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Schumpeter and the Obsolescence of the Entrepreneur

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  • Richard N. Langlois

    (University of Connecticut)

Abstract
The English-language literature of technological change is one of the few areas of economic writing in which Joseph Schumpeter has maintained a following and in which he has been accorded some modicum of the attention he deserves. There has grown up within this literature a standard interpretation of Schumpeter's famous assertion that progress will eventually come to be 'mechanized'. The conventional wisdom goes something like this. The argument in Schumpeter's early writings by which writers invariably mean the 1934 English translation of The Theory of Economic Development -- is really quite different from that in Capitalism, Socialism, and Democracy. There are, in effect, two Schumpeters: an 'early' Schumpeter and a 'later' Schumpeter. It was the former who believed in the importance of bold entrepreneurs, while the latter envisaged their demise and replacement by a bureaucratized mode of economic organization. Moreover, the reason Schumpeter changed his views is that he was reacting to the historical development of capitalism as he saw it taking place around him. As he moved from the world of owner-managed firms in early twentieth-century Europe to the world of large American corporations in the 1930s and 1940s, his opinions changed appropriately. The paper attempts to make two points. The first is that, as a doctrinal matter, the 'two Schumpeters' thesis, as it is understood in the Anglo-American literature on technological change, is clearly wrong. Equally wrong is the idea that the fundamentals of Schumpeter's thought on entrepreneurship were influenced importantly by any observation of large firms in the United States after 1931. Schumpeter's ideas were remarkably consistent from at least 1926 (five years before he came to the U. S.) until his death. The obsolescence thesis speaks to a distinction between early capitalism and later capitalism, perhaps, but not to an earlier and later Schumpeter. The second, and more important, point is that the obsolescence thesis is wrong. It rests on a confusion -- or perhaps a bait-and-switch -- between two quite different kinds of economic knowledge.

Suggested Citation

  • Richard N. Langlois, 2002. "Schumpeter and the Obsolescence of the Entrepreneur," Working papers 2002-19, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2002-19
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    Cited by:

    1. Bormotov, Michael, 2010. "Modern Knowledge Based Economy: all-factors endogenous growth model and total investment allocation," MPRA Paper 19932, University Library of Munich, Germany.
    2. Remy Guichardaz & Julien Pénin, 2021. "Entrepreneurs “from within”? Schumpeter and the challenge of endogenizing novelty," Working Papers of BETA 2021-41, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    3. Michaela Slabová, 2021. "Development of Entrepreneurial Competencies of Students and Relevent Teaching Methods," Economics Working Papers 2021-05, University of South Bohemia in Ceske Budejovice, Faculty of Economics.
    4. Deirdre Nansen McCloskey, 2022. "Schumpeter the incomplete rhetorician," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(4), pages 423-443, December.
    5. Slavo Radosevic, 2007. "National Systems of Innovation and Entrepreneurship: In Search of a Missing Link," UCL SSEES Economics and Business working paper series 73, UCL School of Slavonic and East European Studies (SSEES).
    6. Federica Saliola & Antonello Zanfei, 2007. "Multinational firms, global value chains and the organization of technology transfer," Working Papers 0710, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2007.
    7. Anthony Endres & Christine Woods, 2010. "Schumpeter’s ‘conduct model of the dynamic entrepreneur’: scope and distinctiveness," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 583-607, August.
    8. Forero, Clemente & Corredor, Sandra & Forero, Nohora, 2010. "Business Networks and Innovation in SMEs of a Developing Country," Galeras. Working Papers Series 027, Universidad de Los Andes. Facultad de Administración. School of Management.
    9. Sophie Boutillier, 2008. "The Russian Entrepreneur Today: Elements of Analysis of the Socialized Entrepreneur," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 131-154.
    10. Saliola, Federica & Zanfei, Antonello, 2009. "Multinational firms, global value chains and the organization of knowledge transfer," Research Policy, Elsevier, vol. 38(2), pages 369-381, March.
    11. Bormotov, Michael, 2009. "Economic cycles: historical evidence, classification and explication," MPRA Paper 19616, University Library of Munich, Germany.
    12. Les Oxley & Shangqin Hong & Philip McCann, 2013. "Why Size Maters: Investigating the Drivers of Innovation and Economic Performance in New Zealand using the Business Operation Survey," Working Papers in Economics 13/13, University of Waikato.
    13. Heinz Kurz, 2012. "Schumpeter’s new combinations," Journal of Evolutionary Economics, Springer, vol. 22(5), pages 871-899, November.
    14. Ferlito, Carmelo, 2015. "Entrepreneurship: State of grace or human action?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 27(1-2), pages 11-36.
    15. Petr Řehoř & Martin Pech & Michaela Slabová & Ladislav Rolínek, 2020. "Contemporary Opinions on the Importance of Entrepreneurial Competencies," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 6(2), pages 127-137.
    16. Marín, Alejandra & Laureiro, Daniela & Forero, Clemente, 2007. "Innovation patterns and intellectual property in SMEs of a developing country," Galeras. Working Papers Series 017, Universidad de Los Andes. Facultad de Administración. School of Management.
    17. Ferlito, Carmelo, 2015. "Entrepreneurship: State of grace or human action? Schumpeter’s leadership vs Kirzner’s alertness," MPRA Paper 67694, University Library of Munich, Germany.

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