Joseph Alois Schumpeter: Case

“Since as we have seen the entrepreneurial qualification is something which, like many other qualities, is distributed in an ethnically homogeneous group according to the law of error, the number of individuals who satisfy progressively diminishing standards in this respect continually increases. Hence, neglecting exceptional cases — of which the existence of a few Europeans in a negro population would be an example — with the progressive lightening of the task continually more people can and will become entrepreneurs, wherefore the successful appearance of an entrepreneur is followed by the appearance not simply of some others, but of ever greater numbers, though progressively less qualified.”

Joseph Alois Schumpeter The Theory of Economic Development

The Theory of Economic Development (1934), Ch. 6 : The Business Cycle

People , Law , Error , Appearance

“The innovation is hazardous, impossible for most producers. But if someone establishes a business having regard to this source of supply, and everything goes well, then he can produce a unit of product more cheaply, while at first the existing prices substantially continue to exist. He then makes a profit. Again he has contributed nothing but will and action, has done nothing but recombine existing factors. Again he is an entrepreneur, his profit entrepreneurial profit. And again the latter, and also the entrepreneurial function as such, perish in the vortex of the competition which streams after them. The case of the choice of new trade routes belongs here.”

Joseph Alois Schumpeter The Theory of Economic Development

The Theory of Economic Development (1934), Ch. 4 : Entrepreneurial Profit

Business

“In all cases, not only in the two which we have analyzed, recovery came of itself. There is certainly this much of truth in the talk about the recuperative powers of our industrial system. But this is not all: our analysis leads us to believe that recovery is sound only if it does come of itself. For any revival which is merely due to artificial stimulus leaves part of the work of depressions undone and adds, to an undigested remnant of maladjustment, new maladjustment of its own which has to be liquidated in turn, thus threatening business with another crisis ahead. Particularly, our story provides a presumption against remedial measures which work through money and credit. For the trouble is fundamentally not with money and credit, and policies of this class are particularly apt to keep up, and add to, maladjustment, and to produce additional trouble in the future.”

Joseph Alois Schumpeter

"Depressions: Can we learn from past experience?" in Schumpeter, Joseph A.; Chamberlin, Edward; Leontief, Wassily W.; Brown, Douglass V.; Harris, Seymour E.; Mason, Edward S.; Taylor, Overton H., The economics of the recovery program (1934)

Money , Truth , Business , Future