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 10: Austrian economics and 'the other canon': the Austrians between the activistic-idealistic and the passivistic-materialistic traditions of economics

Erik S. Reinert

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


10. Austrian economics and ‘the other canon’: the Austrians between the activistic-idealistic and the passivistic-materialistic traditions of economics Erik S. Reinert TYPOLOGIES OF ECONOMIC THEORY AND THE TWO CANONS We have recently argued that when focusing on very long-term longitudinal trends in economics, two ideal types of economic theory appear to have coexisted in parallel over an extended period of time.1 These ideal types can be seen as constituting two separate filiations2 – to use Schumpeter’s term – and they come into occasional methodological clashes. Werner Sombart fittingly calls the first tradition activistic-idealistic, a tradition born with the Renaissance. The second type of economic theory he calls passivistic-materialistic,3 a tradition having its origins with Mandeville and Adam Smith and solidifying as the ‘a priori method’ with David Ricardo. The purpose of this paper is to outline the characteristics of the two traditions – the tradition behind today’s mainstream and ‘the other canon’ – and to discuss the position of Austrian economics in this context. In most sciences, periodical and radical gestalt-switches terminate old theoretical trajectories and initiate new ones. In a Kuhnian paradigm shift the scientific world moves from a situation when everybody knows that the world is flat, to a new understanding when everybody knows that the world is round. This happens in a relatively short time. Lakatos’ idea of ‘degenerating scientific research programmes’ that gradually shift to ‘progressive’ ones conveys a similar conception. In this respect economics is different. In economics the theory that the world is flat has been living...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information