Marshall, Schumpeter and the Shifting Boundaries of Economics and Sociology

Abstract

Both Alfred Marshall and Joseph Schumpeter pronounced on the scope and boundaries of economic theory. For Marshall, economics was a broad subject, concerned primarily with business and pecuniary matters. Marshall also aligned himself with the methodological ideas of Gustav Schmoller, even after the outbreak of the Methodenstreit in 1883. Schumpeter reacted differently to the Methodenstreit by arguing that much of the work of Schmoller and others in the German historical school was ‘economic history’ or ‘economic sociology’ rather than ‘economic analysis’. Also Schumpeter’s close contact with Talcott Parsons and Paul Samuelson at Harvard University from 1927 was probably significant in their redrawing the boundaries of both economics and sociology, although they did not strictly follow Schumpeter’s criteria. Following Lionel Robbins, economics was redefined more narrowly as the ‘science of choice’. Sociology was concerned with the explanation of values and ends. However, by the 1990s these disciplinary definitions were breaking down, and a major reexamination of their scope and boundaries is required.