This file is a single occasional lecture: Schumpeter addresses an industrial association in Weimar Germany and deliberately turns from immediate business troubles to the long-run conditions of entrepreneurial legitimacy. Its thesis is that the entrepreneur’s economic function may be indispensable, but that function alone cannot secure social authority. The lecture therefore moves from economics to sociology and psychology: first defining what entrepreneurs do, then asking why they have remained unpopular, and finally urging a transformation of entrepreneurial self-presentation.
Die sozialen Kräfte wirken langfristig.
English translation: Social forces operate over the long run.
That opening premise justifies the lecture’s distance from daily “Zeitfragen.” Schumpeter’s scope is not the next tariff or tax dispute but the submerged forces that reshape the standing of a class. He explicitly divides the inquiry into three registers:
Wir können die Fragengruppen des Unternehmers, wenn wir so schulmeisterlich pedantisch sein wollen, einteilen in die Ökonomie, die Soziologie und die Psychologie des Unternehmers.
English translation: If we wish to be schoolmasterly and pedantic about it, we may divide the questions concerning the entrepreneur into the economics, the sociology, and the psychology of the entrepreneur.
The economic section clarifies two distinctions central to Schumpeter’s theory. First, entrepreneur is not identical with capitalist, and entrepreneurial profit is not simply capital rent. Second, mere management is not the essence of entrepreneurship. The entrepreneur administers, decides, represents, and disciplines, but these are not the decisive functions. His specific role is dynamic: to carry new combinations into practice.
Der Kern der Sache und die wahre Funktion des Unternehmers besteht vielmehr darin, neue technische und kommerzielle Kombinationen in die Praxis umzusetzen oder, populär gesagt, Träger des wirtschaftlichen Fortschritts zu sein.
English translation: The heart of the matter and the true function of the entrepreneur consist rather in putting new technical and commercial combinations into practice or, to put it in popular terms, in being the bearer of economic progress.
Schumpeter also defends entrepreneurial profit less as a reward for consumption than as a condition of capital formation. The industrial family, at its ascendant stage, embodies an ethic of accumulation rather than luxury:
Der scheinbare Widersinn: Erwerben, um nicht zu konsumieren – ist seit Jahrhunderten das Motto der typischen industriellen Familie gewesen, wenigstens in jener Phase des Lebens einer jeden, in welcher sie vorankommt.
English translation: The seeming paradox—to acquire in order not to consume—has for centuries been the motto of the typical industrial family, at least during that phase of its life in which it is moving upward.
The problem is that this economic usefulness does not translate into affection or prestige. Hence the psychological question:
Ich will die Frage beantworten, die sich mancher von Ihnen in den letzten Jahren grollend gestellt hat, warum der Unternehmer ein so wenig populärer Typus ist.
English translation: I wish to answer the question which many of you have been resentfully asking yourselves in recent years: why the entrepreneur is such an unpopular figure.
Schumpeter’s answer is historical and social-psychological. From antiquity through mercantilism and into the nineteenth century, commercial and industrial actors were often treated by warriors, priests, aristocrats, state officials, and later labor-oriented intellectuals as useful but inferior. Their activity lacked visible grandeur: unlike the military leader on horseback, the entrepreneur works amid office routines, discipline, credit negotiations, and wage conflicts. The public sees the unpleasant surfaces of his function more readily than its systemic effects.
In hartem Kleinkrieg und kühlem Rechnen Werkzeug der wirtschaftlichen Vernunft zu sein, ist eben keine Aufgabe, die Applaus und politische Anhängerschaft bringt.
English translation: To be the instrument of economic reason amid hard skirmishing and cool calculation is simply not a task that wins applause and political followers.
The lecture’s most important conceptual move is to make unpopularity reciprocal. Entrepreneurs are not merely misunderstood; their own class habitus helps produce misunderstanding. The bourgeoisie lacks a stable public ethos, has too often sought protection, titles, subsidies, and recognition from older powers, and remains politically a “Privatmann.” Schumpeter treats this not as moral failure alone but as a structural outcome of the entrepreneur’s workday, competitive discipline, and family-centered horizon.
Die Einstellung des kommerziellen und industriellen Bürgertums selbst zu seiner Umwelt ist teils die Folge des geschilderten Sachverhalts und teils auch die Ursache davon.
English translation: The attitude of the commercial and industrial bourgeoisie itself toward its environment is partly a consequence of the situation just described and partly a cause of it.
The closing argument is therefore practical without becoming programmatic. If entrepreneurs wish to survive socially under modern mass politics, they must cease relying on performance alone. They must learn to appear as public actors and “soziale Funktionäre,” persuading others that private gain can perform a public function.
Von der Schnelligkeit, mit der die Anpassung an neue, nun einmal unabänderlich gegebene soziale Machtverhältnisse gelingt, hängt das soziale Überleben der führenden Schichten unseres Wirtschaftslebens ab.
English translation: The social survival of the leading strata of our economic life depends on the speed with which they succeed in adapting themselves to the new, now irrevocably given, social relations of power.
The lecture’s relevance lies in this fusion of economic theory with legitimacy analysis. Schumpeter anticipates his later account of capitalism’s vulnerability: not failure in production, but weakness in social defense, symbolism, and belief. Entrepreneurship is here not only innovation and capital formation; it is also a contested social office that must learn to justify itself before those who do not see its work.
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