Journal of Evolutionary Economics

, Volume 27, Issue 1, pp 115–138 | Cite as

Schumpeter and the meanings of rationality

Regular Article


This paper discusses various meanings of rationality distinguished by Schumpeter – as well as related concepts like rationalization – and connects them with widely remarked tensions or dilemmas in The Theory of Economic Development and other substantive works. The well-known contrast between Schumpeter’s commitment to equilibrium economics and his heterodox, evolutionary vision is analyzed on the basis of the notions of ‘rationality of the observer’ and ‘rationality in the observed’, developed in his article on The Meaning of Rationality in the Social Sciences. Schumpeter’s thesis of the obsolescence of the entrepreneurial function – already present in The Theory of Economic Development – is also scrutinized, by investigating the coherence between his conceptions of rationality and of rationalization. This topic is, in turn, connected with Schumpeter’s assessment of the socialist calculation debate.


Schumpeter Methodology Ontology Rationality 

JEL classifications

B3 B4 



This research has been financed by Portuguese Public Funds through FCT (Fundação para a Ciência e a Tecnologia) in the framework of the project UID/ECO/04105/2013.

I am grateful to Diogo Lourenço, Nuno Ornelas Martins and two anonymous referees for their comments. I thank Agnès Festré for her patience and encouragement.


  1. Andersen ES (2009) Schumpeter’s evolutionary economics: a theoretical, historical and statistical analysis of the engine of capitalism. Anthem Press, LondonGoogle Scholar
  2. Andersen ES (2011) Joseph A. Schumpeter: a theory of social and economic evolution. Palgrave MacmillanGoogle Scholar
  3. Arena R (2002) Schumpeter on Walras. In: Arena R, Dangel-Hagnauer C (eds), pp 40–65Google Scholar
  4. Arena R, Dangel-Hagnauer C (2002) Introduction. In: Arena R, Dangel-Hagnauer C (eds), pp 1–18Google Scholar
  5. Arena R, Romani P-M (2002) Schumpeter on entrepreneurship. In: Arena R, Dangel-Hagnauer C (eds), pp 167–183Google Scholar
  6. Becker MC, Knudsen T (2002) Schumpeter 1911: farsighted visions on economic development. Am J Econ Soc 61:387–403CrossRefGoogle Scholar
  7. Becker MC, Knudsen T (2003) The entrepreneur at a crucial juncture in Schumpeter’s work: Schumpeter’s 1928 handbook entry Entrepreneur. In: Koppl R (ed) Advances in Austrian economics, volume 6. Elsevier, Amsterdam, pp 199–233Google Scholar
  8. Boehm S (1990) The Austrian tradition: Schumpeter and Mises. In: Hennings K, Samuels WJ (eds) Neoclassical economic theory, 1870 to 1930. Kluwer, Boston, pp 201–241CrossRefGoogle Scholar
  9. Cordes C (2006) Darwinism in economics: from analogy to continuity. J Evol Econ 16:529–541CrossRefGoogle Scholar
  10. De Vecchi N (1995) Entrepreneurs, institutions and economic change: the economic thought of J. A. Schumpeter (1905–1925). Edward Elgar, AldershotGoogle Scholar
  11. Festré A, Garrouste P (2008) Rationality, behavior, institutional, and economic change in Schumpeter. J Econ Methodol 15:365–390CrossRefGoogle Scholar
  12. Festré A, Nasica E (2009) Schumpeter on money, banking and finance: an institutionalist perspective. Eur J Hist Econ Thought 16:325–356CrossRefGoogle Scholar
  13. Freeman A (2014) Schumpeter’s theory of self-restoration: a casualty of Samuelson’s Whig historiography of science. Camb J Econ 38:663–679CrossRefGoogle Scholar
  14. Graça Moura M (2002) Metatheory as the key to understanding: Schumpeter after Shionoya. Cambridge J Econ 26. Reprinted in: Pratten S (ed) (2015) Social ontology and modern economics. Routledge, London, pp 265–286Google Scholar
  15. Graça Moura M (2003) Schumpeter on the integration of theory and history. Eur J Hist Econ Thought 10:279–301CrossRefGoogle Scholar
  16. Graça Moura M (2015) Schumpeter’s conceptions of process and order. Camb J Econ 39:1129–1148CrossRefGoogle Scholar
  17. Hayek FA (1942/44). Scientism and the study of society. Economica 9/11. Reprinted in: Caldwell B J (ed) (2010) The collected works of F A Hayek, volume 13: studies on the abuse and decline of reason. Text and documents. University of Chicago Press, Chicago, pp 77–166Google Scholar
  18. Hayek FA (1945) The use of knowledge in society. Am Econ Rev 35:519–530Google Scholar
  19. Keizer W (1997) Schumpeter’s Walrasian stand in the socialist calculation debate. In: Keizer W, Tieben B, van Zijp R (eds) Austrian economics in debate. Routledge, London, pp 75–94Google Scholar
  20. Kirzner IM (1999) Creativity and/or alertness: a reconsideration of the Schumpeterian entrepreneur. Rev Austrian Econ 11:5–17CrossRefGoogle Scholar
  21. Lakomski O (2002) The long-term perspective: Schumpeter’s prediction of the end of capitalism. In: Arena R, Dangel-Hagnauer C (eds), pp 146–164Google Scholar
  22. Langlois RN (2007) The dynamics of industrial capitalism: Schumpeter, Chandler, and the new economy. The Graz Schumpeter lectures. Routledge, LondonCrossRefGoogle Scholar
  23. Lavoie D (1985) Rivalry and central planning: the socialist calculation debate reconsidered. Cambridge University Press, CambridgeGoogle Scholar
  24. Lawson T (1994) Critical realism and the analysis of choice, explanation and change. In: Boettke PJ, Kirzner IM, Rizzo MJ (eds) Advances in Austrian Economics, volume 1. JAI PressGoogle Scholar
  25. Lawson T (1997) Economics and reality. Routledge, LondonCrossRefGoogle Scholar
  26. Osterhammel J (1987) Varieties of social economics: Joseph A. Schumpeter and Max Weber. In: Mommsen WJ, Osterhammel J (eds) Max Weber and his contemporaries. Allen & Unwin, London, pp 106–120Google Scholar
  27. Reder MW (1982) Chicago economics: permanence and change. J Econ Lit 20:1–38CrossRefGoogle Scholar
  28. Schubert C (2013) How to evaluate creative destruction: reconstructing Schumpeter’s approach. Camb J Econ 37:227–250CrossRefGoogle Scholar
  29. Schumpeter JA (1908) Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie. Duncker & Humblot, LeipzigGoogle Scholar
  30. Schumpeter JA (1911/12) Theorie der wirtschaftlichen Entwicklung. Duncker & Humblot, LeipzigGoogle Scholar
  31. Schumpeter JA (1919) Zur Soziologie der Imperialismen. Archiv für Sozialwissenschaft und Sozialpolitik 46. English translation as ‘The sociology of imperialisms’ in: Sweezy P M (ed) (1951) Imperialism and social classes. Reprinted in: Swedberg R (ed) (1991), pp 141–219Google Scholar
  32. Schumpeter JA (1920/21) Sozialistische Möglichkeiten von heute. Archiv für Sozialwissenschaft und Sozialpolitik 48. Reprinted in: Schneider E, Spiethoff A (eds) (1952), pp 455–510Google Scholar
  33. Schumpeter JA (1927) Die sozialen Klassen im ethnisch homogenen Milieu. Archiv für Sozialwissenschaft und Sozialpolitik 57. English translation as ‘Social classes in an ethnically homogeneous environment’ in: Sweezy PM (ed) (1951) Imperialism and Social Classes. Reprinted in: Swedberg R (ed) (1991), pp 230–283Google Scholar
  34. Schumpeter JA (1928) The instability of capitalism. Econ J 38. Reprinted in: Clemence RV (ed) (1989), pp 47–72Google Scholar
  35. Schumpeter JA (1932) Das Woher und Wohin unserer Wissenschaft. In: Schneider E, Spiethoff A (eds) (1952), pp 598–608Google Scholar
  36. Schumpeter JA (1934a) The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle. Harvard University Press, CambridgeGoogle Scholar
  37. Schumpeter JA (1934b) Depressions: can we learn from past experience? In: Brown, D V et al. (eds) The economics of the recovery program. McGraw-Hill, New York. Reprinted in: Clemence RV (ed) (1989), pp 108–117Google Scholar
  38. Schumpeter JA (1939) Business cycles: a theoretical, historical, and statistical analysis of the capitalist process. McGraw-Hill, New YorkGoogle Scholar
  39. Schumpeter JA (1942) Capitalism, socialism and democracy. 5th edition (1976). Allen & Unwin, LondonGoogle Scholar
  40. Schumpeter JA (1947) The creative response in economic history. J Econ Hist 7. Reprinted in: Clemence RV (ed) (1989), pp 221–231Google Scholar
  41. Schumpeter JA (1949) Science and ideology. Am Econ Rev 39. Reprinted in: Clemence RV (ed) (1989), pp 272–286Google Scholar
  42. Schumpeter JA (1954) History of economic analysis. Allen & Unwin, London. Reprinted by Routledge (1994)Google Scholar
  43. Schumpeter JA (1991) The meaning of rationality in the social sciences. In: Swedberg R (ed), pp 316–338Google Scholar
  44. Shionoya Y (1997) Schumpeter and the idea of social science: a metatheoretical study. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  45. Simon HA (1976) From substantive to procedural rationality. In: Latsis SJ (ed) Method and appraisal in economics. Cambridge University Press, Cambridge, pp 129–148CrossRefGoogle Scholar
  46. Vromen JJ (2008) Ontological issues in evolutionary economics: the debate between generalized Darwinism and the continuity hypothesis. Papers on economics and evolution #0805. Max Planck Institute of Economics, JenaGoogle Scholar
  47. Witt U (2004) On the proper interpretation of ‘evolution’ in economics and its implications for production theory. J Econ Methodol 11:125–146CrossRefGoogle Scholar

Further bibliography

  1. Arena R, Dangel-Hagnauer C (eds) (2002) The contribution of Joseph Schumpeter to economics. Routledge, LondonGoogle Scholar
  2. Clemence RV (ed) (1989) Joseph A. Schumpeter: essays on entrepreneurs, innovations, business cycles, and the evolution of capitalism. Transaction Publishers, New BrunswickGoogle Scholar
  3. Schneider E, Spiethoff A (eds) (1952) Joseph A. Schumpeter: Aufsätze zur ökonomischen Theorie. Mohr, TübingenGoogle Scholar
  4. Swedberg R (ed) (1991) Joseph A. Schumpeter: the economics and sociology of capitalism. Princeton University Press, PrincetonGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.Faculdade de Economia da Universidade do Porto (FEP-UP) and CEF.UP, Universidade do PortoPortoPortugal

Personalised recommendations