Schumpeter Lecture by Branko Milanović — Schumpeter Gesellschaft Wien

Branko Milanović is Research Professor at the Graduate Center, City University of New York (CUNY), Senior Scholar at the Stone Center on Socio-Economic Inequality at CUNY and Visiting Professor at the London School of Economics. Following the invitation of the Schumpeter Society, he discussed Schumpeter's theories of Capitalism, Socialism and Democracy for the first time in Schumpeter's home country and compared them with the economic circumstances of today. He posed the question of why Schumpeter's predictions did not come to pass and how correct our current predictions may prove 80 years hence?

The starting point of his lecture was the historical and temporal context of the book (1942), especially in connection with the then already existing works and views of Karl Marx. Milanović gives a little insight into Schumpeter's way of thinking and working: Whether it is the general difficulty of predicting social developments and changes, or the paradoxes that appear in Schumpeter's work. For example, his advocacy of the use of mathematics in The Theory of Economic Development, despite its constant non-use in his foundational work.

The second point concerns the content of the book Capitalism, Socialism and Democracy. Contrary to Schumpeter's assumptions that capitalism will pass into a system of socialism - which works at least as efficiently - the capitalist system is flourishing 80 years later and socialism has disappeared. The discussed arguments of Schumpeter are: 1. The lack of entrepreneurial creativity when monopolies are too large. 2. The attachment to private property by many small shareholders. 3. The distancing of intellectual societies from private property.

These lines of thought are followed by the big "Why" these predictions did not come true. From Milanović's perspective, one of the main reasons is the impossible prediction of technological development. Especially in the last decades, this technological progress has led to an economic upswing and an increase in the efficiency of capitalism. Therefore, even from today's perspective, it is impossible to predict future developments and to establish accurate theories without exceptions.