Marshall and Schumpeter on Evolution
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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.
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Chapter 13: Marshall on Economic Chivalry and Business Ethics

Kenji Fujii


Kenji Fujii 13.1 INTRODUCTION Marshall’s advocacy of economic chivalry has been conventionally evaluated as trivial decorations which have no relation to his theoretical work. Many writers have ascribed it to his predilection for ‘pious asides and prim moralisings’ typical of late Victorians.1 This chapter is an attempt to argue that the prevalent evaluation is erroneous because too naive an image is imposed on Marshall. We show a theoretical connection between economic chivalry and his theory of the firm. We start from an identification of Marshall’s view of a firm in the next section. Utilizing the concept of context-dependent recognition, we propose to identify a firm as one of social contexts which consist of shared knowledge and values. Then, in the third section, we discuss the role of an entrepreneur in Marshall; he required an entrepreneur to lead in morality as well as in knowledge. In the fourth section, the role of economic chivalry is discussed. Although economic chivalry is often misunderstood as mere preaching, we argue that it is to be understood as a latent mechanism which helps the chivalrous firms to develop the faculties of human beings. 13.2 CONTEXT-DEPENDENCY OF A FIRM 13.2.1 Context-Dependent Recognition Economists have been accustomed to regard perfect competition as a reference point because ‘perfect rationality’ is considered one of the indispensable conditions for economics. But, instead of assuming perfect rationality, many economists nowadays are inclined to assume ‘bounded rationality’. Although there are different meanings in ‘bounded rationality’, it has been recognized as...

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