I have finally started reading Capitalism, Socialism, and Democracy by Joseph Schumpeter. And now I simply can’t put it down. This has not happened to me with an economics book since I read The Road to Serfdom by Hayek. Schumpeter’s work is pure gold, prescient, wise, analytically crystal clear, and beautifully written (yes, every so …
For those of you interested in an extra unit or two, this term we are offering an independent study / tutorial reading Joseph Schumpeter’s classic, Capitalism, Socialism, and Democracy. For those of you unfamiliar with the book, here is a review by Schumpeter biographer, Thomas McCraw. This is a thick book, so you might think …
The intellectual founder of transaction cost economics, Ronald Coase, turns 100 today. Coase is best known for two papers: “The Nature of the Firm” in 1937 and “The Problem of Social Cost” in 1960. Both are about the importance of transaction costs. The former shows that without transaction costs the firm doesn’t matter, and this …
The Economic History Blog refreshes our memories on the various types of growth: Recently I was reminded of the distinction made by Joel Mokyr, in the Lever of Riches, between the four types of growth: The Solovian growth, after Robert Solow, which is driven by an increase of the saving rate leading to more investment …
All right, who said it? I am not interested in literature, I do not go to the theatre, and I do not listen to music. I am occupied only with theories. Is that Professor Galamobos talking about what he did on his sabbatical leave? His advice to students taking Econ 300 during winter term? Professor …
For those of you interested in an extra unit or two, next term we are offering an independent study / tutorial reading Joseph Schumpeter’s classic, Capitalism, Socialism, and Democracy. For those of you unfamiliar with the book, here is a review by Schumpeter biographer, Thomas McCraw. This is a thick book, so if you are …
A preview of things to come over the next few days: The evolution of the capitalist style of life could be easily — and perhaps most tellingly — described in terms of the genesis of the modern Lounge Suit. That’s Schumpeter on the fashion industry. Watch this space for Schumpeterian-type discussions of fashion, beer, Hollywood, …
Rational ignorance is a common theme of economists thinking about voting and the electorate, but what about willing ignorance? That’s the gist of this Schumpeter quotation: “[T]he typical citizen drops down to a lower level of mental performance as soon as he enters the political field. He argues and analyzes in a way which he …
Describe the industrial structure and to evaluate the interrelationships between firm size, market structure, and innovation in your assigned industry. You should address the following questions: What are the strengths and weaknesses of using a model of “perfect competition” (many firms, homogenous products, low switching costs, price competition) to characterize the industry? What is the …
Following up on Chapter VII of Capitalism, Socialism, & Democracy from last time, we move on to some rather more modern treatments of the economics of innovation. We start with Professor Galambos’ and a slightly modified version of the primer he gives to his students in his excellent course, In Pursuit of Innovation (coming this …
In the second post here, I will simply concentrate on Chapter VII of Capitalism, Socialism, and Democracy, and try to tie together some themes for the weekend. For our purposes, I have numbered the paragraphs 1-13. As we proceed into this chapter, it is probably useful to keep in mind that at the time of …
This is a first in a series of short posts to guide the Schumptoberfest readings. I included these readings literally to give you an introduction to Schumpeter and the “Schumpeterian Hypotheses.” These introductory readings shouldn’t take terribly long to read — perhaps an hour. I will carefully go through Chapter VII of Capitalism, Socialism, and …
I have logged several folks for the Schumptoberfest weekend weekend, October 22 to 24, at Björklunden. If you are interested and would like IS credit, please sign up with me by Friday. I have some IS forms tacked on the board outside my office. it is best that you sign up by Friday. Again, the …
As an addition to the burgeoning I&E program, the inaugural Schumptoberfest™ is coming to Björklunden over reading period weekend, October 22-24. If interested, you need to sign up with Professor Gerard. What is Schumptoberfest ? In short, it is a celebration of the ideas of economist Joseph Schumpeter, the subject of our first I&E Reading …
For those of you who wish to see a response to Rajan’s (and my) argument posted earlier today, Paul Krugman in a NY Times blogpost makes the standard Keynesian case for full fledged stimulus. He even criticizes our hero Schumpeter. The battlelines are drawn between short term and long term thinking.
Here are a few links for you as we bid farewell to the 2010 Lawrence economics graduates and brace ourselves for the alumni revelers descending upon campus for Reunion Weekend. As Neil Young might say, economics never sleeps.* As you have probably noticed, we have more than a passing interest in the oil spill around …
Great post by Richard Langlois at the Organizations and Markets blog about the extent to which “James Watt’s steam-engine patents retarded innovation in steam technology and slowed the British industrial revolution.” Typically, we teach that the patent is an imperfect solution to the “appopriability” or “positive externality” problem, where individuals and firms are reluctant to …
In a just published book entitled The Great Reset, Richard Florida explains how recessions can be Schumpeterian moments. See today’s Financial Times article on innovation inspired by economic recessions for some juicy examples.
Week three of the Spring term is shaping up to be a busy one for the economics crowd. On Monday we have our usual Economics TeaBA, featuring a discussion of health insurance reform (see here for the source article and here for Professor Finkler’s post). Stop by some time after 4:15 in Briggs 217 for …
Before I catalog my notes on the last section of the book, The Sage, I’d like to simply point out some excellent resources that have helped me to put Schumpeter’s work in context. Indeed, that is one of the main challenges for economists today, I think, is what was genuinely important about Schumpeter’s work and …
