Joseph Alois Schumpeter

Joseph Alois Schumpeter , 1883-1950, Austrian-American economist, LL.D. Univ. of Vienna, 1906. He began practicing law but turned to teaching two years later. He was professor of economics at the Univ. of Graz from 1911 to 1914 and at Bonn from 1925 to 1932, when he went to the United States; thereafter he was professor of economics at Harvard. He served (1919-20) as Austrian minister of finance. His major contributions to economics were the theory of the entrepreneur as the dynamic factor in fostering the business cycle and the theory of economic development of capitalism. His most important books are Theory of Economic Development (1911, in German; tr. 1934), Business Cycles (1939), Capitalism, Socialism, and Democracy (1942, 3d ed. 1950), and History of Economic Analysis (1954).

Bibliography: See study ed. by S. E. Harris (1951, repr. 1969).

Schumpeter, Joseph (1883–1950) A Moravian historical economist, whose interdisciplinary work addresses issues of interest to sociologists, and who taught throughout the Habsburg Empire, Germany, and the United States. Schumpeter himself saw sociology and economics as complementary disciplines, and often wrote about subjects which are today considered to lie within the province of the former, for example social class and imperialism.

Like both Karl Marx and Max Weber, Schumpeter was interested in the origins and development of the capitalist system, and attached similar importance to the profit-generating and risk-taking entrepreneurs who pioneered new products and techniques. This, together with his interest in the links between business cycle theory and capital formation, are characteristic features of the Austrian School of Economics—of which Schumpeter can therefore be seen as a direct descendant. His books included Theory of Economic Development (1912), Business Cycles (1939), and the best-selling Capitalism, Socialism and Democracy (1942). In the last of these, Schumpeter warned against both the tendency for entrepreneurs to be replaced by a more conservative class of industrial administrators, and the necessity of economic planning to encourage socialism. See also IMPERIALISM.