The Essential Fact of Capitalism: On the Divergence of Hayekian and Schumpeterian Thought

Beyond private ownership of the means of production, what is the most important, or essential, fact of capitalism? Friedrich A. Hayek thought it was the economy of knowledge with which the system operated, whereas for Joseph A. Schumpeter it was the process of creative destruction. To our knowledge, the divergence of thought between these two Austrian-born economists on this fundamental question has gone unheralded in the vast literature devoted...