IN THE FALL OF 1942, as the Allied and Axis nations marshalled their forces for decisive battles at Guadalcanal, El Alamein, and Stalingrad, Joseph A. Schumpeter's Capitalism, Socialism, and Democracy (CSD) was published. Perceived by Schumpeter at the time as a little book of essays somewhat in the nature of a potboiler,' it distilled for the intelligent lay reader almost forty years' thought, observation, and research (1942, p. ix) by the Austrian economist-statesman-banker turned Harvard don. Fifty years later, it remains relevant. In particular, it brought into the main stream of economic discourse the question of what market structures were most favorable to technological change and hence economic growth. Both in the United States and abroad, policy debates over that issue persist. Schumpeter's conjectures on market structure, the work by economists to extend them, and the continuing policy puzzles are the main focus of this anniversay essay. II. The Challenge

E BEGAN to conceptualize average total cost functions during the early decades of the twentieth century. But a century before, a German music publishing firm calculated and used in its internal decision making output-dependent average cost estimates for two methods of printing sheet music. This note describes that early experience and juxtaposes against it the relatively late emergence of the ATC curve in the formal literature of economics.

Economists were among the many scholars uprooted following Hitler's rise to power in 1933. This article reviews a series of books edited by Harald Hagemann and others which provide extensive biographical information on 314 German-speaking economists whose professional opportunities were shattered by Nazi policies. It evaluates the impact of the massive emigration on economic research and teaching in Germany and Austria and in the nations to which most of the economists emigrated. An analysis of 1966-70 data reveals that the emigres' cited publication counts were equivalent to the citations of three leading U.S. economics departments.

I. Returns and costs in the nonrivalrous case, 359. — II. The general rivalry problem, 363. — III. Specific duopoly models, 367. — IV. Solution concepts, 371. — V. Specific Cournot reaction patterns, 377. — VI. The N-firm problem, 389. — VII. Welfare implications, 392. — VIII. Conclusion, 394.

I. The basic contract types, 258. — II. The contractor's profit maximization problem, 261. — III. Outlay minimization by the government as buyer, 271. — IV. Consistency with empirical evidence, 273. — V. Toward a theory of risk aversion, 276. — VI. Some broader implications, 278.

An unusually rich data set was tapped to explore the relationship between research and development (R and D) and productivity growth. The most-important finding is that, with disaggregated data, the wrong lag hypothesis is not supported: there is no clear indication that the productivity slump of the 1970s resulted from a decrease in the marginal productivity of R and D. Also important is the evidence of substantial returns to used R and D, i.e., from internal-process work and the purchase of R and D-embodying products, but not (at least in industries with productivity indices based upon physical output or comprehensive price deflators) to the performance of product R and D. Given the fact that three-fourths of all industrial R and D is product-oriented, studies that fail to distinguish between the origination and use of R and D may suffer from appreciable specification errors. Further research using improved R and D and (especially) productivity data is plainly needed, among other things, to clarify the mystery of why estimated R and D-productivity relationships differ for productivity-data subsets of varying quality. 15 references, 3 tables.