Schumpeter on Capitalism
Chris Coyne
David Saito-Chung has an article at Investor's Business Daily on how "Joseph Schumpeter spoke out for Capitalism."
Here is an excerpt:
In his view, classes did not form because of capitalism. They formed because people spent more time with other people of the same background, interests and social standing. Schumpeter argued that if a man wanted to reach a higher class, becoming an entrepreneur gave him that chance...
Schumpeter saw that investors fuel capitalism because they finance new ideas. They provide credit, knowing all the while that they could lose 100% of their investment.
Our very own Pete Boettke is quoted as well:
Peter Boettke, a professor of political economy at George Mason University in Virginia, likens capitalism's success to a horse race.
One horse, named Schumpeter, represents innovation. The second horse, called Smith, stands for free trade. The third is government "and its stupid decisions," Boettke said.
"As long as the first two horses stay ahead of the stupid horse, the economy's cycles are manageable," he told IBD. "The trouble happens when the stupid horse's nose gets in front by (creating) policies that restrict trade or are anti-technology."
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