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Prophet of Innovation: Joseph Schumpeter and Creative Destruction annotated edition Edition

4.4 out of 5 stars 39 customer reviews
ISBN-13: 978-0674025233
ISBN-10: 0674025237
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Editorial Reviews

From The New Yorker

In 1939, the economist Joseph Schumpeter wrote that "the history of capitalism is studded with violent bursts and catastrophes" that, while ultimately bettering society, seem "like a series of explosions." He called this process "creative destruction," a phrase that, McCraw writes, aptly describes Schumpeter’s own course. After a series of dramatic turns (including stints as Austrian finance secretary and investment adviser to an Egyptian princess, and a tragic, arguably bigamous marriage), Schumpeter landed in the dubious sanctuary of Harvard ("despicable playground of despicable little tyrants," he wrote), where he turned out several key texts in twentieth-century political economics. McCraw doesn’t get lost in the baroque details of Schumpeter’s story—how many economists ever fought a duel?—or in the arcana of his theories, achieving a balance that his brilliant and restless subject rarely did in life
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This well-paced and beautifully written book explains not only Schumpeter's work but also the fast-changing phenomenon of modern capitalism. McCraw brings out Schumpeter's energy and charisma as well as the power of his ideas, quite skillfully linking the economist's colorful and adventurous personal life with the development of his views. This book is a fine tribute to a great thinker.
--Harold James, Princeton University

A welcome book--a truly penetrating biography of the most influential theorist of finance capitalism.
--Edmund S. Phelps, 2006 Nobel Laureate in Economics

A most compelling portrait of a complex man who has had a profound influence on how we think about entrepreneurship.
--Amar Bhidé, Columbia University

[Schumpeter's] private life was no less fascinating than his public message. In Prophet of Innovation, Thomas McCraw--emeritus professor of history at the Harvard Business School--artfully weaves the two together.
--Dan Seligman (Wall Street Journal 2007-04-05)

In this biography, Pulitzer Prize winner McCraw neatly divides his emphasis between Schumpeter's professional and personal life. He portrays his subject as a somewhat self-absorbed insatiable scholar not entirely comfortable with his contemporaries, which might explain marriages and affairs with much older and younger women, as well as his affinity with students and often-strained relations with colleagues of his own generation. McGraw lucidly addresses Schumpeter's economic theories through an examination of his letters, lectures, addresses, articles, and major works...[An] insightful and highly readable biography.
--Lawrence R. Maxted (Library Journal (starred review) 2007-04-01)

[A] persuasive and eloquent biography.
--Jay Hancock (Baltimore Sun 2007-04-22)

Much honored as an economic prophet, Joseph Schumpeter has had to wait half a century after his death for this splendid full-dress biography covering his ideas, life, and times...[This is] a fat, learned biography by Thomas McCraw, one of America's most respected business historians, the author of a Pulitzer prize-winning history of the rise of regulation. He has found the perfect subject in Schumpeter. He succeeds in getting inside the economist's head, explaining not just what he thought but why he thought it. Beyond this, he also succeeds in painting a portrait of his times. Fin de siècle Vienna, Weimar Germany, Harvard University before and after the first world war: all come to life on these pages. (The Economist 2007-04-28)

Prophet of Innovation: Joseph Schumpeter and Creative Destruction is a well-written and entrancing look at one of the twentieth century's most important economic and political thinkers. McCraw's book may rightly take its place as one of the two or three best biographies of an economist ever written...[It] is so splendid because it succeeds on so many different levels. If the book were simply an account of the Harvard economics department, it would stand as a lasting and significant contribution to the history of economic thought. Alternatively, it is one of the best treatments of what it was like for European intellectuals to migrate to the United States. Or are you interested in why Austria fell apart during the 1920s, and how someone with as little real world experience as Schumpeter became Minister of Finance? The book is also a love story, and an account of how a possibly dysfunctional man can nonetheless find romantic happiness after repeated failures and tragedies. Last but not least it is an intellectual history...Every year there are three or four non-fiction books that have to be read, and this is one of them.
--Tyler Cowen (American.com 2007-05-04)

McCraw...frames his narrative confidently and writes beautifully...Best of all, McCraw is an extremely good interpreter of Schumpeter's published work.
--David Warsh (economicprincipals.com 2007-04-01)

An extraordinary new biography. Prophet of Innovation by Thomas K. McCraw chronicles the life of one of the 20th century's most original and insightful scholars...Like his contemporary and frequent rival John Maynard Keynes, Schumpeter makes for a rich biographical subject. Keynes received the treatment he deserved from Lord Robert Skidelsky's magisterial multi-volume biography. McCraw's effort, similarly, is worthy of Schumpeter.
--Nick Schulz (National Review 2007-07-09)

McCraw's triumph is to tell...readers quite as much as we need to know about Schumpeter in a lucid and well-paced narrative, while also supplying, for more rigorous scholars, no fewer than two hundred pages of endnotes...McCraw successfully passes off the life of a professor of economics as a story that fully complements its undoubted intellectual significance with a tantalizing human interest.
--Peter Clarke (London Review of Books 2007-07-19)

McCraw doesn't get lost in the baroque details of Schumpeter's story--how many economists ever fought a duel?--or in the arcana of his theories, achieving a balance that his brilliant and restless subject rarely did in life. (New Yorker 2007-07-30)

A thinker as multifaceted as Schumpeter demands much of a biographer, and in Prophet of Innovation: Joseph Schumpeter and Creative Destruction, Thomas McCraw delivers...McCraw not only excels at conveying the innovation and excitement in Schumpeter's work, he keeps readers riveted to the story of the economist's life, and some of the twists are almost novelistic...[An] outstanding biography.
--Daniel McCarthy (American Conservative 2007-07-16)

It's no small feat to make a jaunty read out of the life of an economist dead more than 50 years, and Thomas K. McCraw has done just that in his impressive new biography of Joseph Schumpeter.
--Kevin R. Kosar (Weekly Standard 2007-05-28)

[Schumpeter] deserves more recognition and McCraw's book is to be welcomed on that account.
--Pat McArdle (Irish Times 2007-06-04)

Prophet of Innovation is an immensely entertaining read.
--Marisa Morrison (Washington Times 2007-07-08)

Although Schumpeter died in 1950, McCraw is right to insist that his contributions to our understanding of the economies in which we live are still vital today.
--Peter Timlin (Harvard Magazine 2007-07-01)

Books on the lives of the great economists might not, at first blush, set the blood coursing. Yet Robert Skidelsky's masterly three-volume biography of John Maynard Keynes proved how engrossing such a life could be. It is high praise to say that Thomas McCraw's biography of Joseph Schumpeter, Prophet of Innovation, has some of the same quality and appeal...McCraw, who has written the definitive biography of his subject, supplies many testimonials to Schumpeter's genius and influence from both his day and our own.
--Robin Blackburn (The Nation 2007-09-24)

[McGraw] has written an impressive and thoughtful biography of one of the most significant economists of the 20th century. Although widely regarded as a man of no small ego, Schumpeter can justifiably lay claim to effecting considerable scholarly debate in a wide range of academic backgrounds. Schumpeter’s analysis of economic development and business cycles, his notion of the process and significance of creative destruction, and his views on entrepreneurial activities continue to influence generations of economists and social scientists. McGraw’s thorough, insightful biography draws on an array of public and private papers to explain Schumpeter’s scholarly development and increasing sway, from his early years in Vienna to Bonn and later to his tenure at Harvard. This engaging scholarly work provides substance and context and is well worth a close read by both students and faculty.
--T.E. Sullivan (Choice 2007-09-01)

McCraw’s book on Schumpeter is an absorbing read, with short chapters, lots of personal detail and historical scene setting, and an important anti-Galbraithian economic theme.
--Deirdre McCloskey (Reason 2007-10-01)

An excellent, thorough and smoothly written biography of Joseph Schumpeter, the greatest economist of the 20th century. Too bad most politicos--and economists--don't fully grasp his insights.
--Steve Forbes (Forbes 2008-10-06)

Those seeking some escape from the deluge of "Keynes the Comeback Kid" will enjoy a refresher on that other brilliant economist of his generation, Joseph Schumpeter. Thomas K. McCraw's brilliant biography of the economist who best understood the turbulence of markets and "creative destruction" is all the more relevant as a credit crisis-induced recession unfolds. This biography is the clearest and most comprehensive guide to Schumpeter's life and work and the turbulence of his time which has, like the classic business cycle, come round again.
--Bill Jamieson (The Spectator 2008-12-01)

It's the lively and penetrating prose of the book itself that make its appearance in paperback a cause for rejoicing. Reading it is certainly time well-invested.
--Abraham Benrubi (openlettersmonthly.com 2010-05-04)

Although he died 60 years ago, Schumpeter's ideas about capitalism still resonate, including the belief that no business, no matter how successful, should assume it will be around forever. (Worth 2010-06-01)

Product Details

  • Hardcover: 736 pages
  • Publisher: Belknap Press of Harvard University Press; annotated edition edition (April 30, 2007)
  • Language: English
  • ISBN-10: 0674025237
  • ISBN-13: 978-0674025233
  • Product Dimensions: 9.4 x 6.4 x 1.7 inches
  • Shipping Weight: 2 pounds
  • Average Customer Review: 4.4 out of 5 stars  See all reviews (39 customer reviews)
  • Amazon Best Sellers Rank: #711,619 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

By Robert Morris HALL OF FAMETOP 500 REVIEWERVINE VOICE on April 23, 2007
Format: Hardcover
As I recently read Thomas K. McCraw's brilliant biography of Joseph Schumpeter (1883-1950), I was intrigued by the evolution of his career after he earned a Ph.D. at the University of Vienna (1906). At age 24, he served as a secretary of state for finance in the new Austrian republic (1919-1920), and later became chairman and president of a Vienna-based Biederman Bank (1920-1924) that collapsed. As a result of that and several substantial investments in companies which also failed, Schumpeter suffered major financial setbacks (both professional and personal) but eventually repaid his debts, then taught at the University of Bonn (1925-1932) before accepting an offer to join the Harvard faculty as a professor of economics where he continued to teach until his death in 1950. McCraw also examines Schumpeter's personal life that, understandably, reflected the successes and failures in his career. For example, Schumpeter fell deeply in love with Anna Josifina Reisinger and married her in 1925. The next year, his beloved mother died and within a month, his wife died in childbirth, as did their son. McCraw suggests that Schumpeter never fully recovered from these personal losses.

Of greatest interest to me is the context or frame-of-reference the biographical material provides for one of Schumpeter's most influential business concepts, "creative destruction," which he introduced in his most popular book, Capitalism, Socialism, and Democracy," first published in 1942. Scholars have divided opinions as to the influences on Schumpeter's development of this concept. They probably include Karl Marx, Friedrich Nietzsche, and Werner Sombart.
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I have been impressed by this book, which is a good mix of the 'history' of Joseph Schumpeter and his ideas and contributions to economics. I think the author has obtained a very good balance between trying to understand this great economist, and presenting his work to the informed lay-person. Economists and non-economists alike will find a lot here, which is very relevant to today (perhaps even more so to economists working in academia!). Some of Schumpeter's major works (like Business Cycles published in 1939) are not easy to digest; but this book brings out enough to capture the essentials. Overall, this is the best book on Schumpeter I have seen.
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Thomas McCraw is one of the best business historians in the world and with this output, late in his career (he is an emeritus professor at Harvard now), he can lay claim to being one of the best historians in the world, not just a business historian. It is hard to imagine a political biography in recent years that comes close to matching the lucid style, perfect prose, excellent quotes and commentary about life as this book.

The subject is one of the most famous economists of the twentieth century, someone who along with Frederick Hayek, Ludwig Mises and others from the Austrian School came to anchor the philosophical basis for the success of economic and political freedom. The book covers in detail the personal life of Schumpeter, including a lot of material not commonly available. His biography of the deaths of his daughter mother and wife within months is an excellent if tragic basis to delineate the first part of Schumpeter's life, which the author suggests made him an Enfant Terrible, from the second, which the author calls made him an adult. The final segment is his becoming a Sage. Peppered throughout the book are some of the best quotations from some of the most famous persons in history, including legendary poets, yet ones the reader would never have read before.

For all those reasons, Thomas McCraw has delivered a book that is filling like a all-you-can-eat buffet, yet with each dish of the same quality as fine dining. IT IS A TOUR DE FORCE.

Yet there is a contextual flaw which weighs down the narrative.
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Moravian-born, Vienna-educated Professor Joseph Alois Schumpeter, who liked to say of his aspirations to be the world's greatest economist, horseman, and lover that only the second had given him problems, was a study in contrasts. He relished his fame as one of the interwar years' premier economic theorists yet modestly declined to mention his work in his Harvard classes or in his exhaustive book on the history of economic thought. (Citations to his work were inserted into that book by his wife after his death). An obsessively hard working, morose (indeed often depressed) writer in private, he affected a public image of carefree, cheerful ebullience. A notoriously easy grader to his students, he often gave himself low marks in his diary. A one-time banker, he relied upon the women in his life to balance his checkbook. He chronicled the evolution of the auto industry but never learned to drive. He admired mathematics but failed to employ them in his work. A harsh critic of the static, steady-state equilibrium thinking of the neoclassical marginal utility/marginal productivity school, he nevertheless declared one of its founders, the French neoclassical equilibrium theorist Leon Walras, the greatest economist of all time.

All his life Schumpeter championed capitalism yet was an expert on Marx, Marxist economics, and the entire socialist literature. A Marxist economist, Paul Sweezy, was among his closest Harvard friends. Schumpeter was a political conservative and anti-socialist who,notwithstanding, served as Finance Minister for a socialist government in post-World War I Austria. He lauded capitalism's superior performance while predicting the system's death from too much success.
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