Joseph Alois Schumpeter

This week in Mailbox: we reveal the name of our November mystery man and announce the names of the winners of our monthly listeners’ competition. Listeners quoted: Keith A. Simmonds, Bart Caspers, Constantin Liviu Viorel, Christine Takaguchi-Coates, Keith Wixtrom, David Eldridge, Ciaran Parker, Lola Hamrayeva, Charles Konecny, Annette Harris.

Another month has gone by and it’s time again to announce the results of Radio Prague’s monthly listeners’ competition.

We asked you to tell us the name of a Moravian-born American economist and political scientist whose important contributions to global economic thinking include the theories of business cycles and development, entrepreneurship, his theory of growth, and creative destruction. Again, you filled our inbox with correct answers, some of them very long – so I hope you will understand that we only quote short bits.

Keith A. Simmonds listens to Radio Prague in Trinidad and Tobago:

Joseph Alois Schumpeter was one of the most influential economists who lived in the first half of the 20th century. He was a political scientist and was known as the father of ‘creative destruction’, the famous phrase in which the old ways of doing things are endogenously destroyed and replaced by the new. He was a prolific writer whose works dealt with various themes like economic analysis, business cycles, the demise of capitalism, democratic theory and entrepreneurship. He died on the 8th of January, 1950.”

Bart Caspers follows our programmes in the Czech Republic:

“I do remember this name from my economics study, however I was unaware of the fact that this man was born in the Czech Republic.”

Constantin Liviu Viorel lives in Romania:

“Some years ago I was sent by my institute to visit the University of Czernowitz (Cernauti in the Romanian language, a town situated in Bucovina, an old region of Romania and which is now in Ukraine), and with this occasion I heard for the first time that Joseph Alois Schumpeter was a teacher at this university in 1909. In Czernowitz I read his biography, that he was born in Triesch, Moravia on the 8th of February 1883. In that period Moravia like the Bucovina region was part of the Austrian-Hungarian Empire. He began to study law at the University of Vienna. After the period from Czernowitz he became professor at the University of Graz in 1911.”

Christine Takaguchi-Coates follows Radio Prague in Japan:

“For a short while in 1919, he served as Finance Minister in the Socialist cabinet of the new Austrian Republic. There he came up against runaway inflation which he found hard to stem. He then went into private banking, but the stabilization crisis caused the bank to collapse, so in 1925 he accepted to go to Bonn University. He visited the United States as an exchange professor at Columbia and Harvard universities on several occasions, and in 1932, he received a permanent faculty appointment at Harvard. [...] The EU innovation programme and its main development plan The Lisbon Strategy, are based on Schumpeter. He died at his country home in Taconic, Connecticut on January 8th, 1950.”

Keith Wixtrom from Texas sent in this answer:

“The answer to the quiz would be Joseph Alois Schumpeter. I have always enjoyed the quote attributed to him about how he always wanted to be ‘the best economist in the world, the best horseman in Austria and the best lover in Vienna. Alas, there was always a better horseman than I.’”

David Eldridge from England sent us an in-depth analysis of Schumpeter’s life and work – which were often not without controversies – but we can only fit in a short quote:

“After graduating from Vienna in 1906 he travelled widely, first to Germany, then France and England. He spent one year in England where he lived the life-style of an aristocratic economist, not only hunting foxes and riding his private horse in Hyde Park, but also studying for long hours in the British Museum. [...] In the mid 1920’s Schumpeter worked on a popular topic amongst economists of the time: business cycles, and in 1928 published an article called ‘The Instability of Capitalism’. He argued that the main reason for the increase in economic instability was that the entrepreneur was disappearing and being replaced by teams of researchers working for huge corporations. [...] Schumpeter died at the age of 66 during the night of 7th January 1950 from a cerebral haemorrhage, which some suspected was due to overwork combined with a lack of will to live.”

Ciaran Parker from Ireland sent in this:

“I am nearly 100 per cent sure that the answer to your question is Joseph Alois Schumpeter, whom I didn't realise was Moravian. I thought he was Austrian, but then I always learn something from Radio Prague.”

Lola Hamrayeva follows Radio Prague in Seoul:

“I am truly amazed by the huge number of smart and talented people the Moravian ground has brought up... and the tendency is continuing. Joseph Alois Schumpeter, another Moravian, was born in Trest, near Jihlava. [...] More than any other theoretical economist, Schumpeter was aware of the fact that economic reality is only a part of the total reality and is credited for increasing our understanding of non-economic events. These thoughts are also reflected in his synthetic work Capitalism, Socialism, and Democracy in which he argued that capitalism will eventually be destroyed through its own success and be replaced by some form of public control.”

Charles Konecny from Ohio wrote this in his answer:

“He had detractors to his economic and entrepreneurship theories but economists always have differences on business cycles and economic development. In reading his bio, and I am no economist, I do believe he was correct when he argued that capitalism caused entrepreneurs to ‘innovate new products, new means of production, and new forms of organization of a company that takes skill and daring’. This in turn caused old ideas, technologies, and equipment, to become obsolete. This was his ‘creative destruction’ theory that he believed caused progress and improved the standard of living for everyone. One example of ‘creative destruction’ at this time is in the area of computers and internet surfing. Boy, if it is 5 or 6 years old, it is already somewhat obsolete. But, as Mr. Schumpeter says, this ‘creative destruction’ causes progress and an improved standard of living.”

Annette Harris from the United States sent us this:

“He believed that capitalism would be destroyed not by its enemies but would be destroyed by its successes. He was married three times and his third wife, Elizabeth Broody was editor of Schumpeter's ‘History of Economic Analysis’ which was published posthumously in 1954. He saw the process of creative destruction as being an essential dynamic of capitalism. Entrepreneurs, because of innovations force adoption of new patterns of production and consumption.”

Once again, many thanks to all of you for writing in; for taking the time to research the facts and also for your thoughts. This time we have two Keiths winning: Keith Simmonds from Trinidad and Tobago and Keith Wixtrom from the United States. Parcels are also in the post for Pier Carlo Acchino from Italy and David Eldridge from England. Congratulations!

And now it’s time to announce this year’s last quiz question.

This time our mystery Czech is a lady. She was born one hundred years ago in Prague. This famous soprano was a star of the Metropolitan Opera in the 1940s and 1950s. She died in New York in 1994.

Your answers should reach us by the end of the year at the usual address: [email protected] or Radio Prague, 12099 Prague. Those are also the addresses for your comments and questions and, of course, reception reports. Until next week, bye-bye.