Chris Coyne
David Saito-Chung has an article at Investor's Business Daily on how "Joseph Schumpeter spoke out for Capitalism."
Here is an excerpt:
In his view, classes did not form because of capitalism. They formed because people spent more time with other people of the same background, interests and social standing. Schumpeter argued that if a man wanted to reach a higher class, becoming an entrepreneur gave him that chance...
Schumpeter saw that investors fuel capitalism because they finance new ideas. They provide credit, knowing all the while that they could lose 100% of their investment.
Our very own Pete Boettke is quoted as well:
Peter Boettke, a professor of political economy at George Mason University in Virginia, likens capitalism's success to a horse race.
One horse, named Schumpeter, represents innovation. The second horse, called Smith, stands for free trade. The third is government "and its stupid decisions," Boettke said.
"As long as the first two horses stay ahead of the stupid horse, the economy's cycles are manageable," he told IBD. "The trouble happens when the stupid horse's nose gets in front by (creating) policies that restrict trade or are anti-technology."
The stupidity horse seems to have taken a lot of steroids lately.
Posted by: Steve Miller | November 10, 2009 at 05:46 PM
Slightly off-topic : Czernowitz is the German name of the city of Cernăuţi, the main city of the Dutchie of Bucovina (German Buchenland, "The Land of the Beech Tree"), historically a part of the High Country of the Principality of Moldova, a region which was annexed by the armies of Empreror Joseph II of Hapsburg in 1775 - after the war between the Russian and the Ottoman empires - and which was defended with his life by Prince Grigore III Ghica of Moldova. Half of it will be annexed by a different empire almost two centuries later.
Posted by: Bogdan Enache | November 11, 2009 at 01:23 AM
Did you see Krugman's recent criticism of Schumpeter? http://www.economicthought.net/2009/11/on-unemployment-and-industrial-restructuring/
Posted by: Jonathan Finegold Catalán | November 11, 2009 at 03:17 AM
For some reasons many people think that the Austrian school is dead, yet I see their ideas even on slashdot.org.
I wonder if associating Schumpeter with this school will not do a lot of damage.
Posted by: Niko | November 11, 2009 at 03:59 AM
Schumpeter: pour Mengerian, Walrasian, Nietzschean, and Weberian theories into a saucepan, then stir. Add two tablespoons of irony and sprinkle a little pessimism and cynicism. Note: better served as an appetizer than as a main course.
Posted by: David EA | November 11, 2009 at 04:41 AM
Great description of Schumpeter, David.
Posted by: Roger Koppl | November 11, 2009 at 12:00 PM
Schumpeter is eminently fair to different and divergent schools of economics, including the Austrian School. He is especially good on Hayek. His treatment of the late Spanish Scholastics is still a standard reference.
Posted by: Jerry O'Driscoll | November 11, 2009 at 02:51 PM
Hear's the stupid horse. It is the platform of the modern Democratic Party to lift up the impoverished, salute the failure, reward the takers, applaud the indecisive and elevate the self-centered to assure us more of these in the future. In giving away the treasure of the nation, they increase the line for hand-outs beyond all ability to satisfy. The downward slope increases its steepness and slip each moment. The result is to assign a willing dictator the control and management of what remains. Is this the future of America, once the greatest nation in the world for individual freedom and prosperity? The 19th century Democrat was the libertarian following Jefferson, cited in THE CHANGING FACE OF DEMOCRATS on Amazon and claysamerica.com. The 20th century Democrat follows Rousseau and Marx and condemns individual freedom, the free market and American exceptionalism to the ash heap of history, all at the hands of Obama and his cadre of communists. Khrushchev was right, that we will impose communism on ourselves, and we are doing it right now.
Posted by: Clay Barham | November 11, 2009 at 05:03 PM
Schumpeter on the profession:
“It would seem that the scientific profession does not always absorb novelties with alacrity. Moreover, professors are men who are constitutionally unable to conceive that the other fellow might be right. This holds for all times and places.”
"Science progresses through the old professors' dying off."
And the young ones killed off?
Posted by: DG Lesvic | November 14, 2009 at 12:14 AM
There's an article on what Schumpeter might say about the health care debate on lastingliberty.com. It's a good read. http://lastingliberty.squarespace.com/timeless/2009/11/8/bigger-than-healthcare.html
Posted by: Tom | November 16, 2009 at 12:41 AM