Schumpeter revealed

Here is my review of Thomas McCraw’s new Schumpeter biography.  Excerpt:

Prophet of Innovation 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.


Geez, how can I not read it after this? Just bought a copy, thanks :-)

Professor Cowen --

As a regular reader of both your blog and your professional publications, I respect both your insight and your fair-mindedness. In particular, I enjoyed the review, and intend to buy the book. But the review is marred by what seems to be a pointless bit of ideology that’s irrelevant to Schumpeter's life and — frankly — beneath you.

Specifically, you write: "The question is why creative destruction is so unpopular in Western Europe these days, among both policymakers and intellectuals †¦ Western Europe lost that love of change with the two World Wars ... "

Do you have any evidence to support this claim? I suspect that perhaps you don’t †¦ that you simply hold, as an article of faith, that Europe’s social arrangements (unlike those in the US) cannot sustain the creative destruction that drives economic growth.

If you do have evidence, I'd appreciate your laying it out. Because the data seem against you on this point--long run growth rates have been almost identical between the US and the European countries. For example, real GDP per capita roughly doubled in both over the period 1970 – 2004:

France 1.96
Germany 1.89
Italy 2.00
UK 2.09
US 2.07

(Source: Penn World tables 6.2)

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