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Joseph Schumpeter and Thorstein Veblen on technological determinism, individualism and institutions


  • Theofanis Papageorgiou
  • Panayotis G. Michaelides


This article investigates Joseph Schumpeter's affinities with Thorstein Veblen with respect to technological change and determinism, the future of capitalism, individualism and institutions. From a methodological point of view, a common point in their analysis is their anti-teleological view regarding economics as a discipline. Also, in the Schumpeterian system, technology is the cornerstone of economic evolution and appears as the making of new combinations. In the Veblenian theoretical framework, the bearer of change is to be found, inter alia , in technology, just like in Schumpeter's works, although not without differences. They also share the opinion that technology revolutionises capitalism and has serious implications for its future as a system. Furthermore, regarding individualism, in his work Schumpeter stresses the importance of the social milieu on individual action, a fact which bears strong resemblance to the Veblenian notion of evolution as ‘depersonalized evolution’. In this sense, Schumpeter is very close to Veblen, although Schumpeter's approach could be classified in what is called institutionalist individualism, whereas Veblen could be classified as holist. Undoubtedly, the role of institutions is of great importance in both Schumpeter and Veblen. Ιnstitutions in the Schumpeterian schema play a central role closely related to the future of capitalism. Institutional and non-institutional factors enter into complex forms of interaction just like in Veblen's approach. There, institutions are part of the social milieu and their underlying framework, much wider than mere economic and social. Of course, the theoretical analyses of Schumpeter and Veblen are not devoid of differences springing mainly from their methodological approach such as the role of the individual in the capitalist process which is probably the most significant difference regarding the importance attributed to it in Schumpeter's early works. Also, the way technical change appears constitutes another difference. However, his views are quite close to Veblen's. After all, Schumpeter began to write in a social, political, theoretical and ideological environment at a time when evolutionary ideas dominated social thought.

Suggested Citation

  • Theofanis Papageorgiou & Panayotis G. Michaelides, 2016. "Joseph Schumpeter and Thorstein Veblen on technological determinism, individualism and institutions," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 23(1), pages 1-30, February.
  • Handle: RePEc:taf:eujhet:v:23:y:2016:i:1:p:1-30
    DOI: 10.1080/09672567.2013.792378

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    References listed on IDEAS

    1. Freeman, Chris & Louca, Francisco, 2002. "As Time Goes By: From the Industrial Revolutions to the Information Revolution," OUP Catalogue, Oxford University Press, number 9780199251056.
    2. Veblen, Thorstein, 1904. "Theory of Business Enterprise," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1904.
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    Cited by:

    1. Dieter Bögenhold & Panayotis G. Michaelides & Theofanis Papageorgiou, 2021. "Schumpeter, Veblen, and Bourdieu on Institutions and the Formation of Habits," Springer Books, in: Neglected Links in Economics and Society, chapter 0, pages 233-259, Springer.
    2. Dante A. Urbina & Alberto Ruiz‐Villaverde, 2019. "A Critical Review of Homo Economicus from Five Approaches," American Journal of Economics and Sociology, Wiley Blackwell, vol. 78(1), pages 63-93, January.
    3. Theresa Hager & Ines Heck & Johanna Rath, 2021. "Competition in Transitional Processes: Polanyi and Schumpeter," ICAE Working Papers 128, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.

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