Schumpeter and Mises as 'Austrian Economists'

Abstract

"Whether and, if so, in what sense Joseph A. Schumpeter (1883-1950) and Ludwig von Mises (1881-1973) may both be classified as ‘Austrian economists’ is a controversial issue. In terms of their biographical background they were, of course, Austrian nationals, and as students of Böhm-Bawerk and von Wieser both qualify in a formal sense as third-generation members of the Austrian School. Yet, whether they so qualify in a substantive sense as well is much more questionable. Apparent differences between their views on a number of issues have often been cited as evidence for a paradigmatic divide between, on the one side, Mises as the true messenger of the Mengerian heritage and the principal inspirer for the modern revival of Austrian economics and, on the other side, Schumpeter as a renegade who departed from constitutive tenets of the Austrian paradigm. While this view has long been dominant among historians of economic thought, Mises’ student Israel Kirzner and others have more recently called for a re-evaluation of Schumpeter’s place in the tradition of Austrian economics. The purpose of the present paper is to take a closer look at the mixture of commonalities and disagreements in the writings of Schumpeter and Mises that have given rise to the ambivalent evaluations of their ‘Austrian’ credentials. Section 1 offers a few comments on their common Viennese background and their different personalities, section 2 looks at Mises’ and Schumpeter’s respective methodological views, section 3 contrasts their arguments on the socialist calculation issue, section 4 compares their outlooks at entrepreneurship, and section 5 draws some conclusions." [author's abstract]