Tag: Studies in Political Economy

The name of Joseph Schumpeter is still a prominent one in the social sciences. He was undoubtedly one of the leading economists of his generation. That by itself would have been enough to ensure him lasting fame, yet his importance as a social theorist extends far beyond that which is attributable simply to his performance as an economist. Unlike most economists, Schumpeter coupled his economic analysis with an historical outlook. The bulk of his immense theoretical con- tribution was directed toward an investigation into entrepreneurial capitalism as a transitory, historical phenomenon. This analysis of the growth of capitalism was tied to both a general theory of social classes and a detailed inquiry into the nature and function of the capitalist class. Nevertheless, while it is generally conceded that Schumpeter had a unified vision of the social process, few attempts have been made to examine his overall theory as a systematic whole.

Only a few years ago it was an article of faith among most orthodox economists that the Great Depression of the 1930s was an unaccountable deviation from the natural course of capitalist evolution. They also thought that any further repetition of severe economic distress was inconceivable in the age of informed macroeconomic policy. Even now, establishment theorists continue to hold out against the notion that stagnation can be traced to the underlying pattern of advanced accumulation; but even the most active defenders of the status quo are no longer inclined to be entirely dismissive of the view that secular stagnation is the characteristic state of modern capitalism. Hence, the historical meaning of the Great Depression has once again become a major subject of interest, and there are signs that some of the long-forgotten legacy of criticism and debate by economic theorists of the 1930s is being rediscovered, with the sudden rebirth of open class struggle over the problem of chronic underemployment.