One of the best known and most famous economists of the first half of the XX century is Joseph Alois Schumpeter (1883-1950). His theoretical heritage is extremely broad and diverse. His works The Nature and Essence of Economic Theory (1908), and History of Economic Analysis (1954) are devoted to the history and methodology of economic analysis. On the Concept of Social Value (1909) is devoted to the economic dynamics while Capitalism, Socialism and Democracy (1942) tell about the theories of social development.
Joseph Schumpeter often said that in his young years, he had three dreams: to become the best rider, the most desirable gallant, and the most outstanding economist. Although it remains unknown whether his other two dreams have come true, his contribution to economics is enormous. Nowadays, the ideas suggested by Schumpeter have spread far beyond the economic area. Today, many companies (including big corporations) successfully transform into business organizations, in which innovative solutions are approved not only by senior management. The entrepreneurial organization seeks to actualize the innovations with benefits regardless of their source. In addition, Schumpeter in his Theory of Economic Development prognosticates the emergence of entrepreneurial organizations. While Schumpeter adapts his teachings for different models of the economy, considers the introduction of private ownership, and new forms of production, his contribution appears extremely important and useful for the modern development of the economy.
Schumpeter’s Economic Views
The problems of dynamic development of a market economic system, reasons and factors that ensure progress and economic growth are principal in Schumpeter’s system. Such a research perspective distinguishes him significantly from the representatives of all known economic schools. Schumpeter is the first person who has initiated the exploration of economic dynamics as opposed to static neoclassical analysis. Innovations, novelties, and entrepreneurship in the theory of Schumpeter play the same central role as price or free competition in the economic theory of Marshall. Schumpeter believes that the explanation of economic development is possible only by studying the dynamic laws of the commodity-capitalist economy. As a result, Schumpeter believes that the use of neoclassical analytical apparatus is insufficient. However, there is some ideological affinity with the views on the economic system’s statics and dynamics of the American school of marginalism representative – John Bates Clark. Developing Clark’s ideas, Schumpeter enriches them with new content: he clearly distinguishes between a static equilibrium system and its dynamic development that transforms the economic structure and the relationship between “new” and “old” manufacture. The scientist feels the need to combine the static theory of equilibrium with the theory of economic growth raising the equilibrium approach to a new evolutionary dynamic level.
A comprehensive study of the economic analysis history drives Schumpeter to the conclusion that the most advanced concept in the political economics of that time is Walras’ theory of general economic equilibrium. Although, he notices in it a significant drawback concerning the fact that the theory of economic equilibrium reflects the static condition of the economy and does not take into account the factors of economic processes development. Trying to overcome this limitation of Walrus’ theoretical concept, Schumpeter concentrates his research on the system development and the factors that serve as driving forces for this development. The main feature of his approach is that analyzing the causes of dynamic change, he pays attention to other manufacture factors than those traditionally considered by his forerunners. The entrepreneur whose social defining features are not the ownership but personal qualities (e.g. credibility, leadership, ambitions, ability to innovate) becomes the driving force of development i