Other approaches
Apart from these approaches, there were some other interesting developments. One was the attempt in 1940 to work out a general equilibrium theory under monopolistic competition by Robert Triffin.
Unlike Mason, he worked on the more theoretical aspects of Chamberlin’s revolution (Corley 1990), but his generalization of the Walrasian theory was considered too abstract to deal with the problems of IO, which revolved around the Marshallian category of industry. Owing to its great abstraction, it is still the general equilibrium theorists who work on this line of research today, rather than industrial economists. A second development taking place outside the structuralist and the Chicago approaches was Joseph Alois Schumpeter’s dynamic theory of competition, in which competition comes about through the introduction of innovations. The 1942 version of this theory states that the main sources of innovation are large-size firms, because it is their monopolistic position which favours innovations. The theory of dynamic competition lets us envisage a role for the antitrust policy that is very different from what was current at that time: to enhance economic welfare, in fact, the monopolistic power of large-scale enterprises should have been regarded favourably. The last development, to mention it briefly, is the innovative theory of the nature of the firm by Ronald H. Coase (in 1937), a British economist who in the 1960s was to become a leading exponent of the Chicago school.