Schumpeter's Economic Growth Theory And Enlightenment

American Austrian economist Joseph Alois Schumpeter's economic theory in the contemporary western economics is self-sustaining, belong to the unique. Schumpeter's economic theory involves extensive range, research method is unique, so Schumpeter had different views and conclusion with contemporary economists. Schumpeter's economic theory and research methods for the development of western economics had important influence on the later development of economy, including the economic cycle theory and economic growth theory, system analysis. The economic theory of innovation and economic growth stage of Rostow was about to some extent, by the influence of the economic theory of Schumpeter.Schumpeter's life played many roles, a excellent student, government minister, bank president, professor, scholar and artist, the history of depression, theorist, victim of economist, even a person say that Schumpeter is Marx's student. All intertwined, make him full of contradictions. But as an economist, Schumpeter is a gaint, whether in academic research or in production quality and this make others can not follow the giant. In economics, the research methods, Schumpeter advocate commonly dynamic equilibrium system, combined theoretical analysis method, the history analysis method and mathematical statistics. All the analysis methods are used, this is features of Schumpeter methodology for economic theory and the study started a new avenue for research.Based on the theoretical analysis and texts, combined static analysis with dynamic analysis method, This paper focuses on the economic development of Schumpeter, including static theory of circulation flow, innovation concept, innovation and economic development, entrepreneurs and economic development, credit and economic development, the economic development, the economic cycle and monopolistic competition and economic crises of simple discussion. First, Schumpeter described the simple reproduction process of capitalism of circulating cycle using the static equilibrium analysis methods, points out that the circular circulation economy is no innovation, no development, no existence of surplus value or profit space, is based on the original equilibrium of the year after year.Schumpeter put forward innovative concept and the theory of innovation is regarded as the earliest. Schumpeter think, "innovation is the production function changes", is "the implementation of new combination", is the economic life of internal quality spontaneous breakthrough. Schumpeter thought that process of destruction is creative development of economic and the economic development of capitalism is a creative destruction process, the fundamental source of power lies in the process of innovative activities.Schumpeter will realize a new combination of people called the true entrepreneurs, pointed, magna didactics adventure and put bitter for joy, smart and sharp and strong dedication this five elements constitute the entrepreneurial spirit. When the entrepreneur achieved after the innovation of product, and the price below the social level, between individual income and cost difference constitute profits. Schumpeter elaborated, no profit without innovation, no development without profits, no wealth accumulation without profits.Schumpeter indicated that credit is the purchasing power of innovation and creation. Credit is the only source of financial innovation, promoting economic development of important functions. Interest is the outcome of profit, is sent in economic development. And Schumpeter contacted the economic development with the credit system, the theory of capitalism and economic development and economic cycle.Schumpeter obtained different conclusions about competing and monopoly with predecessors on account of capitalism is a creative destruction process. The perfect competition is not only unrealistic, but hamper innovation and economic development. For innovation, Schumpeter approved of the monopoly that can get a bigger economy of scale, denied the monopoly that narrow economic scale.Schumpeter's concept of innovation is to illustrate the endogenous economic cycle of commercial society, and put forward a periodic model containing only the rise and fall of the two stages called "pure model". Considering the speculation by inducement of various affiliate phenomenon of economic cycle, Schumpeter reach a conclusion about economic cycle model including the economic prosperity and decline, depression, the recovery of the four stages. Schumpeter didn't mention anything about economic cycle and pointed out the policy suggestions from the vibration source of endogenous will not eliminate them.Finally, this text analyses on the basis of economic development, put out brief evaluation of Schumpeter's economic development theories and obtain academic contributions and limitations and bias of Schumpeter's economic theories. According to the economic development of Schumpeter's theory, such as credit creation, innovation, this paper puts forward the views of China's economic development, including the revelation of enterpriser procession, high safety effectively use financial resources to achieve innovation and development, orderly economy structure adjustment, etc.