Schumpeter found in Marx an evolutionary approach to economics, which saw capitalism as constantly revolutionizing itself from within, and he embarked on a life-long project of building a dynamic understanding of economic development based on this insight. Schumpeter did so against the background of the struggles between the Austrian School and the German Historical School on issues over methods, and subjective versus objective approaches to economics, in part relating to evaluations of the merits of Marx’s Das Kapital. Schumpeter developed his objectivist theory of economic development, credit and the cyclical nature of capitalism in large part by discussing the subjectivist theory of leading Austrian School economist Böhm-Bawerk. Through his engagement with Böhm-Bawerk’s theory, Schumpeter brings out key aspects on the science of economics, in particular with regards to the relation between statics and dynamics, as well as the role of abstraction in his theorizing. Ultimately, compared to Smith and List, Schumpeter develops a view on direction of economic activity different from the liberal positions held by Smith and List, as he envisioned the entrepreneur as the one carrying out the function of setting economic development on a new path.