Profile Major Works Resources

Joseph A. Schumpeter, 1883-1950.

Portrait of J. Schumpeter

A product of the waning years of the Austro-Hungarian Empire, Joseph A. Schumpeter exemplified that heritage. Although a student of Böhm-Bawerk and Wieser, Schumpeter was never really a footsoldier of the Austrian School, but cut his own swathe through economics.

Joseph Alois Schumpeter was born in Triesch (Austrian Moravia), the only son of a cloth manufacturer. The Schumpeters were a long-established German Catholic family in a largely Czech town. After his father's early death in 1887, his mother moved to Graz, where Schumpeter received his elementary education.  In 1893, his mother re-married a military officer Sigismund von Keler and the family moved to Vienna.  His stepfather used his connections to secure Schumpeter's entrance into the prestigious Theresianum school as a day student.

Right after finishing high school, Schumpeter enrolled at the law faculty of the University of Vienna in 1901.  Initially interested in history, Schumpeter was lured into economics by his teachers Eugen Philippovich, Friedrich von Wieser and Eugen von Böhm-Bawerk   Schumpeter obtained his doctorate in law in February 1906, at the relatively young age of 23, and had no clear idea what to do next.  Schumpeter spent a summer studying economics in Berlin, then decided to go abroad.  Schumpeter spent a year in England, loosely affiliated with the LSE, ostensibly undertaking research for a project on English common law.   But in fact, Schumpeter spent much of his time as a man about town enjoying the delights of London.  In 1907, Schumpeter married Gladys Ricarde Sever, the daughter of an Anglican dignitary, and soon after took a job with an Italian law firm in Cairo, Egypt. It was a well-paid position and Schumpeter relished the high life of the expatriate elite. He finish his first major work on economic methodology (1908) while in Cairo. 

After two years in Egypt, encouraged by the reception of his book,  Schumpeter decided to return to Vienna and rejoin academia. Schumpeter submitted his habilitation thesis at Vienna and quickly obtained a job in March 1909 as assistant professor at the University of Czernowitz (east Galicia, now Ukraine) . It was while he was teaching at Czernowitz that Schumpeter wrote his Theory of Economic Development (1911), where he first outlined his famous theory of entrepreneurship. He argued those daring spirits, entrepreneurs, created technical and financial innovations in the face of competition and falling profits - and that it was these spurts of activity which generated (irregular) economic growth.  

Bored of provincial Czernowitz, Schumpeter moved on to become full professor of economics at the University of Graz in 1911.  Still quite young, the position was secured with critical assistance from Böhm-Bawerk.  Graz was then dominated by German Historicists, and Böhm-Bawerk deployed Schumpeter in an effort to capture Graz for the Austrian school.  Despite being saddled with a heavy teaching load (all economics courses were foisted on him), Schumpeter found time to write a stream of books and articles during this stage. Nonetheless, Schumpeter found the environment at Graz to be hostile.   He jumped at the opportunity to spend a year (1913-14) at Columbia in the United States.  When World War I broke out in 1914, Schumpeter's wife refused to return to Austria, and went back to England on her own (they were eventually divorced by 1920). Schumpeter's wartime years were spent rather unproductively in Graz.   Schumpeter opposed the war, partly out of Anglophilia, but also partly because of patriotism - Schumpeter feared the war boded ill for the Hapsburg empire, and was merely serving to increase Germany's dominance over Austro-Hungary.

After the war ended, in late 1918, Joseph Schumpeter surprisingly joined the German Socialization Committee in Berlin for Weimar Germany.  The invitation had been extended by old Austro-Marxist friends, Rudolf Hilferding and Emil Lederer, from his student days in Vienna, and Schumpeter accepted (as Schumpeter later quipped, "if someone wants to commit suicide, it is a good thing if a doctor is present").  After a few months of discussion, Schumpeter signed the majority report (written by the Marxists) rather than the minority report (of the liberals), agreeing that some kind of nationalization was necessary to make the German economy more efficient.

Schumpeter left Berlin in March 1919 to take up the more alluring offer to serve as Minister of Finance in the new rump state of Austria.  The government consisted of a fractious coalition of all parties, only notionally under social-democrat chancellor  Karl Renner.  Schumpeter was invited not for political reasons, but as a technician to solve the country's economic mess.   Unfortunately, the situation in Austria was impossible to manage, and Schumpeter presided over a period of raging hyperinflation, and was dismissed later that year.

After a brief return to teaching at Graz, Schumpeter decided to resign his professorship in 1921.  He migrated to the private sector and became the president of a small Viennese banking house. Ill-luck dogged him: his bank collapsed in 1924. He returned once again back into academia - taking up a teaching position at the University of Bonn (Germany) in 1925.

In 1932, Schumpeter failed in his bid to get the retiring Sombart's chair at Berlin University (it went to Lederer instead). Sensing his political leanings were not welcome in Weimar Germany, Schumpeter left to take up a position at Harvard, succeeding the Marshallian F.W. Taussig.  He was joined by Alvin Hansen, Wassily Leontief, Richard Goodwin, Paul Sweezy, John Kenneth Galbraith and fellow Austrian, Gottfried Haberler. Schumpeter ruled Harvard during the period of the "depression generation" of the 1930s and 1940s - when Samuelson, Tobin, Tsuru, Heilbroner, Bergson, Metzler, etc. were his students.

Although excelling as a teacher above everything, Joseph Schumpeter nonetheless wrote three more major books while at Harvard: his didactic Business Cycles (1939), his popular Capitalism, Socialism and Democracy (1942) - in which he famously predicted the downfall of capitalism in the hands of intellectuals - and his encyclopedic, History of Economic Analysis (1954, incomplete and published posthumously). In the first two, Schumpeter expanded upon his theory of entrepreneurship and theory of growth into a wider theory of the development of capitalism, integrating it into a business cycle theory and a theory socio-economic evolution.

Schumpeter's legacy is difficult to assess. Although an enthusiast of Walras and the Lausanne School, Schumpeter contributed little to it beyond praise. Although his early methodological works had contributed to the Methodenstreit against the German Historicists, the other Austrians had long written him off as one of the faithful.  And his old Marxian comrades of Berlin and Vienna certainly did not regard this man with conservative instincts as a fellow traveler.

Like Frank Knight, Schumpeter remains unclassifiable in our schema. Consequently, we give him the honor of founding "evolutionary" economics, given his concern with economic change brought about by the interaction between individuals and the economy as a whole, a concern with socio-economic history and institutions, but not enough to overshadow his search for an inherently theoretical explanation for the development of capitalism.



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Major Works of Joseph A. Schumpeter

  • "Über die matematische Methode der theoretischen Ökonomie", 1906, ZfVSV, p.30 [gb, av]
  • "Professor Clarks Verteliungstheorie", 1906, ZfVSV, p.325 [gb, av]
  • "Das Rentenprinzip in der Verteilungslehre", 1907, SchmJGVV, Pt. 1 (gb), Pt. 2 (gb)
  • "Einige Neuere Erscheinungen auf dem Gebiete der theoretischen Nationalökonomie", 1908, ZfVSV, p.402 (review of Jevons, Seligman, Bastiat, Carver, Fetter, etc.)
  • "J.B. Clark's Essentials", 1908, ZfVS, p.653
  • Wesen und Hauptinhalt der theoretischen Nationalökonomie,1908 [gb, av] [English title The Nature and Essence of Theoretical Economics; first chapter trans. as Methodological Individualism, 1980 mis]
  • "On the Concept of Social Value", 1909, QJE  [av],[McM]
  • "Bemerkung über das Zurechnungsproblem", 1909, ZfVSV  p.79 [av]
  • "Marie Esprit Leon Walras", 1910, ZfVSV.
  • "Über das Wesen der Wirtschaftskrisen", 1910, ZfVSV
  • "Die neuere Wirtschaftstheorie in der Vereinigten Staaten", 1910, SchmJGVV, p.913 [av]
  • "Neuere Erscheinungen auf dem Gebiete der Nationalökonomie", 1911, ZfVSV, p.240 [av]
  • Theorie der wirtschaftlichen Entwicklung: Eine Untersuchung über Unternehmergewinn, Kapital, Kredit, Zins und den Konjunkturzyklus, 1911 [hth] [English 1934 trans. The Theory of Economic Development: An inquiry into profits, capital, credit, interest and the business cycle] - Chapter IV (pdf)
  • Epochen der Dogmen- und Methodengeschichte, 1912 [repr. 1914, Grundriss der Sozialökonomik,  Abt. 1, Pt. A.2, p.19-124] [English 1954 trans: Economic Doctrine and Method: An historical sketch, mis]
  • "Eine 'dynamische' Theorie des Kapitalzinses: Eine Entgengung", 1913, ZfVSV,  p.599 [av] (reply to Böhm-Bawerk)
  • "Franz Oppenheimers Theorie", 1913, ZfVSV, 797 [av]
  • "Das wissenschaftliche Lebenswerk Eugen von Böhm-Bawerks", 1914, ZfVSV. p.454 [av]
  • Vergangenkeit und Zukunft der Sozialwissenschaft, 1915.
  • Die Krise der Steuerstaats, 1918 [av] [English title, The Crisis of the Tax State]
  • "The Sociology of Imperialism", 1919, Archiv für Sozialwissenschaft und Sozialpolitik
  • "Max Weber's Work", 1920, Der östereichische Volkswirt
  • "Carl Menger", 1921, ZfVS (trans: mis)
  • "The Explanation of the Business Cycle", 1927, Economica
  • "Social Classes in an Ethnically Homogeneous Environment", 1927, Archiv für Sozialwissenschaft und Sozialpolitik.
  • "The Instability of Capitalism", 1928, EJ
  • Das deutsche Finanzproblem, 1928.
  • "Mitchell's Business Cycles", 1930, QJE
  • "The Present World Depression: A tentative diagnosis", 1931, AER.
  • "The Common Sense of Econometrics", 1933, Econometrica
  • "Depressions: Can we learn from past experience?", 1934, in Economics of the Recovery Program
  • "The Nature and Necessity of a Price System", 1934, Economic Reconstruction.
  • "Review of Robinson's Economics of Imperfect Competition", 1934, JPE
  • "The Analysis of Economic Change", 1935, REStat.
  • "Professor Taussig on Wages and Capital", 1936, Explorations in Economics.
  • "Review of Keynes's General Theory", 1936, JASA
  • Business Cycles: A theoretical, historical and statistical analysis of the Capitalist process, 1939. v.1, v.2 [av] [pdf]
  • "The Influence of Protective Tariffs on the Industrial Development of the United States", 1940, Proceedings of AAPS
  • "Alfred Marshall's Principles: A semi-centennial appraisal", 1941, AER.
  • "Frank William Taussig", with E.S. Mason and A.H. Cole 1941, QJE.
  • Capitalism, Socialism and Democracy, 1942. [pdf]
  • "Capitalism in the Postwar World", 1943, Postwar Economic Problems.
  • "John Maynard Keynes", 1946, AER.
  • "The Future of Private Enterprise in the Face of Modern Socialistic Tendencies", 1946, Comment sauvegarder l'enterprise privée
  • Rudimentary Mathematics for Economists and Statisticians, with W.L.Crum, 1946.
  • "Capitalism", 1946, Encyclopaedia Britannica.
  • "The Decade of the Twenties", 1946, AER
  • "The Creative Response in Economic History", 1947, JEH
  • "Theoretical Problems of Economic Growth", 1947, JEH
  • "Irving Fisher's Econometrics", 1948, Econometrica.
  • "There is Still Time to Stop Inflation", 1948, Nation's Business.
  • "Science and Ideology", 1949, AER.
  • "Vilfredo Pareto", 1949, QJE.
  • "Economic Theory and Entrepreneurial History", 1949, Change and the Entrepreneur
  • "The Communist Manifesto in Sociology and Economics", 1949, JPE
  • "English Economists and the State-Managed Economy", 1949, JPE
  • "The Historical Approach to the Analysis of Business Cycles", 1949, NBER Conference on Business Cycle Research.
  • "Wesley Clair Mitchell", 1950, QJE.
  • "March into Socialism", 1950, AER.
  • Ten Great Economists: From Marx to Keynes, 1951.
  • Imperialism and Social Classes, 1951 (reprints of 1919, 1927)  (mis)
  • Essays on Economic Topics, 1951.
  • "Review of the Troops", 1951, QJE.
  • History of Economic Analysis, 1954. (ed. Elizabeth Boody Schumpeter)  [pdf]
  • "American Institutions and Economic Progress", 1983, Zeitschrift fur die gesamte Staatswissenschaft
  • "The Meaning of Rationality in the Social Sciences", 1984, Zeitschrift fur die gesamte Staatswissenschaft
  • "Money and Currency", 1991, Social Research.
  • Economics and Sociology of Capitalism, 1991.



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Resources on Joseph Schumpeter

  • "Review of Schumpeter's Das Wesen" by Adolphe Landry, 1909, RHDES, p.419
  • "Abstract Economics according to Schumpeter", by Alvin S. Johnson, 1909, JPE [av]
  • "Review of Schumpeter's Nature and Essence of Theoretical Economics", by George Ray Wicker, 1911, AER
  • "Review of Schumpeter's Theory of Economic Development", by John Bates Clark, 1912, AER
  • "Austrian exchange professor Josef Schumpeter" (Dec, 1913, p.69, pic), "Courses" (p.88), doctorate of letters received (Mar 1914, p.202), in Columbia University Quarterly, 1913-14
  • "Schumpeter's Dynamic Economics" by Benjamin M. Anderson, 1915, PSQ, p.645
  • "The Strangling of Austria", 1920, The Nation (Jan 17), p.72.
  • "Kapitel: Die mechanische-mathematishe Richtung von Schumpeter" by Karl Diehl, 1922, Theoretische nationalökonomie, v.1, p.304
  • International Joseph A. Schumpeter Society website.
  • European Association for Evolutionary Political Economy (EAPE) website
  • J.A. Schumpeter Page by Edward J. Harpham at UT-Dallas, including English-language bibliography
  • Schumpeter Page at McMaster
  • Schumpeter profile at Mises Institute (
  • "Joseph Schumpeter" profile by Robert Skidelsky
  • "Was Schumpeter Right After All?", by Robert Heilbroner, 1993, JEP [aea]
  • "Schumpeter vs. Keynes: In the long-run not all of us are dead", by Arthur M. Diamond, 2009, JHET [pdf]
  • "Schumpeter on the Integration of Theory and History" by Mario de Graca Moura, EJHET, 2003 [pdf]
  • "The Grand Pursuit of Alfred Marshall and Joseph Schumpeter: the firm, the entrepreneur and economic growth", by Sylvia Nasar, 2013, Proc APS [pdf]
  • "On the Laws of Capitalism: The Sweezy-Schumpeter debate", by J. Bellamy, 2011, Monthly Review [online]
  • "Why Schumpeter got it wrong on Capitalism, Socialism and Democracy" by Herbert Gintis, Challenge [pdf]
  • "Finance and Growth: Schumpeter might be right", by Robert G. King and Ross Levine, World Bank [pdf]
  • "Schumpeter might be right again: the functional differentiation of credit" by Dirk Bezemer, [pdf]
  • "Innovations, profit and growth: Schumpeter and Penrose" by John Cantwell, 2000/01 [pdf]
  • "Schumpeter and the Obsolescence of the Entrepreneur" by R. Langlois, 2002 [pdf]
  • "Schumpeter's General Theory of Social Evolution: The early theory" by Esben S. Andersen, 2006[pdf]
  • "Appraising Schumpeter's 'Essence' after 100 Years: From Walrasian Economics to Evolutionary Economics", by Esben S. Andersen, 2006 [pdf]
  • "Classifying and Citing Schumpeter's Works From the Perspective of English Availability" by Esben S. Anderson, 2007 [pdf]
  • "Fundamental Fields of Post-Schumpeterian Evolutionary Economics" by Esben S. Andersen, 2008 [pdf]
  • "A Strategic and Evolutionary Perspective on Entrepreneurial Dynamics: Reconciling Schumpeter with Kirzner", by John Matthews, 2006 [pdf]
  • "Schumpeterian Entrepreneurship" by A. Ohyama, S. Braguinsky and S. Klepper, 2009 [pdf]
  • Schumpeter: A biography by R. Swedborg, 1991
  • "Schumpeter the Superior: Review of Swedborg & Marz" by G. Hawthorn, 1992, London Rev Books [online]
  • Jospeh Alois Schumpeter: The Public Life of a Private Man by Wolfgang Stolper, 1994
  • Schumpeter and the Idea of Social Science, by Yuichi Shinoya, 1997
  • Entrepreneurs, institutions and economic change: the economic thought of J.A. Schumpeter by Niccolo de Vecchi
  • "Review of De Vecchi's Schumpeter" by Spencer J. Pack, 2000, HOPE [online]
  • Prophet of Innovation: Joseph Schumpeter and Creative Destruction by Thomas K. McCraw
  • "Heavy Thinker: Review of McCraw's Schumpeter" by Robert M. Solow, 2007, New Republic [online]
  • "Review of McCraw's Prophet of Innovation" by T.C. Leonard [pdf]
  • "Talking Capitalism: Review of Schumpeter and Galbraith" by Deirdre McCloskey [pdf]
  • "Interview with T.K. McCraw on Schumpeter" online at Harvard BS
  • "Schumpeter's TED: Review to a book that is almost 100 years old" by Alin Croitoru, J of Comp Research in Anthrop & Sociology, 2012 [pdf]
  • "Schumpeter in his own Words" by W.M. Cox, Economic Insights  of FRB Dallas [pdf]
  • "Schumpeter's Depressions" reviewed by Brad de Long blog
  • "Testing the Schumpeterian Hypothesis" by Z. Acs and D.B. Audretsch, 1988, EEJ [pdf]
  • "Schumpeter's Leadership Democracy" by Gerry Mackie, Political Theory [pdf]
  • Graz Schumpeter Center in Univ. Graz, Austria
  • Schumpeter page at [pdf]
  • Schumpeter entry at Concise Encyclopedia of Economics at Liberty Fund
  • Schumpeter entry in Britannica
  • Wikipeda


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