Joseph Alois Schumpeter (1883-1950) was an Austrian economist who advocated the view that business cycles are an integral part of the process of economic development in a capitalist economy.

Joseph Schumpeter was born in Triesch in Moravia (now Czechoslovakia) on Feb. 8, 1883, the only son of Alois Schumpeter, a clothing manufacturer who died when Joseph was 4 years old. Because of his mother's remarriage 7 years later to the commanding general of all Austrian troops in Vienna, Schumpeter was raised in the manner traditional to the Austrian aristocracy. In 1901 he graduated with high honors from the Theresianum, a school distinguished for its classical education.

From 1901 to 1906 he studied law and economics at the University of Vienna, where he attended the seminars of Eugen Philippovic, Friedrich von Wieser, and Eugen Böhm-Bawerk. He received the degree of doctor of law in 1906 and spent a brief period visiting England and practicing law in Egypt. In 1909 he returned to Austria, where he accepted a professorship in economics at the University of Chernovtsy. In 1911 he joined the faculty at the University of Graz, where, except for the academic year 1913/1914, he remained until 1918. During this period he had written his first major article and three important books and had established his preeminence in economic theory.

During World War I Schumpeter took part in the intrigues to negotiate a separate peace for Austria and in putting forward proposals for economic reconstruction. In 1919 he became finance minister in the coalition government of the Austrian Republic but was forced to resign before even presenting his financial proposals to Parliament.

Next, Schumpeter became president of a private bank in Vienna which, because of economic conditions and the dishonesty of some of his associates, failed in 1924. He returned to academic life, accepting a professorship at the University of Bonn in 1925. He visited Harvard in the following year and again in 1930 and, in 1932, moved there permanently. During his years at Harvard he produced several more major books, the last of which was in rough manuscript at his death and was edited and published by his wife, Elizabeth Boody Schumpeter. Schumpeter died in his sleep, of a cerebral hemorrhage, on Jan. 8, 1950.

Schumpeter's work, published in 15 books and pamphlets, over 200 articles, book reviews, and review articles, defies classification by school of thought or by methodology. Although his Theory of Economic Development (1912) is a classic in the abstract-deductive tradition of Léon Walras and Böhm-Bawerk, many of his articles and his Business Cycles (1939) demonstrate his interest in and capacity for statistical and econometric research. Finally, his writings on socialism, Imperialism and Social Classes (1951) and Capitalism, Socialism and Democracy (1942), and on the history of economic theory, Economic Doctrine and Method (1914) and History of Economic Analysis (1954), reveal an insight into the broad sweep of sociological and historical forces on economic ideas and events that can be compared only to that of Marx.

Further Reading

• Seymour E. Harris, ed., Schumpeter, Social Scientist (1951), contains a number of excellent essays about Schumpeter's life and work. Richard V. Clemence and Francis S. Doddy, The Schumpeterian System (1950), is a study of his system of economic analysis. His career is discussed briefly in Joseph Dorfman, The Economic Mind in American Civilization (5 vols., 1946-1959), and Ben B. Seligman, Main Currents in Modern Economics: Economic Thought since 1870 (1962).
• Allen, Robert Loring, Opening doors: the life and work of Joseph Schumpeter, New Brunswick, N.J.: Transaction Publishers, 1991.
• Mearz, Eduard, Joseph Schumpeter: scholar, teacher, and politician, New Haven: Yale University Press, 1991.
• Schneider, Erich, Joseph A. Schumpeter: life and work of a great social scientist, Lincoln: Bureau of Business Research, University of Nebraska-Lincoln, 1975.
• Stolper, Wolfgang F., Joseph Alois Schumpeter: the public life of a private man, Princeton, N.J.: Princeton University Press, 1994.
• Swedberg, Richard, Joseph A. Schumpeter: his life and work, Cambridge, UK: Polity Press, 1991.
• Swedberg, Richard, Schumpeter: a biography, Princeton, N.J.: Princeton University Press, 1991.