chapter  4
Innovations and profi ts: Schumpeter and the Classical heritage
Pages 22

Did the contributions of other authors fare better? Léon Walras’s general equilibrium theory the young Schumpeter (1908) had praised as the Magna carta of economics, but as time went by his admiration for the Lausanne economist’s achievements shrunk. Ironically, he kept him in high esteem essentially for allegedly having analysed an economic system, the so-called ‘circular fl ow’, in which the differentia specifi ca of capitalism, profi ts and interest are absent. The classical economists are given slightly better marks. The only author who, according to Schumpeter, deserves to be credited with having grasped at least elements of the capitalist mode of production and its inherent dynamism was Karl Marx. The latter fi gures prominently in Schumpeter’s interpretative and constructive work even and occasionally especially when there are no direct references to him.