Joseph Schumpeter

Quotes From

Capitalism, Socialism, and Democracy (1943)

• A system that at every given point of time fully utilizes its possibilities to the best advantage may yet in the long run be inferior to a system that does so at no given point of time, because the latter’s failure to do so may be a condition for the level or speed of long-run performance.#
• The problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them.#
• The position of a single seller can in general be conquered – and retained for decades – only on the condition that he does not behave like a monopolist.#
• Was not the observed performance [of the economy] due to that stream of inventions that revolutionized the technique of production rather than the businessman’s hunt for profits? The answer is negative. The carrying into effect of those technological novelties was of the essence of that hunt.#
• The picture of the prettiest girl that ever lived will in the long run prove powerless to maintain the sales of a bad cigarette. There is no equally effective safeguard in the case of political decisions. Many decisions of fateful importance are of a nature that makes it impossible for the public to experiment with them at its leisure and at moderate cost. Even if that is possible, judgment is as a rule not so easy to arrive at as in the case of a cigarette, because effects are less easy to interpret.#
• The will of the people is the product and not the motive power of the political process.#

Business Cycles (1939)

• Expectations cannot be used as part of our ultimate data in the same way as taste for tobacco can. Unless we know why people expect what they expect, any argument is completely valueless which appeals to them as causae efficientes.#Quoted in Ludwig Lachmann, Capital, Expectations, and the Market Process (1940)