In 1932, he emigrated to the United States to become a professor at Harvard University, where he remained until the end of his career, and in 1939 obtained American citizenship.

Schumpeter was one of the most influential economists of the early 20th century, and popularized the term "creative destruction", coined by Werner Sombart.

Schumpeter was born in 1883 in Triesch, Habsburg Moravia (now Třešť in the Czech Republic,[8] then part of Austria-Hungary), to German-speaking Catholic parents.

[9] Schumpeter was educated at the Theresianum and began his career studying law at the University of Vienna under Eugen von Böhm-Bawerk, an economic theorist of the Austrian School.

He proposed a capital levy as a way to tackle the war debt and opposed the socialization of the Alpine Mountain plant.

[19] In 1932, Schumpeter moved to the United States, and soon began what would become extensive efforts to help fellow central European economists displaced by Nazism.

At the beginning of World War II, the FBI investigated him and his wife, Elizabeth Boody (a prominent scholar of Japanese economics) for Nazi sympathies, but found no evidence of such leanings.

[28][1] Despite being born in Austria and having trained with many of the same economists, some argue he cannot be categorized with the Austrian School of economics without major qualifications[29] while others maintain the opposite.

[31] The Austrian sociologist Rudolf Goldscheid's concept of fiscal sociology influenced Schumpeter's analysis of the tax state.

[33] According to Christopher Freeman (2009), "the central point of his whole life work [is]: that capitalism can only be understood as an evolutionary process of continuous innovation and 'creative destruction'".

In History of Economic Analysis, Schumpeter stated the following: "An 'automatic' gold currency is part and parcel of a laissez-faire and free-trade economy.

"[37] Schumpeter's relationships with the ideas of other economists were quite complex in his most important contributions to economic analysis – the theory of business cycles and development.

The entrepreneur disturbs this equilibrium and is the prime cause of economic development, which proceeds cyclically along with several time scales.

If each of these were in phase; more importantly, if the downward arc of each was simultaneous so that the nadir of each was coincident, it would explain disastrous slumps and consequent depressions.

Furthermore, he claimed that even if the common good was possible to find, it would still not make clear the means needed to reach its end, since citizens do not have the requisite knowledge to design government policy.

Although periodic votes by the general public legitimize governments and keep them accountable, the policy program is very much seen as their own and not that of the people, and the participatory role of individuals is usually severely limited.

[46] Within such a minimalist definition, states which other scholars say have experienced democratic backsliding and which lack civil liberties, a free press, the rule of law and a constrained executive, would still be considered democracies.

[50] Schumpeter faced pushback on his theory from other democratic theorists, such as Robert Dahl, who argued that there is more to democracy than simply the formation of government through competitive elections.

[50] Schumpeter's view of democracy has been described as "elitist", as he criticizes the rationality and knowledge of voters, and expresses a preference for politicians making decisions.

Many social economists and popular authors of the day argued that large businesses had a negative effect on the standard of living of ordinary people.

Contrary to this prevailing opinion, Schumpeter argued that the agents that drive innovation and the economy are large companies that have the capital to invest in research and development of new products and services and to deliver them to customers more cheaply, thus raising their standard of living.

In one of his seminal works, Capitalism, Socialism and Democracy, Schumpeter wrote: As soon as we go into details and inquire into the individual items in which progress was most conspicuous, the trail leads not to the doors of those firms that work under conditions of comparatively free competition but precisely to the door of the large concerns – which, as in the case of agricultural machinery, also account for much of the progress in the competitive sector – and a shocking suspicion dawns upon us that big business may have had more to do with creating that standard of life than with keeping it down.

Yet, the Schumpeterian variant of the long-cycles hypothesis, stressing the initiating role of innovations, commands the widest attention today.

The impact of technological innovation on aggregate output is mediated through a succession of relationships that have yet to be explored systematically in the context of the long wave.

The speed with which inventions are transformed into innovations and diffused depends on the actual and expected trajectory of performance improvement and cost reduction.

[63] He argued that technological innovation often creates temporary monopolies, allowing abnormal profits that would soon be competed away by rivals and imitators.

[73] Other outstanding students of Schumpeter's include the economists Nicholas Georgescu-Roegen and Hyman Minsky and John Kenneth Galbraith and former chairman of the Federal Reserve, Alan Greenspan.

For instance, the European Union's innovation program, and its main development plan, the Lisbon Strategy, are influenced by Schumpeter.

According to University President Professor Lambert T. Koch, "Schumpeter will not only be the name of the Faculty of Management and Economics, but this is also a research and teaching programme related to Joseph A.

The initial Schumpeter column praised him as a "champion of innovation and entrepreneurship" whose writing showed an understanding of the benefits and dangers of business that proved to be far ahead of its time.