Schumpeter and the Political Economy of International Change

The article attempts to reassess the world economy with an eye to understanding what is automatic about it and thus beyond the control of national economies. Towards that end, Schumpeterian analysis is applied in an effort to illustrate how changes occur and how such changes affect discrete units or subsets of international capitalism. The discussion suggests that firms with leadership roles in national economies may bring those economies down with them if they lose their position in the world economy. It also suggests that the international economy may provide firms with a more flexible climate which in turn may prolong their effective lives. The major policy implication for governments is that such institutions may no longer have it within their preserves to control economic activities spawned in the international arena.