Re: Schumpeter and the Capitalist Process.

Kenneth:
A few responses come to my mind:
(1)  Despite what you write, for Schumpeter, each cycle is a "historic
individual" with its own historical specificity.  On this Schumpeter
is unambiguous and this is what I read too in his work.  Cf. Business
Cycles vol.1, Part 1; cf. also Theory of Economic Development,
chapter on business cycles.  I point this out to argue that Schumpeter's
attempt was precisely to explain each cycle individually even as he utilised
a general theory of innovations for that purpose.  (On Kuznets I am
on relatively unfamiliar terrain: I do recall that his focus was on construction
cycles).
(2)  Schumpeter was less concerned with growth and more
with the dynamics of "development" or Entwicklung, historical processes
by which the contours of the capitalist system as a system, unfolds over
time and space.
(3) Consumer Demand for Schumpeter, was a derivative.  Production
was of determining importance.  I am inclined to think that it is
still true today, though it is a much more contested terrain than in earlier
periods (cf. N.Klein's No Logo).   Keynes' (i.e. Marx's)
theory of inadequate "effective demand" is a pointer to the incapacity
of the masses who have made possible the great mass production, to buy
what they have produced .  But the production process itself, i.e.,
what is to be produced, has little to do with consumer demand. 
'Consumer sovereignty' is more a longing than a 'reality', though one could
also say that 'you only get what you ask for'.  But what is it that
"you" ask for?  Mass assembly line production?  Sweatshop labor
production?  Is there really consumer sovereignty regarding demand
for the products of transnational enterprises of today or the vertically
integrated multinational corporations of the 1890s-1960s?
(4)  Debt is endogenous to the functioning of the economic
system.  Who is the one who goes into debt and when do problems of
debt arise?  Capitalist entrepreneurs go into debt to finance the
new plant and new machinery with which to plunge into production, and to
unleash processes of 'creative destruction', which when complete provide
rewards ('profits') that are adequate to re-pay the interest and loans
from banks taken to finance the investment.  States also go into debt,
often catastrophically.  Spanish bankruptcy in the 16th and 17th centuries,
French bankruptcies in the 17th and 18th centuries, these are historically
documented (cf. Braudel).  There are limits to the Schumpeterian construct. 
What explains the debt crises of the 1980s and of the late 1990s? 
On the one hand you may say demand for debt, but the demand is forthcoming
precisely because there is an overabundance of liquidity, as there was
in the 1980s when third world states began to borrow avidly from transnational
and private banks and then found that they could not repay the loans. 
Such debt crises are common to all financial expansions.  So it is
not as though there is no space in the Marx/Schumpeterian process of creative
destruction to accomodate debt crises.  And it is not as though no
one has taken them into account either.    Ganesh Trichur.

kenneth couesbouc wrote:

 Ganesh,
         Schumpeter and, later, Kuznets can't explain
the various cycles individually. All they consider is
growth in general. And then, apparently, cycles just
happen of themselves. Why not take demand into
consideration? Debt increases demand and debt
durations coincide rather well with the studied
cycles. Why has no one gone into this?
  Regards, Kenneth

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