ABSTRACT
During the twentieth century, the line of evidence from Schumpeterian ideas to policies to outcomes is perhaps clearest in the high-performing East Asian economies of the late twentieth century, especially Japan, Korea, Taiwan, and Singapore. Schumpeter’s characterisation of the tax state is essentially Austrian, with a Von Misean flavour, a perspective that would resurface with full force under the public choice approach championed by Buchanan, Tullock, Wagner and others. Capitalism, Socialism and Democracy constitutes, as just mentioned, the closest of a coherent set of propositions by Schumpeter on state action in economic affairs. China’s development trajectory fully supports Schumpeter’s emphasis on reliance on credit and the banking system as sine-qua-non-conditions for successful development processes. The overall desired policy result is to decrease the system’s inescapable elements of financial and technological instability and uncertainty.
