Schumpeter and Wikipedia, a case for creative destruction

I’ve just finished reading a brilliant biography of a brilliant man. The Prophet of Innovation – Thomas McCraw’s biography of Joseph Alois Schumpeter is meticulously researched, insightful, and thorough.  McCraw writes with a deft and personal touch. He manages to mix the tale of Schumpeter’s complex personal life with a broad tour of economics, and provide a deep insight to his huge impact on economics and business studies. McCraw makes Schumpeter accessible without compromising the depth and the complexity of his work. This is a rare talent, and the book is a treat.  (here is another review,   another, another and another)

Anyone who is interested in how capitalism works or doesn’ t work ought to spend some time with Schumpeter. McCraw’s book is a great place to start, or an even better place to rekindle an interest.  I’d read Schumpeter a bit at university, but I didn’t give him the focus and respect he deserved. I will need to re-read him. Capitalism, Socialism and Democracy (CSD) will be my companion for my next airport lounge visit.

Filled with my newly found Schumpeterian knowledge, I headed over to the wikipedia, mainly to save me re-typing stuff about him here.  I’d planned to post something about innovation, standards, big companies and software, but that will need to wait.

As usual, typing in Schumpeter in Google brings up the wikipedia entry first.

 I was really disappointed with the  wikipedia piece

The entry could do with some significant creative destruction.  It is factually inaccurate, and it damns Schumpeter with faint praise. It is equivalent to saying Mozart wrote a couple of nice tunes.

According to Wikipedia,

During his Harvard times, he was not generally considered to be a very good classroom teacher, but he acquired a school of loyal followers. His prestige among colleagues was likewise not very high, because his views seemed outdated and not in touch with then-fashionable Keynesianism. This period as a Harvard professor was characterized by very hard work but also by little real recognition of his core ideas.

It is true that he had a long standing battle with Keynes, but very little else in that paragraph is correct.

1.He was elected President of the American Economic Association in 1949, the most prestigious office in the country for an economist. (first foreigner to get the honour)

2. When Yale tried to headhunt him, and all 17 members of the economics department signed a letter urging him to stay, and 26 of his Graduate Students did the same.

3. He was rated very highly by graduate and undergraduate students in reports.(There is some disagreement on this when he was near the end of his career.)

4. His History of Economic Analysis received rave reviews from his peers. (as did CSD)

5. His speech to American Economic Association in 1948 received  “A thunderous and prologed standing ovation.It was a spontaneous expression of respect and gratitiude…”(McCraw p 483)

6. On his death (while still an active faculty member) His Students and Colleagues took the very unsual step of dedicating a future issue of the Review of Economics and Statistics to him.

7. McCraw commented that Schumpeter would have won the Nobel prize for economics if it had existed then.(3 of Schumpeter’s students did win it.) He also noted that in 1950 Schumpeter was the most illustrious economist in the world.  In 1983 Forbes Magazine christened Schumpeter as the most influencial economist of the 20th Century. 

The wikipedia piece doesn’t even mention his other major work, the History of Economic Analysis. His analysis of the role of credit, venture capital, and strategy don’t get a mention either. There is no mention of his wife, who played a key role in keeping him on track.

McCraw commented in an interview

As for my personal feelings about him, I think Schumpeter is one of those historical figures that anyone would love to have dinner with, as many people have said of Benjamin Franklin. He was just so witty, knowledgeable, and downright interesting that you couldn’t come away without feeling enriched. Weaving together the fascinating story of his life with an interpretation of his great body of work made the writing of my book not only a challenge, but also a tremendous pleasure.

You would never know this from reading the Wikipedia. More’s the pity. And more ammunition Wikipedia’s most fervent critic.

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