Marshall and Schumpeter on Evolution

Marshall and Schumpeter on Evolution

Economic Sociology of Capitalist Development

Edited by Yuichi Shionoya and Tamotsu Nishizawa

This unique and original work contends that, despite the differences between Marshallian and Schumpeterian thinking, they both present formidable challenges to a broad type of social science beyond economics, particularly under the influence of the German historical school. In a departure from the received view on the nature of the works of Marshall and Schumpeter, the contributors explore their themes in terms of an evolutionary vision and method of evolution; social science and evolution; conceptions of evolution; and evolution and capitalism.

Chapter 2: The General Pattern of Marshallian Evolution

Tiziano Raffaelli

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


1 Tiziano Raffaelli 2.1 PARTIAL EQUILIBRIUM ANALYSIS AS A MODEL FOR PIECEMEAL EVOLUTION Marshall is usually considered the champion of static equilibrium analysis; so much so that the point of intersection of the Marshallian cross epitomizes the very notion of static equilibrium, the final aim of economic analysis. However, as is widely acknowledged, he was not fully satisfied with static economic analysis per se. In his eyes, statics was ‘but a branch of dynamics’ (Marshall, 1920: 366 n.) and the latter itself ought to be replaced by economic biology (ibid.: xiv), the economist’s Mecca, which required economics to be supplemented with sociological, historical and institutional research. Notwithstanding these reservations on their role, the tools he devised helped economics to develop static analysis and, thanks to them, static value theory became its prominent research field. This reconstruction relies on the unchallenged and almost obvious static interpretation of partial equilibrium analysis, the theoretical core of Marshall’s economics. Even though there is general recognition that he is concerned with time, as when he resorts to time period analysis, he does not appear to be interested in change itself, but in its termination, in the way change can be disposed of through the action of equilibrating forces. The somewhat mechanical operation of the principle of substitution is the leading force that brings the system into equilibrium. Although the principle does not always lead to straightforward, unambiguous solutions, especially when the time horizon widens, its prevailing aim appears to be that of charting...

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