Free Republic

The 2012 presidential race will be, in part, a showdown between two different models of economic growth. President Barack Obama and his Democratic administration will defend the once-discredited and now-resurgent theory that government must act as the economy’s “tutor” and use public funds to stimulate it. The Republican nominee, presumably Mitt Romney, will advance the free-market argument that the main source of new growth is the innovative energy of American entrepreneurs and that government needs to get out of the way. An essential part of the free-market argument is “creative destruction,” a theory proposed by the great Austrian economist...

Schumpeter 2.0 By Richard Swedberg and Thorbjørn Knudsen Wednesday, June 23, 2010 Filed under: Big Ideas, Economic Policy A great thinker’s contribution not only appears in his or her finished works and arguments, but also within the rich intuitions or core ideas that underlie the arguments. During the last decade or so, the theories of Joseph Schumpeter have gone through a revival, and much attention has been devoted to his work. By now many economists and commentators value his work highly, especially what he says about entrepreneurship and creative destruction. While this work on Schumpeter is very valuable, one might...

In the battle for the soul of the Republican Party the usual suspects want to make the brand more bland.  We should avoid dividing people with divisive social issues. But the Milquetoasts forget that democratic politics is a combination of Our Glorious Vision of the Future and Their Cruel and Unjust Swamp of Waste and Corruption.  They also forget what Joseph Schumpeter knew.  Public opinion is not something that creates itself.  It is something that is created by game changers.  Schumpeter: [P]rofessional politicians... or exponents of an economic interest... or idealists... are able to fashion and, within very wide limits,...

Ghost of Joseph Schumpeter and the end of the Monthly Payment Consumer, again More than 25 years of successful credit bubble re-inflations have trained us to think of consumer retrenchment as temporary. This time it is not. Invest accordingly. The monthly payment consumer (MPC) first appeared in the late 1920s with the advent of installment credit that temporarily extended the purchasing power of the American middle class enough to make exciting consumer products affordable, products that entrepreneurs unleashed in a wave as they beat government financed WWI military technology swords into consumer products plowshares--radios, refrigerators, and automobiles. By 1929, personal...

...The stock market isn't the economy. Nor is it a perfect predictor of future economic events. But it's a very reliable gauge of investor sentiment, and investors were sending a clear signal: The Kerry economic plan wasn't good for growth.... These market moves make it is easy to fall into the trap of thinking that Republican presidency's are good for markets and the economy, while Democratic ones are bad. But history shows this is simply not true. It is policies that matter, not politicians or political parties. The policies that most encourage wealth creation and higher standards of living are...

The extent to which green-left thinking on the environment has taken hold in the mass media and at all levels of education has made it the dominant voice in the so-called environmental debate. There is not one opinion leader or political party, especially the Democrats, that has not been heavily influenced by it one way or another. However, it would be a serious mistake to assume that the green-left is ideologically united. It is not. Basically it comprises two factions: the Marxist-Leninist faction and the utopian faction. Both are temporarily united by their mutual loathing of capitalism. I say temporarily...

A Credit to the Corporate Raider Stuart K. Hayashi The media's exploitation of the 2001 corporate scandals in its hysterical (and popular) campaign to defame businesspeople in general harkens back to another anti-capitalist witch hunt they conducted in the 1980s. That era is now pejoratively dubbed "the Decade of Greed," as it saw the proliferation of honest but controversial characters known as "corporate raiders." "Corporate raiders" are the mavericks who launch "hostile takeovers," trying to take over failing mega-corporations for themselves. (Successful companies have higher stock prices and are thus harder to buy out.) To do this in the...