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• Editorial Staff
• Associate Editors
• Editorial
• Bibliographical Essay: Isaac Kramnick, English Middle-class Radicalism In the Eighteenth Century
• I: I Social and Political Thought
• Community, Individuality, and Freedom
• Rousseau's Social Thought
• A Sociological History of Utilitarianism
• Spencer and Comte In American Labor Thought
• Bureaucracy In Weber & Kafka
• Bergson's Political Doctrines
• Oakeshott's Political Theory
• Oakeshott's Political Philosophy
• Undermocratic Liberal Republicans
• Wilkes and Radical Politics
• Late Liberal Imperialism
• Kant and Reason In Politics
• II: Education, Politics, and Values
• Schools and Political Socialization
• Schooling For Imperialism
• The Political Economy of Public Schooling
• Federal Education Policy
• The Problems of Federal Education
• William James As Individualist
• Existential and Phenomenological Education
• Early Federal Educational Policy
• Education, Labor Markets, & Controlled Youth
• Government Control of Universities
• III: Economic Thought and Values
• Business and Legal History
• Schumpeter's Economic Theories
• Menger and Entrepreneurship
• Saint-simonian Economic Ideas
• The Free Market & the Third World
• Democratic Capitalism, Justice, & Religion
• Property, Law, and Economics
• The Economic Analysis of Law Vs. Values
• IV: Foreign Policy and Ideology
• The Attractiveness of War
• Walzer On International Morality
• Eduard Bernstein and Imperialism
• Roosevelt Vs. His War Critics
• American Preconceptions of Japan
• The Marshall Plan and Russia
• V: Self-knowledge, Autonomy, and Liberty
• The Self In Political Thought
• Autonomy, Self, and Will Power
• Self-knowledge: Goethe, Kant, and Hegel
• The Egoist As a “psychopath”
• The History of Social Psychology
• Psychology, Self, and Society
• Free Will, Responsibility, and Motivation
• Free Will, Purpose, and Responsibility
• Political “groupthink” and Reality
• Personal Freedom and Autonomy
• Research Fields
• Economics
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• History
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• Political Philosophy
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• Sociology

Schumpeter's Economic Theories

Herbert Kisch

• Michigan State University, East Lansing (recently deceased)

Joseph Schumpeter (1883–1950) studied economics under the Austrian economists Wieser, Philipovich, and Bohm-Bawerk at the University of Vienna where Bohm-Bawerk took a special interest in the brilliant young economist. Among his classmates were the later leader of the Austrian economists, Ludwig von Mises, and the Austro-Marxists Otto Bauer, Rudolph Hilferding, and Email Lederer. The twin perspectives of Marxian and the Austrian school of economics were to influence Schumpeter's view of the social process throughout his career. After receiving his doctorate in 1906, Schumpeter traveled to England to continue his research and to follow up on his growing interest in mathematical economics, an interest that can be clearly seen in his first major publication, Das Wesen und der Haupinhalt der theoretischen Nationalökonomie.

It is, however, with his second publication, The Theory of Economic Development (1912), that Schumpeter first advanced what was to be his most important contribution to economic theory and what was to remain a constant theme in his work throughout the rest of his life. In this work (unlike his first work where he had “solved” to his own satisfaction the allocation problem in a static setting) Schumpeter turns his attention to the real world of dynamic change. It is here that he unveils the driving force of the market economy—the innovator-entrepreneur. It is the entrepreneur who bursts onto the static scene and, armed with unusual insight, innovation, and perseverance, disturbs the static equilibrium and throws the whole economic system into a frenzy of change, growth, and development.

Schumpeter's scholarly interests were both wide ranging and deep. His knowledge of the theoretical economic literature was astounding, yet his interests were far broader than economics narrowly defined. In his well known essay, Imperialism (1918), Schumpeter sets forth his contention that imperialism is not due to modern capitalist forces but rather to feudal atavisms that remain in the not yet totally modern socio-economic system—an obvious challenge to the theories of Lenin and Hilferding. According to Schumpeter, the purely economic forces are self-equilibrating. It is, therefore, within the political realm that one must look for the causes of market failure and social breakdown.

For years Schumpeter continued work on his theory of innovation and change, and in 1939 he published the fruits of his life-long research: Business Cycles—A Theoretical, Historical and Statistical Analysis of the Capitalist Process. The reception from the profession was disappointing, but, undeterred, he pushed on. In 1942 he published the remarkably successful Capitalism, Socialism and Democracy. This work, addressed to the educated layman, set forth Schumpeter's unique analysis of the capitalist system, a system whose very successes would cause its downfall.

Joseph Schumpeter died in 1950 while at work on yet another and perhaps his most erudite work: History of Economic Analysis. Two years later his wife Elizabeth Boody Schumpeter published the manuscript which detailed two thousand years of economic thought in well over one thousand pages of rich and stimulating prose.