Oskar Morgenstern, Obituary: Joseph A. Schumpeter, 1883–1950 (1951)

Oskar Morgenstern’s journal obituary combines a chronological account of Schumpeter’s career, a critical survey of his writings, and a personal portrait of his intellectual and social character. Its governing claim is that Schumpeter’s standing rests on an exceptional combination of breadth, sustained productivity, and influence rather than exclusive mastery of one specialty. Morgenstern writes as both an economist assessing a colleague and a former student recalling a formative encounter with his work. Admiration does not preclude criticism: the obituary distinguishes theoretical originality from empirical achievement, scientific openness from social nostalgia, and personal influence from the formation of a school.

The opening situates Schumpeter in the multinational world of the Austro-Hungarian Empire. His linguistic versatility and ease in different countries coexist with unmistakably Austrian manners and memories. The subsequent career narrative follows him through Egypt, Czernowitz, Graz, a brief term as Austrian finance minister, private banking, Bonn, and Harvard. His unsuccessful encounter with inflation and the collapse of his bank interrupt rather than define the scholarly career. His presidency of the American Economic Association in 1948 marks his recognition within American economics, while Morgenstern’s portrait preserves the distance between professional integration and personal belonging.

The substantive assessment begins with the precocity and scale of Schumpeter’s early publications. The 1908 Das Wesen und der Hauptinhalt der Theoretischen Nationalökonomie is criticized as excessively long but praised for its brilliance and its combination of Walrasian theory with Austrian approaches. Morgenstern’s recollection of its effect gives this judgment an experiential basis:

I myself remember what sort of revelation it was to me when I first laid hands on it and, like many others of my generation, I resolved to read everything Schumpeter had written and would ever write.

The passage establishes a recurring measure of Schumpeter’s importance: his capacity to generate intellectual commitments beyond agreement with particular doctrines. The early book also anticipated the development and interest theories subsequently elaborated in the 1912 Theorie der Wirtschaftlichen Entwicklung, which Morgenstern considers probably his most important work. Its decisive move was to make economic dynamics central to theory. The entrepreneur disturbs the circulatory process; credit creation enables entrepreneurial activity; profit, interest, and the business cycle enter a connected explanatory framework. Later, Morgenstern characterizes the development theory as, in many ways, a combination of Walras and Marx, identifying a synthesis that exceeds a narrowly Austrian genealogy.

The 1939 Business Cycles extends this theoretical project through statistics and extensive historical evidence. Morgenstern nevertheless prefers the earlier work’s clarity and regards the later empirical conclusions as unresolved, sometimes vague. His qualification matters because he distinguishes the success of verification from the willingness to undertake it:

The fact that he wanted empirical verification is also significant; not many pure theorists in economics go to comparable trouble about their own speculations.

Schumpeter’s large-scale investigation, conducted without institutional assistance or advanced econometric methods, thus earns respect without receiving an unqualified endorsement. The obituary later sharpens this distinction in discussing his leadership of the Econometric Society. He encouraged measurement and mathematics, but his own mathematical engagement remained that of an admiring amateur rather than a practitioner whose theories depended on deep mathematical results.

The third major early achievement, Epochen der Dogmen- und Methoden-geschichte (1914), demonstrates another kind of mastery: historical learning compressed into a concise treatment of doctrines and their often obscure antecedents. Morgenstern values its mature judgment as much as its erudition. Schumpeter’s return to this subject in the forthcoming History of Economic Analysis makes intellectual history a lifelong undertaking, not a peripheral interest. The obituary similarly praises his biographical essays for probing economists’ minds through informed interpretation. Its references to forthcoming books express expectations held at the time of writing, rather than judgments of already published works.

The discussion of Capitalism, Socialism and Democracy links Schumpeter’s prediction of capitalism’s end to both his development theory and his attachment to an older social order. Morgenstern acknowledges the book’s brilliance and wide reception, but questions the historical object of its prognosis:

What particular Capitalism he had in mind, is not quite clear from the work.

He suggests that Schumpeter insufficiently recognized American transformations that retained important capitalist features. The attraction of pre-1914 English capitalism and dismay at a socialist future complicate the prediction: theoretical analysis and grief for a disappearing world are not easily separated. Morgenstern also records Schumpeter’s rejection of the stagnation hypothesis in the second edition, preserving a more discriminating account than a simple identification of pessimism with economic stagnation.

The concluding portrait brings warmth and intellectual independence together. Schumpeter’s courtesy, wit, generosity with younger scholars, and ability to inspire loyalty contrast with the absence of a unified doctrinal following:

Yet there is no Schumpeter school of economics.

This absence qualifies, rather than negates, his influence. Students could pursue their own economics while acknowledging his stimulus. A parallel tension governs the final assessment of his outlook: increasingly Anglo-American scientific methods coexisted with social attitudes still haunted by the vanished world of his youth. Morgenstern closes by declining precise ranking while placing Schumpeter among economics’ highest figures. The obituary’s enduring interest lies in this measured account of greatness: originality and range remain unmistakable, even where empirical results, political judgments, and personal allegiances resist resolution.