Joseph Schumpeter (1883 – 1950)
Economist from Austria and an influential political scientist.
Lack of outlets, excess capacity, complete deadlock, in the end regular recurrence of national bankruptcies and other disasters-perhaps world wars from sheer capitalist despair-may confidently be anticipated. History is as simple a that.
The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U. S. Steel illustrate the same process of industrial mutation-if I may use that biological term-that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.
The trouble with Russia is not that she is socialist but that she is Russia.
As a matter of fact, capitalist economy is not and cannot be stationary. Nor is it merely expanding in a steady manner. It is incessantly being revolutionized from within by new enterprise, i.e., by the intrusion of new commodities or new methods of production or new commercial opportunities into the industrial structure as it exists at any moment.
Innovation is the market introduction of a technical or organisational novelty, not just its invention.
However, if Marx had not been more than a purveyor of phraseology, he would be dead by now.
Geniuses and prophets do not usually excel in professional learning, and their originality, if any, is often due precisely to the fact that they do not.
Nothing is so treacherous as the obvious.
Situations emerge in the process of creative destruction in which many firms may have to perish that nevertheless would be able to live on vigorously and usefully if they could weather a particular storm.
Want and effective demand are not the same thing. If they were, the poorest nations would be the ones to display the most vigorous demand.
It is quite possible that future generations will look upon arguments about the inferiority of the socialist plan as we look upon Adam Smith's argument about joint stock companies which, also, were simply false.
Gentlemen, a depression is for capitalism like a good, cold douche.
Cassel is 10 per cent Walras and 90 per cent water.
Nothing is so retentive as a nation's memory.
To realize the relative validity of one's convictions and yet stand for them unflinchingly is what distinguishes a civilized man from a barbarian.
Capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.
Schumpeter was the most romantic of economists, and capitalism to his eyes had all the glamor and excitement of a knightly jousting tourney.
For one thing, to predict the advent of big business was considering the conditions of Marx's day an achievement in itself.
Capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defense they may hear; the only success victorious defense can possibly produce is a change in the indictment.
In economic life competition is never completely lacking, but hardly ever is it perfect.