Joseph Schumpeter


Austrian/Moravian-born American Economist, Sociologist and Political Scientist

Author Quotes

To realize the relative validity of one's convictions and yet stand for them unflinchingly is what distinguishes a civilized man from a barbarian.

Nothing is so treacherous as the obvious.

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U. S. Steel illustrate the same process of industrial mutation-if I may use that biological term-that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.

Gentlemen, a depression is for capitalism like a good, cold douche.

We always plan too much and always think too little.

This civilization is rapidly passing away, however. Let us rejoice or else lament the fact as much as everyone of us likes; but do not let us shut our eyes to it.

History is a record of "effects" the vast majority of which nobody intended to produce.

The first thing a man will do for his ideal is lie.

Geniuses and prophets do not usually excel in professional learning, and their originality, if any, is often due precisely to the fact that they do not.

I felt it my duty…to inflict upon the reader…my paradoxical conclusion: capitalism is being killed by its achievements.

Credit creation [is] the monetary complement of innovation. This relation…is at the bottom of all the problems of money and credit.

You can’t save your way to wealth—either personally or as a nation. True wealth accrues mainly through innovation. Individual fortunes are built that way, as is the commonwealth.

Profit…is the premium put upon successful innovation in capitalist society and is temporary by nature: it will vanish in the subsequent process of competition and adaptation.

Most new firms are founded with an idea and for a definite purpose. The life goes out of them when that idea or purpose has been fulfilled or has become obsolete or even if, without having become obsolete, it has ceased to be new. That is the fundamental reason why firms do not exist forever. Many of them are, of course, failures from the start. Like human beings, firms are constantly being born that cannot live. Others may meet…death from accident or illness. Still others die a "natural" death, as men die of old age. And the "natural" cause, in the case of firms, is precisely their inability to keep up the pace in innovating which they themselves had been instrumental in setting in the time of their vigor.

It is by no means farfetched or paradoxical to say that "progress" unstabilizes the economic world, or that it is by virtue of its mechanism a cyclical process.

Innovation is the outstanding fact in the economic history of capitalist society or in what is purely economic in that history, and also it is largely responsible for most of what we would at first sight attribute to other factors.

Technological possibilities are an uncharted sea. We may survey a geographical region and appraise…that the best plots are first taken into cultivation, after them the next best ones and so on. At any given time during this process it is only relatively inferior plots that remain to be exploited in the future. But we cannot reason in this fashion about the future possibilities of technological advance. From the fact that some of them have been exploited before others, it cannot be inferred that the former were more productive than the latter. And those that are still in the lap of the gods may be more or less productive than any that have thus far come within our range of observation….There is no reason to expect slackening of the rate of output through exhaustion of technological possibilities.

Capitalism…is by nature a form or method of economic change and not only never is but never can be stationary.

Consumers’ satisfaction supplies the social meaning for all [capitalist] economic activity.

We must always start from the satisfaction of wants, since they are the end of all production.

We have to define that word which good economists always try to avoid: capitalism is that form of private property economy in which innovations are carried out by means of borrowed money.

Economic progress, in capitalist society, means turmoil.

Democracy is a political method, that is to say, a certain type of institutional arrangement for arriving at political - legislative and administrative - decisions and hence incapable of being an end in itself.

Bureaucracy is not an obstacle to democracy but an inevitable complement to it.

Capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.

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Austrian/Moravian-born American Economist, Sociologist and Political Scientist