Life

Joseph Alois Schumpeter (1883–1950) is one of the most frequently quoted economists in our days. Above all, many recall his idea that the process of economic development is generated by a succession of innovations achieved by entrepreneurs with the purchasing power supplied to them by bankers.

The attractiveness of Schumpeter's ideas stems, at least in part, from their twofold political implications. On the one hand, they bring to the fore entrepreneurs and bankers, the leading actors of the development process; at the same time, Schumpeter opposed Keynesian-type policy activism and considered crises a necessary evil, needed to stimulate the very vitality of capitalism. On the other hand, the view of a dynamic process endogenous to the economy and society, and of the decay of capitalism as the inevitable outcome of such dynamics, seems to align Schumpeter with Marx against the traditional theorising of economic equilibrium.

Schumpeter's thought is, however, far more complex and richer in lights and shadows than these contrasting evaluations might suggest. What remains truly alive today is the objective he propounds for economic science, namely to start from solid theoretical foundations and accomplish a theory of social change. As we shall see in § 2, in order to make headway along this road Schumpeter proposed as methodological canon the maximum possible flexibility: his theoretical building, extensive and complex, is made up of ‘analytical bricks’ bound together by a common pre-analytical view: not by a formally unified scheme, but by a broad representation of economic life.