My wife and I have an inside joke referring to “feta cheese and spinach pizza” because early in our relationship I apparently told her repeatedly about the amazingness of the feta cheese and spinach pizza at Tut’s on the strip in Tuscaloosa, Alabama. Sobel and Clemens explain Schumpeter’s argument in the context of an interesting example: Hawaiian pizza, which, it turns out, is actually Canadian–”The creation of Hawaiian pizza is often credited to Sam Panopoulos, who first cooked one at the Satellite Restaurant in Ontario, Canada in 1962”–and is now the most popular pizza in Australia (p. The relevant question was not “how many firms are in this industry” but “what are the barriers to entry that are preventing firms from coming up with substitutes?” The workhorse models of perfect competition that economists use to understand so many things are of great value as models however, if Schumpeter is right, then they are limited in their ability to tell us how the world should be. As Sobel and Clemens point out, Schumpeter’s main criterion for whether or not a market was competitive concerned its contestability. One of Schumpeter’s most important contributions is a rethinking of how we understand competition. That’s a tall order, but the Bible exhorts us to “get understanding.” I think it’s worth it (I admit my view is idiosyncratic). Schumpeter argued that to really understand Karl Marx one must read all three volumes of Capital, the entirety of Theories of Surplus Value, and have a strong working knowledge of British political economy, French socialism, and the German philosophical tradition. Understanding all this stuff at a very deep level requires more than just knowledge of what has been published in the American Economic Review in the last year. This has some important implications for cottage industries about what this or that thinker really meant or the nature of social processes very generally. Schumpeter was the complete scholar, asking and answering very big questions while appreciating and understanding their intellectual history and context.
Schumpeter was very prolific, but four key works stand out: The Theory of Economic Development (German edition 1911, English edition 1934), Business Cycles (1939), Capitalism, Socialism, and Democracy (1942), and the posthumously published, incomplete but still very important History of Economic Analysis (1954). Fortunately, his ideas (and not just his quick wit) warranted it. Between that kind of sly wit, his brilliant mind, and his disciplined work ethic, you can see how Schumpeter became one of the twentieth century’s most interesting economists. When someone asked him how things were going, he said that things weren’t going so well with the horses. He is said to have boasted that his goal in life was to become the world’s greatest economist, the world’s greatest lover, and the world’s greatest horseman. Schumpeter (1883-1950) was a brilliant economist and, apparently, quite a character. They introduce us to The Essential Joseph Schumpeter in yet another volume that can be downloaded for $0 and, at just a few dozen pages, read very quickly.
#Joseph schumpeter bookz series#
Their most recent contribution to the series comes from Russell A. Boudreaux) and then moved on to The Essential Adam Smith (James Otteson), The Essential John Locke (Eric Mack), and The Essential Milton Friedman (Steven Landsburg). They started with The Essential Hayek (by Donald J.
The Fraser Institute in Vancouver, British Columbia, has put together a series of very useful introductions to the key ideas of some great thinkers in their Essential Thinkers series.
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