Background
Joseph Alois Schumpeter was born in 1883, the year Karl Marx died, his family origins were solid Catholic bourgeoisie in Moravia, now part of the Czech Republic. His father owned a factory, but he died when Joseph was only four years old. In 1893, Joseph and his mother moved to Vienna. In 1901 he graduated from High School in Theresianum, Vienna. Schumpeter began his career studying law at the University of Vienna under the Austrian capital theorist Eugen von Böhm-Bawerk and became the youngest Private Docent, and then took his PhD in 1906.
In 1909, after some study trips, he became a professor of economics and government at the University of Czernowitz. In 1911 he joined the University of Graz, where he remained until World War I. In 1919, he served briefly as the Austrian Minister of Finance, with some success, and in 1920–1924, as the president of the private Biedermann Bank. That bank, along with a great part of that regional economy, collapsed in 1924 leaving Schumpeter bankrupt.
From 1925 to 1932, he held a chair at the University of Bonn, Germany. He lectured at Harvard in 1927–1928 and 1930.
In 1932, he moved to the United States, in 1939 he became a US citizen.
During his Harvard years he was not generally considered a good classroom teacher, but he acquired a school of loyal followers. His prestige among colleagues was likewise not very high because his views seemed outdated and not in tune with the then-fashionable Keynesianism. This period of his life was characterized by hard work but little recognition of his core ideas.
Although Schumpeter encouraged some young mathematical economists and was even the president of the Econometric Society (1940–1941), Schumpeter was not a mathematician, but rather an economist, and tried instead to integrate sociological understanding into his economic theories. From current thought it has been argued that Schumpeter's ideas on business cycles and economic development could not be captured in the mathematics of his day – they need the language of non-linear dynamical systems to be partially formalized.
He died in his home in Taconic, Connecticut, at the age of 66, on the night of 7 January 1950.
For some time after his death, Schumpeter's views were most influential among various heterodox economists, especially European, who were interested in industrial organization, evolutionary theory, and economic development, and who tended to be on the other end of the political spectrum from Schumpeter and were also often influenced by Keynes, Karl Marx, and Thorstein Veblen. Robert Heilbroner was one of Schumpeter's most renowned pupils. Other outstanding students of Schumpeter's include the economists Nicholas Georgescu-Roegen and Hyman Minsky and former chairman of the Federal Reserve, Alan Greenspan. Future Nobel Laurette Robert Solow was his student at Harvard, and he expanded on Schumpeter's theory.
Today, Schumpeter has a following outside of standard textbook economics, in such areas as in economic policy, management studies, industrial policy, and the study of innovation. Schumpeter was probably the first scholar to develop theories about entrepreneurship. For instance, the European Union's innovation program, and its main development plan, the Lisbon Strategy, are influenced by Schumpeter. The International Joseph A. Schumpeter Society awards the Schumpeter Prize.
The Schumpeter School of Business and Economics opened in October 2008 at the University of Wuppertal.