Medieval Islamic Economic Thought: Filling the Great Gap in European Economics (Islamic Studies)

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This book is a collection of papers on the origins of economic thought discovered in the writings of some prominent Islamic scholars, roughly during the five centuries prior to the Latin Scholastics, like St. Thomas Aquinas.

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A classic
Creative Destruction of Capitalism and the Emergence of Socialism
How so much Smartness Can Get it so Utterly Wrong
Provocative and Informative Analysis
Historical Endnote

Capitalism, Socialism and Democracy
Joseph Alois Schumpeter , and Tom Bottome
Manufacturer: Peter Smith Publisher
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Binding: Hardcover

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ASIN: 0844660272

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A classic.......2007-03-08

For economy,political science, law and sociology students, this is the mandatory Schumpeter title.

Creative Destruction of Capitalism and the Emergence of Socialism.......2007-02-04

Like Marx, Schumpeter predicts the inevitable disintegration of the capitalist system. However, where Marx foresees the collapse as stemming from proletariat revolution, Schumpeter argues that the "actual and prospective performance" of capitalism is strong, and unlikely to fail. But, Schumpeter argues, it is these same successes which will ultimately destroy the social institutions, namely private property and free contracting, necessary for its continued survival. As such, new conditions will emerge which will not allow capitalism to continue and socialism will become the dominant economic system.

Capitalism is an evolutionary and dynamic process. This constant state of motion is driven by the emergence of new methods of production (and subsequently new consumer goods), the pursuit of new markets, and improved forms of industrial organization (83). As such, aspects of the internal capitalist system are constantly being revolutionized; old processes are being replaced with new processes in the name of progress and improvement. Schumpeter refers to this process as a state of creative destruction. "This process of creative destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has to live in" (83).

The theory of creative destruction is based on the classic feature of capitalism, competition. Traditionally, capitalism is characterized by competition stemming from price, methods of production, and organization. This competitive attributes help to ensure the market efficiency of firms. However, Schumpeter argues that the real feature of capitalism is destructive competition. Destructive competition includes the emergence of new commodities, technologies, sources of supply and new types of organizations (84). Where the traditional measures of competition allow for existing firms to evolve in a changing market, destructive competition tends to destroy those firms which become inefficient. It is this system of destructive competition that revolutionizes the internal capitalist structures.

Through the process of destructive competition, Schumpeter argues that the vital institutions of capitalism, ownership of property and freedom of choice in contracting, are destroyed. Schumpeter's sentiment is illustrated through a brief examination of the collapse of the feudal structure. During the feudal period, changes in production and mechanization overran and obliterated the artisan and small producer. Today, the same process can be observed in that larger, more efficient firms are eliminating their smaller, less efficient brethren. Stated simply, the capitalist process attacks its own institutional framework. The entrepreneurial class, which fuels the dynamic capitalist system, is being retarded, or as Schumpeter suggests, "economic progress tends to become depersonalized and automatized" (133).
This is exemplified by the emergence of mega-companies in which the firm is rarely owned by one individual but rather is composed of board members and stock holders. Schumpeter argues that none of these actors truly own the company and as such lack the drive of the entrepreneur who owns his or her company. What then emerges is capitalist stagnation. Individual choice is usurped by the interest of large corporations. Instead of relying on choice, corporations will come to agreements between themselves, thus creating a system of pseudo-monopoly. With this limited competition, laws and regulations are imposed on the corporations rather than left to individual firms (141). As such, we begin to see the emergence of socialist ideology in that competition and ownership are removed, and replaced by a centralized governmental system of control.

Of particular note, unlike Marx who sees the destruction of bourgeois entrepreneur as a necessary precondition to socialism, Schumpeter sees the same entrepreneur as integral to the success of the socialist transition. Socialism will only emerge when capitalism has reached its maturity, that point in time where capitalism has destroyed its own vital institutions of ownership and choice. Although these institutions are eliminated, socialism still reaps the benefits from the technology, knowledge, and resources developed by the entrepreneurial class in the earlier stages of capitalism. In order to be sustainable such inheritances are necessary condition for the success of socialism.

How so much Smartness Can Get it so Utterly Wrong.......2006-03-01

As to the best of my knowledge, there were two major intellectual responses to the seemingly endless and insuperable crisis which the capitalist system had got itself into after the Great Slump of 1929: Keynes`s "General Theory of Money, Interest and Employment" of 1936 and Schumpeter`s "Capitalism" which was first published in 1942. Like Marx before them, both Keynes and Schumpeter reject the "classic economists'" contention that what they called the market system wíll always automatically swing back to an ideal equilibrium - expecially one that implied full employment - provided only the state kept its hands off as much as possible.

However, that is just about where their concurrence ends. While Marx sees the only solution outside the system, in its bloody overthrow and its succession by a "dictatorship of the proletariat" introducing the next evolutionary step in human history, called socialism, Keynes considered the market system as basically viable. All that was needed, according to him, was governmental involvement by which the lacking demand in times of a slump would be lifted to more agreeable levels. Schumpeter, in contrast, agrees with Marx in that capitalism's days are counted and that it is about to be replaced by socialism, even though he doesn't share Marx`s more aggressive notions: according to him, the present day capitalists need not be dealt with by the guillotine alone, they may indeed have a useful function as entrepreneurs employed by his envisaged omnipotent and omniscient super agency that will ideally plan everybody's well-being in his imagined socialist system.
What to think of the book today?
First, it is hard to fathom how Schumpeter could have turned such an absolutely blind eye on the totalitarian tendencies necessarily inherent in a state that not only controlled the political field but also was quasi the monopolist employer and as such responsible for the economic side of peoples's lives as well, in particular when one considers the time when it came out: 1942!
Second, it is a fine example of how wrong you can get things even if (or: because?) you know so much as Schumpeter did - maybe that is the best argument of all against the establishment of such a super agency planning everybody's life to the extent envisaged by Schumpeter.
Finally, even if such an agency did not err - is it not a basic right - and half of the fun of life - to make mistakes - for oneself that is, not forcing them on others?

Provocative and Informative Analysis.......2005-12-14

Despite its age (published in 1942), Schumpeter's book remains a classic. If I have one dominant complaint, it's that he uses the Ubiquitous terms "rational" and "rationality" to refer to human calculus, not in its philosophical or logical senses.

Part One exposes some of the failures of Marxism, although Schumpeter is a thoroughly avowed Marxist. If the book had been written more recently, I am sure he could add some more. Surprisingly, the two major objections to Marxism, labor allocation and price determination, are not even mentioned.

Part Two gives Schumpeter's blueprint for a revised "socialism" along Marxist lines. That in itself is quite a feat, considering that there are at least 60 competing kinds. As I was examining each of his proposals, I could not help observe that to a detail they mirror the efforts of the former U.S.S.R. But the first caveat of Part Three disowns "Russian" socialism. For the life of me, I could not find a single distinction. Under his blueprint, the Board of Planning will, with utilitarian expertise, determine what the consumer wants, determine the price, and the supply. But based on what? Human calculus. But calculus based on what? Obviously, this means an extraordinary bureaucracy to "administer" such a state of affairs, but it'll save money in the long run. Even more troubling, what if something I "need" doesn't fit the calculus? For example, say I want a birth-control device, and the bureaucrats determine condoms are cheap and effective. No need for pills or IUDs under this scheme. What if I think I look better in baby-blue shirts, but drab is more economical and just as efficient? No baby-blue shirts. After all, a shirt is a shirt is a shirt.

Part Three is a "critique" of capitalism. Finally, an author who agrees with me that if capitalism "fails," it will be because of its successes, not because of its intrinsic weaknesses. Indeed, the central thesis of the book is that Marxist socialism can ONLY succeed once capitalism has reached full maturity. Perhaps the most apparent "maturity" will be the emergence of the monopoly, both governmental and commercial. Too bad Wal-mart did not exist at the time of his writing, for it is an example par excellence. It's a mega-business that destroys "smaller" competition by its low prices, volume purchases, and low wages. Beyond the obvious, one only has to observe all the mergers and acquisitions to see the increasing interests in mega-business, or call your "company" and go through a battlefield of menu options to get to a "specialist" who might be able to address your concerns. Good luck. Even more bizarre is the complicity of federal and municipal governments granting mega-businesses dispensations from the customary and usual ordinances (like the 2005 Energy Bill). In each and every case, capitalism has reached a "maturity" that in the end stifles the very thing it touts: competition.

So instead of playing "bourgeoisie" football, we'll all be playing "proletariat" football (this is directly from the book). Under this scheme, the most utilitarian scheme always wins. We don't need Fords, Chevrolets, Chryslers; we can all suffice on an extrapolated Volkswagen that the bureaucrats determine is "best" for all. You think the local DMV is a headache, just imagine it a hundred-fold more bureaucrats under the socialist paradigm. And to what purpose? Equalitarianism (today we'd use egalitarianism). The means of production and income will be uniform. Everyone would be given the same units of consumption to purchase their needs as the bureaucrats have determined a priori that consumers want. What if one wants a home with a view, another with a balcony, another with all-electric kitchen, etc.? If such needs exist, the bureaucrats will provide them. Right. Everyone under this scheme would be employed, even if "make work" programs need to be used. Plus, it really doesn't matter, because everyone - everyone - gets the same units of consumption (also known as "money"). So what about that "lazy" person who refuses to "carry his/her own weight?" Economic punishment by authoritarian rule. What about the one person in a hundred who performs extraordinary service? Personal fulfillment and human betterment are sufficient. What part of this scheme does not mirror the U.S.S.R.?

Schumpeter's critique of democracy in Part Four is on target. Like said: It's the worst form of government, save all others. But he makes a number of salient points. He favors the parliamentary system (as do I). The institution of the Senate is blatantly anti-democratic, and if nothing else, must be dissolved. He doesn't have much regard for constitutions, but they alone protect "minority" interests. He flatly rejects proportional representation, but it's obviously more democratic than what we have now: Majority Rule. His prescience did allow him to envision Rank Voting, but I think it's something he'd approve. But in the end, democracy is just a capitalist institution. Whether or not it survives the "revolution" will only be known at that time. Politics will be subordinate to economics anyway, so perhaps all "public policy" will be negated by socialism.

It's ironic that capitalism will, in time, become its own dissolution, but Schumpeter's alternative seems far worse than anything we have now, or can expect. Certainly a "mixed" economy with regulated capitalism is only part of the answer. After all, Wal-mart may be a socialist's worse nightmare, but at least one has alternatives: Target, K-mart, Kohl's, etc. And equally obvious, whatever the "market" cannot provide, the government must. Is it government's duty to provide ALL of Maslov's hierarchy of needs? No. But surely it must provide what the market does not: A Safety Net.

Obviously, Marxist socialism is thoroughly discredited. Read Hayek's "Road to Serfdom," and observe the fall of the U.S.S.R. Even socialists governments are on the wane, not on the increase. Yet, for all its obvious defects, it's great to have one book that explains the matters it does.

Excellent and accessible writing.

Historical Endnote.......2005-10-03

Like Hayek's Road to Serfdom, this book was written during the Secon World War when Keynes was busy crafting the post war peace. It is infused with the 1930s' corporatist ideas and tends to favour the Communist version more than the Nazi/Fascist version. Keynes is indisputably the 2oth century's most important economist but why does Schumpeter and his creative destruction occupy position #2? I put it down to the same reason as Marx' Theory of Alienation gained such sway. As there was little else to salvage from Marx' writings, they hit on that to make him apear relevant. Marx was a dangerous idiot and the fact that Schumeter heaps measured praise on him suggests that Schumpeter should also join him in the intellectual trash can of history. I see little relevant in his work which I feel has gained prominence simply because economics has lost its intellectual direction. Unlike Gary Becker and other recipients of the Nobel Prize, Schumpeter tackles big issues. But the big issues shrug him off. Nothing here to ponder over.

Can Capitalism survive? (Harper colophon books, CN 595)

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Can Capitalism survive? (Harper colophon books, CN 595)
Joseph Alois Schumpeter
Manufacturer: Harper & Row
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Binding: Paperback

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ASIN: 0060905956

Business Cycles: A Theoretical, Historical, And Statistical Analysis of the Capitalist Process. 2 Vol. Set

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Innovations propagate business cycles that trend to higher equilibria.
Don't forbide this book
Great
Comprehensive theoretical framework

Business Cycles: A Theoretical, Historical, And Statistical Analysis of the Capitalist Process. 2 Vol. Set
Joseph Alois Schumpeter
Manufacturer: Martino Pub
ProductGroup: Book
Binding: Hardcover

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ASIN: 1578985560

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Innovations propagate business cycles that trend to higher equilibria........2005-12-04

Schumpeter published his own theory of business cycles three years after Keynes' General Theory (1936). In his review of Keynes' book in Journal of the American Statistical Association (1936) Schumpeter described Keynes' "Propensity to Consume" as nothing but a deus ex machina that is valueless if we do not understand the "mechanism" of changing situations in which consumers' expenditures fluctuate. And he adds that Keynes' "Inducement to Invest", his "Multiplier", and his "Liquidity Preference", are all an Olympus of such hypotheses, which should be replaced by concepts drawn from the economic processes that lie behind the surface phenomena. Schumpeter had his own business cycle theory describing the cycle as an interaction between the stable Walrasian system and revolutionary innovations.

In the opening chapter of his Theory of Economic Development (1934) Schumpeter says that any satisfactory explanation of economic factors must ultimately be in terms of noneconomic factors. In his book, Three Views on Method in Economics (1960), Henry W. Briefs reported a 1954 conversation with Jacob Marshak, econometrician and former Research Director for the Cowles Commission, about Schumpeter's book, Business Cycles (1939). In his review of Schumpeter's book in Journal of Political Economy (1940) Marshak criticized that he could not translate Schumpeter's business cycle theory into a complete system of equations, because he needed an equation for innovation. In subsequent personal correspondence Marshal asked Schumpeter what drives innovation, and in reply Schumpeter referred Marshak to Henri Bergson's elan vital. This is certainly a noneconomic factor!

However in his Business Cycles book, Schumpeter states that innovation is internal to the economy. It is not external like an earthquake, nor is it the same as invention. He maintains that innovations are made by the actions of entrepreneurs, who produce discontinuous structural changes in the production function, by making new combinations of input factors that increase marginal productivity. Each such change in turn propagates a damped cyclical oscillation in the levels of economic output, which trends to a stable equilibrium at a higher level. But Walrasian equilibrium is never actually achieved, because the cyclical phases of increased activity occasion further innovations, so innovations and business cycles are both endogenous.

Schumpeter's theory is closer to economic history than Keynes' theory, particularly the pre-Depression period of industrialization from which he drew his perspective. He has more to tell us about economic development than about business cycles, and his book Business Cycles is actually an extension of his earlier book, Theory of Economic Development. See my other reviews and my web site philsci.

Don't forbide this book.......2005-05-11

If you don't want to be swallowed with the Mathematics of the General Equilibrium Theory of Walras (and then Arrow and Debreu) read from chapter one to three of Schumpeter's Business Cycles.

I don't recommend the other chapters to reach a better comprehension of Schumpeter... I think it's too much out of context history. Very dificult to understand for engineers, economists and non historian people. Perhaps a best option is the reading of "The Human Web: A Bird's-Eye View of World History" by McNeill. This book has a mountains of unexpected links with Shumpeter's...but, of course, I know It wasn't Schumpeter's Aim to describe economy in a Human History Perspective.

Great.......2001-03-19

One of the best books ve read in a long time....i read it because of Mr.Greenspan....wanted to learn about how the "MAN" thinks and am glad that i read it...a must for people really interested in economics......

Comprehensive theoretical framework.......2000-01-23

A thorough description of Schumpeter's ideas and theories with practical applications. His 'creative destruction' theory is well documented and explained. A wonderful read in an argument against government intervention in industry.

Imperialism [and] Social classes;: Two essays (Meridian books)

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Imperialism [and] Social classes;: Two essays (Meridian books)
Joseph Alois Schumpeter
Manufacturer: Meridian Books
ProductGroup: Book
Binding: Unknown Binding

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The Future of the Capitalist State
Bob Jessop
Manufacturer: Polity Press
ProductGroup: Book
Binding: Paperback

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ASIN: 0745622739

Book Description

In this important new book, Bob Jessop offers a radical new interpretation of capitalist states and their likely future development. He focuses on the changing forms, functions, scales and effectiveness of economic and social policy that have emerged since the 1950s in advanced western capitalist states. The postwar Keynesian welfare national state that developed in most advanced capitalist societies has long been regarded as being in crisis. Mounting tensions have been generated by technological change, globalization, and economic and political crises, and new social and political movements have also had a destabilizing impact. Jessop examines these factors in relation to the rise, consolidation and crisis of Atlantic Fordism and asks whether a new type of capitalist state that is currently emerging offers a solution. He notes that there are several difficulties still to be overcome before the new type of state is consolidated; in particular, he is critical of its neoliberal form and considers its main alternatives. This book will have broad cross-disciplinary appeal. It will be read by sociologists, political scientists, institutional economists, geographers and students of social policy.

Marx, Schumpeter, and Keynes: A Centenary Celebration of Dissent

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Marx, Schumpeter, and Keynes: A Centenary Celebration of Dissent
Suzanne Helbrun
Manufacturer: M E Sharpe Inc
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ASIN: 0873323815

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Joseph Alois Schumpeter
Wolfgang F. Stolper
Manufacturer: Princeton University Press
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Binding: Hardcover

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ASIN: 0691043051

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In this major scholarly study of the life of Joseph A. Schumpeter, one of the great intellectual figures of the twentieth century, the distinguished economist Wolfgang Stolper delves into the mind of his former teacher, exploring the development of his ideas and, especially, their influence on politics and public policy. After reflecting briefly on Schumpeter the man, Stolper explains the evolution of Schumpeter's work, particularly his insights during the 1920s on public finance, his contributions to monetary theory and the study of business cycles, and his writings on socialism. Stolper goes on to describe and evaluate Schumpeter's public activities following World War I and his role as a finance minister, placing the development of his thought in the turbulent political context of his times. Drawing on a vast array of new and exciting sources, Stolper paints a portrait of his mentor as a decent, ambitious, and complex man whose many insights into economy and society found their way outside of the academy and into the practical world of economic policy. All readers interested in the history of economic thought and twentieth-century political and intellectual history will find this book invaluable.

Joseph Schumpeter's Two Theories of Democracy

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Joseph Schumpeter's Two Theories of Democracy
John Medearis
Manufacturer: Harvard University Press
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Binding: Hardcover

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This book offers the first full-length treatment of Joseph Schumpeter's political thought. Schumpeter's theory of democracy as a competition among elites has influenced several generations of political scientists, but this book is the first to show that Schumpeter also conceived of democracy as a powerful transformative tendency leading toward the establishment of democratic socialism. Deploring this prospect, he theorized elite-dominated forms of society in which democratic change could be reined in.

The contrasts between the two perspectives are striking. The neglected transformative view, which this book expounds, stressed the importance of democratic beliefs and ideology, whereas the elite conception minimized their significance. The transformative perspective highlighted the radicalizing, dynamic effects of movements that attempt to realize democratic values and act upon democratic ideologies, while the better-known elite model depicted democracy in static terms and as institutionally stable.

Despite the sharp contrasts, both perspectives were part of Schumpeter's complex and deeply conservative response to political change in his lifetime. Precisely because he viewed democracy as a potent transformative social force, he labored strenuously to theorize a form of society in which elites could restrain the pace and nature of democratic change.

The Economics and Sociology of Capitalism

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The Economics and Sociology of Capitalism
Joseph A. Schumpeter
Manufacturer: Princeton University Press
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Binding: Paperback

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ASIN: 0691003831

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This book gives information on studies based on sociology and capitalism.

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This 12 country comparative volume examines the impact of economic structural adjustment programs upon grassroots civil associations and the implications for political liberalization and democratization in the developing countries of Latin America, Africa, Asia, and the Middle East. The authors take an in-depth look at the impact of economic reform upon women's groups, human rights organizations, social-welfare non-governmental organizations, unions, and business associations. They challenge the prevailing assumption that economic reform will automatically lead to greater democratization.

Economic Liberalization, Democratization and Civil Society in the Developing Wor (International Political Economy)

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Economic Liberalization, Democratization and Civil Society in the Developing Wor (International Political Economy)
Palgrave Macmillan
Manufacturer: Palgrave Macmillan
ProductGroup: Book
Binding: Paperback
ASIN: B000OTBY6Q

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