Interesting take. I'm not sure capitalism and academia can be separated here, such that it is one killing the other. In our love-affair with entrepreneurialism -- a term Schumpeter did much to promote -- we forget that Schumpeter himself thinks the great age of the entrepreneur is over. With the advent of the corporation, a necessary vehicle of the build-out of the second industrial revolution, innovation is also institutionalized in corporate R&D. So innovation is bureaucratized in the private sector as well. The result is bureaucracy across society. The reason is fundamentally, the same. As science and technology advances, specialization becomes the order of the day, and the problem becomes to coordinate the ever greater number of specialists, whether in corporations or universities. The age when the individual idea-entrepreneur could run his own organization/institution is at an end.
In academia, we find the rise of research university in the late nineteenth century parallels the rise of the corporation. Darwin, Marx, and JS Mill, three of the great "idea-entrepreneurs" of the mid-19th century, all operated outside the university system in ways that are hard to imagine today. Even a later generation of people like Weber and Durkheim, who were lifelong academics, were not products of undergraduate education in the fields we would see them as belonging to today. They were mostly trained in law and moral philosophy. Alfred Marshall, who founded neoclassical economics in the Anglophone world, was himself trained in mathematics and moral philosophy, as was Keynes. I think it could be argued that the low-hanging fruit in the social sciences has also been picked. As far as I can tell, after the second world war, university education was highly specialized and the age of the generalist idea-entrepreneur was largely over. Ironically, today entrepreneurialism is taught in university business schools, although the vast majority of their graduates will be mid-level managers in corporations.
The crisis here is really one of the conflict between high-levels of specialization necessary to fund education and implement innovation and growth -- and the bureaucratic structure this entails -- working against the individual idea-innovator. It is a problem for capitalism, but also for industrialized societies in general - a sociological problem that Marx, Weber, Durkheim and Schumpeter can all agree on. Kuhn and Foucault essentially tell the same story -- the conflict of the normalizing "scientific" institution and the the anomaly.
A bit of a correction: the modern research university was pioneered in the early 19th century in Germany with the founding of the Humboldt University of Berlin. The intellectual foundations are rooted in German Idealism.
Yes, that’s a good point. As I have read more on late 19th century American intellectual history, the German influence has really struck me. That was the model that Americans followed. It would be interesting to see how the peer review system worked in German universities at that time.
Thank you for that, it’s very helpful and I will reflect on it a lot. I definitely need to think about bureaucratization in the private sector more.
That said, I’d push back and say that the corporate lab and university seemed to work well up to the second half of the twentieth century, which is why I emphasize the post-1960s changes in the creation of knowledge.
Schumpeter was probably wrong to glorify the individual entrepreneur to such a degree?
Regarding bureaucracy and the problems of governance in large orgs (whether private or public), you might want to take a look at Dan Davies. I found him following Brad DeLong (which I think is how I found you). I've also been meaning to read Peter Drucker's On the Concept of the Corporation. I suspect Coase's theorem is in the mix here.
Agreed, I was rather dismissive regarding corporate labs and universities pre-1960's. Though I wonder to what extent their research and innovation was building on and building out the the fundamental inventions of the second IR - electricity, combustion engines and pharmaceuticals. Electricity and combustion engines seemed to have been pioneered by classic individual inventor-entrepreneurs working largely outside corporate and academic institutions (Benz, Diesel, Edison, Ford). That said, pharmaceuticals seems to be much more dependent on the research of university academics (Justus Liebig for example).
I'm not sure that Schumpeter over-estimates the role of the entrepreneur -- but I think popular culture and even certain branches of academia may be guilty of that. Can't help thinking of the glorification of Elon Musk and silicon valley here. More Ayn Rand than Schumpeter. I suspect this glorification of entrepreneurs is a bit of an anxious reaction to the dimly perceived stagnation of innovation starting in the 70's. Might be interesting to see an N-gram for the word entrepreneur and when it takes off!
Intriguingly, the person Schumpeter takes to task for under-estimating the role of the entrepreneur is none other than Adam Smith. Much more to say here but will leave it there for the moment.
It was really "academia" that Schumpeter thought that will destoy capitalism? Or it was more people-who-dream-of-being-academics-but-who-can't-find-a-job-there?
Haha, well, to me, he seems to have a vision of the overproduction of highly educated people, leading to the creation of a malcontented underemployed academic precariat… It seems quite prophetic, except without the socialism part.
Interesting take. I'm not sure capitalism and academia can be separated here, such that it is one killing the other. In our love-affair with entrepreneurialism -- a term Schumpeter did much to promote -- we forget that Schumpeter himself thinks the great age of the entrepreneur is over. With the advent of the corporation, a necessary vehicle of the build-out of the second industrial revolution, innovation is also institutionalized in corporate R&D. So innovation is bureaucratized in the private sector as well. The result is bureaucracy across society. The reason is fundamentally, the same. As science and technology advances, specialization becomes the order of the day, and the problem becomes to coordinate the ever greater number of specialists, whether in corporations or universities. The age when the individual idea-entrepreneur could run his own organization/institution is at an end.
In academia, we find the rise of research university in the late nineteenth century parallels the rise of the corporation. Darwin, Marx, and JS Mill, three of the great "idea-entrepreneurs" of the mid-19th century, all operated outside the university system in ways that are hard to imagine today. Even a later generation of people like Weber and Durkheim, who were lifelong academics, were not products of undergraduate education in the fields we would see them as belonging to today. They were mostly trained in law and moral philosophy. Alfred Marshall, who founded neoclassical economics in the Anglophone world, was himself trained in mathematics and moral philosophy, as was Keynes. I think it could be argued that the low-hanging fruit in the social sciences has also been picked. As far as I can tell, after the second world war, university education was highly specialized and the age of the generalist idea-entrepreneur was largely over. Ironically, today entrepreneurialism is taught in university business schools, although the vast majority of their graduates will be mid-level managers in corporations.
The crisis here is really one of the conflict between high-levels of specialization necessary to fund education and implement innovation and growth -- and the bureaucratic structure this entails -- working against the individual idea-innovator. It is a problem for capitalism, but also for industrialized societies in general - a sociological problem that Marx, Weber, Durkheim and Schumpeter can all agree on. Kuhn and Foucault essentially tell the same story -- the conflict of the normalizing "scientific" institution and the the anomaly.
A bit of a correction: the modern research university was pioneered in the early 19th century in Germany with the founding of the Humboldt University of Berlin. The intellectual foundations are rooted in German Idealism.
Yes, that’s a good point. As I have read more on late 19th century American intellectual history, the German influence has really struck me. That was the model that Americans followed. It would be interesting to see how the peer review system worked in German universities at that time.
Thank you for that, it’s very helpful and I will reflect on it a lot. I definitely need to think about bureaucratization in the private sector more.
That said, I’d push back and say that the corporate lab and university seemed to work well up to the second half of the twentieth century, which is why I emphasize the post-1960s changes in the creation of knowledge.
Schumpeter was probably wrong to glorify the individual entrepreneur to such a degree?
Thanks for taking the time to respond!
Regarding bureaucracy and the problems of governance in large orgs (whether private or public), you might want to take a look at Dan Davies. I found him following Brad DeLong (which I think is how I found you). I've also been meaning to read Peter Drucker's On the Concept of the Corporation. I suspect Coase's theorem is in the mix here.
Agreed, I was rather dismissive regarding corporate labs and universities pre-1960's. Though I wonder to what extent their research and innovation was building on and building out the the fundamental inventions of the second IR - electricity, combustion engines and pharmaceuticals. Electricity and combustion engines seemed to have been pioneered by classic individual inventor-entrepreneurs working largely outside corporate and academic institutions (Benz, Diesel, Edison, Ford). That said, pharmaceuticals seems to be much more dependent on the research of university academics (Justus Liebig for example).
I'm not sure that Schumpeter over-estimates the role of the entrepreneur -- but I think popular culture and even certain branches of academia may be guilty of that. Can't help thinking of the glorification of Elon Musk and silicon valley here. More Ayn Rand than Schumpeter. I suspect this glorification of entrepreneurs is a bit of an anxious reaction to the dimly perceived stagnation of innovation starting in the 70's. Might be interesting to see an N-gram for the word entrepreneur and when it takes off!
Intriguingly, the person Schumpeter takes to task for under-estimating the role of the entrepreneur is none other than Adam Smith. Much more to say here but will leave it there for the moment.
It was really "academia" that Schumpeter thought that will destoy capitalism? Or it was more people-who-dream-of-being-academics-but-who-can't-find-a-job-there?
Haha, well, to me, he seems to have a vision of the overproduction of highly educated people, leading to the creation of a malcontented underemployed academic precariat… It seems quite prophetic, except without the socialism part.