Schumpeter's Plea for Reasoned History

Chris Freeman and Francisco Louçã

in As Time Goes By

Published in print March 2002 | ISBN: 9780199251056
Published online November 2003 | e-ISBN: 9780191596278 | DOI:
 Schumpeter's Plea for Reasoned History

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The chapter summarizes some of the main characteristics of Schumpeter's evolutionism, discussing his own evolution in some detail, since the early days of the Methodenstreit between Menger and Schmoller, and the participation of Schumpeter along the Walrasian side.

Yet he tried to surpass what he recognized as the limits of that side: the analysis of capitalism from the point of view of statics, and consequently the understatement of the dynamic role of innovation, the main endogenous drive for change and adaptation of the economic system.

Schumpeter's non‐Darwinist evolutionism is analysed, and his contributions are compared to his main rival and bête‐noir, J. M. Keynes; in spite of the conflicting views of both men, some essential points of proximity are indicated: both interpreted modern industrial relations as part of a dynamic, nonlinear, complex system, emphasizing the emergence of uncertainty (Keynes) or change (Schumpeter).

Their closely related understanding of the cyclical nature of capitalism is indeed one of the crucial contributions of the first half‐century economics.

Keywords: economic history; evolutionism; innovation; John Maynard; Joseph Schumpeter; Keynes; Léon; Methodenstreit; Walras

Chapter.  11864 words. 

Subjects: Economic History

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