Schumpeter Joseph(1883-1950) Moravian-born, Austrian and US economist, politician and social theorist, whose distinctive approach combined economic and sociological analysis. In The Theory of Economic Development (1951, German 1912) and Business Cycles (1939) he advanced a general theory of fluctuations in economic growth (see LONG-WAVE THEORY). Three types of economic cycle were identified by Schumpeter, the most novel of which were KONDRATIEFF CYCLES (named after the Russian economist). These are periods of between 50 and 60 years initiated by a clustering of technical and commercial innovations – steam power (1787-1842), railways (1842-97) and subsequently electricity – creating new products and rapid advance, and brought to an end when the opportunities created by these innovations become exhausted.
Although, historically, economic growth and profit had been the outcome of entrepreneurial and technological innovation, Schumpeter also noticed an historical tendency for individual entrepreneurs to be replaced by a new class of industrial administrators. He also argued the need for long-term planning (not only Keynesian short-term planning, (see KEYNESIAN ECONOMICS)) in modern societies to seek to control economic cycles. Although he rejected much of Marx's account of the onset of socialism, in Capitalism, Socialism and Democracy (1942), he suggested that the disappearance of the traditional entrepreneur and the need for economic planning meant that socialism was inevitable. He was not personally attracted by socialism, which he believed would undermine individualism and democracy.