Difference between revisions of "Joseph Schumpeter"
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Schumpeter argued that capitalism is constantly re-inventing itself through innovation and improvements for greater efficiency, which leads to economic benefits to the wider society as a whole, a process he called [[creative destruction]]. [[Unemployment]] and worker retraining are downside effects of creative destruction, as older industries are replaced by technological improvements, lower costs, and rising living standards in the greater population. | Schumpeter argued that capitalism is constantly re-inventing itself through innovation and improvements for greater efficiency, which leads to economic benefits to the wider society as a whole, a process he called [[creative destruction]]. [[Unemployment]] and worker retraining are downside effects of creative destruction, as older industries are replaced by technological improvements, lower costs, and rising living standards in the greater population. | ||
| − | Schumpeter's theory stands in contrast to [[Marxist]] economic theory, which focuses on keeping stale, outdated, and stagnant industries alive by eliminating the ruling class, operating on a thin margin, or forbidding [[profit]]-making completely, leaving nothing for maintenance, upkeep, improvements, or competitiveness. | + | Schumpeter's theory stands in contrast to [[Marxist]] economic theory, which focuses on keeping stale, outdated, and stagnant industries alive by eliminating oppressors and the ruling class, operating on a thin margin, or forbidding [[profit]]-making completely, leaving nothing for maintenance, upkeep, improvements, or competitiveness. |
Schumpeter saw that occurring, citing the disappearance of the capitalistic institutions that had fostered entrepreneurship in the late 1800s and early 1900s. | Schumpeter saw that occurring, citing the disappearance of the capitalistic institutions that had fostered entrepreneurship in the late 1800s and early 1900s. | ||
Revision as of 23:45, May 29, 2018
Joseph Schumpeter (1883-1950) was the leading Austrian-American economist in the first half of the 20th century.
He viewed the entrepreneur as the prime mover of capitalism, and that in seeking profits the entrepreneur creates innovative organizational methods and production techniques. This innovation causes economic growth, but also leads to business cycles, which leads to disfavor of capitalism.
Schumpeter argued that capitalism is constantly re-inventing itself through innovation and improvements for greater efficiency, which leads to economic benefits to the wider society as a whole, a process he called creative destruction. Unemployment and worker retraining are downside effects of creative destruction, as older industries are replaced by technological improvements, lower costs, and rising living standards in the greater population.
Schumpeter's theory stands in contrast to Marxist economic theory, which focuses on keeping stale, outdated, and stagnant industries alive by eliminating oppressors and the ruling class, operating on a thin margin, or forbidding profit-making completely, leaving nothing for maintenance, upkeep, improvements, or competitiveness.
Schumpeter saw that occurring, citing the disappearance of the capitalistic institutions that had fostered entrepreneurship in the late 1800s and early 1900s.