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In the twentieth century, perhaps only Keynes had more influence on economics than Joseph Schumpeter. However, his thinking comes from a different tradition (i.e Austrian) of economic thought and he had a more conservative political outlook. My reason for buying this volume was to get a view into his thought from the man himself, having previously encountered him only in popularisations. Robert Heilbroner in The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers (Penguin Business Library) has a particularly good chapter on him.

"Can Capitalism Survive?" appears to be a section of Schumpeter's most famous book Capitalism, Socialism and Democracy (Routledge Classics). Though it has a slightly abstract and academic style, it repays effort and gives a window into the author's ideas such as creative destruction and his view of markets. Schumpeter's take on them is one of dynamic processes. Cycles of innovation through entrepreneurs making new industries to obsolescence and slumps (or destruction) that go with it. He views these as being an inevitable part of capitalism.

It's interesting here to compare this with Keynes' views on markets as they share some similarities in recognising that slumps are apart of capitalism. Yet it's this, perhaps one of the most important of his insights that, proponents of the "efficient markets hypothesis" rejected from Keynes, partly for ideological reasons. Yet in rejecting Keynes, they were also rejecting Schumpeter who they might have found more ideological sympathy.

However, Keynesians may also learn much from Schumpeter. His analysis of what causes slumps goes deeper, looking at the effect they can have on social classes, intellectual ideas as well as with business. He examines to what degree economic organisations remain competitive as they develop in size and how this may change markets. All this he looks at from a wider viewpoint going beyond the limits of economics as a subject, arguing slumps can also be creative in bringing forth new technology and ideas. Thus, he argues, "destruction" may be another name for transformation.

At the time of writing, Keynes has come back into fashion after the credit crisis. At times he still seems to me the writer with has most insight into the causes of the current recession. After reading this, I would say he has an equal in Schumpeter, whose insights raise new questions. Both should be read and studied. This volume is a good place to start with the great Austrian.
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