History of Economic Thought. Economic views of J. Schumpeter (the most important)

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History of Economic Thought. Economic views of J. Schumpeter (the most important)

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55. ECONOMIC VIEWS OF J. SCHUMPETER

Joseph Schumpeter (1883-1950) - Economist and sociologist. His views combine both elements of institutionalism and premises of classical political economy.

Schumpeter gained fame for his work "The Theory of Economic Development" (1912).

He developed theory of economic development, placing at the center of the analysis those internal factors that cause the economic development of the system. Such factors are new production combinations, they determine the dynamic changes in the economy.

These new combinations are:

1) creation of a new product;

2) use of new production technology;

3) the use of a new organization of production;

4) opening of new sales markets and sources of raw materials. New combinations are associated with an entrepreneur who, by overcoming technological and financial difficulties, discovers new ways to make a profit.

In the concept of economic development Schumpeter assigns a particularly important role to the entrepreneur.

Entrepreneurship - a special gift, a property of a human character that does not depend on class, social affiliation.

Entrepreneurship is characterized by the following features:

1) self-reliance;

2) risk preference;

3) the value of one's own independence;

4) orientation to one's own opinion;

5) the need to achieve success despite the fact that the very value of money for him is not great;

6) the desire for innovation.

В static state Schumpeter highlights entrepreneurial motives дactivities based on rational behavior (maximum utility, benefit), in dynamic model - the motive of irrationality, the main motives are self-development of the personality, success, creativity.

Schumpeter introduced concepts "effective competition" и "effective monopoly", linking them with the process of innovation, which is the core of a new type of competition. The innovator receives profit, which is an incentive and reward for his inventions, so the monopoly, which is a consequence of innovation, Schumpeter call effective monopoly and recognized it as a natural element of economic development.

Banks are a special phenomenon of development, which, speaking on behalf of the national economy, issue the authority to implement new production combinations.

Schumpeter infers existence economic qiкfishing of the periods of introduction of inventions, carried out by jerks, one invention pulls a bunch of innovations (economic cycles). Also in this work he singles out and establishes relationship between loop types - long, classic and short.

The cause of economic crises Schumpeter saw in the panic associated with the termination of the economic boom, highlighting the psychological motive as central to explaining this phenomenon.

The basis of the existence of capitalism he saw in the private enterprise system of the classical type, based on small and medium-sized property. With the accumulation of wealth in corporations, the culture and the nature of thinking change, since the corporation is managed by managers, and they have no desire for innovation, there is no consistency in decision-making at all levels, but there is only a desire for a career, i.e., the possibility of economic development disappears.

Author: Tatarnikov E.A.

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