ABSTRACT
This chapter argues that only in Capitalism, Socialism and Democracy (CSD) does a fully radical, ‘Schumpeterian’, Schumpeter emerge. Creative destruction, the kernel of competition, is presented as an openended process filled with turbulence, instability and uncertainty. The chapter describes that the result is an updated Schumpeterian departure point for economic analysis. The process of economic development is a well-behaved theory of cycles where the invisible hand is at work through crises/recessions. They ‘clean’ the system, restoring the equilibrium, though as a condition for the next ‘wave of prosperity’. Financial entrepreneurship and therefore financial evolution are central to Schumpeter’s vision of the process of economic development. Schumpeter’s 1939 Business Cycles is a retrogression from his 1911 Theory of Economic Development. Entrepreneurial profits are the outcome of temporary monopolisation of market opportunities and creatures of development. They can show up as the result of decreasing costs, increasing margins, or both.
