Methodological individualism in Walras

According to Donzelli (1983 639), Schumpeter was the first to coin the expression 'methodological individualism'. A complete chapter of DW is dedicated to a careful definition and detailed discussion of both methodological individualism and its main opponent, methodological organicism. There can be little doubt that Schumpeter's main conclusion is instrumentalist. For him, the point is not so much to establish whether one of the two approaches is superior but rather under which circumstances...

Social motives and social classes

For Schumpeter, human motives are never strictly individual. Rather, they are always embedded in a social context and related to the historical circumstances under which they have emerged. From this point of view, two main concepts are essential. On the one hand, following Wieser's conception of economic sociology, Schumpeter argues that, whatever the social environment, men are always divided into two categories leaders and followers.5 It should, however, be noted that Schumpeter does not...

Ibid 326

Put differently, according to Schumpeter, social theorists, and in particular economists, writing in the conventional tradition attribute to the consciousness of observed agents the knowledge of and the ability to employ the 'rationality of the observer'. At its most extreme, this view also assumes that these 'consciously rational actions' are mutually compatible and therefore produce socially optimal results. Schumpeter raises several objections to this received view. First, even if it is...

Schumpeter and Hayek on money banking and dynamics Wicksells legacy

In the aftermath of the so-called 'marginal revolution', many economists writing at the end of the nineteenth and beginning of the twentieth centuries considered the static or stationary state of the economy as the methodological starting-point of their analyses. This could then be extended to account for monetary and financial factors as well as for dynamic movements of the economy. In this framework, the introduction of money, bank credit or financial factors does not affect the essential...

The mechanisms in Schumpeters theory of the business cycles

In the above section, we have focused on the originality of Schumpeter's conception of dynamic as opposed to static analysis. We have, in particular, pointed out that what Schumpeter means by 'statics' contrasts with the meaning more commonly attributed to the term and clarified first by Frisch and later by Samuelson Statical refers to the form and structure of the postulated laws determining the behavior of the system. An equilibrium defined as the intersection of a pair of curves would be...

Preface

More often than not, volumes such as this serve the purpose of trying to save a particular author or debate from oblivion. This is most definitely not the purpose of this book for the simple reason that Joseph A. Schumpeter has never fallen into oblivion. Since his death in 1950, his work has never ceased to attract the attention of economists, even when focused on very different aspects of his thought. The timeless nature and unremitting relevance of Schumpeter's ideas and analysis is directly...

The Contribution of Joseph Schumpeter to Economics

This collection constitutes an examination of Schumpeter's legacy that is wider than most of those attempted up to now. As one of the key economists of the twentieth century, Schumpeter's theory is viewed in relation to his important contributions to areas as diverse as the history of economic analysis, economic methodology and economic sociology, as well as to the theories of entrepreneur-ship, competition, innovation, business cycles, money, banking and finance. These wide-ranging...