Schumpeter 1911: Farsighted Visions on Economic Development

This paper presents to the English‐speaking reader a sample of material contained only in Schumpeter’s first German edition (1911) of Theorie der wirtschaftlichen Entwicklung, material subsequently omitted from later German editions and from the English translation. The newly‐translated material, presented here for the first time in English, comprises a substantial part of the second chapter, only available in a completely rewritten version, and fully half of the famous seventh chapter, which has not been previously available at all in English. This material merits attention today because it contains remarkable and farsighted visions on economic theory that may inspire current efforts to devise models of economic and social evolution. In order to better appreciate the original text, we briefly introduce the “background” to Theorie and its revisions, briefly describing the social and intellectual environment of the time. We then discuss how the entrepreneur evolved over the three editions of Theorie (from 1911 to 1934) in view of the shift in Schumpeter’s personal and intellectual life and outline the most important implications raised by the first German edition of 1911. Finally, we use Schumpeter’s own statements to settle the obstinate confusion on the publication year of Theorie in favour of the year 1911.