Subjectivism and the Austrian School of Economics
- New Thinking in Political Economy series
Appendix: Schumpeter and the Austrian Tradition
___________________________________________________ Complex relations It is difficult to avoid the dominant figure of Joseph Schumpeter when examining the theory of entrepreneurship; quite apart from the central position this question occupies in his work (The Theory of Economic Development, 1912; Capitalism, Socialism and Democracy, 1942) the fact that this economist was born and educated in Austria would seem to gain him at least some attention in the present book. However, he at no point claimed he followed the line of thought started by Menger or even less of his contemporary, Mises. It is true he was, with Mises, a member of Böhm-Bawerk’s seminar and he does name Carl Menger as one of the Ten Great Economists (1952), again paying homage to his ‘genius’ in his famous History of Economic Analysis (1954). Yet a few lines later he proclaims, Walras is in my opinion the greatest of all economists. His system of economic equilibrium, uniting, as it does, the quality of ‘revolutionary’ creativeness with the quality of classic synthesis, is the only work by an economist that will stand comparison with the achievements of theoretical physics. Compared with it, most of the theoretical writings of that period, – and beyond – however valuable in themselves and however original subjectively, look like boats beside a liner, like inadequate attempts to catch some particular aspect of Walrasian truth (1954, p. 827). As a result, Menger’s heirs’ view was unequivocal: Because Austrian economics is a theory of human action, Schumpeter does not belong to the Austrian school. In...
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