Determinateness and Indeterminateness in Schumpeter’s Economic Sociology

1. Determinateness and Indeterminateness in Schumpeter’s Economic Sociology Kiichiro Yagi （Kyoto University)

2. １．Was Schumpeter a fatalist? • Schumpeter These: Capitalism transforms itself to socialism. • S stressed always that this is a diagnosis of a doctor without any value judgment. • Is this compatible with his innovation/entrepreneurship theory?

3. 2. Economic Sociology • “Economic analysis deals with the question haw people behave at any time and what the economic effects are they produce by so behaving: economic sociologydeals with the question how they came to behave as they do. If we define human behavior widely enough so that it includes not only actions but also the social institutions that are relevant to economic behavior such as government, property inheritance, contract, and so on, that phrase tells us all we need.” (HEA, p.21)

4. 3. “Fragment of Cultural Sociology” in TED (1912) other areas economy static view economics dynamic view

5. 3. continued • “statistically disposed individuals” and “leaders” in each fields (109) • “Virtually never would a new thought be experienced as a new reality without the activity of a leader.”(110) • “In this total conception of the development of culture the economy also has its place.”(112) • “Doubtlessly we have to be satisfied with an indeterminate concept.(112) TED chap.7 in Backhaus ed (2003)

6. 4.Novelty and In-explicability in Development (1932)＊＊JEL43（March ２００５） • Explanation of “development” in general • Development: “transition from one norm of the economic system to another norm in such a way that this transition cannot be decomposed into infinitesimal steps.” • Emergence of “novelty”: neither Darwin nor Mendel couldn’t explain it.

7. 5. Turn to “evolutionism”?(1) • Rejected association with evolutionism in 1912 • Repeated in 1932 against 1) faith in progress, 2) evolutionism • Choose “development” in the Eng. ed. ED (1934), but wrote it “evolution” in correspondence

8. 5. continued... • “Evolution” was adopted in Business Cycles (1939). • “The changes in the economic process brought about by innovation, together with all their effects, and the response to them by the economic system, we shall designate by the term Economic Evolution.”(97fn) • Ground: distinction from “progress”

9. 6. Another Innovation Theory • Schumpeter encountered another innovation scholar in Abbot Payson Usher, author of A History of Mechanical Inventions (1929). • Kept Usher’s 1933 plan “Social Evolution and Historical Process” • Acknowledged indebtedness to Usher in BC, but stuck to strict distinction between invention and innovation

10. 6. continued ...: Usher’s peculiarity in the 1933 Plan • “Social evolution a multilinear process of dynamic adaptation” • “Achievements of ‘genius’ conceived as conditioned acts of synthesis” • “Scope of innovation as a social factor” • “Development from implicit relations to explicit relations”

11. 6. continued...: Usher’s criticism on Schumpeter • Usher’s contribution in 1951 JAS memorial publication (Harris ed.) • Idealistic position • No usable theory of invention and innovation • innovation as socially massive process

12. 7. Partial Acceptance: concession? • Developments in other fields as data • Changes in the data: Knowledge, institutions, and policies • Creative response/adaptation • A more general theory beyond Economic Evolution

13. 8. Last (intended) Lectures • American Institutions and Economic Progress (Walgreen Lectures, Jan. 1950) in Swedberg ed.1991 • Definition of Institutions • Stress on Group and Classes • Principle of Indeterminateness: “emergence of exceptional individuals”

14. 8. continued ... • “The questions of whether the process will lead to socialism ... are questions for a prophet to answer, but not for an analyst, who can only list tendencies and possibilities.”(444)

15. 9. CONCLUSIONS • 1. S’s quest for unified view of social science with qualitative change • but not by the analogy of biological evolution • 2. S’s scheme is comprised of “general interdependence” and “distinction between statics and dynamics”. • 3. Determinateness and In determinateness coexist in the dual and interdependent structure of S’s scheme • Isomorphic but relatively autonomous areas of social life • Coevolution of economic and other areas • Emergence of novelty is in the core

16. 9. continued ... • S was not a fatalist! • Due to the “indeterminateness” the prediction is impossible, only talk about tendency and possibility. • Recommendation to counter the tendency is also banned to a value-free social scientist! THANK YOU FOR ATTENTION!!