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Capitalist development, innovations, business cycles and unemployment: Joseph Alois Schumpeter and Emil Hans Lederer

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Abstract

Emil Lederer and Joseph Schumpeter became life-long friends in their student days at the University of Vienna. The life and work of both economists took place in three states and four political cultures. After a short biographical information with emphasis on the linkages between Schumpeter and Lederer, section II addresses the influence of B¨ohm-Bawerk’s famous seminar in 1905–06 where both Schumpeter and Lederer first developed a greater interest in Marxian analysis. Next the role of the Archiv für Sozialwissenschaft und Sozialpolitik is covered, which in the years of the Weimar Republic was edited by Lederer with Schumpeter as an associate editor. Among many important papers in the Archiv we find also Kondratieff’s famous article on the long waves in economic life which had a strong impact on Schumpeter’s Business Cycles (1939). Lederer and Schumpeter both shared the view that capitalist economies normally are in dynamic disequilibrium. Business cycles are seen as an integral part of capitalist development. Emphasis in economic theory should therefore be put on the analysis of the short-run and particularly the long-run dynamics of the economy. In section IV Schumpeter’s analysis of business cycles and capitalist development is compared with Lederer’s analysis. In section V Lederer’s treatment of technological unemployment is analyzed and compared with the analysis of Schumpeter who considered technological unemployment as a special case arising from disturbance by innovations within the economic system. Finally, some reflections are made how far Schumpeter and Lederer were social economists.

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Notes

  1. Jacob Marschak, letter to Hans Speier, April 14, 1977. Hans Speier Papers, State University of New York at Albany.

  2. Schumpeter (1954: 884 n. 10).

  3. “I first ran up against him [Lederer] in Professor Philippovich’s seminar, if my memory serves me, in 1903. Though life separated us it always brought us together again and we never lost contact completely.” Schumpeter (2000: 331), letter to Alvin Johnson, March 17, 1941.

  4. For greater details see Hagemann (2000).

  5. For greater details see Schumpeter’s Letters (2000: 189–219) and Stolper (1994: 311-2).

  6. Schumpeter (2000: 246).

  7. Ibid: 247. In attributing the succession of Schmoller to Sombart, Schumpeter is confusing the two central chairs in Berlin.

  8. For a detailed analysis of Schumpeter’s early contributions on business-cycle theory and the development of his views over time see Hagemann (2003).

  9. See Schumpeter (1942: chpt. XII.3).

  10. 10 Streissler (1994: 30).

  11. See Section 3 ‘Economics of Socialism’ in the obituary of Lederer by Marschak et al. (1941: 93–100). For greater details on Schumpeter’s role see Stolper (1994: 202–214) and Swedberg (1991: 54–58).

  12. See Lederer (1919) and also pages 193–201 in the conference volume for the debate on Lederer’s contribution.

  13. 13 See Lederer (1919: 111).

  14. See Marschak (1924: 514).

  15. See Hayek (1940: 128).

  16. See, for example, Lederer (1925: 368) who explicitly refers to Schumpeter. For a modern assessment of the development of Lederer’s analysis of business cycles, crises, and growth see Allgoewer (2003).

  17. See chapter 3 on ‘Credit and Capital’ in Schumpeter ([1926](1934)).

  18. For a more detailed analysis of Lederer’s studies on technological unemployment see Hagemann (2009).

  19. See, for example, Lederer (1931: VI).

  20. Lederer (1931: 72n, my italics).

  21. See Lederer (1938: 198–214).

  22. See Hagemann (2008).

  23. See Schumpeter (1954: 944 n. 57), and Boianovsky and Trautwein (2008) for a more detailed analysis of Schumpeter’s theory of unemployment.

  24. See, for example, Shionoya (1997) and Swedberg (1991).

  25. On Schumpeter’s relationship with Max Weber, who had created the new discipline of economic sociology and also the notion of social economics, see Swedberg (1991: 92–3) and Perlman ([1994](1996)): 184).

  26. With all his disappointment and frustration about the failing offer to come from the University of Berlin, Schumpeter was surely unjust to Lederer and exaggerated when he wrote in a letter to Keynes on December 3, 1932, discussing the issue who could follow Schumpeter as the German correspondent of The Economic Journal, after Schumpeter’s move to Harvard: “he [Lederer] is a party man of the type which obeys orders without asking a question. And in all matters which can be brought into any relation at all with politics he is absolutely unable to see except through party glasses” (Schumpeter 2000: 230).

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  1. Institute of Economics (520), University of Hohenheim, 70593, Stuttgart, Germany

    Harald Hagemann

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Hagemann, H. Capitalist development, innovations, business cycles and unemployment: Joseph Alois Schumpeter and Emil Hans Lederer. J Evol Econ 25, 117–131 (2015). https://doi.org/10.1007/s00191-014-0358-4

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