Paul Samuelson on Joseph Schumpeter

“Schumpeter was uncharacteristically naive in awarding Lange and Lerner victory over Ludwig von Mises on the issue of whether rational economic calculation would be possible under socialism. Of course Mises was wrong in his sweeping rejection. But Schumpeter of all people should have understood the importance of uncertainty, stochastic error, and dynamic innovation in all social life. And this might have been expected to lead him to award the victory to Hayek for his insistence on the difficulty of pooling information when command and bureaucracy limit the workings of the market. Had Schumpeter lived another third of a century he would also have realized what Oskar Lange had to learn the hard way, that few socialist societies will play the Barone-Lerner-Lange game of simulated decentralized market pricing.”

“My Harvard teacher Joseph Schumpeter’s 1939 two-volume treatise is almost a parody of eclecticism: It described short cycles under the Kitchin-Crum terminology; then the good old business cycle of allegedly eight to ten years’ periodicity was labeled Juglar cycles; and of course there were also the long waves of Kondratieff and the Sunday newspaper supplements. But that was not the whole of it. In between Juglars and Kondratieffs came Kuznets’s intermediate cycles in construction and immigration, with an alleged approximate periodicity of 18 to 20 years. The tortured epicycles of pre-Copernicus Ptolemaic astronomy had nothing on Schumpeter.”

“Now, at the turn of the millennia, when total-factor-productivity has remarkably soared in America and abroad, both fools and sages sing Schumpeter‘s praise. That would have amused and pleased this worldly scholar who in some dark hours of the night used to despair in his German-shorthand diaries of justly deserved praises passing him by. So Keynes was wrong: in the long run not all of us are dead.”