Joseph Schumpeter
Austrian economist who popularized creative destruction.
Joseph Alois Schumpeter was an Austrian political economist who served briefly as Finance Minister of Austria in 1919. He emigrated to the United States in 1932 to become a professor at Harvard University, where he remained until the end of his career, and obtained American citizenship in 1939. He is considered one of the most influential economists of the early 20th century and popularized the term 'creative destruction,' originally coined by Werner Sombart. His magnum opus is widely regarded as *Capitalism, Socialism and Democracy*.
- born
- February 8, 1883, Triesch, Habsburg Moravia (now Třešť, Czech Republic)
- died
- January 8, 1950
- field
- Political economy
- nationality
- Austrian; later American (1939)
- known_for
- Creative destruction, theory of business cycles, entrepreneurship
Lore & Background
Schumpeter was born in 1883 in Triesch, Habsburg Moravia, to German-speaking Catholic parents. His father died when he was four, and in 1893 he moved with his mother to Vienna. He was educated at the Theresianum and studied law at the University of Vienna under Eugen von Böhm-Bawerk, receiving his doctorate in 1906. He became a professor at the University of Czernowitz in 1909 and later at the University of Graz in 1911, where he remained until World War I. In 1913–1914 he taught at Columbia University as an invited professor, receiving an honorary doctorate.
Reader's Guide
Schumpeter's significance lies in his dynamic, innovation-based view of capitalism as an evolutionary process of 'creative destruction.' He argued that capitalism can only be understood through continuous innovation and the disruption of existing structures. His work on business cycles integrated multiple cycle lengths—Kondratiev, Kuznets, Juglar, and Kitchin—into a composite model. He opposed Marxism but believed socialism's triumph was inevitable in the long run. His posthumous *History of Economic Analysis* critiqued the 'Ricardian vice' of abstract modeling in Ricardo and Keynes. Despite harboring antisemitic views, he was a dedicated teacher at Harvard, known for heavy teaching loads and personal interest in students. His legacy includes influencing evolutionary economics and the study of entrepreneurship.
Did You Know?
- Schumpeter served as Finance Minister of Austria in 1919 and proposed a capital levy to tackle war debt.
- He was investigated by the FBI during World War II for suspected Nazi sympathies, but no evidence was found.
- Schumpeter considered Léon Walras the 'greatest of all economists.'
- His magnum opus, *Capitalism, Socialism and Democracy*, was published in 1942.
Notable Quotes (Wikiquote)
"Joseph Alois Schumpeter (February 8, 1883 – January 8, 1950) was an economist from Austria and an influential political scientist." — Joseph Schumpeter "Economists have never allowed their analysis to be influenced by psychologists of their time, but have always framed for themselves such assumptions about psychical processes as they have thought it desirable to make." — Joseph Schumpeter "The first thing a man will do for his ideals is lie." — Joseph Schumpeter "This civilization is rapidly passing away, however. Let us rejoice or else lament the fact as much as everyone of us likes; but do not let us shut our eyes to it." — Joseph Schumpeter
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