of the book. The key Schumpeterian themes are constantly in view. However diverse the case studies are in terms of period, industry, technology, and markets, entrepreneurial opportunities and problems dominate. As one would expect of a book covering so many industries in so many countries over such a long time span, there are extensive, up-to-date guides to further reading, making the volume a valuable introduction to a large slice of modern economic history. The narratives flow smoothly, speeding the reader almost effortlessly over nearly 600 pages of text (including substantive footnotes). These achievements are not without costs, however. A trade-off, perhaps inevitably, has had to be made between detailed analysis and broad coverage. This is not always a disadvantage, provided the reader is prepared to seek out among the copious references the details highlighted by the broad-brush surveys. But those seeking concrete understanding within the confines of this single volume are likely to be frequently disappointed.	. . .