The Path of Economic Science

With Epochs in the History of Doctrines and Methods (1914) and the History of Economic Analysis, left unfinished and published posthumously in

1954, Schumpeter provided a reconstruction of the path followed by economic science.

According to Schumpeter (ibid.),

Scientific analysis ... is not simply progressive discovery of an objective reality ... Rather it is an incessant struggle with creations of our own and our predecessors’ minds and it “progresses”, if at all, in a criss-cross fashion, not as logic, but as the impact of new ideas or observations or needs, and also as the bents and temperaments of new men, dictate.

In studying the zigzag path of economic science, Schumpeter focused attention on theories and analytical tools, leaving aside visions or ideologies, or ‘systems of political economy’. Indeed, it is only when we succeed in isolating the analytical aspect in economic enquiries from the elements of vision and ideology that we can speak of ‘“scientific progress” between Mill and Samuelson’ in ‘the same sense in which we may say that there has been technological progress in the extraction ofteeth between the times of John Stuart Mill and our own’ (ibid., p. 39). The analytical work also includes elaborating a conceptual apparatus for the representation of reality, and indeed this latter aspect comes before the stage of construction of formal models.

Schumpeter identified in the chain physiocrats-Smith-John Stuart Mill-neoclassical theory the dominant line of development in economic research, while the Ricardo-Marx line was considered a deviation along which sight is lost of the central role played by demand and supply in the determination of equilibrium and of the fact that the issue of income distribution in essence concerns determination of the prices of productive factors. Schumpeter also criticized the notion of homo oeconomicus:

The conscious will of the individual, fleeing from pain and seeking satisfaction, is the scientific nucleus of this strictly rationalist and intellectualist system of philosophy and sociology which, unsurpassed in its baldness, shallowness and its radical lack of understanding for every thing that moves man and holds together society, was with a certain justification already an abomination to the contemporaries and to an even larger extent to later generations in spite of all its merits.[1]

The Austrian economist was implicitly suggesting here the possibility of a different - and more attractive - view of the economic agent, namely the active figure of the entrepreneur-innovator (and of the banker) on which his own theory of economic development relied. As was the case with many theoreticians, so too for Schumpeter reconstruction of the history of economic thought was in a sense part of his theoretical contribution, in the twofold sense of clarifying its methodological and conceptual foundations through contrasts and analogies while stressing the innovative qualities marking it out from the whole of the previous tradition.

  • [1] Schumpeter 1914, p. 87; cf. also p. 97 and pp. 177-8.
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