83rd International Atlantic Economic Conference

March 22 - 25, 2017 | Berlin, Germany

Schumpeter's split between "pure" economics and institutional economics

Friday, 24 March 2017: 15:10
Dieter Boegenhold, Ph.D. , Economics, University of Klagenfurt, Klagenfurt, Austria
While Joseph A. Schumpeter is generally classified as a pioneer of evolutionary economics in a wider sense and of entrepreneurship and innovation management in a narrower sense, Schumpeter is less known for his seminal contributions in the area of scientific methodology and history of science. This paper deals with Schumpeter’s methodological attempts. Some authors argue that Schumpeter was very stable over the course of his life regarding his principle scientific positions. It is said that he came up with his main ideas very early on in his time in Europe and that he worked out those ideas more thoroughly during the following decades without changing his early positions very much. Compared to this view, one may see at least once a clear shift in Schumpeter’s principle positions between the early and late periods of his career. The paper will discuss a shift which is centered on Schumpeter’s scientific positioning. In 1908, in his "Das Wesen und der Inhalt der theoretischen Nationalökonomie" ("The Essence and Content of the Theoretical National Economy"), Schumpeter developed and pioneered his methodological individualism which is very widely acknowledged. However, comparing these early positions with methodological writings in his "History of Economic Theory" (1954) shows that he has not really shifted from Methodological Individualism to an institutional perspective, which addresses academic interplay and which sees economic action rooted in historical predispositions and paths and in social constraints. Both perspectives are in relation to each other and seem to be undecided in the end. Schumpeter oscillates between a “universal” social science and a narrow one ("pure economics") but, at the end, a perspective of institutional economics, which emphasizes the idea of institutions and social embeddedness of economic behavior, seems to dominate clearly.