Review of Michael Carrier’s Innovation for the 21st Century
Summary
“Michael Carrier has written a timely and interesting book. There is much to like about the book, in particular its accessible format and content. I do fear that it is a bit overly ambitious, however, hoping both to educate the completely uninitiated as well as to develop a more advanced agenda, and at times it reads like two separate books. I suppose related to this criticism are my more detailed comments, which perhaps distill down to this: The book repeatedly and appropriately canvasses both sides of some pretty heated debates, nicely presenting the most basic arguments, and suggesting if not saying that these are matters about which we are profoundly uncertain. Nevertheless, with what seems to me to be little support (and with only essentially anecdotal empirical support), Carrier then chooses sides.
For example, the concept of the innovation market is contentious and unsettled. Carrier presents truncated versions of both sides of this debate and then summarily votes in favor of innovation markets, slyly offering to confine the analysis to pharmaceutical industry mergers, but nevertheless offering a “framework for innovation-market analysis.” Frankly, the framework strikes me as little more than a stylized merger analysis under the Guidelines, with a “Schumpeterian Defense” thrown in for good measure (but extremely limited, and essentially the same as the traditional failing firm defense). I see little here to suggest that the innovation market analysis, even as styled by Carrier, will do much effectively to incorporate dynamic efficiency concerns into antitrust. And there are other examples. I would have preferred to see a book that went into far greater depth in defending these sorts of choices among uncertain alternatives.”