Cambridge Journal of Economics 2009, 33, 495–516 doi:10.1093/cje/ben052 Advance Access publication 18 November 2008 Joseph Schumpeter and the German Historical School Panayotis G. Michaelides and John G. Milios* So far Schumpeter’s affinities with the German Historical School (GHS) have been inadequately acknowledged or even unexplored in major accounts of Schumpeter’s work. This essay argues that Schumpeter’s principal theses are consistent with the GHS. Schumpeter’s affinity with the GHS is established by examining his writings and his relationship with Schmoller, Max Weber and Sombart. It is demonstrated that Schumpeter’s works built heavily on the GHS. However, some obvious differences between Schumpeter and the GHS are observed. Clearly future and more extended research on the GHS would be of great interest. Key words: Schumpeter, German Historical School, Influence, History, Theory JEL classifications: B15, B25, B31, B52 1. Introduction Undoubtedly, Joseph Alois Schumpeter ‘was one of the greatest economists of all time’ (Haberler, 1950, p. 1) who made seminal contributions to economics and had a major impact on the development of the discipline in the twentieth century. However, some important aspects of his works remain less widely discussed. For instance, Schumpeter’s affinities with the German Historical School (GHS) have been inadequately acknowledged or even unexplored in recent decades with the exception of a few important contributions, e.g. Swedberg (1989), Streissler (1994), Shionoya (1997, 2005), Ebner (2000), Hodgson (2001, 2003), Becker and Knudsen (2002) and Kesting (2006). Given the presence of central elements of Schumpeter’s vision in the GHS’s works, it is surprising that so little attention has been paid to the GHS as an intellectual source for the flamboyant economist. There is one main reason why studying the potential influence of the GHS on Schumpeter, Vienna’s enfant terrible of economic theory, is of great interest. Given that Schumpeter ranks among the ‘most important and enduringly influential economists of all time’ (Hodgson, 2007A, p. 1) and had a major impact on the development of economics, Manuscript received 6 August 2007; final version received 13 May 2009. Address for correspondence: Dr. P. G. Michaelides, Department of Humanities, Social Sciences and Law, National Technical University of Athens, Zografou Campus, 157.80, Athens, Greece; email: pmichael@ central.ntua.gr *National Technical University of Athens, Greece. The authors would like to thank three anonymous referees for their constructive comments. Ó The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.