Chapter 28 : JOSEPH A. SCHUMPETER (1883-1950)

JOSEPH A. SCHUMPETER (1883-1950)

Biographical Background and Major Works

• Joseph A. Schumpeter was born in the Austrian province of Moravia (now Czechoslovakia) in 1883.
• He was educated in Law and Economics at the University of Vienna.
• Political and Academic Career:
• He was a lover of peace and hated war, expressing anti-German sentiments during World War I.
• Served as Finance Minister of the Austrian Republic in 1919.
• Became a professor at the University of Bonn in Germany.
• Joined Harvard University in America in 1932 and taught there until his death in 1950.
• He was the first foreign-born economist to become the president of the American Economic Association.
• Major Works: Schumpeter was a great scholar whose works included exactly four major publications listed in the text:

1. "The Theory of Economic Development" (1934)
2. "Business Cycles" (1938)
3. "Capitalism, Socialism and Democracy" (1947)
4. "The History of Economic Analysis" (Edited posthumously by his wife).

Key Terms

📌 Exam Tidbits

• Joseph A. Schumpeter (1883-1950): First foreign-born president of the American Economic Association; served as Austrian Finance Minister in 1919.
• Enumeration: 4 major works listed (The Theory of Economic Development, Business Cycles, Capitalism, Socialism and Democracy, The History of Economic Analysis).

Intellectual Influences and Stance on Marxism

• Schumpeter was profoundly influenced by two major thinkers:
• Leon Walras: Schumpeter was highly impressed by Walras's emphasis on the interdependence of economic quantities.
• Karl Marx: Schumpeter greatly admired Marx's understanding of the process of economic change.
• View on Marx's Methodology: Schumpeter liked that Marx, while "criticizing and rejecting, or accepting and co-ordinating, he always went to the bottom of every matter."
• Stance on Capitalism vs. Marxism:
• Schumpeter was no Marxist; he was deeply devoted to the institutions of capitalism.
• However, he agreed with Marx's conclusion that capitalism was doomed.
• Crucial Distinction: The reasons Schumpeter gave for the fall of capitalism were entirely different from those given by Marx.

Key Terms

📌 Exam Tidbits

• Leon Walras: Influenced Schumpeter regarding…