Joseph A. Schumpeter, 1883-1950.
A product of the waning years of the Austro-Hungarian Empire, Joseph A. Schumpeter
exemplified that heritage. Although a student of Eugen von Böhm-Bawerk
and Friedrich von Wieser, Schumpeter was never really a
footsoldier of the Austrian School.
After a quick doctorate at Vienna, Schumpeter roamed about as something of a footloose
lawyer until he rejoined academia in 1909. It was while he was teaching at Czernowitz (now
in the Ukraine) that he wrote his Theory of Economic Development (1911), where he
first outlined his famous theory of entrepreneurship. He argued those daring spirits,
entrepreneurs, created technical and financial innovations in the face of competition and
falling profits - and that it was these spurts of activity which generated (irregular) economic growth.
His second book (1914) he finished while at Graz when World War I broke out - which
Schumpeter opposed. After the war, Schumpeter joined the German Socialization Committee in
Berlin - which then was composed of several Marxian
scholars (such as Hilferding and Kautsky)
and the Kiel School economists (such as Lowe and Lederer).
In 1919, Schumpeter became the Austrian Minister of Finance - unfortuantely, presiding
over the hyperinflation of the period, and thus was dismissed later that year. After a
brief teaching stint at Graz, Schumpeter migrated in 1921 to the private sector and became
the president of a small Viennese banking house. Ill luck dogged him: his bank collapsed
in 1924. He drifted once again back into academia - taking up a teaching position at Bonn
In 1932, Schumpeter took up a position at Harvard,
succeeding the Marshallian F.W. Taussig. He was joined by
Alvin Hansen, Wassily Leontief,
Richard Goodwin, Paul Sweezy, John
Kenneth Galbraith and fellow Austrian, Gottfried Haberler. Schumpeter ruled Harvard during the period of the
"depression generation" of the 1930s and 1940s - when Samuelson,
Tobin, Tsuru, Heilbroner, Bergson, Metzler, etc. were his students.
Although excelling as a teacher above everything, Joseph Schumpeter nonetheless
completed three more books while at Harvard: his didactic Business Cycles (1939),
his popular Capitalism, Socialism and Democracy(1942) - in which he famously
predicted the downfall of capitalism in the hands of intellectuals - and his encyclopedic,
History of Economic Analysis (1954). In the first two, he expanded upon his theory
of entrepreneurship and theory of growth
into a wider theory of the development of capitalism, integrating it into a business cycle theory and a theory socio-economic
Schumpeter's legacy is difficult to assess. Although an enthusiast of Walras and the Lausanne
School, he contributed little to it beyond praise. Although he had contributed to the Methodenstreit
against the German Historicists and on behalf of Menger, the other Austrians
had long written him off as one of the faithful - and his old Marxian comrades of Berlin and Vienna certainly did not
regard this man with conservative instincts as a fellow traveler.
Like Frank Knight, Schumpeter remains unclassifiable in our
schema. Consequently, we give him the honor of founding "evolutionary"
economics, given his concern with economic change brought about by the interaction
between individuals and the economy as a whole, a concern with socio-economic history and
institutions, but not enough to overshadow his search for an inherently theoretical
explanation for the development of capitalism.
Major Works of Joseph A. Schumpeter
- "Über die matematische Methode der theoretischen Ökonomie", 1906, ZfVSV.
- "Das Rentenprinzip in der Verteilungslehre", 1907, Schmollers Jahrbuch
- The Nature and Essence of Theoretical Economics, 1908.
the Concept of Social Value", 1909, QJE
- "Marie Esprit Leon Walras", 1910, ZfVSV.
- "Über das Wesen der Wirtschaftskrisen", 1910, ZfVSV
- The Theory of Economic Development: An inquiry into profits, capital, credit,
interest and the business cycle , 1911.
- Economic Doctrine and Method: An historical sketch, 1914.
- "Das wissenschaftliche Lebenswerk Eugen von Böhm-Bawerks",
- Vergangenkeit und Zukunft der Sozialwissenschaft, 1915.
- The Crisis of the Tax State, 1918.
- "The Sociology of Imperialism", 1919, Archiv für Sozialwissenschaft und
- "Max Weber's Work", 1920, Der östereichische
- "Carl Menger", 1921, ZfVS.
- "The Explanation of the Business Cycle", 1927, Economica
- "Social Classes in an Ethnically Homogeneous Environment", 1927, Archiv
für Sozialwissenschaft und Sozialpolitik.
- "The Instability of Capitalism", 1928, EJ
- Das deutsche Finanzproblem, 1928.
- "Mitchell's Business Cycles", 1930, QJE
- "The Present World Depression: A tentative diagnosis", 1931, AER.
- "The Common Sense of Econometrics", 1933, Econometrica
- "Depressions: Can we learn from past experience?", 1934, in Economics of
the Recovery Program
- "The Nature and Necessity of a Price System", 1934, Economic Reconstruction.
- "Review of Robinson's Economics of Imperfect
Competition", 1934, JPE
- "The Analysis of Economic Change", 1935, REStat.
- "Professor Taussig on Wages and Capital", 1936, Explorations
- "Review of Keynes's General Theory", 1936, JASA
- Business Cycles: A theoretical, historical and statistical analysis of the Capitalist
- "The Influence of Protective Tariffs on the Industrial Development of the United
States", 1940, Proceedings of AAPS
- "Alfred Marshall's Principles: A semi-centennial
appraisal", 1941, AER.
- "Frank William Taussig", 1941, QJE.
- Capitalism, Socialism and Democracy, 1942.
- "Capitalism in the Postwar World", 1943, Postwar Economic Problems.
- "John Maynard Keynes", 1946, AER.
- "The Future of Private Enterprise in the Face of Modern Socialistic
Tendencies", 1946, Comment sauvegarder l'enterprise privée
- Rudimentary Mathematics for Economists and Statisticians, with W.L.Crum, 1946.
- "Capitalism", 1946, Encyclopaedia Britannica.
- "The Decade of the Twenties", 1946, AER
- "The Creative Response in Economic History", 1947, JEH
- "Theoretical Problems of Economic Growth", 1947, JEH
- "Irving Fisher's Econometrics", 1948, Econometrica.
- "There is Still Time to Stop Inflation", 1948, Nation's Business.
- "Science and Ideology", 1949, AER.
- "Vilfredo Pareto", 1949, QJE.
- "Economic Theory and Entrepreneurial History", 1949, Change and the
- "The Communist Manifesto in Sociology and Economics", 1949, JPE
- "English Economists and the State-Managed Economy", 1949, JPE
- "The Historical Approach to the Analysis of Business Cycles", 1949, NBER
Conference on Business Cycle Research.
- "Wesley Clair Mitchell", 1950, QJE.
- "March into Socialism", 1950, AER.
- Ten Great Economists: From Marx to Keynes, 1951.
- Imperialism and Social Classes, 1951 (reprints of 1919, 1927)
- Essays on Economic Topics, 1951.
- "Review of the Troops", 1951, QJE.
- History of Economic Analysis, 1954.
- "American Institutions and Economic Progress", 1983, Zeitschrift fur die
- "The Meaning of Rationality in the Social Sciences", 1984, Zeitschrift fur
die gesamte Staatswissenschaft
- "Money and Currency", 1991, Social Research.
- Economics and Sociology of Capitalism, 1991.
Resources on Joseph Schumpeter
- HET Pages: Growth After Marx, Business Cycle Theory
- Bibliography of Schumpeter
of Schumpeter's Nature and Essence of Theoretical Economics", by George Ray Wicker, 1911, AER
of Schumpeter's Theory of Economic Development", by John
Bates Clark, 1912, AER
of De Vecchi, Entrepreneurs, institutions and economic change: the economic thought of
J.A. Schumpeter" by Spencer J. Pack, 2000, HOPE
Page at McMaster
Page at Akamac.
Evolutionary Theory" by Esben Sloth Andersen
- R. Langlois's "Schumpeter
and the Obsolescence of the Entrepreneur"
- Articles about Schumpeter by
Harpham at UT-Dallas.