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Schumpeter: A Biography.

Ever since Joseph Schumpeter's death in January 1950 it has been remarked that he left no school. By now, however, there is an International Schumpeter Society, encouraging and publishing research in the tradition of Schumpeterian dynamics, and other volumes published independent of the Society. And now, too, there are two biographies, a two-volume work by an economist, Robert Loring Allen |1~, reviewed by Samuels |2~, and a single volume by a sociologist, Richard Swedberg, and a newly translated volume (originally published in 1983 in Vienna) of personal and intellectual biographical essays, by the late Austrian economist Eduard Marz. Allen and Marz were students of Schumpeter's at Harvard.

Swedberg's is more of an intellectual biography than is Allen's, though it too covers all the important details of Schumpeter's career in Europe and the U.S. Both biographies present the same dismal picture of Schumpeter's depression and sense of personal inadequacy, his arrogance and elitism, and his secret private religion centering on his late mother and second wife, treated as private saints. Both tell the same story of Schumpeter the man. Schumpeter loses his magisterial, larger-than-life image, although his enormous intellectual accomplishments remain.

Swedberg presents very sophisticated interpretations of Schumpeter's three "sociological" essays, those on the crisis of the tax state, imperialism, and social classes. Particularly impressive is Swedberg's sympathetic account of what Schumpeter tried to do, and in fact did, in his Business Cycles (1939). Generally, Swedberg shows how Schumpeter's "economic" works look different once one goes beyond interpreting them on the basis of economics defined as pure microeconomic theory. Both Swedberg and Allen stress that Schumpeter sought and to some extent achieved a broadly comprehensive definition of economics, the latter emphasizing Schumpeter's failure to achieve a determinate evolutionary model encompassing economic and social history. Distinctive in Swedberg's interpretation is the role of Gustav Schmoller's work for both Max Weber and Schumpeter.

Swedberg writes that Schumpeter was always "intensely aware that even if there exist several social sciences, there is only one social reality"; thus Schumpeter's Theory of Economic Development opens with the statement that "the social process is really one indivisible whole". By the same token, part of Swedberg's interpretation of Schumpeter's case for studying the history of economic thought is that "economics is not a self-sufficient and independent doctrine but part of society. It is . . . very important for an economist to contemplate the fact that economics is socially grounded . . .".

What distinguishes Schumpeter's intellectual work was his working out of these ideas of the nature of socioeconomic reality and of socio-economics. "The great problem for Schumpeter, as for some of his colleagues in Vienna, such as von Wieser," Swedberg writes,

was how to put all of these different approaches together. What role, for example, should history play in relation to economic theory? And what exactly was the role of sociology and statistics? During his career as an economist Schumpeter would answer these questions in different ways; sometimes he emphasized the role of abstract theory and at other times the role of economic history. But he always addressed these questions, and it is the way that he worked out these problems in his various writings which constitutes the major theme in his life-work as an economist.

This also meant that Schumpeter, as in his Theory of Economic Development, attempted "to grasp the whole economic process with the help of economic theory in combination with the other social sciences," and not independent of them. Thus Swedberg says that "Schumpeter's major project as an economist . . . was how to devise a way to encompass the whole economic phenomenon through economic theory and the adjoining social sciences . . . . |Schumpeter~ had been forced to change his earlier stance that economic theory should be radically cut off from the other social sciences".

Marz's essays typically present the relevant Schumpeter material against the background of some combination of economic history, contemporary writings of others, and selected subsequent work. The first five essays, on Schumpeter the economist, treat his theory in relation to Marxism; the Schumpeterian entrepreneur; the genesis of his theory of economic development; and the theories of imperialism and the crisis of the tax state.

The next three chapters examine the Bauer-Mises-Schumpeter socialization and socialist calculation controversies; the dating of cyclical periodization of the Austrian and German economies; and Schumpeter in relation to the Austrian School of Economics. The final two chapters examine Schumpeter's short career in 1919 as Austrian Minister of Finance and the author's recollections of Schumpeter the teacher at Harvard.

Marz is a perceptive interpreter and careful historian, especially in relating Schumpeter to Marx, Max Weber, and Austro-Marxism, and in discussing various critics of Schumpeter. He, too, notes Schumpeter's elitism and racism. Although Veblen is not mentioned in this connection, Schumpeter's ideas on the nature of predatory states with their predispositions to expansion and war are seen to be close to Veblen's. Marz also is perceptive with regard to Schumpeter's emphasis on the important role of the credit system in regard to forced saving. On the other hand, his application of the idea of a crisis of the tax state could have been less presumptuous.

Schumpeter dealt with fundamental questions of the economy, especially capitalism, as a system and anyone interested in his work thereon will find careful reading of these volumes quite rewarding.


1. Allen, Robert Loring. The Life and Work of Joseph Schumpeter. Two volumes. New Brunswick, N.J.: Transaction, 1991.

2. Samuels, Warren J. Review. Journal of Economic Literature, 30, March 1992, 179-81.
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Author:Samuels, Warren J.
Publication:Southern Economic Journal
Article Type:Book Review
Date:Apr 1, 1993
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