5 Lessons from Schumpeter

Capitalism and Democracy in the 21st Century

This short book publishes a 1998 essay on the famous Austrian-American economist Joseph A. Schumpeter (1883 to 1950) who is renowned for his concept of "Creative Destruction" in capitalism. The essay focuses on using Schumpeter's method of socio-economic analysis to obtain insights on trends for capitalism and democracy in the 21st century. The fact that the essay is from 1998 provides an interesting way of testing the value of Schumpeter's insights to see how these insights have fared since 1998. Schumpeter is very popular among writers on business and economics because his concept of creative destruction focuses attention on the role of innovation. We are living again in a time of great innovation through the marvels of computing, including artificial intelligence. Thus some familiarity with Schumpeter is quite relevant today. It is also noteworthy that Schumpeter's insights can be applied beyond the narrow areas of business and economics just as Thomas Kuhn's work on scientific revolutions resonates beyond the natural sciences. The concept of creative destruction and, more importantly, Schumpeter's broad method of social analysis that includes historical, cultural, legal, and technological changes are of value beyond the narrow fields of specialized economics.