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 7: Alfred Marshall and the Historico-Ethical Approach

Tamotsu Nishizawa

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


Tamotsu Nishizawa 7.1 THE AGE OF ETHICO-HISTORICISM, OR THE AGE OF SOCIAL REFORM From 1870 to 1914 (and Later) Around 1870, a new interest in social reform, a new spirit of ‘historicism’ and new activity in the field of economic ‘theory’ began to assert themselves (Schumpeter, 1954: 753). During this period, through ‘revolutions’ and heated discussions, the neoclassical economics based on marginal utility theory and, later, general equilibrium theory were formed and developed, and the field of economics as such was professionalized and institutionalized. At the same time, the ideas of the German historical school, or the historico-ethical school, and the social policy school were also formed, developed and disseminated internationally, in the course of which economic sociology and institutionalism were conceived and elaborated. This development of the historico-ethical and social policy schools was much stronger in backward countries (latecomers) such as Germany, America and Japan. It seems that Marshall and the Cambridge school have been largely discussed in context of the neoclassical economics, but not in context of the historico-ethical and social policy schools. I aim to discuss Marshall against the background of the historico-ethical age or the age of social reform. Indeed it was historicism, not marginal theory, that was more in accordance with the general trend of thought from J.S. Mill’s death in 1873 to the appearance of Marshall’s Principles in 1890, and it was the historical school rather than marginal utility theory that set its mark on the Principles (Maloney, 1987: 147–9; Shove, 1942: 309)...

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