Joseph Alois Schumpeter

There are certain great men remembered for something beyond the scope of their research, and Joseph Alois Schumpeter (1883-1950) is one of them. His life is rather a legendary than a narrative story.

Joseph Alois Schumpeter, an Austrian, was born in a place belonging no longer to Austria today. He showed a good talent in his school time and began smoothly his career by studying law at University of Vienna under the great Austrian capital theorist Eugen von Böhm-Bawerk. After PhD, he finally stepped into the domain where he later cultivated his own territory. He unfortunately experienced the collapse of the bank he led during the years after World War I. Then he retook his academic role in the University of Bonn until the arrival of shadow of Nazi. It was Harvard that accepted him where Schumpeter stayed until his death. In Harvard, he played a lively story of "Dead Poet Society". Joseph was so popular among the students and so hard among the colleagues that made his prestige and achievements in economics unnoticed. I almost forgot to tell that he has even been for a while the minister of Treasury of Austria even though it was not a successful try.

A well spread story of Schumpeter is that his student once had been refused by the librarian to borrow books freely and the student had turned to him. Schumpeter proposed then a duel against the librarian and won thanks to his training when he was young. Since after, his students could make themselves at home in the library.

However, Schumpeter was not so easy in his economist life since he was the most enemy, in the sense of theory discussion, of Keynesian economists. He thought low of Keynes' ideas that the government should intervene as the depression appeared. Schumpeter insisted The Theory of Economic Development that economy would adjust itself and without breaking down the old-fashioned, people could thus not enjoy a crystal new era! Many of his thinking was not recognized until the tide of IT in the 90's last century, especially by the entrepreneurs of silicon-valley.

By reviewing his most famous pieces, we could imagine in the turn of 19 and 20 century, a vigorous and learned young man flashed between the celebrity cafe salons and the classic music theaters, pursuing beautiful ladies. We should not affirm that it was his character inherent or the cultural influence of Vienna.
---"History of Economic Analysis"
---"The Theory of Economic Development"
---"Capitalism, Socialism and Democracy"
……

The author of those books was instead a dreamer of being the greatest rider of Austria, the greatest lover of Austria together with the greatest economist in the world.

Milton Friedman

Precious as a sunny day in the fall in Paris, today we shall focus on somebody who is still alive while influential to the economic world. Even though deserving a reputation no less than Keynes of his time, he rarely received it for complex reasons. However, his theory finally persists to the day he was awarded the Noble prize for his tremendous achievements.

Milton was born to a Jewish family originated from Ukraine. He grew up in New Jersey and educated in Rutgers University then Chicago University for master degree where he was deeply affected by those economists disagreeing with the popular ideas. After graduation, he worked once for New Deal to survive since no academic job had been found then. During the World War II, he served as a spokesman for the government as well as advisor to high Treasury officials. Young as he was, he advocated without reserve the theory of Keynes and boosted it with an appreciated effort. Later, he shifted his research in the domain of statistical issues. Receiving a PhD in Columbia University in 1946, he returned to Chicago University to his professor role. A cradle of Noble prize winners was thus established. In his years of retirement, he was gradually acknowledged by the public together with the economists to be one of the greatest economists in our days.


His scholar views are commonly opposite to those of Keynes which shed his radiation until a quite score of years later. His theory of money supply contributes a lot in explaining the phenomena of the economic life in the U.S... Milton is also a defender of quantity theory of money. In addition, he insists that the freedom of economics is fairly crucial to the healthy development of economy. While an intervention of government, as followed by the guide of Keynesian theory, turns out to be detrimental in a long run.

Mr. Friedman has a good name which predefines his orientation in the debates: his most famous works is "Freedom to choose" and he, indeed, succeeded in being a freed man! By the way, his son, perhaps under his influence became an economist too.

David Ricardo

When we are talking about the classic economics, especially political economics, the only one that we can never avoid is David Ricardo. Even though many of his ideas suit no longer today, much more are still proved to be fundamental and evoking.

From his family name, we can deduce more or less that he was not a native Anglo-Saxon. In fact, he was originated from Portugal. He was brought up in a huge family since 17 children were really a astonishing number. He received his education in the school in Holland and then joined his father or rather employed by his father in London Stock Exchange (which is deemed to be illegal today since David was only fourteen years old!!!). These experiences rendered him a great deal in his future achievement. When he was 21, he left his family for marriage and religious reason. Thanks to his social circle, he soon got a new business of his own which made him become wealthy. Afterwards, Mr. Ricardo started his hermit life while he thought had earned enough within his desire.

His interest in economics was triggered by Adam Smith's book "The Wealth of Nation" which led him into the research of this subject. His most acknowledged work is "Principles of Political Economy and Taxation" that contains two main sparkling ideas: a statement of labor theory of value and comparative advantage. The latter provides the basic theory support of current world's international trade. In his articulation of wage theory, he proclaimed the natural price is a trustable reference to the cost of production. Let's read a brief abstract from his words:

"Notwithstanding the tendency of wages to conform to their natural rate, their market rate may, in an improving society, for an indefinite period, be constantly above it; for no sooner may the impulse, which an increased capital gives to a new demand for labour, be obeyed, than another increase of capital may produce the same effect; and thus, if the increase of capital be gradual and constant, the demand for labour may give a continued stimulus to an increase of people...

"It has been calculated, that under favourable circumstances population may be doubled in twenty-five years; but under the same favourable circumstances, the whole capital of a country might possibly be doubled in a shorter period. In that case, wages during the whole period would have a tendency to rise, because the demand for labour would increase still faster than the supply."

(On the Principles of Political Economy, Chapter 5, On Wages, provided by Wikipedia).