Money, Banks and Finance in Economic Thought

Capitalism without capitalists. Bankers, capitalists & entrepreneurs in Schumpeter theory

Tristan Velardo, University of Lille

Schumpeter intends to theorize capitalism as an evolutionary process through a dynamic model that aims to go beyond the Walrasian static model. In order to dynamize the general equilibrium, Schumpeter introduces a new function, the entrepreneur. The entrepreneur is the carrier of the innovation, which is allowed by another economic agent, the banker, who selects and makes possible innovation projects by mean of credit. Indeed, the entrepreneur needs a purchasing power fund in order to realize his innovation. According to Schumpeter, the capitalist is defined by his possession of means of payment (capital). All three absent from the Walrasian model, bankers, capitalists and entrepreneurs are involved in the capitalist process and perform economic functions that Schumpeter want to clarify. So, both capitalists – through capital - and bankers – through credit – fulfill the economic function of lending means of payments. But Schumpeter stresses the crucial role of the banker in the emergence of innovations at the expense of the other central agent in capitalism, that of capitalist himself. Indeed, the role and function of the capitalist is minimized in favor of the role of the banker, so much so that the latter can replace the former. By a curious paradox, Schumpeter seems to develop a theory of capitalism without capitalists, where the relationship between entrepreneur and the banker seems to be enough to impulse evolution and to upset the entire economic structure. This paper intends to question the triptych entrepreneurs-capitalists-bankers through their respective relationships and functions in the Schumpeterian model. The distinction between these different actors and the apparent paradox of a capitalism without capitalists makes it possible to highlight the Schumpeterian definition of capitalism, which places money at its very core. Thus, the capitalist evolution is driven by a set of means whose heart lies in the phenomenon of borrowed money and credit creation.


Keywords: Schumpeter, capitalism, capitalist, entrepreneur, banker, innovation, money, credit, capital, static, dynamic

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