Schumpeter, Joseph A. (1883–1950). Business Cycles: a Theoretical, Historical, and Statistical Analysis of the Capitalist Process. London and New York: McGraw-Hill Book Company, Inc, 1939. First editions. Two volumes. 24 cm; xvi, 448; x, [449]-1095, [1] pp. Original burgundy cloth, spines ruled and lettered gilt. In very good condition. Housed in a custom clamshell case.

From the library of Richard V. Clemence (1910–1982), with his ownership stamps and occasional notes.

A superb association copy of this landmark work in economic theory.  Richard Clemence was both one of Schumpeter’s first graduate students at Harvard and one of his last. A native of Rhode Island, Clemence had attended Brown University, earning a master’s degree in economics before matriculating at Harvard in 1938. Schumpeter himself arrived at Harvard only a few years earlier, in 1932. Clemence’s graduate studies at Harvard were interrupted by military service, but he finally received his doctorate in 1948 with a dissertation on the theory of economic maturity. His readers included Joseph Schumpeter, who announced his retirement the following year.

Joseph A. Schumpeter in Harvard Yard, circa 1948. Harvard University Archives.

Written over the course of seven years in the depths of the Great Depression, Business Cycles addressed the urgent questions of the day through detailed analysis of patterns of boom and bust in three countries (Britain, Germany and the United States) over the whole capitalist epoch –- a monumental undertaking. As business historian Thomas McCraw notes, writing the book “changed the way [Schumpeter] thought about capitalism. . . Business Cycles presaged the emergence of modern, rigorous business history – a new academic subdiscipline.” Most significantly, the book drew attention to the figure of the entrepreneur, whose activities disrupt economic equilibria through processes that Schumpeter first documented here and would later describe as “creative destruction.” The introduction of new products, processes, or technology, Schumpeter argued, generates waves of innovation that fuel investment booms and stimulate the market. Inherently volatile, Capitalism operates in long cycles of prosperity, recession, depression, and revival. A work of immense erudition, rich with economic and historical insight, Business Cycles “cannot be merely read,” wrote one contemporary reviewer; “it must be studied.” As McCraw notes, Schumpeter’s “years of intense labor on that book added immensely to his empirical knowledge. . . . His immersion in the histories of firms and industries led him to a uniquely powerful understanding of modern capitalism.” Three years after publishing Business Cycles, Schumpeter drew upon this “intellectual storehouse” to write his brilliant (and much more accessible) synthesis, Capitalism, Socialism and Democracy (1942).

Richard V. Clemence at Wellesley College, 1957. He would retire in 1976 as A. Barton Hepburn Professor of Economics. The Wellesley Legenda 1957, p. 21.

McCraw relates how “at a Harvard seminar that Schumpeter’s students organized to discuss Business Cycles, it became evident that almost nobody had read the text,” much to the author’s fury and chagrin. (One of those students, future Nobelist Paul Samuelson, would later dismiss the book's emphasis on predictable wave periods as “Pythagorean moonshine.”) Richard Clemence distinguished himself from his classmates not only by reading the book but by devoting much of his career to exploring its ramifications and extending its methodology.

From his seat at Wellesley College, whose faculty he joined in 1947, Clemence promoted the ideas of his teacher through a series of books he published in rapid succession. His book The Schumpeterian system (1950) written with his former classmate Francis S. Doody, was one of the first to introduce the theory of business cycles to a wider readership. He included Schumpeter in the several collections of readings he edited on economic analysis (1950), business cycles and national income (1953), and economic change (1954). But perhaps most significantly, Clemence edited a collection of Schumpeter’s essays, most of which were written while the two worked together at Harvard. First published in 1951, it was recognized instantly as an essential text and today is assigned as required reading in M.B.A. programs worldwide.

Clemence edited an essential collection of Schumpeter's essays

Clemence did not annotate his books heavily, but his stamps and sparse annotations in these two volumes mark them as significant artifacts of economic history.

Select Bibliography of Richard V. Clemence

1936. A critical examination of theories of consumer's choice with a new theory and method of analysis. Thesis (M.A.), Brown University.

1947.  The theory of economic maturity and its application to the United States of America. Thesis (Ph. D.), Harvard University.

1950a. The Schumpeterian system [with Francis S. Doody]. Cambridge, Mass.: Addison-Wesley Press.

1950b. Readings in economic analysis, 2 volumes [ed.]. Cambridge, Mass., Addison-Wesley Press.

1951a. Income analysis. Cambridge, Mass., Addison-Wesley Press.

1951b. Essays of J. A. Schumpeter [ed.]. Cambridge, Mass., Addison-Wesley Press.

-----. reprinted as Essays on entrepreneurs, innovations, business cycles, and the evolution of capitalism. New Brunswick: Transaction Publishers, 1989.

1953a. The economics of defense; a primer of American mobilization. Harrisburg, Pa.: Stackpole Co.

1953b. Readings in business cycles and national income. [ed., with Alvin H. Hansen] New York: Norton.

1954. Economic change in America; readings in the economic history of the United States. [ed., with Joseph T. Lambie]. Harrisburg, Pa.: Stackpole Co., 1954

1971. The Ruth Stout no-work garden book [with Ruth Stout]. Emmaus, Pa.: Rodale.

Work Cited

McCraw, Thomas K. Prophet of innovation : Joseph Schumpeter and creative destruction. Cambridge, Mass.: Belknap Press of Harvard University Press, 2007