Schumpeter and Steindl on the dynamics of competition

This paper compares and contrasts the contributions of Joseph Alois Schumpe ter and Josef Steindl to the competitive paradigm. Both reject the static n ature of traditional profit maximizing analysis and the analytical device o f a representative firm. Instead they both opt for a dynamic framework in w hich there is a key role for innovation. Differences emerge in terms of the characteristics of individual firms that nurture the competitive struggle and are responsible for technical change. The maturation process of a capitalist economy, whereby a natural progressi on will involve an increase in concentration, as prescribed by Schumpeter a nd Steindl is also explored, as is criticism of their analyses. Finally the holistic approach to competitive modelling, a legacy of these two economis ts, is expounded and challenges for the future identified.