Schumpeter as a diffusionist: a new interpretation of Schumpeter’s theory of socio-cultural evolution

Abstract

Joseph A. Schumpeter’s theory of socio-cultural evolution has been widely studied. Many researchers have sought the origins of this theory in several sources, notably in the work of Karl Marx, in the historical debate on methods between the German and Austrian economic schools, and in business cycle theory. However, most researchers have not adequately attended to the influence of one of the early anthropological schools of thought, namely, diffusionism, on Schumpeter’s theory. Emphasizing the importance of diffusion in cultural change, early diffusionists rejected the ideas put forward by evolutionists who posited the deterministic and unidirectional development of culture. The argument developed in this paper is that the dispute between these two schools had an important influence on Schumpeter’s theory of socio-cultural evolution. Schumpeter had studied jurisprudence, which was then closely related to anthropological research (particularly that of the evolutionists), at the University of Vienna. He had also attended lectures by leading anthropologists who were skeptical of some of the views proposed by evolutionism when he studied at the London School of Economics. This paper suggests that Schumpeter became acquainted with concepts in diffusionism at these two places, and partially accepted some of them, applying them in developing his unique theory of socio-cultural development, as formulated in his second book, Theorie der wirtscaftlichen Entwicklung (The Theory of Economic Development). The paper shows that in this book, he used diffusionist ideas to refute the evolutionist concept of continuous and deterministic development.