As is well known, Hyman Minsky was a student of Joseph Schumpeter’s at Harvard. Minsky’s “stages” theory of capitalist development, fleshed out during the later part of his life while he was here at the Levy Institute, arguably owes something to the influence of his former dissertation adviser. There’s a short paper in the archive from 1992, “Schumpeter and Finance” (pdf), in which Minsky presents a tight, clear summary of his vision of the evolution of capitalism and finance, right up to the present-day stage of “money manager capitalism.”

You should read it for that reason alone (especially if your acquaintance with Minsky’s work extends only to his “financial instability hypothesis”), but it also contains a short passage that deserves to be quoted on its own, in which Minsky, in the context of a reminiscence of his teacher (“We talked about important things as well as about economics”), insists on the need to approach economics as the study of an “evolutionary beast”:

“In 1948–49 the representative graduate student considered Schumpeter to be passé. Paying attention to him, joining him in his study was evidence of a lack of fundamental seriousness, of dilettantism. Given the command of mathematics that economists of that time possessed, Schumpeter’s model was not tractable. As a result his vision was ignored by the candidates striving to be mathematical economists and econometricians.

The events of our time, especially but not exclusively the break-up of the Soviet ministerial model of socialism, vindicates the Schumpeter vision of economies as evolving systems, systems that exist in history and change in response to endogenous factors. (Schumpeter acknowledged that this vision owes much to Marx.) This message, that societies are evolutionary beasts which cannot be frozen in time and reduced to static mathematical formulations, was never more relevant that it is today. No doctrine, no vision that reduces economics to the study of equilibrium seeking and sustaining systems can have a long-lasting relevance. The message of Schumpeter is that history does not lead to an end of history.”