Capitalist development, innovations, business cycles and unemployment: Joseph Alois Schumpeter and Emil Hans Lederer

Emil Lederer and Joseph Schumpeter became life-long friends in their student days at the University of Vienna. The life and work of both economists took place in three states and four political cultures. After a short biographical information with emphasis on the linkages between Schumpeter and Lederer, section II addresses the influence of B¨ohm-Bawerk’s famous seminar in 1905–06 where both Schumpeter and Lederer first developed a greater interest in Marxian analysis. Next the role of the Archiv für Sozialwissenschaft und Sozialpolitik is covered, which in the years of the Weimar Republic was edited by Lederer with Schumpeter as an associate editor. Among many important papers in the Archiv we find also Kondratieff’s famous article on the long waves in economic life which had a strong impact on Schumpeter’s Business Cycles (1939). Lederer and Schumpeter both shared the view that capitalist economies normally are in dynamic disequilibrium. Business cycles are seen as an integral part of capitalist development. Emphasis in economic theory should therefore be put on the analysis of the short-run and particularly the long-run dynamics of the economy. In section IV Schumpeter’s analysis of business cycles and capitalist development is compared with Lederer’s analysis. In section V Lederer’s treatment of technological unemployment is analyzed and compared with the analysis of Schumpeter who considered technological unemployment as a special case arising from disturbance by innovations within the economic system. Finally, some reflections are made how far Schumpeter and Lederer were social economists.