Schumpeter’s View on Entrepreneur and Credit Versus Contemporary Mega-Banks Problem
7 Pages Posted: 16 Apr 2014
Date Written: April 14, 2014
Considering Schumpeter’s basic proposition about innovations as the strength of the capitalist dynamics, this paper focus on the main goal which is the answering the question: What was the Schumpeter’s view on entrepreneur and credit versus modern mega-banks? The basic problems with the modern banks are mainly related with the level of concentration in the banking sector, the bonuses of the management (which are the derivative of bank’s motivational systems) but most of all are related with phenomenon that the banking sector is pursuing goals, that are harmful to the long-term economic profitability. According to the Schumpeter banks should stimulate innovations implemented by entrepreneurs in the economy. Unfortunately the bankers nowadays seemed to have other priorities than those implied by their function in the economic system. According to Schumpeter credit contributes to the development, because development results from the activities of entrepreneurs. Other types of credit are not important from the point of view of "life process of the economic organism".
Keywords: Schumpeter, bank, credit, money, mega-bank, big bank, innovation, entrepreneur
JEL Classification: E59, F01, M21
Suggested Citation: Suggested Citation