Abstract
This paper analyzes Schumpeter’s concept of the entrepreneur in comparison to Kirzner and the Austrian School of Economics. For this purpose, the research uses the original German text as the reference, both the first larger edition of 1911 and the later shorter editions (mainly the seventh edition of 1987, which is an unaltered reprint of the fourth edition of 1934). To elaborate on the differences and similarities between Schumpeter and the Austrian approach, the study focuses on the aspects of equilibrium, discovery, speculation, capital, profit, institutions, and development. The analysis shows how the entrepreneur acts as the motor of economic development and how profit and profit expectations serve as the motifs of entrepreneurial action – both for the pioneer of innovation and the imitators. Different from the Austrian School, Schumpeter applies the concept of equilibrium in the neoclassical sense as the starting point of his dynamic analysis. The Schumpeterian entrepreneur is that economic actor who breaks the statics to push the economy toward development, which is not merely economic growth because development signifies that fundamental changes of the economy take place in the process.
Highlights
The capitalist system depends fundamentally on the action of the entrepreneur
The Schumpeterian model of innovation, in which seizing opportunities implies a process of disruption, is widely studied, including empirical investigations, while some of the Austrian approaches, as, for example, the Kirznerian model of discovery, remains still undervalued and suffers some neglect by the general entrepreneurship theory
Hayek (1937) shows that any market equilibrium analysis is based on data that change with economic activity
Summary
The capitalist system depends fundamentally on the action of the entrepreneur. The entrepreneur is the figure who gives life to products and services that other people have not imagined. The entrepreneur is the one who moves the economy forward by creating new goods and services and new methods of production. Both approaches combine the pivotal role of the entrepreneur with the consumer sovereignty. By deciding of what to buy or not to buy, the consumers decide over the fate of the entrepreneur Besides these obvious similarities, there are significant differences between the two approaches. The Schumpeterian model of innovation, in which seizing opportunities implies a process of disruption, is widely studied, including empirical investigations, while some of the Austrian approaches, as, for example, the Kirznerian model of discovery, remains still undervalued and suffers some neglect by the general entrepreneurship theory
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