I am an economics professor and have been dissatisfied with the way that economic theory has described the miracle of economic growth the global economy has seen since the beginning of the Industrial Revolution. Growth cannot come without progress, which means new and improved goods and services, and more efficient production methods. Progress is the result of entrepreneurship. The role of entrepreneurship in the creation of economic progress has been underappreciated by economists, which was my motivation for exploring the topic in more detail.
Schumpeter describes capitalism as an ever-evolving economic system driven by entrepreneurship and characterized by creative destruction.
New and improved goods and services are created by entrepreneurs and displace the old. His discussion of capitalism is very insightful, but his discussion socialism is somewhat dated.
I recommend skipping ahead to read his discussion of capitalism first.
“Joseph Schumpeter’s classic Capitalism, Socialism and Democracy explains the process of capitalism’s 'creative destruction' — a key principle in understanding the logic of globalization." — Thomas L. Friedman, Foreign Policy
In this definitive third and final edition (1950) of his prophetic masterwork, Joseph A. Schumpeter introduced the world to the concept of “creative destruction,” which forever altered how global economics is approached and perceived. Now featuring a new introduction by Pulitzer Prize-winning Schumpeter biographer Thomas K. McCraw, Capitalism, Socialism and Democracy is essential reading for anyone who seeks to understand where the world economy is headed.
Kirzner characterizes entrepreneurship as the noticing of previously unnoticed profit opportunities.
Economists tend to depict firms and markets as in a state of equilibrium in which the quantity supplied equals the quantity demanded, but Kirzner notes that no real competition is taking place when firms are represented that way. The entrepreneurship that Kirzner describes produces the new and improved goods that drive economic progress.
The real value of this book is the way it questions how economists typically characterize competitive markets.
Stressing verbal logic rather than mathematics, Israel M. Kirzner provides at once a thorough critique of contemporary price theory, an essay on the theory of entrepreneurship, and an essay on the theory of competition. Competition and Entrepreneurship offers a new appraisal of quality competition, of selling effort, and of the fundamental weaknesses of contemporary welfare economics.
Kirzner's book establishes a theory of the market and the price system which differs from orthodox price theory. He sees orthodox price theory as explaining the configuration of prices and quantities that satisfied the conditions for equilibrium. Mr. Kirzner argues that "it is more…
Beinhocker looks at an economy as an evolutionary social system and builds on complex adaptive systems theory to describe the way that economies evolve to produce new goods and services, and in the process, increase wealth.
The book describes the evolution of the global economy from primitive times to the present, and explains how institutions such as financial markets have developed to facilitate economic activity. The book is well-written and a joy to read.
If you start reading the book, you will be compelled to finish it.
Over 6.4 billion people participate in a $36.5 trillion global economy, designed and overseen by no one. How did this marvel of self-organized complexity evolve? How is wealth created within this system? And how can wealth be increased for the benefit of individuals, businesses, and society? In The Origin of Wealth, Eric D. Beinhocker argues that modern science provides a radical perspective on these age-old questions, with far-reaching implications. According to Beinhocker, wealth creation is the product of a simple but profoundly powerful evolutionary formula: differentiate, select, and amplify. In this view, the economy is a "complex adaptive system" in…
Landes is an economic historian who describes the development of economies throughout history and throughout the world, noting the importance of market institutions to economic development.
Nations that have protected property rights and enforced an objective set of laws have prospered, while those that have not remain poor. The history is interesting and the evidence is compelling. An institutional environment that fosters entrepreneurship is essential for prosperity.
Now that the old division of the world into the two power blocs of East and West has subsided, the great gap in wealth and health that separates North and South remains the single greatest problem and danger facing the world of the Third Millennium. The only challenge of comparable scope and difficulty is the threat of the environmental deterioration, and the two are intimately connected, indeed are one. David Landes argues that the North-South division is the great drama of our times, and that drama implies tension, passion, conflict and disappointment as well as happy outcomes. While Landes does…
Economists tend to characterize firms as profit maximizers, but the people who manage firms operate in an uncertain environment and the path to profitability is rarely clear.
Firms that suffer losses or go out of business provide evidence on this. Foss and Klein depict those who run firms as entrepreneurs who must use their judgment in the face of uncertainty to direct their firms.
They connect the concepts of management and entrepreneurship more closely than has been done in the past, creating a bridge between the academic literature in economics and management.
Entrepreneurship, long neglected by economists and management scholars, has made a dramatic comeback in the last two decades, not only among academic economists and management scholars, but also among policymakers, educators and practitioners. Likewise, the economic theory of the firm, building on Ronald Coase's (1937) seminal analysis, has become an increasingly important field in economics and management. Despite this resurgence, there is still little connection between the entrepreneurship literature and the literature on the firm, both in academia and in management practice. This book fills this gap by proposing and developing an entrepreneurial theory of the firm that focuses on…
Economists (and people, more generally) tend to look at economic growth as income growth, but income could not grow as much as it has without the introduction of new and improved goods into the economy. We travel in automobiles rather than horse-drawn wagons, and communicate using smartphones rather than by telegraph. That economic progress is the result of entrepreneurs who take the risks, and if they are successful, reap the rewards of introducing innovations into the economy. Innovations tend to build on one another, but an innovative economy requires free markets and a set of institutions my book describes in more detail. Economic growth cannot be understood without understanding economic progress, and economic progress is the product of entrepreneurship.
I come by my interest in history and the years before, during, and after the Second World War honestly. For one thing, both my father and my father-in-law served as pilots in the war, my father a P-38 pilot in North Africa and my father-in-law a B-17 bomber pilot in England. Their histories connect me with a period I think we can still almost reach with our fingertips and one that has had a momentous impact on our lives today. I have taken that interest and passion to discover and write true life stories of the war—focusing on the untold and unheard stories often of the “Average Joe.”
October 24, 1944, is not a day of national remembrance. Yet, more Americans serving in World War II perished on that day than on any other single day of the war.
The narrative of No Average Day proceeds hour by hour and incident by incident while focusing its attention on ordinary individuals—clerks, radio operators, cooks, sailors, machinist mates, riflemen, and pilots and their air crews. All were men who chose to serve their country and soon found themselves in a terrifying and otherworldly place.
No Average Day reveals the vastness of the war as it reaches past the beaches in…
October 24, 1944, is not a day of national remembrance. Yet, more Americans serving in World War II perished on that day than on December 7, 1941, when the Japanese attacked Pearl Harbor, or on June 6, 1944, when the Allies stormed the beaches of Normandy, or on any other single day of the war. In its telling of the events of October 24, No Average Day proceeds hour by hour and incident by incident. The book begins with Army Private First-Class Paul Miller's pre-dawn demise in the Sendai #6B Japanese prisoner of war camp. It concludes with the death…
