Thanks. I have shorter things on the blog (https://nakedkeynesianism.blogspot.com/). Here is for a bit longer pieces that might, or not, become a paper eventually
I think he’s mainly considered heterodox because he believed in endogenous money, and rejected equilibrium (other than as an anslytical starting point).
Well, he has endogenous money in the same sense that Wicksell (both derived their theories from their teacher Böhm-Bawerk). The key distinction, for Schumpeter, is between real analysis and monetary analysis is not simply the distinction between real magnitudes and nominal magnitudes. It is a deeper distinction about whether money is treated as secondary or as constitutive of the capitalist process.
The main analytical point is about neutrality. Real analysis presupposes, or at least searches for, conditions under which money is neutral. In other words, conditions under which money leaves the real structure of production, distribution, and accumulation unaffected. Schumpeter notes that Wicksell’s concept of neutral money was important precisely because it exposed the problem. It expressed the belief in pure real analysis, but it also forced economists to ask when money could actually be neutral.
Schumpeter did see his own theory of capitalist development as belonging to the monetary-analysis tradition, because for him capitalist development cannot be explained without bank credit and the creation of purchasing power. Innovation is not financed simply by prior saving in a real-exchange economy. It requires the banker to create means of payment that allow the entrepreneur to command resources away from their existing uses. However, Schumpeter’s position is ambiguous because his analytical ideal remained Walrasian general equilibrium. The changes are fully explained by the process of innovation, a real phenomenon. And banks are necessary, but not central. The Walrasian circular flow is re-established.
I think banks are central to his theory of business cycles. Entrepreneurs borrowing to invest creates expansions; obsolete firms and unsucessful entrepreneurs failing to pay their debts creates contractions
They don't change the equilibrium. It depends on the real (technological shock). In that sense, exactly as in Wicksell. Credit is created, but the real rate of return explained by the innovations that make the system more productivity are the fundamental cause of the system that govern the behavior of monetary variables. That is just descriptive of what he says. And the system returns to Walrasian equilibrium. Again, as per Schumpeter.
Thanks for posting this, mostly agree with everything you argued. I want to talk with Basu and Orellana (and Marcellus Andrews) about co authoring on a paper combining the Basu and Orellana falling rate of profit with technical change paper and Andrews Shumpeter insights from his thesis. I think it’s relevant to understanding what seems to be going on now with weakened MPC at the lower end of the income and wealth distributions?…anyway thanks again this is excellent.
Yeah I didn’t read it in full, unfortunately. Its his Yale PhD thesis…I was able to read a preview via ProQuest during graduate school. I was planning on asking him if he has a full copy. It seems promising. I was able to get a copy of Marglins thesis copied from Harvard via ILL, quite brilliant. Darity, Chichilnisky, and more recent theses by Farhi, Schlossberger, Okafor, Davis, and Derenoncourt also excellent from ‘mainstream’ departments. Although calling Berkeley “mainstream” is inaccurate wrt Chichilnisky
But let me quickly add that, yes, there are “two” Schumpeters. The equilibrium and the Creative Destruction. The interesting task is to disentangle them and see what comes up. I tried that “ surgery”. Easer to get your critical lens on it.
Oi Leonardo. Obrigado pelo comentário. A destruícão criativa é só mudança tecnológica que move a curva de investimento (aumento da produtividade do capital). Não tem nada de novo realmente. Pensa bem, usar o termo destruição criativa não muda nada sobre o que é mesmo. Mudança tecnológica. E no caso dele vem mesmo da vontade heróica do empresário. Dizer que progresso técnico é a chave do capitalismo tá no Adam Smith, a tal da divisão do trabalho. De qualquer forma. Se você tiver críticas específicas, com prazer conversamos. Abração
Opa. Para mim é infinitamente mais do que isso. Se puder ler os posts, vai entender minhas razões. Mas é uma interpretação minha , de Schumpeter. Há certamente outras possíveis leituras. Vamos falando. Abs
Posso ler. Mas infinitamente mais o que? Produtividade maior e crecimento. Pelo lado da oferta. Qdo sai é do equilibrio Walrasiano (ele diz), ou seja pleno emprego. E volta pra um, com pleno emprego. Lei de Say. Se há dúvida, veja que ele era contra o New Deal e política fiscal pra voltar pro pleno emprego pq não precisava. A Depressão era uma chuveirada fria que ia passar, mas era boa pro sistema (dizia em sala de aula). Eu li os livros todos. Não há nada não. É só isso, lamentavelmente
Opa. Evidentemente tô falando do seu comentário aqui (que a destruição criativa "é infinitamente mais do que isso", isso sendo inovação tecnológica e aumento da produtividade) em relação ao Schumpeter (que como autor marginalista que nunca desabonou a teoria neoclássica e usava os conceitos tradicionais). Em vez de me desqualificar, me explique qual é o significado alternativo, ou pelo menos me de um tempo pra ler. Comentarei lá com prazer. Abs
Hi NK. Happen to disagree. Check my posts on Creative destruction meets financial instability and Creative destruction meets the State. I will appreciate your comments on them given your take on Schumpie. Cheers.
Loved your blogspot. One of the only PKs I read. I hope you go back to posting more regularly.
Thanks. I have shorter things on the blog (https://nakedkeynesianism.blogspot.com/). Here is for a bit longer pieces that might, or not, become a paper eventually
I think he’s mainly considered heterodox because he believed in endogenous money, and rejected equilibrium (other than as an anslytical starting point).
Well, he has endogenous money in the same sense that Wicksell (both derived their theories from their teacher Böhm-Bawerk). The key distinction, for Schumpeter, is between real analysis and monetary analysis is not simply the distinction between real magnitudes and nominal magnitudes. It is a deeper distinction about whether money is treated as secondary or as constitutive of the capitalist process.
The main analytical point is about neutrality. Real analysis presupposes, or at least searches for, conditions under which money is neutral. In other words, conditions under which money leaves the real structure of production, distribution, and accumulation unaffected. Schumpeter notes that Wicksell’s concept of neutral money was important precisely because it exposed the problem. It expressed the belief in pure real analysis, but it also forced economists to ask when money could actually be neutral.
Schumpeter did see his own theory of capitalist development as belonging to the monetary-analysis tradition, because for him capitalist development cannot be explained without bank credit and the creation of purchasing power. Innovation is not financed simply by prior saving in a real-exchange economy. It requires the banker to create means of payment that allow the entrepreneur to command resources away from their existing uses. However, Schumpeter’s position is ambiguous because his analytical ideal remained Walrasian general equilibrium. The changes are fully explained by the process of innovation, a real phenomenon. And banks are necessary, but not central. The Walrasian circular flow is re-established.
I think banks are central to his theory of business cycles. Entrepreneurs borrowing to invest creates expansions; obsolete firms and unsucessful entrepreneurs failing to pay their debts creates contractions
They don't change the equilibrium. It depends on the real (technological shock). In that sense, exactly as in Wicksell. Credit is created, but the real rate of return explained by the innovations that make the system more productivity are the fundamental cause of the system that govern the behavior of monetary variables. That is just descriptive of what he says. And the system returns to Walrasian equilibrium. Again, as per Schumpeter.
Thanks for posting this, mostly agree with everything you argued. I want to talk with Basu and Orellana (and Marcellus Andrews) about co authoring on a paper combining the Basu and Orellana falling rate of profit with technical change paper and Andrews Shumpeter insights from his thesis. I think it’s relevant to understanding what seems to be going on now with weakened MPC at the lower end of the income and wealth distributions?…anyway thanks again this is excellent.
Hi Justin, I didn't know Marcellus had done work using Schumpeter's insights. If you talk to him send him my best.
Yeah I didn’t read it in full, unfortunately. Its his Yale PhD thesis…I was able to read a preview via ProQuest during graduate school. I was planning on asking him if he has a full copy. It seems promising. I was able to get a copy of Marglins thesis copied from Harvard via ILL, quite brilliant. Darity, Chichilnisky, and more recent theses by Farhi, Schlossberger, Okafor, Davis, and Derenoncourt also excellent from ‘mainstream’ departments. Although calling Berkeley “mainstream” is inaccurate wrt Chichilnisky
But let me quickly add that, yes, there are “two” Schumpeters. The equilibrium and the Creative Destruction. The interesting task is to disentangle them and see what comes up. I tried that “ surgery”. Easer to get your critical lens on it.
Oi Leonardo. Obrigado pelo comentário. A destruícão criativa é só mudança tecnológica que move a curva de investimento (aumento da produtividade do capital). Não tem nada de novo realmente. Pensa bem, usar o termo destruição criativa não muda nada sobre o que é mesmo. Mudança tecnológica. E no caso dele vem mesmo da vontade heróica do empresário. Dizer que progresso técnico é a chave do capitalismo tá no Adam Smith, a tal da divisão do trabalho. De qualquer forma. Se você tiver críticas específicas, com prazer conversamos. Abração
Opa. Para mim é infinitamente mais do que isso. Se puder ler os posts, vai entender minhas razões. Mas é uma interpretação minha , de Schumpeter. Há certamente outras possíveis leituras. Vamos falando. Abs
Posso ler. Mas infinitamente mais o que? Produtividade maior e crecimento. Pelo lado da oferta. Qdo sai é do equilibrio Walrasiano (ele diz), ou seja pleno emprego. E volta pra um, com pleno emprego. Lei de Say. Se há dúvida, veja que ele era contra o New Deal e política fiscal pra voltar pro pleno emprego pq não precisava. A Depressão era uma chuveirada fria que ia passar, mas era boa pro sistema (dizia em sala de aula). Eu li os livros todos. Não há nada não. É só isso, lamentavelmente
Caro, opinar sem ler é complicado p mim. Let’s agree to disagree. Friendly. Cheers 🥂
Opa. Evidentemente tô falando do seu comentário aqui (que a destruição criativa "é infinitamente mais do que isso", isso sendo inovação tecnológica e aumento da produtividade) em relação ao Schumpeter (que como autor marginalista que nunca desabonou a teoria neoclássica e usava os conceitos tradicionais). Em vez de me desqualificar, me explique qual é o significado alternativo, ou pelo menos me de um tempo pra ler. Comentarei lá com prazer. Abs
Hi NK. Happen to disagree. Check my posts on Creative destruction meets financial instability and Creative destruction meets the State. I will appreciate your comments on them given your take on Schumpie. Cheers.
Vou tentar ler. Abs