I recently finished listening to an audiobook about the Austrian economist Joseph Schumpeter, who lived from 1883 to 1950. He eventually emigrated to the United States, and obtained U. S. citizenship. This was a good audiobook about him, and seemed to offer a good summation of his life's work. But I have somewhat mixed feelings about Joseph Schumpeter's ideas.
On the one hand, he was a defender of capitalism, who believed that it was the best system. On the other hand, he believed that there were inherent weaknesses in the system, which he believed made it likely that it would be replaced by socialism. Unlike Karl Marx, he did not believe that the coming of socialism was “inevitable,” but he did believe that socialism could actually exist – unlike the vast majority of free-market economists, before and since his time. He was heavily influenced by the Austrian school, which has tended to favor free-market economics. But he also had some influence from Karl Marx, so his philosophy is something of a mixed bag for someone like me.
Joseph Schumpeter
Some of his contributions are well-remembered by economists of all kinds, such as his analysis of different kinds of competition. Economists have often used a model known as “perfect competition,” which has a number of assumptions that are not entirely realistic. For example, they assume homogeneous products that are made identically by different competitors. At the other end of the spectrum, economists had once spoken of “monopolistic competition” – where no two companies offer exactly the same product, but nonetheless compete with one another. (For example, a golf course may be competing for the same entertainment budget as a movie theater, despite the fact that golf is very different from cinema.) Despite their noting of these complications, their model was still vastly oversimplified, and was in need of a more nuanced approach from a later generation of economists.
In practice, both extremes are somewhat rare. Schumpeter was able to show that it was indeed a spectrum, which was more complex than the economic models that had come before it. This is why he is often remembered favorably, even by economists who disagree with parts of his political theory. I count myself among those who disagree with parts of his work. Nonetheless, I enjoyed this presentation about him, which helped me to put his work into the context of the times. It was a good primer on his theories.
See also:
Part of the audiobook series
Great Economic Thinkers
Joseph Schumpeter and Dynamic Economic Change
See also the audiobook series
Secrets of the Great Investors
Others to be covered later
See also the audiobook series
The Giants of Political Thought
Others to be covered later
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