Schumpeter and the Essence of Profit

28 Pages Posted: 22 May 2011 Last revised: 25 May 2015

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Date Written: May 18, 2011

Abstract

Schumpeter had a clear vision of the developing economy, but he did not formalize it. The quest for a germane formal basis is in the following guided by the general question: what is the minimum set of foundational propositions for a consistent reconstruction of the evolving money economy? We start with three structural axioms. The claim of generality entails that it should be possible to free Schumpeter’s approach from its irksome Walrasian legacy and to give a consistent formal account of the elementary circular flow that served him as a backdrop for the analysis of the entrepreneur-driven market system.

Keywords: new framework of concepts, structure-centric, axiom set, profit, money, credit, structural stress, catching-up process, monopoly

JEL Classification: B41, E10, E25, E30, E40

Suggested Citation

Kakarot-Handtke, Egmont, Schumpeter and the Essence of Profit (May 18, 2011). Available at SSRN: https://ssrn.com/abstract=1845771 or http://dx.doi.org/10.2139/ssrn.1845771

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

Keplerstrasse 17
Stuttgart
Germany

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