Joseph A. Schumpeter [ ] Économiste autrichien classique, professeur à l'université de Harvard, aux États-Unis, à partir de 1932, - PDF

Joseph A. Schumpeter [ ] Économiste autrichien classique, professeur à l'université de Harvard, aux États-Unis, à partir de 1932, (1939) BUSINESS CYCLES A Theoretical, Historical and

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Joseph A. Schumpeter [ ] Économiste autrichien classique, professeur à l'université de Harvard, aux États-Unis, à partir de 1932, (1939) BUSINESS CYCLES A Theoretical, Historical and Statistical Analysis of the Capitalist Process Abridged, with an introduction, by Rendigs Fels Un document produit en version numérique par Didier LAGRANGE, bénévole, Chef de projets dans une entreprise du secteur automobile, France Courriel: Dans le cadre de: Les classiques des sciences sociales Une bibliothèque numérique fondée et dirigée par Jean-Marie Tremblay, professeur de sociologie au Cégep de Chicoutimi Site web: Une collection développée en collaboration avec la Bibliothèque Paul-Émile-Boulet de l'université du Québec à Chicoutimi Site web: Joseph Schumpeter, Business Cycles. (1939) 2 Cette édition électronique a été réalisée par Didier LAGRANGE, bénévole, Chef de projets dans une entreprise du secteur automobile, France à partir de : Joseph A. Schumpeter [ ] BUSINESS CYCLES. A Theoretical, Historical and Statistical Analysis of the Capitalist Process. New York Toronto London : McGraw-Hill Book Company, 1939, 461 pp. Abridged, with an introduction, by Rendigs Fels Polices de caractères utilisée : Pour le texte: Times New Roman, 14 points. Pour les citations : Times New Roman, 12 points. Pour les notes de bas de page : Times New Roman, 12 points. Édition électronique réalisée avec le traitement de textes Microsoft Word 2004 pour Macintosh. Mise en page sur papier format : LETTRE (US letter), 8.5 x 11 ) Édition numérique réalisée le 14 juillet 2007 à Chicoutimi, Ville de Saguenay, province de Québec, Canada. Fichier revu et corrigé le 31 mars 2008. Joseph Schumpeter, Business Cycles. (1939) 3 Joseph A. Schumpeter [ ] BUSINESS CYCLES. A Theoretical, Historical and Statistical Analysis of the Capitalist Process. New York Toronto London : McGraw-Hill Book Company, 1939, 461 pp. Abridged, with an introduction, by Rendigs Fels Joseph Schumpeter, Business Cycles. (1939) 4 Table of Contents I. EDITOR'S INTRODUCTION II. III. Chapter I. INTRODUCTORY Chapter II. EQUILIBRIUM AND THE THEORETICAL NORM OF ECONOMIC QUANTITIES A. The Meaning of a Model B. The Fundamental Question C. The Stationary Flow D. Equilibrium and the Theoretical Norm E. Complications and Clarifications F. Imperfect Competition G. Equilibrium Economics and the Study of Business Fluctuations IV. Chapter III. HOW THE ECONOMIC SYSTEM GENERATES EVOLU- TION A. Internal Factors of Change B. The Theory of Innovation C. The Entrepreneur and His Profit D. The Role of Money and Banking in the Process of Evolution E. Interest (Money Market; Capital) V. Chapter IV. THE CONTOURS OF ECONOMIC EVOLUTION A. The Working of the Model; First Approximation B. Looking at the Skeleton C. The Secondary Wave; Second Approximation D. Many Simultaneous Cycles; Third Approximation VI. Chapter V. TIME SERIES AND THEIR NORMAL A. Introduction B. Trend C. A Single Cyclical Movement D. Many Simultaneous Waves Joseph Schumpeter, Business Cycles. (1939) 5 VII. Chapter VI. HISTORICAL OUTLINES. I. INTRODUCTION; A. The Fundamental Importance of the Historical Approach to the Problems of the Cyclical Process of Evolution. B. Questions of Principle. A few questions of principle must be disposed of first C. The Long Wave from 1787 to 1842 VIII. Chapter VII. HISTORICAL OUTLINES. II A. The Period B. The Agricultural Situations of the Period C. Railroadization D. Some Features of the Development of Manufactures E. The First Sixteen Years of the Third Kondratieff ( ) IX. Chapter VIII A. Postwar Events and Postwar Problems B. Comments on Postwar Patterns C. Further Comments on Postwar Conditions D. Outlines of Economic History from 1919 to 1929 E. The Industrial Revolution of the Twenties Joseph Schumpeter, Business Cycles. (1939) 6 Joseph Schumpeter, BUSINESS CYCLES (1939) I. EDITOR S INTRODUCTION RENDIGS Fels - Vanderbilt University Table of Contents The younger generation of economists should look upon this book merely as something to shoot at and start from as a motivated program for further research. ' Joseph A. Schumpeter, Preface to Business Cycles, 1939 edition, p. v. Schumpeter had bad luck with Business Cycles. 1 The most ambitious work of the trilogy setting forth the Schumpeterian system, it has attracted less attention than his Theory of Economic Development 2 or his Capitalism, Socialism, and Democracy. 3 It is true that a reference to Business Cycles can occasionally be found in a footnote, but the text to which the footnote is appended rarely contains a dis- 1 The full citation is Joseph A. Schumpeter, Business Cycles : A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, 1 st edition (New York and London : McGraw-Hill Book Company, Inc., 1939}. Schumpeter, an Austrian economist who spent the last eighteen years of his life at Harvard, was born in 1883 and died in For an account of his life see the Memorial by Arthur Smithies in the American Economic Review, September 1950, pp The Theory of Economic Development ; an Inquiry into Profits, Capital, Credit, Interst, and the Business Cycle, translated from the German by Redvers Opie (Cambridge, Mass. : Harvard University Press, 1934). 3 3d edition (New York : Harper & Brothers Publishers, 1950). Joseph Schumpeter, Business Cycles. (1939) 7 criminating discussion of its ideas. Clemence and Doody accorded it its proper place in The Schumpeterian System, but they preferred defending their former teacher against criticism to paying him the higher compliment of building on his work. 4 The publication date of Business Cycles proved singularly unfortunate. Had it appeared three years before Keynes's General Theory sent economists scurrying off in other directions instead of three years' afterwards, it would have gained from the enormous interest everyone had in business cycles in 1933 and might have been accorded a reception second only to that later received by the General Theory itself. 5 Instead, it appeared just as the outbreak of World War II raised economic problems to which Keynes's tools, but not Schumpeter's, could be readily adapted. But Business Cycles lost almost as much from appearing six years too soon as from appearing six years too late. Given a different title, it might in 1945 have profited from the growing interest in economic development, for its theme is as much how the present industrial nations developed as the themes indicated by its title and subtitle. Modern scholars can hardly be blamed if they turn for Schumpeter's ideas on the subject that currently fascinates them to a book called The Theory of Economic Development rather than to a book called Business Cycles. They might have done so even if the titles had been reversed ; they might well prefer the shorter, more finished account to the longer, less polished one. The kind of fault that contributed to the success of Keynes's General Theory added to the neglect of Schumpeter's Business Cycles. Both would have been better books had their authors spent another year improving them. Whereas the shortcomings of the General Theory stimulated other economists to lay bare and refine and 4 Richard V. Clemence and Francis S. Doody, The Schumpeterian System (Cambridge, Mass. : Addison-Wesley Press, 1950). 5 John M. Keynes, The General Theory of Employment, Interest, and Money (New York : Harcourt, Brace and Company, 1936). Joseph Schumpeter, Business Cycles. (1939) 8 apply the model half-concealed in it, incidentally making Keynesians of them, the similar need to clarify and improve and use the Schumpeterian model repelled them. There are no Schumpeterians. One need not take issue with Schumpeter's criticism of Marshall for lavishing too much time on the eight editions of the Principles to hold that he himself made the opposite error. 6 Though a quarter of a century has elapsed since the first edition of Business Cycles, the opportunities it opened up for further research remain largely unexploited. The chief exception is Schumpeter's own Capitalism, Socialism, and Democracy. Much has been published on innovation and entrepreneurship, usually with a nod in Schumpeter's direction but no more. Even a work like Yusif A. Sayigh's Entrepreneurs of Lebanon, which ostensibly takes Schumpeter's concepts as its starting point, actually deals with entrepreneurs as people their education, religion, opinions, even the number of their children to the neglect of what was central to Schumpeter's analysis, innovating activity and its impact. 7 At the time Business Cycles was written, work on Kuznets cycles the long swings of fifteen to twenty years was still at an early stage. Since then a large amount of statistical and a small amount of analytical work has gone forward. Those who have made the principal efforts to explain Kuznets cycles, Matthews and Abramovitz, have not seen fit to draw on Schumpeter's work but have resorted to an incomplete and essentially aggregative tool, the capital-stock adjustment principle. 8 (It is ironic that a generation of economists that tegards 6 «Alfred Marshall, Principles of Economics, 8th edition (London : Macmillan and Co., limited, 1922). 7 Entrepreneurs of Lebanon ; The Role of the Burine» Leader in a Developing Economy (Cambridge, Mass. : Harvard University Press, 1962). 8 R.C.O. Matthews, The Business Cycle (Chicago : University of Chicago Press, 1959), Ch. 12 ; Moses Abramovitz, The Nature and Significance of Kuznets Cycles, Economic Development and Cultural Change, April 1961, pp Joseph Schumpeter, Business Cycles. (1939) 9 disaggregation as a shining virtue has underestimated the theory of such a staunch opponent of aggregation as Schumpeter. In our heart of hearts, we prefer the aggregates of Keynes, Harrod, Domar, etc. ; despite Walras's earlier and better claim to a general theory, we permitted Keynes to take over the term, Schumpeter's objections notwithstanding. Our cant about disaggregation means only that we have guilty consciences.) Yet Schumpeter's concept of recesssion could be exceedingly helpful in interpreting the 1870s, a period which raises a problem ignored by Matthews and Abramovitz in the works cited in the footnote above. Their most telling evidence for the existence of Kuznets cycles consists of two circumstances, swings in the rate of growth of real GNP that average fifteen to twenty years, and the recurrence of deep depressions at similar intervals there was one in the 1870s, one in the 1890s, there would (or might) have been one in the 1910s but for World War I, and there was one in the 1930s. Including in the category of deep depressions at first sight seems reasonable enough, since it is generally considered not only the longest but also one of the worst business contractions on record. But Abramovitz shows a tentative peak in the rate of growth of real GNP, after eliminating the effects of business cycles, which he dates This means that the average annual rate of growth between the complete business cycle with peaks in 1869 and 1873 and the complete business cycle with peaks in 1873 and 1882 was higher than for neighboring pairs of cycles in fact it was the highest on record for any successive pairs of cycles, in spite of the fact that the contraction included in the period is rated a deep depression, whereas the contraction phase of the preceding cycle was very mild. Thus the statistical finding about the rate of growth of real GNP collides with the judgment that was a deep depression ; furthermore, it plays hob with Abramovitz's analysis of the way Kuznets cycles unfold, in which deep depressions and troughs in growth rates go together. How can the paradox of a rapid rate of growth in a period encompassing deep depression be resolved? Schumpeter's concept of recession could illuminate it : previous innovation must have made possible a great increase in output that imposed hardship symptoms Joseph Schumpeter, Business Cycles. (1939) 10 of depression on all parts of the economy unable to adapt to the new conditions. Not that one can turn to Schumpeter's own account of the 1870s for a ready-made explanation of the facts Matthews and Abramovitz have wrestled with ; it is rather that today's economists are missing an opportunity to build on Schumpeter's work. The importance of a book is judged by what it leads to. By this test, it is doubtful if Schumpeter's Business Cycles would merit rescue from the limbo of out of print. The first reason for the present edition lies in the conviction that it can yet stimulate significant research. Why an abridged edition? Ordinarily, I deplore abridgements, but in the present case there is every reason to believe that a shorter version will prove more useful, especially since the longer one will always be available in libraries. Eliminating digressions and the less valuable parts of the original two volumes, which ran to more than a thousand pages, will enable the reader, I hope, to spend his time more profitably. Having myself spent a great deal of labor trying to master the original edition, I have nothing but sympathy for economists who felt that it was not worth the effort In the work of abridgement, my first concern has been to preserve a complete statement of the theory, since less thorough accounts are readily available elsewhere. This has meant retaining most of Chapters II, HI, and IV and parts of Chapters I and V. Even in Chapters II- IV, however, I have not hesitated to cut footnotes, paragraphs, and whole pages where the discussion seemed to go pretty far afield, as well as deleting superfluous sentences and phrases. Although I hope that what remains is somewhat more readable than the original, it is still hard going, and I would have liked to add as an appendix a summary of Schumpeter's theory that I prepared for my own use many years ago. But it seemed better to save the space for Schumpeter's own words. Besides, an excellent summary of Schumpeter's theory is Joseph Schumpeter, Business Cycles. (1939) 11 already available in Clemence and Doody's The Schumpeterian System. 9 My second concern was to retain a full account of the interpretation of the cyclical history of one country, in preference to partial accounts of the three countries that Schumpeter discussed at length. The nature of the theory, which includes a Kondratieff cycle sixty years in duration, calls for a long sweep of history. That the country chosen should be the United States rather than England or Germany reflects more than the national origins of editor and publisher. The United States was the country Schumpeter devoted most attention to and, particularly in the discussion of the 1930s, is the one that best illustrates the working of his model. The decisions to keep fairly complete accounts of the theory and of its application to one country dictated omitting virtually all the statistical analysis (Chapters VII-XIII and a long section of Chapter XIV of the original edition). One of the reviews that appeared not long after the 1939 edition was published criticized it for not having a serviceable statistical technique. The criticism was just, and omitting the statistical chapters may be deemed no great loss. Perhaps it would have been desirable to have cut them heavily, retaining the parts most useful for throwing light on the implications of the theory, but the abridged edition is quite long enough as it is. I have regularly deleted references to sources of information. Since Schumpeter's sources ace now obsolescent, if not obsolete, very few readers would be interested in them. 9 Moses Abramovitz, Statement in United States Congress, Joint Economic Committee, Employment, Growth, and Price Levels, Hearings (86th Congress, 1st Session), Part II (Washington : Government Printing Office, 1959), p. 434. Joseph Schumpeter, Business Cycles. (1939) 12 Schumpeter's style ran not only to frequent digressions, which I have tried to eliminate, but also to surplus words, to stating what is already implied, to burdening the reader with phrases that distract his attention. In such a sentence as, It is surely not too much to ask economists to realize that behavior in human societies differs from behavior in animal societies or in physical systems (p of the 1939 edition), I have deleted the italicized words without using dots to so indicate. Occasionally it was convenient to alter the punctuation. I have generally resisted the temptation to substitute a word or two of my own, even where doing so could have saved a good deal of space, on grounds that my words would have to be in square brackets which would distract the reader ; but I have, on rare occasions, taken the liberty of rearranging Schumpeter's own words. To give an extreme example, a passage on p. 31 of the first edition reads, We cannot enter here into the epistemological problem of the relation between 'theory' and 'facts.' But it must be emphasized that what will be said in this chapter and those following is, in part, nothing but a generalized formulation of some of the facts presented later. Therefore the term verification does not accurately describe that relation. Wanting to omit the first sentence, I transposed a few words from it to the last, which in this edition reads, Therefore, the term verification does not accurately describe the relation between 'theory' and 'facts.' There are severe limits to what an editor may properly do. I wish Schumpeter were still alive to do the rewriting the book cries out for. Since that is not possible, McGraw-Hill is to be commended for deciding on its own initiative to publish an abridged edition. RENDIGS Fels - Vanderbilt University Op cit., pp Joseph Schumpeter, Business Cycles. (1939) 13 Joseph Schumpeter, BUSINESS CYCLES (1939) II Chapter I Introductory Table of Contents Among the factors which determine any given business situation there are some which act from within and some which act from without the economic sphere. Economic consideration can fully account for the former only ; the latter must be accepted as data and all we can do about them in economic analysis is to explain their effects on economic life. Hence we arrive at the very important concept of factors acting from without {let us call them External Factors), which it stands to reason we must try to abstract from when working out an explanation of the causation of economic fluctuations properly so called, that is, of those economic changes which are inherent in the working of the economic organism itself. 11 The best examples of what we mean by an external factor are offered by such events as the great Tokyo earthquake, the virtue of which from our standpoint consists in the fact that no one has thought 11 The effects of these external factors will be called the external irregularities of our material, as distinguished from its internal irregularities, to be defined later Joseph Schumpeter, Business Cycles. (1939) 14 of attributing responsibility for them to our industrial system. Whenever a disturbance is the product of social processes, the difficult question arises whether it is not as much a consequence as a cause of economic events and situations and hence whether we are within our rights if we speak of it as acting from without the economic sphere. In a deeper sense, the answer is undoubtedly in the negative. But for our purpose it is yet permissible to draw a line between the phenomena directly incident to the working of the economic system and the phenomena produced by other social agencies acting on the economic system, however obviously this action may be conditioned by economic situations or propelled by economic aim or class interest. In a sense, therefore, we may within the limited range of our investigation look upon wars, danger of war, revolutions, and social unrest as external factors. Changes in the tariff policy of a country or in its System of taxation, me
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