Competition and Innovation in 1950’s Britain

We find little support for the Schumpeterian hypothesis of a positiverelationship between market power and innovation in 1950’s Britain eventhough many economists and policymakers accepted it at the time. Pricefixingagreements were very widespread prior to the 1956 RestrictivePractices Act and they seem to have had adverse effects on costs andproductivity. Competition policy appears to have been much too lenient but theproductivity problems of British industry at this time are best viewed as arisinglargely from the difficulties of reaping the benefits of innovation rather thanfrom a failure to innovate per se.[...]