Schumpeter’s Market
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Schumpeter’s Market

Enterprise and Evolution

David Reisman

Schumpeter was an interdisciplinary political economist who made institutional transformation the centrepiece of his theory of supply and demand. This comprehensive monograph reconstructs and assesses Schumpeter’s contribution to the restless economics of entrepreneurship, disequilibrium and search. Examining the evidence from all of Schumpeter’s published work, the book fills a significant gap in the literature of economic thought. Partly because Schumpeter was so prolific, partly because he touched on so many interrelated topics, there have been few books that have sought to span the whole of this important author's influential insights.
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Chapter 10: Continuity and Change

David Reisman


Marx was up-to-date. His economic interpretation took for granted that current attitudes and structures were a reflection of current economic conditions and dominant productive imperatives. History explained the evolution of the present. Inherited patterns, however, no longer played a significant part in moulding and shaping the patterns of the future. Marx, treating bygones as bygones, was content to start from here. Schumpeter, more anchored, was a theorist of lagged adaptation who looked backward in order to look forward. He did this because, empirically speaking, the past had not gone away: ‘Social structures, types and attitudes are coins that do not readily melt. Once they are formed they persist, possibly for centuries.’ (Schumpeter, 1942a:12). Free people freely choose their bestjudged course of action. They make their free choices within the framework of vestiges and survivals that define for them the continuing path. Schumpeter as an empiricist concluded that handed-on institutions were all around. Schumpeter as a functionalist also believed that the conservatism had an active role to play: ‘No social system can work which is based exclusively upon a network of free contracts between (legally) equal contracting parties and in which everyone is supposed to be guided by nothing except his own (short-run) utilitarian ends.’ (Schumpeter, 1950b:423–4). Capitalism thrives because the past fulfils its function. Capitalism would decline if the remembered and the pre-filtered lost their hold. Orderly change presupposes cultural continuity. There is no other way. The remembered and the pre-filtered keep the pace of transmutation within...

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