Schumpeter Research Articles

Law and Religion: Destruction and Reconstruction

Diritto e religione: decostruzione e ricostruzione ABSTRACT. In the 1940s, Austrian economic Joseph Schumpeter coined the concept of “creative destruction” to describe how capitalism evolves through the relentless and continuous dismantling of its old paradigms. Fast forward to the present, British and American scholars Russell Sandberg and Marc O. De Girolami are emerging today as contemporary “creative destroyers” in the field of law and religion. Pointing to the pathologies affecting the intellectual development of the discipline and prescribing possible remedies, this paper introduces and discusses two recent works by the Authors as part of their efforts to critically deconstruct law and religion and project it into the future. SUMMARY: 1. Introduction - 2. Repentance - 3. Reappraisal- 4. Regeneration - 5. Discussion - 6. Death and New Life - 7. Conclusions.

Joseph Schumpeter, Allyn Young, and the future of capitalism

Schumpeter placed the entrepreneur and innovation at the center of capitalism and thought that once monopoly capitalism inevitably emerges, the link between individual initiative and innovation will be broken. Capitalism will then undermine its own institutional context and socialism would ultimately emerge. But his support for socialism was nuanced and restricted to mature capitalism; for him, unfettered capitalism was preferable to socialism with fascist features. For Young Smith’s relationship between the division of labor and market size was central to growth, and the role of the entrepreneur was more to find markets than innovation. The objective of this paper is to analyze the contrasting views of Schumpeter and Young on endogenous process of growth and the future of capitalism itself, particularly pertaining to the emergence of monopoly capitalism.

On knowledge and economic transformation: Joseph Schumpeter and Alfred Marshall on the theory of restless capitalism

ABSTRACT Joseph Schumpeter and Alfred Marshall pioneered the study of innovation and entrepreneurship as key forces of economic development. This article offers an overview of key ideas developed by these influential economists in works published between 1890 and 1944. We argue that while our own time presents a partly different set of challenges, opportunities and institutional conditions than those of that age, many insights championed in their work remain highly relevant for our time and day. Noting how analysis of markets is relatively absent from some of the strands of contemporary innovation research, we suggest that re-visiting the foundational work of Schumpeter and Marshall can help stimulate deep insights relevant to societal transformation and the potential role of technical innovations.

Cultural Innovation in Indonesia as a Development of the Creative Economy

Culture is a part of life that regulates the norms and habits of society. Culture takes two forms: material culture and non-material culture. Through the Creative Economy Agency, the creative economy has been promoted as one of the new pillars of the Indonesian economy. This study aims to analyze the culture-based creative industry as an option for advancing the creative economy in Indonesia. This study applies the theory of economic development by Joseph Alois Schumpeter to emphasize the creativity of entrepreneurs in using existing production factors to support economic activity. Data was collected from secondary data related to the cultural and creative economy. The results show that the creative industry in Indonesia has emerged as the answer to the creative economy system and has also shown rapid development. Practically, in Indonesia, abundant opportunities exist for a culture-based creative economy, spanning various sectors such as arts and tourism, awaiting innovation by industry actors. Government facilitation and increasing engagement from individuals further support this burgeoning creative landscape, aligning with the Ministry of Tourism and Creative Economy/Tourism and Creative Economy Agency’s mission to bolster Indonesia's economy by 2030 through successful synergy between government and industry

The Catholic Church in Hungary and Romania during the Communist Dictatorship: A Comparative Analysis

The structure and cultural characteristics of a society are, in the words of Joseph Schumpeter, “like metal” – they bend and melt but do not readily evaporate. My comparative analysis confirms the diagnosis that the everyday presence of dictatorship cannot be adequately described by the standard top-down models of ideologically driven communist power. The substantive differences in developments between Hungary and Romania suggest that external power is only part of the construct, however rigid the hegemonic structure. By looking at the reactions caused by similar effects in different contexts, it becomes clear what has an impact on what. The relationship of the churches to the state in the countries under study includes similarities and differences shaped by distinct historical trajectories that are partly structural and partly situational. In terms of circumstances, Romania’s Orthodox pattern regarding the relationship between the state and the church also determined the relationship with other denominations and sealed the fate of Greek Orthodox Catholics. The measures taken against Roman Catholics, although more or less the same as in Hungary, also tended more towards the state-church model. However, this feature was not the primary cause of the different impact in Romania compared to Hungary. This is because, just as the relationship between church and state differed from country to country, so did the relationship of the churches to their own “national” societies. Further, no matter how tempting it might be to consider the Catholic Church a closed entity, the comparison clarifies that neither the hierarchical division nor the same (Catholic) norm made behaviour uniform. The differences arising from local configurations of the single norm grew more and more evident in the 1950s. All this suggests that state and church strategies and actions were shaped more by the conflict of contexts and pressures to comply than by the tension between the scope of action and the constraints: the differences between Romania and Hungary are explained by the different contexts and the cross-generational ecclesiastical and social patterns A greater historical understanding explains how bishops in Hungary, in line with previous conditions and established practice, hoped for quasi-freedom in church operations through a “partnership” with the state while the Roman Catholic Church in Romania has been operating under exlex conditions for four decades. That does not mean that a rational-legal approach on its own is the key to understanding what has occurred. Under a dictatorship, we can identify deviance, excesses, abuses and arbitrary actions in relation to the law. However, these “models” can only be understood in the context of processes that transcend political history. The behaviour of the authorities in Bucharest towards the Catholic Church has been dramatic compared to other countries under Soviet influence. With the arrests of Áron Márton and Anton Durcovici, the public hierarchy appointed by the Holy See ceased to exist. The elimination of dioceses by the state was also a unique feature. The resistance organised by the Jesuits and Franciscans, with the support of the faithful, successfully paralysed the ecclesiastical administration, which had been put in place due to state intervention after the arrest of Áron Márton. This process was largely due to the church’s strengthened social embeddedness in previous years and its successful adaptation of strategies developed to cope with its minority status. Over the centuries, the Catholic Church in Transylvania has faced a series of challenges that have threatened its very existence. These pressures have also shaped the thinking of its clergy and its relationship with its faithful. The recoveries from crises have led to innovative and flexible adaptation strategies, making the local church “tough” and thus contributing to its management of the next crisis. The mentality of the church, which was minimally domesticated or determined by the secular power, showed fewer Josephine traits than in Hungary. The relationship between church and state tended towards the passive model, while the relationship between church and society tended towards the active model. The Catholic Church’s double minority status in Transylvania during the Communist years – minority as a Hungarian and minority as a Catholic – created an alternative society that did not allow it to abstain entirely from politics. Beyond individual choices, this also made its confrontational position more flexible and its submission more moderate.

Creative Destruction versus Robert Frank’s Progressive Consumption Tax

Joseph Schumpeter, like Ludwig von Mises, thought of capitalism as a process that often, over time, turned luxuries into necessities. Schumpeter warned that assessments that ignored this process, which he termed creative destruction, would misconstrue the social results that arise from capitalism in practice. This article exposes the applicability of this warning to the analyses of positional-good consumption presented by Robert Frank which led him to conclude that a steeply progressive tax on consumption would constitute a free-lunch, bringing in “trillions of dollars” without the loss of “anything of enduring value.”

A Critical Analysis of the Financial Frictions Approach in a Minskyan Perspective

The concept of financial frictions is at the core of the Financial Frictions Approach (FFA) which underlines that to explain the financial crisis of 2007–2008 it is sufficient to add the financial system to the New Keynesian Dynamic Stochastic General Equilibrium (NK-DSGE) model. Many economists have cited Hyman Minsky among those who “emphasized the importance of financial frictions.” The aim of this work is: 1) to show that Minsky cannot be considered the precursor of the FFA and that FFA does not allow for a solid explanation of financial crises; and 2) to present a sound explanation of the financial instability affecting capitalist economies based on two teachings characterizing Minsky’s work. The first consists in Minsky’s interpretation of John Maynard Keynes’s General Theory, which recovers the revolutionary elements of Keynes’s thought neglected by the Neoclassical Synthesis. The second teaching consists in underlining the need to integrate Keynes’s and Joseph Schumpeter’s theoretical frameworks.

Reception History and the Historiography of Economics

This paper explores reception history as a framework for historians of economics in the light of the impasse between contextual and traditional historiography. It focuses on the particular reception history approach of the German literary critic Hans Robert Jauss, which is grounded in the philosophical hermeneutics of Hans-Georg Gadamer. Jauss’ reception approach is outlined and then compared to the contextual historiography of Quentin Skinner, and Donald Winch, as well as to the traditional historiography of economics exemplified by Joseph Schumpeter, George Stigler, Paul Samuelson and Mark Blaug. I argue that Jauss’ reception history framework encompasses the contextual and traditional approaches, picking up the attention of original readers which is the strength of the contextual approach, while also validating attention to contemporary economist readers. It provides tools for more self-conscious attention to the multiple contexts involved in the study of past economic texts. It thus offers a way forward in the historiographical impasse facing contemporary historians of economics.

Epistemological and ontological indeterminism: Hayek and Schumpeter

The aim of this article is to compare and contrast the ideas of Friedrich von Hayek and Joseph Alois Schumpeter, who both adopted an indeterminist approach in their economic analyses, through a discussion of their relative strengths and weaknesses. The analysis makes extensive references the ideas of Karl Popper and Roy Bhaskar because of their profound impact on philosophical as well as economic thought. The article examines the indeterminism that marks the theories of Hayek and Schumpeter from an ontological and epistemological standpoint. More specifically, it addresses Popper and Hayek on the side of epistemological indeterminism as they theorized indeterminacy on the basis of the uncertainty of the future, and temporality in general, as well as the everchanging and always incomplete nature of knowledge, whereas it analyzes Bhaskar and Schumpeter as ontological indeterminists who saw indeterminacy as resulting from the nature of economic and social systems. The article?s conclusion is that epistemological approaches to the study of indeterminacy are bound to remain within a static framework and that an ontological reasoning is needed for a transition to a dynamic framework. In other words, the reasons lying behind discontinuity in economic systems can be found only within the inherent characteristics of those systems. Therefore, any economic analysis should start with a careful assessment of the social reality?s nature, because faulty assumptions about it will inevitably lead to disconnect between theory and practice.

СВЯЗЬ НЕРАВЕНСТВА ДОХОДОВ И НАУЧНО-ТЕХНИЧЕСКОГО ПРОГРЕССА С ТОЧКИ ЗРЕНИЯ ПОЛИТЭКОНОМИИ

The article analyzes the views of scientists of the late 20th and early 21st centuries on the question of whether there is a connection between income inequality and the development of the digital economy. Based on an analysis of the works of Lawrence F. Katz, David Autor, David Deming, Dani Rodrik, Robert Solow, Joseph Schumpeter and Klaus Schwab, the author answers the research question – what factors are determining for the generation of inequality in the digital economy. As such factors, the author identifies globalization, a reduction in the share of labor in the world GDP with a simultaneous reduction of the capital profitability, an increase in economic rent from the possession of technology, and a greater profitability for capital compared to labor from the introduction of technology. As a result of a comparative analysis of the concepts set out in the works of the above mentioned authors, it is concluded that they all recognize the fact that as a result of the introduction of new technologies, there is an increase in inequality. It was also found that the IT industry is developing according to the same laws as conventional production. As a new technology is widely introduced, it becomes «routinized,» and accordingly, as a large number of workers master the technology, wages fall. Moreover, the development of technology can, in principle, lead to layoffs of workers, which further deepens the problem of inequality. To verify the results of the analysis, the author analyzed statistical indicators for achieving SDG 10 «Reducing inequality within and between countries» based on the annual UN Sustainability Report. It was found that the target will not be achieved by 2030, but it significantly lays behind the other 16 SDGs. Thus, the author’s hypothesis about the growth of income inequality under the influence of digitalization processes is confirmed.

Entrepreneurial Management Structure and Performance of Small and Medium Livestock Enterprises in Kenya

The purpose of this study was to investigate the relationship between entrepreneurial management structure and the performance of small and medium livestock farms in Kenya, with a focus on examining the moderating effect of the regulatory framework on this relationship. The study was grounded in key theoretical frameworks, including Joseph Schumpeter’s theory of innovation, Knight’s Uncertainty Bearing theory, McClelland’s theory of motivation, the Resource-Based View theory, and the Neo-Classical Theory of Management (Elton Mayo). These theories provided a comprehensive understanding of the factors influencing entrepreneurial success in the livestock sector. A mixed research design was adopted, targeting a population of 500 livestock enterprises in Turkana County. Stratified sampling was employed to ensure representation across different enterprise sizes, resulting in a sample of 196 entrepreneurs. Data was collected using meticulously designed questionnaires, and the validity and reliability of these instruments were confirmed through pilot testing. The analysis revealed that entrepreneurial management structures, when effectively aligned with supportive regulatory frameworks, significantly enhance the performance of small and medium livestock enterprises in Kenya. To further strengthen the livestock sector, the study recommends that SMEs adopt comprehensive strategies, including product diversification, differentiation, cost reduction, and internationalization. Additionally, technological and innovation incubators should play a crucial role in ensuring that new technologies are relevant, compatible, and beneficial to the livestock sector. Government intervention is vital, with the need for incentives to enhance competitiveness, alongside strategies to retain market share in a challenging environment. The study also emphasizes the importance of implementing performance-based reward schemes and continuous managerial training to boost decision-making and enterprise success. Moreover, robust anti-corruption policies and streamlined tax systems are essential to reducing bureaucracy in the livestock value chain. These findings are expected to benefit a wide range of stakeholders, including entrepreneurs, policymakers, implementers, and the broader public, contributing to sustainable growth in the livestock sector.

Cooperative Entrepreneurship: Future Back Thinking, Translation, and Digital Organizational Change in the Credit Union Space

In this essay, I examine cooperative entrepreneurship’s role in driving digital organizational change in a Southern California credit union that caters to a mobile university population. Drawing on Joseph Schumpeter’s interpretative approach to entrepreneurship, I highlight the pivotal role of an innovative CEO in combining a new technology, AI chatbots, with the credit union’s existing technologies to create a new means of production in a contact center: AICCs or Artificial Intelligence Contact Center Agents. I extend Schumpeter’s theory by showing both how future-back thinking can generate ideas for new methods of production, and how acts of translation can help align these methods with local organizational values, overcoming resistance to change. I suggest that such combinatorial activity can help credit unions to sustainably compete against a new breed of financial technology companies known as fintechs.

Eccentric Circles: Rudolf Goldscheid and the Unrealized Goal of Menschenökonomie during the Era of Socialization

Abstract This article explores the sudden rise in popularity and limited long-term impact of Rudolf Goldscheid's work around the time of the Great War. Goldscheid is remembered as a founder of central European sociology, a creator of fiscal sociology, and a fin-de-siècle feminist and pacifist. His reputation ranks behind many of his peers in the social sciences, however. A reevaluation of Goldscheid's position within the fin-de-siècle intellectual landscape of Vienna and central Europe reveals why his sudden success—which was really decades in the making—did not endure in the same way as that of Joseph Schumpeter or Otto Neurath, among others. Goldscheid's ideas seemed innovative in the revolutionary years 1918–1920, yet they were frequently misunderstood. His eccentric position in the socio-liberal sphere of fin-de-siècle Vienna seemed to mute his political impact after the war. A better appreciation of Goldscheid's work not only enriches our understanding of his innovative proposals but also illuminates a frenetic, experimental era in central European history.

Schumpeter’s Gesetz and Gestalt in space: exploring evolutionary economic geographies of money and finance

Abstract This paper argues that money and finance are not sufficiently integrated into the research agenda of evolutionary economic geography (EEG). I identify two dimensions of Joseph Schumpeter’s vision of the inherent instability of capitalism as promising for the EEG research agenda: First, the ‘law’ (Gesetz) of a disequilibrating role of credit creation and innovations in financial relations reveals the deeply ‘monetary character’ of his theory of development. Second, Schumpeter’s vision of an evolutionary ‘form’ (Gestalt) of capitalism describes a social process that rests on macro-drivers of institutional change. Money and finance thus simultaneously act as both static indicators and dynamic drivers of economic development in space.

Ibn Qayyim al-Jawziyya's Himma

Risen to a prominent role in the 2030 visions of economical and societal transformation of several Arab nations of the Gulf, entrepreneurial leadership has emerged as a new paradigm of disseminated leadership whose function has less to do with notions of political power and hierarchy and more with the shared task of converting vision into reality. Yet the link between entrepreneurship and Islam has only received limited attention at the individual level thus far. Following the multiple semantic thread of the Arabic word himma, this article seeks to further the discourse by exploring the distinctive account of the word emerging from the writings of the Ḥanbalī scholar Ibn Qayyim al-Ǧawziyya. By bringing into a dialog the implications of this account with the classic portrait of the entrepreneur by the economist Joseph Schumpeter, the contribution of the Damascene scholar comes to light as particularly meaningful and momentous for furthering the discourse on entrepreneurial leadership as an expression of the Islamic tradition and opens the door to further inquiries into a topic of the highest relevance for a new generation of Muslim leaders across geographies.

Principles of Shaping and Composition of the Management Staff of Polish Industry (1945–1956)

Numerous studies on the economies of socialist countries indicate that one of the main sources of their weakness was the attitudes and behavior of “socialist managers”. Contrary to the predictions (e.g. by Joseph Schumpeter), they were not characterized by entrepreneurship, innovation, the ability to lead changes or the ability to formulate strategies. This was due to the nomenclature system existing in all countries of the Soviet bloc. Nominations, promotions, but also dismissals were at the discretion of party bodies. It was the main source of the communist party’s dominance in the country and the fundamental factor guaranteeing control over all spheres of social and economic life. Determining why the nomenclature system turned out to be dysfunctional requires considering three issues: what were the goals of the communist personnel policy, what methods were used to implement it, and finally who were the people appointed to perform managerial functions in the economy. We will focus our analysis on the management of Polish industry in the years 1945–1956. This is because it was the most important sector of the economy of the People’s Republic of Poland, and the personnel policy mechanisms developed at that time remained valid until the end of the “real socialism” system.

From the Pandemic to Restructuring to Disruptive Corporate Behavior: 2023 as the Inevitable Year of Efficiency

Joseph Schumpeter’s concept of creative destruction is being put to the test as each month of 2023 passes with the process of economic evolution and recreation being witnessed as a rapid pace of change is upon us. Mark Zuckerberg’s pronouncement of 2023 as the year of efficiency was not a prediction but rather a description of the events that have unfolded in the Tech industry that has also spilled over to other key economic sectors. Are we seeing a normal evolution of the development of the next phase of economic realities or a major upheaval of the system to correct decisions and actions of the past that were ill conceived and executed? This study is an attempt to accurate identify this unique economic phenomenon this has been occurring since Spring of 2022.

Macro and Micro Environmental Perspectives on the Ability of SME Business to Innovate and Perform Good

The production environment has changed to a knowledge and technology system, and competition has also developed into a more global and innovation system, becoming a competitive environment in most countries and businesses. Companies must evolve and innovate to deal with intense competition and shifting consumer demands if they hope to succeed over the long term in today's global market economy. Small and medium enterprises should seek new business motivations and strategies to better develop new goods and services and take new information and technological advances into account. For a business to grow, innovation is essential. The traditional innovation literature, first published in 1934 by Joseph Schumpeter, focuses on the manufacturing sector and the level of competition in advanced markets and economies. Compared to other countries, Indonesia has a much higher proportion of small businesses per capita. Over the years, SMEs have made a significant contribution to developing countries in Asia (including ASEAN). SMEs are cited in ASEAN countries as a key driver of economic growth and development, the foundation of the national economy, the highest paying industry, and a potential tool for reducing poverty. Especially after the Asian financial crisis, including Indonesia's SMEs which are strategic in private sector growth.

What Would Joseph Schumpeter Say About Innovation in the Age of Generative Artificial Intelligence? A Conversation with ChatGPT-4

This paper reports a wide-ranging conversation in November and December 2023 between the author and ChatGPT-4 about how Joseph Schumpeter, the pioneer of modern innovation studies and the popularizer of the concept of creative destruction, might address innovation in the age of generative AI. I asked ChatGPT to perform four sorts of tasks: 1) produce plausible imaginary accounts of what Schumpeter would say about innovation and generative AI; 2) generate plausible and amusing cultural products in three common genres (a limerick, a formal verse, and an epic rap battle), all on the theme of Schumpeter and generative AI; 3) produce plausible and reliable accounts of Schumpeter’s thoughts on innovation, including identification and correction of a user’s deliberately erroneous statements; and 4) identify and produce an accurate assessment and summary of scholarly and scientific knowledge about Schumpeter and his thinking, with attributed sources. In the concluding section I offer some comments and thoughts on the strengths and weaknesses of ChatGPT-4 as a tool to explore, imagine, compare ideas, and support the production of reliable scholarship.

Теория на парите без теория за ценността. Подходът на Петър Бернгардович Струве

In the article are presented the main logical points through which Peter Struve (1870–1944) explained the functioning of exchange and the coordination of individual economic activities. Value and the theory of value are eliminated. In its mildest form, it is subordinated to the theory of price and the theory of money. Accounting and statistics, as well as legal norms, became leading mechanisms for measuring individual human efforts. Peter Struve can be seen as a prominent representative of monetary analysis (if one follows Joseph Schumpeter's famous classification in his History of Economic Analysis).