| Review of: | Schumpeter on the Economics of Innovation and the Development of Capitalism by Arnold Heertje |
|---|---|
| Reviewed By: | Rachel S. Turner |
| Reviewed in: | Political Studies Review |
| Date accepted online: | 14/01/2008 |
| Published in print: | Volume 05, Issue 03, Pages 395-474 |
Book Reviews: Political Theory
Joseph Schumpeter is one of the most celebrated economists of the twentieth century. Yet compared to fellow economists of his era such as J. M. Keynes and F. A. Hayek, extant academic literature on his life and contribution to economics is insubstantial. This makes the current volume a welcome addition to existing publications on Schumpeter, providing a vivid and engaging account of Schumpeter's approach to major social and economic issues and methodology, and his empirical research on economic dynamics and technical change.
The book is split into three parts. The first part provides a fascinating overview of Schumpeter's life and his methodological approach. It compares his observations on methodological individualism with those of other twentieth-century economists, specifically Carl Menger, James Buchanan and Gordon Tullock. The second part of the book evaluates Schumpeter's infamous interpretation of evolutionary economics and the future of capitalism. In discussing Schumpeter's theory of the 'creative destruction' of capitalism, Heertje highlights what Schumpeter saw as the characterising feature of capitalism - the behaviour of economic actors, in particular entrepreneurs. Here Heertje is careful to distinguish Schumpeter's predictions on the inevitable breakdown of capitalism from Marx's earlier analysis. This section of the book also contains an excellent evaluation of the significance of Schumpeter's
Schumpeter's work presented one of the most dynamic views of capitalism, and Heertje's book does not undersell this significance. As he rightly points out, as a historian of economic thought as portrayed in his masterpiece