Abstract:
The apparent contradiction between Schumpeter’s attachment to Walrasian equilibrium and his advocacy of a theory of cyclic economical movement was discussed. Also the economic role of institutions was investigated. I remain unconvinced of endogenous long cycles and with the theory of capitalist self-restoration. I think we can deduce better explanations of capitalist dynamics from the ideas of Marx and Keynes. In conclusion, the differences between Marx’s and Schumpeter’s views were discussed on capitalist crisis as regards the function of exogenous and endogenous variables are quite critical. Marx presents an endogenous theory of decline, in which accumulation is self-limiting. Schumpeter presents an endogenous theory of recovery, in which the entrepreneur and the financier combine forces to create an expansive virtuous circle.
