Austrian Economist Joseph A. Schumpeter And His Notion Of Creative Destruction

Heilbroner, Robert L. "The Inexorable System of Karl Marx." The worldly philosophers: the lives, times, and ideas of the great economic thinkers. New York: Simon & Schuster, 1999. 133-67. Print.

During the nineteenth century, Karl Marx and Andrew Carnegie had definite opinions about the affects of industrialization on society. A greater understanding of their views on history and humanity can be gained by comparing and contrasting two written artifacts: The Communist Manifesto and “Wealth.”

More recently it seems that most profit lies in company-wide specialization, and the avant-garde of most industries lies entirely in individual companies working towards their own goals. In fact, recently competition has been avoided amongst very large companies, as it is more profitable to exploit the consumer by limiting their options. When the consumer has few to no options, there is little incentive to invest in the improvement of services. Capitalism can be both a catalyst and a hinderance for improvements, and it would be disingenuous to assume socialism couldn’t at least match capitalism in this regard. For example in socialistic societies, financial sustainability wouldn’t be a concern for freelance or employed thinkers. The idea that capitalism is holistically superior innovatively stems from capitalism’s omnipresence on a global scale. The ex post facto attribution of innovative technology to capitalism is a post hoc ergo propter hoc

Modern political economic theory and philosophy can be greatly attributed to the works of two men who seemingly held polar opposite views on the subject. Adam Smith, a Scottish philosopher, published his most well-known work An Inquiry into the Nature and Causes of the Wealth of Nations in 1776 and is most often associated with the ideas and principles of the political economic system known as Capitalism. At the other end of the spectrum is Karl Marx; the German philosopher most often associated with Communism and the author (or co-author) of The Communist Manifesto. This paper seeks to discuss the core differences in their respective political economic philosophies with regards to what economic value is and what the role of government should be in their versions of political economy. This will conclude with the argument that while Smith 's work had laid the foundation for modern economic philosophy, it was Marx who would ultimately leave the most significant impression upon the world with his revolutionary ideas.

In the face of a complex world, it is often difficult for both individuals and governing bodies to find the best way to live and rule. Many great thinkers have attempted to make sense of the world with organized systems that raise the question of what role humans hold within that structure. Friedrich Nietzsche creates an overarching view of existence in which individuals are responsible for their own lives, subsequently creating their own realities. For Nietzsche, human agency is the only system. On the other hand, John Maynard Keynes and F. A. Hayek create financial systems that take opposing stances on whether free will helps or hurts the economy. In this essay, I will show how both economic authors temper Nietzsche’s radical and existential

Karl Marx and Friedrich Engels have historically been considered to be two of the more outgoing opponents of capitalism; however, a closer reading of some of their works, particularly The Communist Manifesto, reveals a different circumstance. David Miller, a modern scholar who addresses Marx’s position on capitalism, stakes the claim that “[The Communist Manisfesto], somewhat oddly, it may seem, for a revolutionary tract, celebrates capitalism as much as it condemns it” (Miller, “Marx, Communism, and Markets,” 189). In his work entitled “Marx and Schumpeter on Capitalism's Creative Destruction: A Comparative Restatement,” John Elliott establishes that Marx’s stance on capitalism has been traditionally misinterpreted, and he sees more value in capitalism than most realize. Within the Manifesto, Marx and Engels identify a good number of capitalism’s positive contributions, specifically citing the large strides capitalism catalyzed in society’s economic and intellectual development. In this sense they were very complimentary of capitalism; however, they ultimately valued capitalism as a means to the eventual creation of a communist society, regardless of the positive contributions brought forth by capitalism.

Michael Munger of Duke University talks with EconTalk have Russ Roberts about permissionless Innovation. Munger battles that the ability to enhance without assent is the most basic thought of political economy. Munger shields this claim and examines the purposeful anecdote of creating demand as a move, an outline starting from the German craftsman Schiller.

It’s been almost two decades since Karl Marx and Friedrich Engels’s brilliant collaboration on the topic of capitalism was brought to light in the Communist Manifesto, yet the predictions made in their journals are yet to lose their grip on the world economy till date. From the invention of Internet phones to the practice of monopoly by the world’s richest men and great recession of 2008, Capitalism has continued to tighten its grip on the world economy. To this end, it seems plausible to approbate that Marx and Engels were adept in their predictions about capitalism.

This was an interesting week viewing Capitalism and Commercialism along with Thomas Garrett’s “Principle of Proportionality”. It became quite overwhelming with Garrett’s “Principle of Proportionality” when trying to decide what constitutes as a major evil vs a minor evil, considering they are both evil and trying to use the words “necessary” and “useful” can be complexing to who views a necessity and something that is useful. Now Capitalism was something I loved reading about, considering how far back it went in history. I laughed at the economist Karl Marx when he argued: “capitalism leads to oligopolies-a concentration of property and resources, and thus economic power, in the hands of a few.”

The word ‘capitalism’ can be defined in our modern society as large businesses and factories that control their rate of production and the way that profits are distributed throughout employees of the company. Being in control means that a company has the ability to know at all times where its money is and what said money is being used for. By doing this, they can earn as much money as possible. However, capitalism was not always centered around businesses and factories. In fact, the concept itself dates back to the Protestant Reformation in the 16th and 17th centuries. In The Protestant Ethic and the Spirit of Capitalism, author Max Weber discusses the origins of capitalism as we know it today. He argues that modern, 21st century capitalism

As the spirit of capitalism clearly portrays the attitude of rational pursuit of profit there had to be a moral justification among the reformed doctrines such as Calvinism concerning wealth. Wealth is often incorporated into religious ideas of greed and selfishness. While the Calvin doctrine ensured the pursuit of profit and wealth for self interest and sins of the flesh were still unethical, there also had to be a time and place when it was seen as a blessing, a sign. This idea of enabling a person to ‘labour to be rich for God, through not for the flesh and sin’ (Bendix 1966: 62) was necessary to rationalise and successful pursuit of economic gain for the Protestant. If the traditional values were held primarily to the attainment of wealth there would have been no economic incentive to accumulate profits or develop the hard, disciplined attitude towards work. With the origin of this attitude being that of religious Protestants after the reformation, it is safe to say their beliefs helped foster the conditions for successful modern capitalism.

The advent of the ideal of capitalism is often attributed to Adam Smith. Sometimes called “The Father of Economics,” Smith was an 18th century moral philosopher from Scotland. Smith is perhaps most known for writing the book “An Inquiry Into the Nature and Causes of the Wealth of Nations.” In this book Adam Smith considers and advances the ideas of the division of labor, the invisible hand, the pursuit of self-interest, the proper role of government and the idea of a Laissez-Faire (or noninterventionist) economy. Each of these ideas were considered heavily during the establishment and development of the United States. Because of their adoption into the new American government, the United States became the forerunner to the free-market.

Some 19th Century ideas were famous for "shocking the Bourgeoisie," who owned and benefitted most from capital. Karl

The Marxist conception that the material basis of human life is determinant of all other societal spheres, is contingent upon the human creative capacity for production. Perceiving man as “at all events a social animal,” Marx regarded history as the union of the social relations of production and the mode or techniques of production, culminating in the superstructure of society (Capital 444). From his account of history as the succession of “social formations,” characterized by antagonistic class structures and their respective modes of production, Marx interprets economic factors as the primary causal constituents of social life, that money binds human life and society altogether. Max Weber, however, contended that the rise of industrial capitalism could be rationalized by an emphasis on the ideas manifested particularly in the Protestant religion. He underscored the moral values and norms which pervaded Protestant societies and the reciprocal process by which religious ethics are swayed by economic and social catalysts and vice versa. Weber thus fostered a more dynamic conception of modern capitalist society, where ideas, namely the spirit of capitalism, rather than economic preconditions theorized by Marx, were instrumental forces in examining the origin of the capitalist system, how it evolved, and how it manifested itself into its present form.

This quote is the best representation of the spirit of this essay, carried through all its parts. The objective is not the critique of neoclassical economic theory in itself, but a starting point towards modernising the economic thought using old-new ways of thinking about capitalism. I felt that I can’t go ahead in research without writing this piece, highlighting some of the fallacies that are best-case misleading. A true progress in social sciences is impossible without