Abstract
American business scholars have crippled their own work by ignoring the positive contributions of government spending and regulation. Because of the efforts made by corporate executives over the past generation to limit the power of government, business school academics have had little incentive to take a realistic view of the contributions governments make to business success. As a result, these scholars rarely acknowledge either the Keynesian or the Schumpeterian functions of government. This neglect has crippled scholarship, because these two functions have a significant effect on business strategies, organization, entrepreneurship, innovation, marketing, ethics, and business—government relations. Government's Keynesian function stimulates demand for goods and services through purchases and income redistribution. Government's Schumpeterian function lowers the cost of innovation through regulatory requirements, R&D subsidies, and the procurement of expensive new technology. Additional research is required to determine whether business scholars of other nations employ a more nuanced understanding of government's effect on business.
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