Schumpeter, Joseph

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'''Joseph Alois Schumpeter''' (February 8, 1883 – January 8, 1950) was an [[economist]] from [[Austria]] and a giant in the [[history of economic thought]].
 
  
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[[Image:Schumpeter.gif|thumb|Joseph Schumpeter]]
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'''Joseph Alois Schumpeter''' (February 8, 1883 – January 8, 1950) was an [[economics|economist]] from [[Austria]] and a giant in the history of economic thought. His work initially received little acclaim, the work of his contemporary [[John Maynard Keynes]] garnering all the attention. Schumpeter's view of economic health was radically different from that of Keynes, regarding innovation by [[entrepreneur]]s and [[investment]] into the development of new [[technology|technologies]] as the essence of healthy, dynamic disequilibrium. He coined the term "creative destruction" to describe this process of the old being constantly replaced by the new. In fact, he viewed the economy as somewhat like a living organism, constantly growing and changing to maintain its health. He warned that [[capitalism]] holds the seeds of its own destruction, and that [[government]] control over the economy carries the danger of out of control [[inflation]] and economic disaster, both due to the self-centered nature of human beings. Schumpeter's analysis has proved of lasting impact, and has garnered the respect and attention of those involved in economic policy. As humankind advances in maturity, overcoming the selfishness that threatens the life of successful economies and [[democracy]], much of Schumpeter's work continues to inform and support the development of a healthier, prosperous society that satisfies all people.
  
 
== Biography ==
 
== Biography ==
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Born in Třešť (then part of Austria-Hungary, now in the Czech Republic). He was always a brilliant student and praised by his teachers. He began his career studying Law at the University of Vienna under the great Austrian capital theorist [[Eugen von Böhm-Bawerk]], taking his PhD in 1906. In 1909, after some study trips, he became a professor of economics and government at the University of Czernowitz (a German-language university in Austria, now in Ukraine), in 1911, at the University of Graz, where he remained until World War I.
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'''Joseph Alois Schumpeter''' was born in Třešť (then part of [[Austria-Hungary]], now in the [[Czech Republic]]) on February 8, 1883. He was always a brilliant student and praised by his teachers. He began his career studying [[law]] at the [[University of Vienna]] under the great [[Austrian school|Austrian]] theorist, [[Eugen von Böhm-Bawerk]], taking his Ph.D. in 1906. In 1909, after some study trips, he became a professor of [[economics]] and government at the University of Czernowitz (a German-language university in Austria, now in [[Ukraine]]), in 1911, at the University of Graz, where he remained until [[World War I]].
  
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In 1919-1920, he served as the Austrian Minister of Finance and, in 1920-1924, as President of the private Biederman Bank which collapsed in 1924 and left Schumpeter in bankruptcy. From 1925-1932, he held a chair at the University of Bonn, Germany.  
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In 1919-1920, he served as the Austrian Minister of Finance and, in 1920-1924, as President of the private Biederman Bank which collapsed in 1924, leaving Schumpeter in [[bankruptcy]]. From 1925-1932, he held a chair at the University of Bonn, [[Germany]].  
  
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Schumpeter had to leave central Europe because of the rise of the Nazis and moved to [[Harvard]] ---he had already lectured there in 1927-1928 and 1930 --- where he taught from 1932 to 1950. During his time at Harvard, he acquired a school of loyal followers. He taught Samuelson, Leontief, Galbraith, Haman, and Bergson, among others.  
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In 1932, Schumpeter had to leave central Europe because of the rise of the [[Nazism|Nazis]] and he moved to [[Harvard University]]—he had already lectured there in 1927-1928 and 1930—where he taught from 1932 to 1950. During his time at Harvard, he was joined by [[Wassily Leontief]], [[John Kenneth Galbraith]], and fellow Austrian, [[Gottfried Haberler]]. There, he taught [[Paul Samuelson]], James Tobin, Abram Bergson, among others.  
  
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His bad luck was that he was the contemporary of Keynes and, hence, his prestige among colleagues seemed a bit outdated and not in touch with then-fashionable [[Keynesianism]].  
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Schumpeter's bad luck was that he was the contemporary of [[John Maynard Keynes]], the two being born but a few months apart. Hence, his prestige among colleagues seemed a bit outdated and not in touch with then-fashionable Keynesianism.  
  
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Although Schumpeter encouraged some young mathematical economists and introduced mathematical economics ( Schumpeter 1906, 1946 ) at Harvard University;  not to mention being the founding president of the Econometric Society ( Schumpeter 1933), Schumpeter was not a mathematician but rather an economist and tried instead to integrate sociological understanding into his economic theories (Schumpeter 1919 ).
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Although Schumpeter encouraged a number of young mathematical economists and introduced mathematical economics (Schumpeter 1906, 1946) to Harvard University, not to mention being the founding president of the Econometric Society (Schumpeter 1933), Schumpeter was not a [[mathematics|mathematician]], but rather an economist. He tried instead to integrate [[sociology|sociological]] understanding into his economic theories (Schumpeter 1919).
  
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From 1945 to 1950 he worked on his probably most famous, "History of Economic Analysis"  which was published posthumously. He died on January 8, 1950.
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From 1945 to 1950, he worked on what is probably his most famous work, ''History of Economic Analysis,'' which was published posthumously. He died on January 8, 1950.
  
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==Schumpeter’s  work==
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==Work==
  
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His major works and influence of  macro-economic thinking are reflected by the following excerpt:
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Schumpeter's major work and influence in [[macroeconomics|macroeconomic]] thinking are revealed in the following assessment:
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<blockquote>Adam Smith, make room: Joseph Schumpeter has come to Washington. Capital policy chiefs may not yet be wearing Schumpeter ties, but the Harvard economist's ideas are cited by everyone from former Federal Reserve chief Alan Greenspan to the warring parties in the Microsoft antitrust case… Schumpeter argued that capitalism exists in the state of ferment he dubbed "creative destruction," with spurts of innovation destroying established enterprises and yielding new ones. This view seems far more current than Smith's Newtonian notion of an "invisible hand" generating stability in the marketplace (Frank Rose, 2002). </blockquote>
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“……''Adam Smith, make room: Joseph Schumpeter has come to Washington. Capital policy chiefs may not yet be wearing Schumpeter ties, but the Harvard economist's ideas are cited by everyone from former Federal Reserve chief Alan Greenspan to the warring parties in the Microsoft antitrust case……Schumpeter argued that capitalism exists in the state of ferment he dubbed "creative destruction," with spurts of innovation destroying established enterprises and yielding new ones. This view seems far more current than Smith's Newtonian notion of an "invisible hand" generating stability in the marketplace''…..” ( Frank Rose 2000 )  
 
  
 
===The father of “Creative Destruction”===
 
===The father of “Creative Destruction”===
  
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Schumpeter's most popular book in English is probably ''Capitalism, Socialism, and Democracy''. Even after publishing this book in 1942, Schumpeter was overshadowed by John Maynard Keynes, who preached government spending as a way out of the Depression.
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Schumpeter's most popular book in English is probably ''Capitalism, Socialism, and Democracy''. However, after publishing this book in 1942, Schumpeter was overshadowed by the work of [[John Maynard Keynes]], who preached government spending as a way out of the [[depression (economics)|depression]].  
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However, the tide has changed a lot in economic thinking at the beginning of the 21st century .
 
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The Cambridge economist Joan Robinson found that Schumpeter "…''has little love for socialism, and none at all for socialists. His natural sympathy is all with the heroic age of expanding capitalism….''." Herself a leading theorist of imperfect competition, Robinson found Schumpeter's analysis of that subject the "most brilliant" part of the book: "…..''his argument blows like a gale through the dreary pedantry of static analysis''..."
 
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Although Schumpeter had little to say about contrary evidence, especially in his argument about the fadeout of capitalism and its replacement by socialism, "…..''The reader is swept along by the freshness, the dash, the impetuosity of Professor Schumpeter's stream of argument''..." Whether or not the reader was totally convinced, "...''this book is worth the whole parrot-house of contemporary orthodoxies, right, left, or centre''…..”( Schumpeter 1934 ).
 
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Another reviewer ( Dutch scolar Lambers ) put it even more succinctly: "….''Schumpeter accomplished the feat of moving five layers of thought—the firm, the markets, the institutions, the cultural values, the leaders of society—as one interwoven dynamic process. With incomparable skill he made history go through time as one stream''..…”
 
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Schumpeter's core argument in Capitalism, Socialism, and Democracy is reducible to three major tenets:
 
  
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*The essence of capitalism is innovation ("creative destruction") in particular sectors. Certain standard tools of economics, such as static equilibrium and macroeconomic analysis, can therefore disguise reality and mislead scholars and students.
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His term, "creative destruction," denotes the "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one" (Schumpeter 1942).
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*The virtues of capitalism—in particular its steady but gradual pattern of growth—are long-run and hard to see; its defects, such as inequality and apparent monopoly, are short-run and conspicuously visible.
 
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*It is dangerous for economists to prescribe "general" recipes, because political and social circumstances are always changing ( Schumpeter 1942 ).
 
  
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Unlike [[Karl Marx]], who predicted capitalism would be overcome by forces outside those within the capitalist system, Schumpeter argued that [[capitalism]] would be destroyed through its own success. He described the capitalist society as producing a class of people who benefited from capitalism but were opposed to the ethos of wealth production, saving, and allocating resources to production; in short to that which sustains capitalism.
  
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Schumpeter emphasizes that he is analyzing trends, not engaging in political advocacy. Some have thought [[John Kenneth Galbraith]] was influenced in his ''The New Industrial State'' by Schumpeter's views on corporations. This view however did not negate the fact that Schumpeter still believed that free market capitalism was the best economic system.
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The [[University of Cambridge|Cambridge]] economist [[Joan Robinson]] found that Schumpeter "has little love for socialism, and none at all for socialists. His natural sympathy is all with the heroic age of expanding capitalism." Herself a leading theorist of imperfect [[competition]], Robinson found Schumpeter's analysis of that subject the "most brilliant" part of the book, "his argument blows like a gale through the dreary pedantry of static analysis." Although Schumpeter had little to say about contrary evidence, especially in his argument about the fadeout of capitalism and its replacement by [[socialism]], "The reader is swept along by the freshness, the dash, the impetuosity of Professor Schumpeter's stream of argument." Whether or not the reader was totally convinced, "this book is worth the whole parrot-house of contemporary orthodoxies, right, left, or centre” (Robinson 1943).
  
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Schumpeter emphasized that he was analyzing trends, not engaging in political advocacy. Although he went so far as to say that creative destruction was an essential aspect of capitalism, this view did not negate the Schumpeter's belief that free market capitalism was the best economic system.
  
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To that end, Schumpeter predicted that a full-labor economy would tend to lead firms to invest in new technology rather than raise product prices. Schumpeter’s predictions are consistent with the economic developments we have witnessed during the past few years.  
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Schumpeter's core argument in ''Capitalism, Socialism, and Democracy'' is reducible to three major tenets:
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*The essence of capitalism is innovation ("creative destruction") in particular sectors. Certain standard tools of economics, such as [[static equilibrium]] and [[macroeconomic analysis]], can therefore disguise reality and mislead scholars and students.
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*The virtues of capitalism&mdash;in particular its steady but gradual pattern of growth&mdash;are long-run and hard to see; its defects, such as inequality and apparent monopoly, are short-run and conspicuously visible.
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*It is dangerous for economists to prescribe "general" recipes, because political and social circumstances are always changing (Schumpeter 1942).
  
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Schumpeter lauded "creative destruction"&mdash;the term he used to describe how innovative products and processes make older ones obsolete&mdash;as the likely result of human progress. Indeed, Schumpeter’s theory is very much applicable to early twenty-first century economy. In celebrating [[technology]], Schumpeter inherently recognized the [[creativity|creative]] expression of human beings (Schumpeter 1942).
  
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Schumpeter lauded "'''creative destruction'''"-the term he used to describe how innovative products and processes make older ones obsolete-as the likely result of human progress. Indeed, Schumpeter’s theory is very much applicable to today’s economy.
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===Entrepreneurship===
  
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Think about recent innovations charged with the task of "revolutionizing" an industry or lifestyle. Odds are, it was not too long ago. In celebrating technology, Schumpeter inherently (if not directly) recognized the creative expression of man ( Schumpeter 1942 ).
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The concept of [[entrepreneur]]ship cannot be fully understood without Schumpeter's contributions, being probably the first scholar to develop its theories. Schumpeter argued that the innovation and technological change of a nation comes from the entrepreneurs, or wild spirits. He came up with the German word ''Unternehmergeist,'' meaning "entrepreneur-spirit." He believed that these individuals are the ones who make things work in the economy of the country.  
  
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==== Schumpeter and entrepreneurship====
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Later, in the [[United States]], he pointed out that the ones who really move the innovation and economy are the big companies which have the resources and [[capital]] to invest in research and development. One can, however, see both arguments as being complementary.
  
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The concept of [[entrepreneurship]] cannot be fully understood without his contributions, being probably the first scholar to develop its theories. Schumpeter argued that the innovation and technological change of a nation comes from the entrepreneurs, or wild spirits. He came up with the German word ''Unternehmergeist'', meaning ''entrepreneur-spirit''. He believed that these individuals are the ones who make things work in the economy of the country. Later in the [[United States of America|United States]], he pointed out that the ones who really move the innovation and economy are the big companies which have the resources and capital to invest in research and development. Both arguments might be complementary today.
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In Schumpeter's theory, [[Leon Walras|Walrasian]] equilibrium is not adequate to capture the key mechanisms of [[economic development]]. Schumpeter also thought that the institution enabling the entrepreneur to purchase the resources needed to realize his or her vision was a well-developed [[capitalism|capitalist]] financial system, including a whole range of institutions for granting [[credit]].
  
 
===Business cycles===
 
===Business cycles===
  
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In the theory of [[business cycles]], where he was following neither Walras nor Keynes, Schumpeter starts in ''The Theory of Economic Development'' with a treatise of [[circular flow]] which, excluding any innovations and innovative activities, leads to a stationary state. The stationary state is, according to Schumpeter, described by Walrasian equilibrium. And the hero of his story, is, in fine Austrian fashion, the [[entrepreneur]] ( Schumpeter 1939 ).
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In the theory of [[business cycles]], where he was following neither [[Leon Walras]] nor [[John Maynard Keynes|Keynes]], Schumpeter starts, in his ''The Theory of Economic Development'' (1911), with a treatise of circular flow which, excluding any innovations and innovative activities, leads to a stationary state. The stationary state is, according to Schumpeter, described by Walrasian equilibrium. And the hero of his story, is, in fine [[Austrian school|Austrian]] fashion, the [[entrepreneur]] (Schumpeter 1939).
  
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A noticed characteristic of ''Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process '' is the author's attempt to turn business cycle patterns into predictive scientific wave theories borrowed from physics.  
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A noticed characteristic of ''Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process'' (1939) is his attempt to turn business cycle patterns into predictive scientific wave theories borrowed from [[physics]]. As Schumpeter wrote, "Barring very few cases in which difficulties arise, it is possible to count off, historically as well as statistically, six Juglars [8-10-year business cycles] to a Kondratieff [50-60 years] and three Kitchins [40 months] to a Juglar—not as an average but in every individual case." Why this was so, he admitted, "is indeed difficult to see" (Schumpeter, 1911).
  
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As Schumpeter wrote, "…..''Barring very few cases in which difficulties arise, it is possible to count off, historically as well as statistically, six  Juglars [ 8-10-year business cycles] to a Kondratieff [50-60 years] and three Kitchins [ 40 months] to a Juglar—not as an average but in every individual case''……" Why this was so, he admitted, "…..''is indeed difficult to see''….." (Schumpeter 1911, 1993).
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===''History of Economic Analysis''===
  
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[[Kuznets]], who wrote a comment on the book, conceded that "...Schumpeter had written a "monumental treatise" that raised all the right questions and did relate short-term business cycles to long-run economic movements'''".  
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Schumpeter's vast erudition is apparent in his posthumous ''History of Economic Analysis'' (1954), although some of his judgments seem quite idiosyncratic. For instance, Schumpeter thought that the greatest eighteenth century economist was [[Anne Robert Jacques Turgot, Baron de Laune|Turgot]], not [[Adam Smith]], as many consider. These judgments are partly explained by his opinion that there is one general system of economic analysis, and [[Léon Walras]] was the one who found it.  
  
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Still, Kuznets wrote: "... ''business cycles are essentially quantitative phenomena. Instead of robust statistical argument, Schumpeter had presented the reader with "an intellectual diary," an account of his own "journey through the realm of business cycles and capitalist evolution, a journal of his encounters there with numerous hypotheses, diverse historical facts, and statistical experiments''....."
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In Schumpeter's treatise, other economists were rated by how much of Walras' theory could be read into them. Schumpeter criticized [[John Maynard Keynes]] and [[David Ricardo]] for the "Ricardian vice" (Schumpeter 1946). According to Schumpeter, Ricardo and Keynes reasoned in terms of abstract models, where they would freeze all but a few variables. Then they could argue that one caused the other in a simple monotonic fashion. This led to the belief that one could easily deduce policy conclusions directly from a highly abstract theoretical model.
  
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===The history of economic analysis===
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Schumpeter was a supporter of free markets. However, while Adam Smith was concerned with the effects of [[supply and demand]] on product price, Schumpeter focused on innovation, rather than [[price]], as the dominant force in the [[business cycle]]. In his early analysis, valuing the role of the [[entrepreneur]] as the agent of change, and later recognizing the need for large-scale development of new ideas, he predicted that a full-labor economy would tend to lead firms to invest in new [[technology]] rather than raise product prices.
  
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Schumpeter's vast erudition is apparent in his posthumous ''History of Economic Analysis'', although some of his judgments seem quite idiosyncratic. For instance, Schumpeter thought that the greatest 18th century economist was [[Anne Robert Jacques Turgot, Baron de Laune|Turgot]], not [[Adam Smith]], as many consider. These judgments are partly explained by his opinion that there is one general system of economic analysis, and [[Léon Walras]] found it.  
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He also argued that the [[family]] was the fundamental unit of the [[capitalism|capitalist]] economy. Also, Schumpeter did unintentionally recognize the dangers of disassociating human [[morality]] from economics when he predicted that capitalism would fall due to the [[business]] and [[government]] [[bureaucracy]] and corruption that can occur in the free market (Schumpeter 1954).
  
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Other economists are rated by how much of Walras' theory could be read into them. Schumpeter criticized [[John Maynard Keynes]] and [[David Ricardo]] for the "Ricardian vice" (Schumpeter 1946 ). According to Schumpeter, Ricardo and Keynes reasoned in terms of abstract models, where they would freeze all but a few variables. Then they could argue that one caused the other in a simple monotonic fashion. This led to the belief that one could easily deduce policy conclusions directly from a highly abstract theoretical model.
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===Schumpeter and Keynesianism===
  
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While [[John Maynard Keynes]] revolutionized economic thinking by answering the same questions economists before him ([[David Ricardo]], [[John Stuart Mill]], [[Alfred Marshall]], even [[Karl Marx]]) had asked with different answers, Schumpeter asked different questions. While Keynes regarded the economy as a closed system, that, when healthy, was in static equilibrium, Schumpeter rejected equilibrium as healthy and regarded innovation as the basis of a healthy economy. For Schumpeter, dynamic disequilibrium is key and the economy is likened to a growing, living organism rather than a machine (Drucker 1983).
  
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Much like Adam Smith  and his followers, Schumpeter was a supporter of free markets. Whereas Smith was concerned with the effects of supply and demand on product price, Schumpeter looked at things differently. He focused on innovation, rather than price, as the dominant force in the business cycle. To that end, Schumpeter predicted that a full-labor economy would tend to lead firms to invest in new technology rather than raise product prices. Schumpeter’s predictions are consistent with the economic developments we have witnessed during the past few years.  
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Schumpeter had openly derided the "stagnation thesis" introduced in Keynes's General Theory (Schumpeter 1946). This thesis holds that as a country grows richer, [[investment]] opportunities shrink but the propensity to save increases; therefore [[saving]]s and investment balance only at high [[unemployment]].
  
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He also argued that the family was the fundamental unit of the capitalist economy-an idea sustained by the Christian notion of subsidiarity. Also, Schumpeter did unintentionally recognize the dangers of disassociating human morality from economics when he predicted that capitalism would fall due to business and government bureaucracy/corruption that can occur in the free market ( Schumpeter 1954 ).
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For Schumpeter, the [[entrepreneur]] who moves resources from old, obsolescent [[technology]] and the firm that invests in developing new ideas providing new employment, are essential to the health of the economy. But, for Schumpeter, innovation is also "creative destruction," as the new makes obsolete the old.
  
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===Schumpeter and Keynesianism===
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While Keynes concluded that a permanent equilibrium of full employment and prosperity could be achieved by [[government]] control&mdash;government spending, the volume of [[credit]], or the [[money supply]]&mdash;Schumpeter saw government intervention as increasing [[inflation]] until [[capital]] would be consumed and both [[capitalism]] and [[democracy]] destroyed. Keynes was famous for his saying "in the long run we are all dead," but it was Schumpeter who saw that short-term measures have long-term impacts. Schumpeter warned that capitalism could destroy itself if those in power looked only to the short-term.
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So in Schumpeter's theory Walrasian equilibrium is not adequate to capture the key mechanisms of economic development. Schumpeter also thought that the institution enabling the entrepreneur to purchase the resources needed to realize his or her vision was a well-developed [[capitalism|capitalist]] financial system, including a whole range of institutions for granting [[credit (education)|credit]]. One could divide economists among (1) those who emphasized "real" analysis and regarded money as merely a "veil" and (2) those who thought monetary institutions are important and money could be a separate driving force. Both Schumpeter and Keynes were among the latter.
 
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Nevertheless, Schumpeter, who was a [[liberal]], at least in the classical European sense, rejected [[Keynesian economics|Keynesianism]] (Schumpeter 1936 ).
 
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Schumpeter had openly derided the "stagnation thesis" introduced in Keynes's General Theory( Schumpeter 1946 ).This thesis holds that as a country grows richer investment opportunities shrink but the propensity to save increases; therefore savings and investment balance only at high unemployment. "…''If valid''….," wrote Smithies ( a Schumpeter’s former student ), "…..''the long-run Keynesian argument provided an impregnable case for socialism''……."
 
  
 
==Legacy==
 
==Legacy==
  
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In it's issue ( in 2000 ) Business Week  named Joseph Schumpeter "today’s hottest economist," citing his prescient analysis of the role of technology in the free economy. The article is useful because revisiting Schumpeterian thought presents the opportunity to review how a moral framework is so often required for a free-market system to serve the needs of mankind efficiently and humanely.  
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Although not well received when Joseph Schumpeter initially published his work, by the early twenty-first century the tide had changed. He was described as "today’s hottest economist," in a 2000 issue of ''Business Week,'' citing his "prescient analysis" of the role of [[technology]] in the free economy (Klesney 2001). Schumpeter has become a protagonist of the mainstream, not in academic economics ("standard textbook economics"), but in economic policy, management studies, industrial policy, and the entire area of innovation. In fact, the concept of [[entrepreneur]]ship cannot be fully understood without his contributions.  
  
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Two former treasury  officials: secretary Lawrence Summers and his ex-deputy Bradford DeLong, observed that "…''the economy of the future is likely to be 'Schumpeterian,'…. with creative destruction the norm and innovation the main driver of wealth''. ….”
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The [[European Union]]'s innovation program, and its main development plan, the [[Lisbon Strategy]], are based on Schumpeter’s theories and ideas.
  
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Products based on ideas - music, software, pharmaceuticals - require an enormous investment to develop but very little to keep making. And they're often subject to network effects, which reward those that achieve critical mass.
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==Author works==
  
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Together, these factors - high cost to create, minimal cost to produce, and a winner-take-all environment - tend to generate natural monopolies, at least until the next innovation comes along. How regulators should respond is debatable, but clearly the rules that governed manufacturing economies don't apply.  
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*Schumpeter, Joseph A. [1908] 1970. ''Das Wesen und der Hauptinhalt der theoretischen Nationaloekonomie''. Berlin: Duncker & Humblot.
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*Schumpeter, Joseph A. 1908. ''The Nature and Essence of Theoretical Economics''.
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*Schumpeter, Joseph A. 1909. "On the Concept of Social Value" in ''Quarterly Journal of Economics''.
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*Schumpeter, Joseph A. [1911] 1982. ''Theorie der Wirtschaftlichen Entwicklung. Eine Untersuchung ueber Unternehmergewinn, Kaptial, Kredit, Zins und den Konjunkturzyklus'' ''(The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle)''. Transaction Publishers. ISBN 0878556982
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*Schumpeter, Joseph A. 1915. ''Vergangenkeit und Zukunft der Sozialwissenschaft''.
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*Schumpeter, Joseph A. 1919. "The Sociology of Imperialism" in ''Archiv für Sozialwissenschaft und Sozialpolitik''.
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*Schumpeter, Joseph A. 1920. "Max Weber's Work" in ''Der östereichische Volkswirt''.
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*Schumpeter, Joseph A. 1927. "The Explanation of the Business Cycle" in ''Economica''.
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*Schumpeter, Joseph A. 1928. "The Instability of Capitalism" in ''The Economic Journal''.
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*Schumpeter, Joseph A. 1930. "Mitchell's  Business Cycles" in ''Quarterly Journal of Economics''.
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*Schumpeter, Joseph A. 1931. "The Present World Depression: A tentative diagnosis" in ''American Economic Review''.
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*Schumpeter, Joseph A. 1933. "The Common Sense of Econometrics" in ''Econometrica''.
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*Schumpeter, Joseph A. 1934. "Review of  Robinson's ''Economics of Imperfect Competition" in ''Journal of Political Economy''.
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*Schumpeter, Joseph A. 1935. "The Analysis of Economic Change" in ''REStat''.
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*Schumpeter, Joseph A. 1936. "Review of Keynes's  General Theory" in ''Journal of the American Statistical Association''.
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*Schumpeter, Joseph A. 1939. ''Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process''. ISBN 1578985560
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*Schumpeter, Joseph A. 1941. "Alfred Marshall's  Principles: A semi-centennial appraisal" in ''American Economic Review''.
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*Schumpeter, Joseph A. [1942] 2005. ''Capitalism, Socialism and Democracy''. New York: Taylor & Francis. ISBN 0415107628
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*Schumpeter, Joseph A. 1946. "John Maynard Keynes" in ''American Economic Review''.
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*Schumpeter, Joseph A. 1946. ''Rudimentary Mathematics for Economists and Statisticians''.
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*Schumpeter, Joseph A. 1947. "Theoretical Problems of Economic Growth" in ''JEH''.
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*Schumpeter, Joseph A. 1949. "Economic Theory and Entrepreneurial History" in ''Change and the Entrepreneur''.
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*Schumpeter, Joseph A. 1949. "The Historical Approach to the Analysis of Business Cycles." NBER Conference on Business Cycle Research.
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*Schumpeter, Joseph A. 1949. "Vilfredo Pareto" in ''Quarterly Journal of Economics''.
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*Schumpeter, Joseph A. 1951. ''Ten Great Economists: From Marx to Keynes''. Oxford Univ Pr (Sd). ISBN 0195007190
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*Schumpeter, Joseph A. [1954] 1996. ''History of Economic Analysis''. Oxford University Press. ISBN 0195105591
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*Schumpeter, Joseph A. 1989. ''Essays: On Entrepreneurs, Innovations, Business Cycles, and the Evolution of Capitalism''. Transaction Publishers. ISBN 0887387640
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*Schumpeter, Joseph A. 1991. ''Economics and Sociology of Capitalism''.
  
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==References==
  
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The concept of [[entrepreneurship]] can not be fully understood without his contributions, being probably the first scholar to develop its theories. And finally, The [[European Union]]'s innovation program, and its main development plan, the [[Lisbon Strategy]], are based on Schumpeter’s theories and ideas.
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*Drucker, Peter. 1983. [http://www.peterdrucker.at/en/texts/proph_01.html "Modern Prophets: Schumpeter and Keynes?"] in ''Texts by Peter Drucker''. Retrieved March 21, 2007.
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*Groenewegen, Peter. 2003. ''Classics and Moderns in Economics: Essays on Nineteenth And Twentieth Century Economic Thought: Vol. 2''. Routledge.
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==Publications==
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*Harris, S.E., ed. 1951. ''Schumpeter: Social Scientist''. Harvard University Press.
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*Schumpeter, Joseph A. (1908) ,"Das Wesen und der Hauptinhalt der theoretischen Nationaloekonomie." Second Edition, Duncker & Humblot, Berlin 1970
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*Klesmey, Joseph. 2001. [http://www.acton.org/ppolicy/comment/article.php?id=30 "Joseph Schumpeter and the moral economy"] in ''Acton Institute for the Study of Religion and Liberty''. Retrieved March 21, 2007.
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*Schumpeter, Joseph A. (1911), "Theorie der Wirtschaftlichen Entwicklung. Eine Untersuchung ueber Unternehmergewinn, Kaptial, Kredit, Zins und den Konjunkturzyklus" Eight Edition, Duncker & Humblot, Berlin 1993 (The Theory of Economic Development: An inquiry into profits, capital, credit, interest and the business cycle)
+
*McCraw, Thomas K. 2007. ''Prophet of Innovation: Joseph Schumpeter and Creative Destruction''. Belknap Press. ISBN 0674025237
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*Schumpeter, Joseph A. (1942) "Capitalism, Socialism and Democracy" Harper & Row, New York 1975
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*Muller, Jerry Z., 2002. ''The Mind and the Market: Capitalism in Western Thought''. Anchor Books. ISBN 0385721668
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*Schumpeter, Joseph A., The History of Economic Analysis, published posthumously in 1954.  
+
*Robinson, Joan. 1943. "Review of Joseph Schumpeter's 'Capitalism, Socialism, and Democracy'" in ''Economic Journal''. 53: 381-383.
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*Schumpeter, Joseph A., "Über die matematische Methode der theoretischen Ökonomie", 1906, ZfVSV. *Schumpeter, Joseph A., The Nature and Essence of Theoretical Economics, 1908.
+
*Robbins, L. C. 1955. "Schumpeter's History of Economic Analysis" in ''Quarterly Journal of Economics.'' 69: 1-22.
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*Schumpeter, Joseph A., "On the Concept of Social Value" , 1909, QJE
+
*Rose, Frank. 2002. "The Father of Creative Destruction" in ''Wired Magazine''.
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*Schumpeter, Joseph A., "Marie Esprit Leon Walras ", 1910, ZfVSV.
+
*Swedberg, Richard. 1995. ''Joseph A. Schumpeter: His Life and Work''. Blackwell Publishing. ISBN 0745607926
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*Schumpeter, Joseph A., The Theory of Economic Development: An inquiry into profits, capital, credit, interest and the business cycle , 1911.  
 
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*Schumpeter, Joseph A., Vergangenkeit und Zukunft der Sozialwissenschaft, 1915.
 
−
*Schumpeter, Joseph A., "The Sociology of Imperialism", 1919, Archiv für Sozialwissenschaft und Sozialpolitik
 
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*Schumpeter, Joseph A., "Max Weber's Work",  Der östereichische Volkswirt 1920
 
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*Schumpeter, Joseph A., "Carl Menger", 1921, ZfVS.  
 
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*Schumpeter, Joseph A., "The Explanation of the Business Cycle", 1927, Economica
 
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*Schumpeter, Joseph A., "The Instability of Capitalism", 1928, EJ
 
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*Schumpeter, Joseph A., "Mitchell's  Business Cycles", 1930, QJE
 
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*Schumpeter, Joseph A., "The Present World Depression: A tentative diagnosis", 1931, AER. *Schumpeter, Joseph A., "The Common Sense of Econometrics", 1933, Econometrica
 
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*Schumpeter, Joseph A., "Depressions: Can we learn from past experience?", 1934, in Economics of the Recovery Program
 
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*Schumpeter, Joseph A., "Review of  Robinson's Economics of Imperfect Competition", 1934, JPE
 
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*Schumpeter, Joseph A., "The Analysis of Economic Change", 1935, REStat.
 
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*Schumpeter, Joseph A., "Review of Keynes's  General Theory", 1936, JASA
 
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*Schumpeter, Joseph A., Business Cycles: A theoretical, historical and statistical analysis of the Capitalist process, 1939.
 
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*Schumpeter, Joseph A., "Alfred Marshall's  Principles: A semi-centennial appraisal", 1941, AER.  
 
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*Schumpeter, Joseph A., Capitalism, Socialism and Democracy, 1942.  
 
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*Schumpeter, Joseph A., "John Maynard Keynes ", 1946, AER.  
 
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*Schumpeter, Joseph A., Rudimentary Mathematics for Economists and Statisticians, with W.L.Crum, 1946.  
 
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*Schumpeter, Joseph A., "Theoretical Problems of Economic Growth", 1947, JEH
 
−
*Schumpeter, Joseph A., "Vilfredo Pareto", 1949, QJE.
 
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*Schumpeter, Joseph A., "Economic Theory and Entrepreneurial History", 1949, Change and the Entrepreneur
 
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*Schumpeter, Joseph A., "The Historical Approach to the Analysis of Business Cycles", 1949, NBER Conference on Business Cycle Research.
 
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* *Schumpeter, Joseph A., Ten Great Economists: From Marx to Keynes, 1951.
 
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*Schumpeter, Joseph A., Imperialism and Social Classes, 1951 (reprints of 1919, 1927)
 
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*Schumpeter, Joseph A., History of Economic Analysis, 1954.
 
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*Schumpeter, Joseph A., Economics and Sociology of Capitalism, 1991.
 
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==References==
 
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* Groenewegen, Peter, 2003. ''Classics and Moderns in Economics: Essays on Nineteenth And Twentieth Century Economic Thought: Vol. 2''. Routledge. Chpt. 22, pp 203+.  
 
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* Harris, S. E. (ed.), 1951. ''Schumpeter: Social Scientist''. Harvard University Press.
 
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* Muller, Jerry Z., 2002. ''The Mind and the Market: Capitalism in Western Thought''. Anchor Books.
 
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* Robbins, L. C., 1955, "Schumpeter's History of Economic Analysis," ''Quarterly Journal of Economics 69'': 1-22.
 
  
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==External links==
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{{Credit1|Joseph_Schumpeter|68897157|}}
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*http://www.humanities.mq.edu.au/Ockham/y6410.html
 
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*http://cepa.newschool.edu/het/profiles/schump.htm
 
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*http://www.cpm.ehime-u.ac.jp/akamachomepage/akamac_e-text_links/Schumpeter.html
 
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*http://www.geocities.com/bcschipper/schumpeter.html
 
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*http://www.peterdrucker.at/en/texts/proph_01.html
 
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*[http://www.business.aau.dk/evolution/esapapers/esa90-93/R93-1.pdf Biography of Schumpeter by Swedberg and Andersen] pdf file
 

Latest revision as of 22:25, 23 February 2011


Joseph Schumpeter

Joseph Alois Schumpeter (February 8, 1883 – January 8, 1950) was an economist from Austria and a giant in the history of economic thought. His work initially received little acclaim, the work of his contemporary John Maynard Keynes garnering all the attention. Schumpeter's view of economic health was radically different from that of Keynes, regarding innovation by entrepreneurs and investment into the development of new technologies as the essence of healthy, dynamic disequilibrium. He coined the term "creative destruction" to describe this process of the old being constantly replaced by the new. In fact, he viewed the economy as somewhat like a living organism, constantly growing and changing to maintain its health. He warned that capitalism holds the seeds of its own destruction, and that government control over the economy carries the danger of out of control inflation and economic disaster, both due to the self-centered nature of human beings. Schumpeter's analysis has proved of lasting impact, and has garnered the respect and attention of those involved in economic policy. As humankind advances in maturity, overcoming the selfishness that threatens the life of successful economies and democracy, much of Schumpeter's work continues to inform and support the development of a healthier, prosperous society that satisfies all people.

Biography

Joseph Alois Schumpeter was born in Třešť (then part of Austria-Hungary, now in the Czech Republic) on February 8, 1883. He was always a brilliant student and praised by his teachers. He began his career studying law at the University of Vienna under the great Austrian theorist, Eugen von Böhm-Bawerk, taking his Ph.D. in 1906. In 1909, after some study trips, he became a professor of economics and government at the University of Czernowitz (a German-language university in Austria, now in Ukraine), in 1911, at the University of Graz, where he remained until World War I.

In 1919-1920, he served as the Austrian Minister of Finance and, in 1920-1924, as President of the private Biederman Bank which collapsed in 1924, leaving Schumpeter in bankruptcy. From 1925-1932, he held a chair at the University of Bonn, Germany.

In 1932, Schumpeter had to leave central Europe because of the rise of the Nazis and he moved to Harvard University—he had already lectured there in 1927-1928 and 1930—where he taught from 1932 to 1950. During his time at Harvard, he was joined by Wassily Leontief, John Kenneth Galbraith, and fellow Austrian, Gottfried Haberler. There, he taught Paul Samuelson, James Tobin, Abram Bergson, among others.

Schumpeter's bad luck was that he was the contemporary of John Maynard Keynes, the two being born but a few months apart. Hence, his prestige among colleagues seemed a bit outdated and not in touch with then-fashionable Keynesianism.

Although Schumpeter encouraged a number of young mathematical economists and introduced mathematical economics (Schumpeter 1906, 1946) to Harvard University, not to mention being the founding president of the Econometric Society (Schumpeter 1933), Schumpeter was not a mathematician, but rather an economist. He tried instead to integrate sociological understanding into his economic theories (Schumpeter 1919).

From 1945 to 1950, he worked on what is probably his most famous work, History of Economic Analysis, which was published posthumously. He died on January 8, 1950.

Work

Schumpeter's major work and influence in macroeconomic thinking are revealed in the following assessment:

Adam Smith, make room: Joseph Schumpeter has come to Washington. Capital policy chiefs may not yet be wearing Schumpeter ties, but the Harvard economist's ideas are cited by everyone from former Federal Reserve chief Alan Greenspan to the warring parties in the Microsoft antitrust case… Schumpeter argued that capitalism exists in the state of ferment he dubbed "creative destruction," with spurts of innovation destroying established enterprises and yielding new ones. This view seems far more current than Smith's Newtonian notion of an "invisible hand" generating stability in the marketplace (Frank Rose, 2002).

The father of “Creative Destruction”

Schumpeter's most popular book in English is probably Capitalism, Socialism, and Democracy. However, after publishing this book in 1942, Schumpeter was overshadowed by the work of John Maynard Keynes, who preached government spending as a way out of the depression.

His term, "creative destruction," denotes the "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one" (Schumpeter 1942).

Unlike Karl Marx, who predicted capitalism would be overcome by forces outside those within the capitalist system, Schumpeter argued that capitalism would be destroyed through its own success. He described the capitalist society as producing a class of people who benefited from capitalism but were opposed to the ethos of wealth production, saving, and allocating resources to production; in short to that which sustains capitalism.

The Cambridge economist Joan Robinson found that Schumpeter "has little love for socialism, and none at all for socialists. His natural sympathy is all with the heroic age of expanding capitalism." Herself a leading theorist of imperfect competition, Robinson found Schumpeter's analysis of that subject the "most brilliant" part of the book, "his argument blows like a gale through the dreary pedantry of static analysis." Although Schumpeter had little to say about contrary evidence, especially in his argument about the fadeout of capitalism and its replacement by socialism, "The reader is swept along by the freshness, the dash, the impetuosity of Professor Schumpeter's stream of argument." Whether or not the reader was totally convinced, "this book is worth the whole parrot-house of contemporary orthodoxies, right, left, or centre” (Robinson 1943).

Schumpeter emphasized that he was analyzing trends, not engaging in political advocacy. Although he went so far as to say that creative destruction was an essential aspect of capitalism, this view did not negate the Schumpeter's belief that free market capitalism was the best economic system.

Schumpeter's core argument in Capitalism, Socialism, and Democracy is reducible to three major tenets:

  • The essence of capitalism is innovation ("creative destruction") in particular sectors. Certain standard tools of economics, such as static equilibrium and macroeconomic analysis, can therefore disguise reality and mislead scholars and students.
  • The virtues of capitalism—in particular its steady but gradual pattern of growth—are long-run and hard to see; its defects, such as inequality and apparent monopoly, are short-run and conspicuously visible.
  • It is dangerous for economists to prescribe "general" recipes, because political and social circumstances are always changing (Schumpeter 1942).

Schumpeter lauded "creative destruction"—the term he used to describe how innovative products and processes make older ones obsolete—as the likely result of human progress. Indeed, Schumpeter’s theory is very much applicable to early twenty-first century economy. In celebrating technology, Schumpeter inherently recognized the creative expression of human beings (Schumpeter 1942).

Entrepreneurship

The concept of entrepreneurship cannot be fully understood without Schumpeter's contributions, being probably the first scholar to develop its theories. Schumpeter argued that the innovation and technological change of a nation comes from the entrepreneurs, or wild spirits. He came up with the German word Unternehmergeist, meaning "entrepreneur-spirit." He believed that these individuals are the ones who make things work in the economy of the country.

Later, in the United States, he pointed out that the ones who really move the innovation and economy are the big companies which have the resources and capital to invest in research and development. One can, however, see both arguments as being complementary.

In Schumpeter's theory, Walrasian equilibrium is not adequate to capture the key mechanisms of economic development. Schumpeter also thought that the institution enabling the entrepreneur to purchase the resources needed to realize his or her vision was a well-developed capitalist financial system, including a whole range of institutions for granting credit.

Business cycles

In the theory of business cycles, where he was following neither Leon Walras nor Keynes, Schumpeter starts, in his The Theory of Economic Development (1911), with a treatise of circular flow which, excluding any innovations and innovative activities, leads to a stationary state. The stationary state is, according to Schumpeter, described by Walrasian equilibrium. And the hero of his story, is, in fine Austrian fashion, the entrepreneur (Schumpeter 1939).

A noticed characteristic of Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process (1939) is his attempt to turn business cycle patterns into predictive scientific wave theories borrowed from physics. As Schumpeter wrote, "Barring very few cases in which difficulties arise, it is possible to count off, historically as well as statistically, six Juglars [8-10-year business cycles] to a Kondratieff [50-60 years] and three Kitchins [40 months] to a Juglar—not as an average but in every individual case." Why this was so, he admitted, "is indeed difficult to see" (Schumpeter, 1911).

History of Economic Analysis

Schumpeter's vast erudition is apparent in his posthumous History of Economic Analysis (1954), although some of his judgments seem quite idiosyncratic. For instance, Schumpeter thought that the greatest eighteenth century economist was Turgot, not Adam Smith, as many consider. These judgments are partly explained by his opinion that there is one general system of economic analysis, and Léon Walras was the one who found it.

In Schumpeter's treatise, other economists were rated by how much of Walras' theory could be read into them. Schumpeter criticized John Maynard Keynes and David Ricardo for the "Ricardian vice" (Schumpeter 1946). According to Schumpeter, Ricardo and Keynes reasoned in terms of abstract models, where they would freeze all but a few variables. Then they could argue that one caused the other in a simple monotonic fashion. This led to the belief that one could easily deduce policy conclusions directly from a highly abstract theoretical model.

Schumpeter was a supporter of free markets. However, while Adam Smith was concerned with the effects of supply and demand on product price, Schumpeter focused on innovation, rather than price, as the dominant force in the business cycle. In his early analysis, valuing the role of the entrepreneur as the agent of change, and later recognizing the need for large-scale development of new ideas, he predicted that a full-labor economy would tend to lead firms to invest in new technology rather than raise product prices.

He also argued that the family was the fundamental unit of the capitalist economy. Also, Schumpeter did unintentionally recognize the dangers of disassociating human morality from economics when he predicted that capitalism would fall due to the business and government bureaucracy and corruption that can occur in the free market (Schumpeter 1954).

Schumpeter and Keynesianism

While John Maynard Keynes revolutionized economic thinking by answering the same questions economists before him (David Ricardo, John Stuart Mill, Alfred Marshall, even Karl Marx) had asked with different answers, Schumpeter asked different questions. While Keynes regarded the economy as a closed system, that, when healthy, was in static equilibrium, Schumpeter rejected equilibrium as healthy and regarded innovation as the basis of a healthy economy. For Schumpeter, dynamic disequilibrium is key and the economy is likened to a growing, living organism rather than a machine (Drucker 1983).

Schumpeter had openly derided the "stagnation thesis" introduced in Keynes's General Theory (Schumpeter 1946). This thesis holds that as a country grows richer, investment opportunities shrink but the propensity to save increases; therefore savings and investment balance only at high unemployment.

For Schumpeter, the entrepreneur who moves resources from old, obsolescent technology and the firm that invests in developing new ideas providing new employment, are essential to the health of the economy. But, for Schumpeter, innovation is also "creative destruction," as the new makes obsolete the old.

While Keynes concluded that a permanent equilibrium of full employment and prosperity could be achieved by government control—government spending, the volume of credit, or the money supply—Schumpeter saw government intervention as increasing inflation until capital would be consumed and both capitalism and democracy destroyed. Keynes was famous for his saying "in the long run we are all dead," but it was Schumpeter who saw that short-term measures have long-term impacts. Schumpeter warned that capitalism could destroy itself if those in power looked only to the short-term.

Legacy

Although not well received when Joseph Schumpeter initially published his work, by the early twenty-first century the tide had changed. He was described as "today’s hottest economist," in a 2000 issue of Business Week, citing his "prescient analysis" of the role of technology in the free economy (Klesney 2001). Schumpeter has become a protagonist of the mainstream, not in academic economics ("standard textbook economics"), but in economic policy, management studies, industrial policy, and the entire area of innovation. In fact, the concept of entrepreneurship cannot be fully understood without his contributions.

The European Union's innovation program, and its main development plan, the Lisbon Strategy, are based on Schumpeter’s theories and ideas.

Author works

  • Schumpeter, Joseph A. [1908] 1970. Das Wesen und der Hauptinhalt der theoretischen Nationaloekonomie. Berlin: Duncker & Humblot.
  • Schumpeter, Joseph A. 1908. The Nature and Essence of Theoretical Economics.
  • Schumpeter, Joseph A. 1909. "On the Concept of Social Value" in Quarterly Journal of Economics.
  • Schumpeter, Joseph A. [1911] 1982. Theorie der Wirtschaftlichen Entwicklung. Eine Untersuchung ueber Unternehmergewinn, Kaptial, Kredit, Zins und den Konjunkturzyklus (The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle). Transaction Publishers. ISBN 0878556982
  • Schumpeter, Joseph A. 1915. Vergangenkeit und Zukunft der Sozialwissenschaft.
  • Schumpeter, Joseph A. 1919. "The Sociology of Imperialism" in Archiv für Sozialwissenschaft und Sozialpolitik.
  • Schumpeter, Joseph A. 1920. "Max Weber's Work" in Der östereichische Volkswirt.
  • Schumpeter, Joseph A. 1927. "The Explanation of the Business Cycle" in Economica.
  • Schumpeter, Joseph A. 1928. "The Instability of Capitalism" in The Economic Journal.
  • Schumpeter, Joseph A. 1930. "Mitchell's Business Cycles" in Quarterly Journal of Economics.
  • Schumpeter, Joseph A. 1931. "The Present World Depression: A tentative diagnosis" in American Economic Review.
  • Schumpeter, Joseph A. 1933. "The Common Sense of Econometrics" in Econometrica.
  • Schumpeter, Joseph A. 1934. "Review of Robinson's Economics of Imperfect Competition" in Journal of Political Economy.
  • Schumpeter, Joseph A. 1935. "The Analysis of Economic Change" in REStat.
  • Schumpeter, Joseph A. 1936. "Review of Keynes's General Theory" in Journal of the American Statistical Association.
  • Schumpeter, Joseph A. 1939. Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process. ISBN 1578985560
  • Schumpeter, Joseph A. 1941. "Alfred Marshall's Principles: A semi-centennial appraisal" in American Economic Review.
  • Schumpeter, Joseph A. [1942] 2005. Capitalism, Socialism and Democracy. New York: Taylor & Francis. ISBN 0415107628
  • Schumpeter, Joseph A. 1946. "John Maynard Keynes" in American Economic Review.
  • Schumpeter, Joseph A. 1946. Rudimentary Mathematics for Economists and Statisticians.
  • Schumpeter, Joseph A. 1947. "Theoretical Problems of Economic Growth" in JEH.
  • Schumpeter, Joseph A. 1949. "Economic Theory and Entrepreneurial History" in Change and the Entrepreneur.
  • Schumpeter, Joseph A. 1949. "The Historical Approach to the Analysis of Business Cycles." NBER Conference on Business Cycle Research.
  • Schumpeter, Joseph A. 1949. "Vilfredo Pareto" in Quarterly Journal of Economics.
  • Schumpeter, Joseph A. 1951. Ten Great Economists: From Marx to Keynes. Oxford Univ Pr (Sd). ISBN 0195007190
  • Schumpeter, Joseph A. [1954] 1996. History of Economic Analysis. Oxford University Press. ISBN 0195105591
  • Schumpeter, Joseph A. 1989. Essays: On Entrepreneurs, Innovations, Business Cycles, and the Evolution of Capitalism. Transaction Publishers. ISBN 0887387640
  • Schumpeter, Joseph A. 1991. Economics and Sociology of Capitalism.

References
ISBN links support NWE through referral fees

  • Drucker, Peter. 1983. "Modern Prophets: Schumpeter and Keynes?" in Texts by Peter Drucker. Retrieved March 21, 2007.
  • Groenewegen, Peter. 2003. Classics and Moderns in Economics: Essays on Nineteenth And Twentieth Century Economic Thought: Vol. 2. Routledge.
  • Harris, S.E., ed. 1951. Schumpeter: Social Scientist. Harvard University Press.
  • Klesmey, Joseph. 2001. "Joseph Schumpeter and the moral economy" in Acton Institute for the Study of Religion and Liberty. Retrieved March 21, 2007.
  • McCraw, Thomas K. 2007. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Belknap Press. ISBN 0674025237
  • Muller, Jerry Z., 2002. The Mind and the Market: Capitalism in Western Thought. Anchor Books. ISBN 0385721668
  • Robinson, Joan. 1943. "Review of Joseph Schumpeter's 'Capitalism, Socialism, and Democracy'" in Economic Journal. 53: 381-383.
  • Robbins, L. C. 1955. "Schumpeter's History of Economic Analysis" in Quarterly Journal of Economics. 69: 1-22.
  • Rose, Frank. 2002. "The Father of Creative Destruction" in Wired Magazine.
  • Swedberg, Richard. 1995. Joseph A. Schumpeter: His Life and Work. Blackwell Publishing. ISBN 0745607926

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