Theory of Economic Development

Joseph Schumpeter (1883-1950) is a renowned twentieth-century economist known for his innovative insights into capitalism. His book "The Theory of Economic Development" challenged the equilibrium approach and argued that economic development is cyclical due to the circular flow of economic life, disruption and innovation, and the levers of capitalism. He also placed the entrepreneur at the heart of capitalism and introduced the idea of creative destruction. This Routledge Classics edition includes a new Introduction by Richard Swedberg.

Format: Paperback / softback
Length: 234 pages
Publication date: 17 May 2021
Publisher: Taylor & Francis Ltd

Joseph Schumpeter (1883-1950) stands as one of the most captivating and influential economists of the 20th century, renowned for his profound and unconventional perspectives on the essence of capitalism. Among his distinguished students are renowned economists such as Paul Samuelson, Robert Solow, and the former chairman of the Federal Reserve, Alan Greenspan.

Schumpeter's magnum opus, The Theory of Economic Development, is widely regarded as one of his most significant works and the one that catapulted him to fame. In this groundbreaking book, he challenges the prevailing economic theory, which viewed economics as a state of equilibrium, by proposing a novel perspective. According to Schumpeter, economic development occurs in a cyclical manner rather than a steady progression because economics is constantly propelled by its internal forces. These forces encompass the intricate circular flow of economic life, the disruptive and innovative nature of economic development, and the levers that propel and guide capitalism, including credit, profit, and interest. These elements manifest themselves in the iconic "business cycle," a concept that Schumpeter made a significant contribution to understanding economics and that has since become a staple in the curricula of economics and business schools worldwide.

Furthermore, Schumpeter is credited with being the first economist to place the entrepreneur at the center of capitalism, a concept that would later gain immense popularity in popular business and management literature. He recognized the crucial role that entrepreneurs play in driving economic growth and innovation, a notion that has since become a central theme in the study of entrepreneurship. Schumpeter's insights into the dynamics of capitalism laid the foundation for his subsequent, highly influential idea of "creative destruction," which describes the process of radical and rapid economic change. This concept emphasizes the disruptive forces that arise from new technologies, market entrants, and economic innovations, leading to the displacement of old industries and the creation of new ones.

The Theory of Economic Development remains a vital and authoritative account of economics and the nature of capitalism, offering numerous insights that continue to hold relevance in the modern world. This Routledge Classics edition includes a new Introduction by Richard Swedberg, providing fresh perspectives on Schumpeter's work and its enduring significance.

Weight: 394g
Dimension: 156 x 233 x 29 (mm)
ISBN-13: 9780367705268