The Origin of the Schumpeterian Research Program: A Chapter Omitted from Schumpeter’s Theory of Economic Development

Abstract

Schumpeter's first book, Das Wesen und der Hauptinhalt der theoretischen Nationalokonomie (1908), was a recapitulation of neoclassical static theory from the methodological point of view. He next developed a skeleton of dynamic theory in Theorie der wirtschaftlichen Entwicklung (1912) 1 and after a long struggle worked out a theoretical, historical, and statistical analysis of capitalist economic development in Business Cycles (1939). Finally, in Capitalism, Socialism and Democracy (1942) he provided an account of the historical evolution of the capitalist system as a whole, and included not only economic but also political, social, and cultural factors. In Schumpeter's works, these three areas of research, i.e., economic statics, economic dynamics, and economic sociology, constituted the subjects of major concern to him. What is the relationship between these three areas of research? On the basis of the received opinion that Schumpeter's distinct contribution was in the theory of economic development, it might be thought that the neoclassical static theory he discussed in Wesen was merely a body of thought to be superseded later by his dynamic theory and that Capitalism, Socialism and Democracy was a mere impromptu in sociology written in a popular style. But the contention of this article is that Schumpeter's statics, dynamics, and economic sociology should be interpreted in a systematic way as constituting a consistent whole. 2 This article argues that such an interpretation derives from Schumpeter's own research program, which was once expressed in the first German edition of Theory of Economic Development but has been completely forgotten. It also argues that his program, which I shall call Schumpeter's research