Evolutionary Economic Thought

Evolutionary Economic Thought

European Contributions and Concepts

New Horizons in Institutional and Evolutionary Economics series

Edited by Jürgen G. Backhaus

Evolutionary Economic Thought explores the theoretical roots of the evolutionary approach, and in so doing, demonstrates how it fits squarely into the theoretical mainstream. Focusing on the institutions of evolutionary change and the processes – such as competition – that generate change, this book takes account of important European contributions to the discipline, hitherto overshadowed by the American paradigm. As such, the book serves to broaden the current discourse. Whilst evolutionary economics itself is a well-researched and widely documented field, this book will be credited with establishing a history of evolutionary economic thought.

Chapter 2: Growth or development: the concept of the historically writing economist

Jurgen G. Backhaus

Subjects: economics and finance, economic psychology, evolutionary economics, history of economic thought


Jürgen G. Backhaus INTRODUCTION1 In his review of economic development ‘From the beginning to Rostow’ Robert Dorfman2 gives a sketch of his view of the history of economic thought on the subject of development. In this history of thought, he notes a big gap between the contributions of Mill and Marshall. For about a hundred years after the end of the classical period, the problems of economic growth seem to have lost their urgency. At any rate, other problems such as justifying and redressing the income distribution or explaining and moderating the business cycle displaced economic growth at the top of the economists’ agendas. As evidence, when you read the sections on economic growth and progress in Marshall’s Principles of Economics, you are struck by how closely they echo the corresponding sections in Mill’s Principles, written 40 years before3 (p. 573). This gap needs some explanation. The purpose of this chapter is to bridge the gap and to provide the missing link. The first part gives some reconstruction of Robert Dorfman’s lineage of the history of development economics up until Rostow.4 The second offers an amendment to Robert Dorfman’s family tree of development economics in emphasizing the work of the historical school, notably of Gustav Schmoller (1838–1917). It is emphasized that Schmoller’s is a complex evolutionary theory emphasizing institutional prerequisites for economic development, going far beyond a theory of stages. This is illustrated in the third part with respect to the institution of money. A GAP IN DEVELOPMENT...

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