IDEAS home Printed from https://ideas.repec.org/p/esi/evopap/2011-14.html
   My bibliography  Save this paper

Herr Schumpeter and the Classics

Author

Listed:
  • Stan Metcalfe
  • Ian Steedman

Abstract

This paper is an exploration of the interface between two quite different strands of economic thought, the Schumpeterian, evolutionary theory of innovation and competition, and the classical, Sraffian theory of prices and distribution. Can the two methods usefully speak to each another? If they can, we would have in prospect a more general evolutionary economics (GEE) in which the classical emphasis on production of commodities by means of commodities would allow a far more sophisticated analysis of the place of technical change in economic development. To explore this question is decidedly not to propose a synthesis between classical and Schumpeterian economics; it is simply to enquire whether there are mutual lessons to be learned to enrich these very different approaches to the long period evolution of capitalist economies. Schumpeter's system is a system that is always out of equilibrium but it is not chaotic, rather it is a system strongly ordered by market forces and the ensuing relations between prices and profitability. Moreover, it is concerned with long-period market forces, that is to say the development of an economy in which innovation and investment to capitalise on innovation are dominant aspects of its working. The classical system is a long-period system of analysis too, and it has the great merit of working in terms of prices of production, those prices that enable the replication of the production process over time. Since much real world innovation is innovation in the produced means of production, within the network of inter-industry input-output relations, there are undoubtedly mutual lessons to be learnt. Our analysis shows how economic growth is a product of uneven economic development, and the impulse that renders development feasible is always the occurrence of innovation in some form or other; one should not be too prescriptive as to its nature or content. Yet innovation in itself is not enough, it is too localised to bear much weight, what matters is not only the impulse that innovation brings but the adaptation of the economic system to the potential generated by the new ways of doing things. Schumpeter sensed this with his account of imitative behaviour spreading the innovation but it remained an account that ignored the central role of investment processes to build the capacity to exploit innovations. This is the theme that we have explored, the theme that naturally depends on long-period methods of analysis, not to uncover the attributes of a never attained future but to understand the immediate transformative forces operating on an economy.

Suggested Citation

  • Stan Metcalfe & Ian Steedman, 2011. "Herr Schumpeter and the Classics," Papers on Economics and Evolution 2011-14, Philipps University Marburg, Department of Geography.
  • Handle: RePEc:esi:evopap:2011-14
    as

    Download full text from publisher

    File URL: ftp://137.248.191.199/RePEc/esi/discussionpapers/2011-14.pdf
    Download Restriction: no

    More about this item

    Keywords

    Length 42 pages;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:esi:evopap:2011-14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christoph Mengs). General contact details of provider: http://edirc.repec.org/data/vamarde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.