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Schumpeter's Evolutionary Economics

Schumpeter's Evolutionary Economics

Esben Sloth Andersen


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Joseph Schumpeter’s views on innovation, entrepreneurship and creative destruction are widely cited in many fields of the social sciences, and are influential in policy and decision making, yet they have often been misinterpreted and misunderstood. ‘Schumpeter’s Evolutionary Economics’ fills this void of analysis by introducing novel interpretations of Schumpeter’s five major works, and tracing the development of his intellectual theory and framework. In so doing it places our understanding of Schumpeter on a new and firmer footing.

Esben Sloth Andersen was awarded the Gunnar Myrdal Prize for 2010 for ‘Schumpeter’s Evolutionary Economics’. The Myrdal Prize is awarded annually for the best monograph on a theme broadly in accord with the research perspectives of the European Association for Evolutionary Political Economy.

‘Schumpeter’s Evolutionary Economics’ fills the void of analysis and serves as a standard reference work on this pioneering thinker by introducing novel interpretations of his five major books and tracing the development of his intellectual framework. Schumpeter’s first German book on the nature of theoretical economics (1908) is still untranslated, but it demonstrates how he developed his evolutionary research programme by studying the inherent limitations of equilibrium economics. He presented core results on economic evolution and extended evolutionary analysis to all social sciences in the first German edition of ‘The Theory of Economic Development’ (1912). He made a partial reworking of the theory of economic evolution in later editions, and this reworking was continued in ‘Business Cycles’ (1939). Here Schumpeter also tried to handle the statistical and historical evidence on the waveform evolution of the capitalist economy. ‘Capitalism, Socialism and Democracy’ (1942) modified the model of economic evolution and added evolutionary contributions to other social sciences. Finally, ‘History of Economic Analysis’, published posthumously, was based on his evolutionary theory of the history of economics. Andersen's analysis of Schumpeter's five books expounds the progress he made within his research programme, and examines his lack of satisfactory tools for evolutionary analysis. In so doing it places our understanding of Schumpeter on a new and firmer footing; it also suggests how modern evolutionary economics can relate to his work.

Esben Sloth Andersen was awarded the Gunnar Myrdal Prize for 2010 for ‘Schumpeter’s Evolutionary Economics’. The Myrdal Prize is awarded annually for the best monograph on a theme broadly in accord with the research perspectives of the European Association for Evolutionary Political Economy.

Esben Sloth Andersen is Professor of Evolutionary Economics in the Department of Business Studies, Aalborg University.

Table of Contents

Section Title Page Action Price
Front Matter\r 1
Half Title\r 1
Series Page\r 2
Title\r 3
Copyright\r 4
Contents\r 5
List of Figures\r 9
List of Tables\r 11
Preface\r 13
Acknowledgements\r 17
Abbreviations\r 19
Main Body\r 21
1. Introduction\r 21
1.1 The name of the game: 'evolutionary economics'\r 22
1.2 Schumpeter's evolutionary pivot\r 26
1.3 Alternative image of Schumpeter's work\r 35
1.4 The structure of the present book\r 39
Part I. Equilibrium Economics and Evolutionary Economics\r 41
2. The Early Years\r 43
2.1 Research programmes for the twentieth century\r 43
2.2 Preparing to become a great economist\r 48
2.3 Schumpeter's new intellectual combination\r 55
3. From Walrasian Statics to Evolutionary Dynamics\r 59
3.1 Different interpretations of 'Wessen'\r 60
3.2 Exploring the 'Magna Carta' of theoretical economics\r 64
3.3 Resolving the battle of methods\r 70
3.4 The Statics-Dynamics dichotomy\r 73
3.5 Types of entrepreneurs and parameters of the system 78
3.6 Conclusion\r 85
4. Elitist Dichotomies and General Evolutionary Analysis\r 87
4.1 The 'lost' chapters of 'Entwicklung I' and their translation\r 88
4.2 From elite theory to the Schumpeterian dichotomies\r 95
4.3 The dichotomies of Pareto and Schumpeter\r 103
4.4 Towards a general theory of social evolution\r 109
4.5 Conclusion\r 115
5. Evolutionary Dynamics in the Capitalist Economy\r 119
5.1 Three interpretations of 'Entwicklung I'\r 121
5.2 Starting at the Bohm-Bawerk Seminar of 1905\r 124
5.3 Theories of interest and of capitalism\r 127
5.4 The evolutionary function of business cycles\r 133
5.5 The \"spirit of capitalism\" and the system of concepts\r 142
5.6 Conclusion\r 152
Part II. The Evolutionary Trilogy\r 155
6. Approaching the Evolutionary Trilogy\r 157
6.1 The Evolutionary trilogy and its name\r 157
6.2 The fields of evolutionary analysis\r 161
6.3 The evolutionary mechanisms of the capitalist engine\r 164
7. The Capitalist Engine and Socio-Political Evolution\r 175
7.1 Two ways of reading 'Capitalism'\r 176
7.2 Mark II of the capitalist engine and its implications\r 181
7.3 Emergence of the capitalist engine and the tax state\r 189
7.4 Democratic political evolution: Mark I and Mark II\r 194
7.5 The endless economic frontier and the sociological trend\r 200
7.6 Conclusion\r 206
8. Waveform Economic Evolution and Business Cycles\r 209
8.1 The complex contents of 'Cycles'\r 210
8.2 Towards a reasoned history of the capitalist process\r 218
8.3 The Kondratieffs and Juglars of the third approximation\r 229
8.4 The pure model of the first approximation\r 237
8.5 The second approximation with the secondary wave\r 245
8.6 Extensions of the second approximation\r 253
8.7 Conclusion\r 258
9. The Basic Mechanisms of Economic Evolution\r 261
9.1 'Development' as part of the evolutionary trilogy\r 263
9.2 The circular flow and the mechanism of adaptation\r 270
9.3 The function of the Schumpeterian entrepreneur 282
9.4 Combining the mechanisms of innovation and adaptation\r 293
9.5 Mark I and Mark II of the capitalist engine\r 304
9.6 Conclusion\r 313
Part III. Works in Progress\r 315
10. Schumpeter and the Years of High Theory\r 317
10.1 Schumpeterian unfinishedness\r 317
10.2 The years of high theory and high econometrics\r 320
10.3 The principle of indeterminateness\r 327
10.4 The theoretical apparatus of economics\r 335
10.5 Schumpeter's \"final thesis\"\r 342
11. Evolutionary Analysis and the History of Economics\r 347
11.1 The gradual development of 'History'\r 349
11.2 Long waves in the evolution of economic analysis\r 356
11.3 Why do we study the history of economics?\r 362
11.4 Economics as a tool-based science and its evolution\r 366
11.5 The brakes of the scientific engine\r 370
11.6 The fundamental fields of scientific economics\r 378
11.7 Conclusion\r 386
12. Beyond Schumpeter's Evolutionary Economics \r 389
12.1 The fields of evolutionary economics \r 390
12.2 Evolutionary economic theory: general problems\r 393
12.3 Evolutionary economic theory: specific mechanisms\r 399
12.4 Evolutionary economic statistics\r 407
12.5 Evolutionary economic history\r 417
12.6 Evolutionary economics as a whole\r 427
End Matter\r 431
Appendices\r 431
A. Chronology\r 433
B. Literature on Schumpeter\r 437
C. Accessing and Grouping Schumpeter's Works\r 441
C.1 The Schumpeter Archives\r 441
C.2 Collections of Schumpeter's papers and letters\r 442
C.3 Translating Schumpeter's German texts\r 443
C.4 Subjects of Schumpeter's works\r 445
D. Some Tools for Evolutionary Analysis\r 447
D.1 The ecological approach to evolutionary analysis\r 447
D.2 The statistical approach to evolutionary analysis\r 456
Schumpeter's Works\r 467
Other References\r 481
Index of Schumpeter's Works\r 503
Index of Persons\r 509