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Schumpeter's early work

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The social process is really one indivisible whole. Out of its great stream the classifying hand of the investigator artificially extracts economic facts. Joseph A. Schumpeter Theorie der wirtschaftlichen Entwicklung (1911)

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References

  1. This article draws heavily on chapter 2 in the author'sSchumpeter—A Biography (Princeton University Press, Princeton, 1991).

  2. Arthur Spiethoff, “Josef Schumpeter in Memoriam”,Kyklos 3 (1950), p. 291. The quote at the beginning of this article comes fromTheorie der wirtschaftlichen Entwicklung (1911) as translated in 1934 asThe Theory of Economic Development (Harvard University Press, Cambridge, Mass., 1934), p. 3.

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  3. See e.g. Joseph A. Schumpeter,Ten Great Economists (Oxford University Press, New York, 1951), p. 87.

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  4. Léon Walras,Correspondance of Léon Walras and Related Papers, edited by William Jaffe North-Holland Publishing Company, Amsterdam, 1965), vol. III, p. 385.

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  5. Erich Schneider, ‘Schumpeter's Early German Works, 1906–1917’, inSchumpeter, Social Scientist, ed. Seymour Edwin Harris (Harvard University Press, Cambridge, 1951), pp. 54–58.

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  6. —Ibid., p. 54.

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  7. See e.g. Richard Swedberg, ‘Joseph A. Schumpeter and the Tradition of Economic Sociology’,Journal of Institutional and Theoretical Economics,145 (1989), pp. 510–511.

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  8. Schumpeter's vita in Akt Nr. 9501 vom 8. März 1909 des k.k. Ministeriums für Kultus und Unterricht, Dep. Nr. VII, Allgemeines Verwaltungsarchiv, Vienna. Schumpeter also refers to this experience in a footnote inBusiness Cycles. See Joseph A.Schumpeter,Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process (McGraw-Hill Books Co., New York, 1939), vol. I, p. 223.

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  9. Joseph A. Schumpeter, ‘Über die internationale Preisbildung (Auszug)’,Statistische Monatsschrift, 10 (1905), pp. 923–928.

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  10. —Ibid., p. 923.

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  11. —Ibid., p. 925.

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  12. Schumpeter's contribution toStammbuch (II) der Philosophischen Fakultät der Universität Bonn of the Archives of the University of Bonn.

  13. Schumpeter to Lloyd S. Huntsman, May 26, 1941 (Harvard University Archives=HUA).

  14. Joseph A.Schumpeter,Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie (Duncker & Humblot, Leipzig, 1908), p. 20.

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  15. —Ibid.,Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie (Duncker & Humblot, Leipzig, 1908, p. xxi.

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  16. —Ibid.,Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie (Duncker & Humblot, Leipzig, 1908, p. xiv.

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  17. —Ibid.,Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie (Duncker & Humblot, Leipzig, 1908, p. vii. Emphasis added.

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  18. —Ibid., pp. 91, 575. Later in life Schumpeter would reevaluate his position and have a more positive opinion of the role of ideology in economics. Ideology would still be seen as detrimental to economics—but without a Vision (which inevitably includes ideology), there would be no progress in economic theory, Schumpeter now adds.

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  19. —Ibid., p. 90. Emphasis in the text has been removed.

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  20. See Max Weber, “‘Objectivity’ in Social Science and Social Policy”, inThe Methodology of the Social Sciences, tr. E. A. Shils and H. A. Finch (The Free Press, New York, 1949), pp. 49–112.

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  21. Schumpeter,Das Wesen,—, p.45.

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  22. —Ibid., p. 536. Emphasis added.

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  23. —Ibid., p. 540.

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  24. —Ibid., p. 553.

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  25. —Ibid., p. 536.

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  26. —Ibid., p. 28.

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  27. Schumpeter uses the term “Beschreibung” for theoretical economics. For the kind of description that historians engage in, he reserves the term “Deskription”. See e.g.—ibid., p. 289, 37, 42.

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  28. —Ibid., p. 43.

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  29. —Ibid., p. 44.

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  30. —Ibid., p. 94.

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  31. —Ibid., p. 573. I thank Murray Milgate for telling me about the intellectual history of the “sea level” and “equilibrium” analogy. According to Milgate, Walras got it from Turgot; and it actually goes back to at least some of the English mercantilists.

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  32. I owe this important point to Prof. Yuichi Shionoya.

  33. Das Wesen—, p. 184, 567.

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  34. —Ibid., p. 182–183.

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  35. —Ibid., p. 626.

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  36. Schumpeter in a letter to Edwin R. Seligman in 1913 as cited in Robert Loring Allen,Opening Doors: The Life and Work of Joseph Schumpeter (Transaction Press, New Brunswick, 1991), vol. 1, p. 132.

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  37. Friedrich von Wieser, ‘Review of Schumpeter,Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie’,Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft, 35 (1911), pp. 395–417; and Léon Walras to Georges Renard, December 24, 1908 —Correspondance of Léon Walras, p. 384.

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  38. Othamar Spann, ‘Die mechanisch-mathematische Analogie in der Volkswirtschaftslehre’,Archiv für Sozialwissenschaft und Sozialpolitik, 30 (1910), pp. 786–824.

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  39. ‘Professor Schumpeter, Austrian Minister, Now teaching Economic Theory Here’,The Harvard Crimson, April 11, 1944. See also Schumpeter to Taksyasu Kimura and Takumam Yasui, August 12, 1936 (HUA).

  40. Von Wieser, ‘Review of Schumpeter’—, p. 417.

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  41. See e. g. Schumpeter,Das Wesen—, p. 94, 198.

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  42. Schumpeter to Léon Walras, October 9, 1908 —Correspondance of Léon Walras, p. 378.

  43. Joseph A. Schumpeter,Essays (Transaction Press, New Brunswick, 1989), p. 166. Schumpeter describes how he changed his opinion of Walras in his preface to the Japanese translation ofTheorie der wirtschaftlichen Entwicklung, which is signed June 1937.

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  44. —Ibid

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  45. —Ibid. Emphasis added.

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  46. Joseph A. Schumpeter,Theorie der wirtschaftlichen Entwicklung (Duncker & Humblot, Leipzig, 1912), p. x.

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  47. 47.—Ibid., p. xi.

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  48. —Ibid., p. 487.

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  49. Joseph A. Schumpeter,The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle (translated by R. Opie; Harvard University Press, Cambridge, 1934) pp. 21–22. I shall often cite this English edition when discussing Schumpeter's 1911 book, since it represents the best-known version. The english translation is based on the second edition ofTheorie, which appeared in 1926. According to Schumpeter's preface to the second edition, “the argument itself has nowhere been altered” (even if there exist some other changes between the two editions) — see Schumpeter,Theory, p. xii. The two books, however, are often different; and it is, for example, often pointed out that the concept of innovation is missing from the 1911 version. But even if this is true, theidea of innovation is clearly present in the 1911 version. Schumpeter thus defines entrepreneurship in terms of putting together new ‘combinations”, and he distinguishes very clearly between entrepreneurs and inventors. See Schumpeter,Theorie (1912), pp. 158–159, 178–179.

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  50. —, p. 64.

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  51. —Ibid., p. 74.

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  52. —, p. 68.

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  53. —, p. 66.

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  54. Schumpeter,Theorie—, p. 529.

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  55. —Ibid. pp. 21–22.

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  56. Schumpeter,Theory— (Duncker & Humblot, Leipzig, 1912) p.65.

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  57. This quote, as well as the one in the preceeding line, come from—ibid. p. 82.

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  58. For a comparison between Schumpeter and Weber on this point see especially Edward Carlin, ‘Schumpeter's Constructed Type’,Kyklos, 9 (1956), pp. 27–42.

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  59. Schumpeter,Theory—, p. 93.

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  60. Here, as elsewhere in the text, I have decided to not present an overly detailed (and thereby technically correct) picture of Schumpeter's economic theory. Credit and capital are, for example, not identical in Schumpeter's scheme. For exact definitions, see—ibid. pp. 116–117.

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  61. —Ibid. p. 212.

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  62. —Ibid. p. 224.

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  63. Joseph A. Schumpeter,Theorie der wirtschaftlichen Entwicklung: Eine Untersuchung über Unternehmergewinn, Kapital, Kredit, Zins und den Konjunkturzyklus, 2nd edn (Duncker & Humblot, Leipzig, 1926), p. xiii.

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  64. Schumpeter,Theorie—, p. 464.

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  65. —Ibid. p. 518.

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  66. —Ibid. p. 56.

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  67. —Ibid. p. 526.

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  68. —Ibid. p. 535.

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  69. —Ibid. p. 535.

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  70. —Ibid. p. 538.

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  71. —Ibid. p. 546–547.

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  72. —Ibid. p. 548.

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  73. Schumpeter to David T. Pottinger, June 4, 1934 (HUA).

  74. Eugen von Böhm-Bawerk, “Eine ‘dynamische’ Theorie des Kapitalzinses”, inEugen von Böhm-Bawerks kleinere Abhandlungen über Kapital und Zins, ed. Franz X. Weiss (Holder-Pichler-Tempsky A.G., Vienna, 1926), vol. II, p. 585.

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  75. Joseph A. Schumpeter, “Eine ‘dynamische’ Theorie des Kapitalzinses: Eine Entgegnung”, inAufsätze zur ökonomischen Theorie (J.C.B. Mohr, Tübingen, 1952), pp. 411–412.

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  76. Schumpeter to Pottinger.

  77. See the bibliography by Massimo M. Augello on pp. 445–481 in Joseph A. Schumpeter, edited with an introduction by Richard Swedberg,The Economics and Sociology of Capitalism (Princeton University Press, New Jersey, 1991).

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  1. Sociologiska Institutionen, Stockholms Universitet, S-10691, Stockholm, Sweden

    R. Swedberg

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Swedberg, R. Schumpeter's early work. J Evol Econ 2, 65–82 (1992). https://doi.org/10.1007/BF01196461

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