The Lost Chapter of Schumpeter’s & ‘E conomic Development’

Abstract

In the second edition of Schumpeter’s ‘Economic Development’ the seventh chapter of the first edition is left out. This note wonders why this decision was wise. After giving a summary of the chapter it examines the reactions after the first and the second editions and in later publications. Then follows an appraisal of form and contents of the seventh chapter. A conclusion believes that an adapted seventh chapter in the second edition would have given a better idea of the Schumpeterian world.

During his lifetime Schumpeter stood in Keynes’ shadow. Schumpeter’s Business cycles published just before the war could not outdo Keynes’ General Theory which came at the right moment. Since the seventies a Schumpeterian renaissance manifests itself. But already earlier Schumpeter’s intellectual superiority is stressed.

Comparing him to Schumpeter Heimann (1950, p. 402) characterises Keynes as ‘(U)n homme qui était son égal par le génie et l’étonnante facilité, mais de combien inférieur par la patiente autodiscipline de l’érudition’ and concludes - rightly in my opinion - that Schumpeter is ‘en tant qu’homme de science, le plus grand des deux’1 (p. 403). Joan Robinson believes that ‘in retrospect he (Schumpeter) will prove to be a more commanding figure than he was among his contemporaries’ (1953, p. 126). According even to H. Giersch ‘(T)he present quarter of the twentieth century is likely to become Schumpeter’s age’ (1984, p. 107).

In my textbook both Schumpeter and Keynes got a separate section. Schumpeter’s section ends as follows:

At a time when technical virtuosity in economics carries too much weight and has engendered many writings bearing little relation to reality, Schumpeter’s publications remind us that a good economist must view economics in a broad setting and have a working knowledge of other sciences, such as history and sociology (Meerhaeghe 1971, p. 488).

I thank Professor Jürgen G. Backhaus for his suggestion to deal with this subject. It proved an intellectually rewarding undertaking.

‘(A) man who was his equal in respect of genius and amazing ease, but far inferior in the field of patient self-discipline of erudition’ ‘As a scientist Schumpeter was greater’.