Schumpeter&Equilibrium

hans despain HANS.DESPAIN at m.cc.utah.edu
Tue Apr 23 09:23:42 MDT 1996


Rakesh what exactly do you mean when you say: "how profoundly Schumpeter
is Marx's other."

Schumpeter and the Austrian tradition (e.g. Bohm-Bawerk forward) have
been quite rehearsed in Marxian economics.  In fact, i have read
Bohm-Bewark described as the "bourgeois Marx".  For example, he and other
Austrians are the only economists in the mist of the (so-called) Marginal
Revolution that do *not* say profits are marginal productivity of capital
(they measure capital as time).

Moreover, Bohm-Bawerk is quite aware of the problems of aggregating
capital and maintains (again contra-Marginalism) land and labor are the
*only* two "oringinal" factors of production.  However, Bohm-Bawerk is
not willing to define capital (following Marx) as a social relation,
maintaining that Marx's notion of capital is that of a "means of
exploitation" which he firmly rejects.

Schumpeter was Bohm-Bawerk's student.  And although the Austrians have
traditionally been quite critical of neo-Classical economics; they have
been even more critical of Marxian economics.  Propably these two
position are some sort of a virtue.

However, they remain firmly wedded and committed to methodological
individualism, but critical of utilitiarianism.  This (imo) leds to
certain contradictions, but Schumpeter maintained that the science of
economics is a type of logic (i could find a cite from the back pages of
his History of Economic Analysis (1954)), rejecting the realism that
grounds Marxian thought.

Also their (Schumpeter and Marx) notions of equilibrium are interesting;
both have some sort of notion of market forces and equilibrization,
distict from the static equilibrium point that characterized in (Walrasian)
General Equilibrium and (Marshallian) Partial Equilibrium.  As you
pointed out both of their interests is *not* with the static "point" but
rather the dynamics of economic movement (if i were talking with a
neo-classical economist i would say their interest is the transition
between equilibrium points; but the points themselves do not exist).

i do not know enough about Schumpter to critique his economic categories,
however, in that he is firmly an irrealist (in the neo-classical sense)
he would necessarily remain within the phenomenal forms of reality.  That
is he would (and does) reject the value-form as a metaphysical category,
rather than as a reality behind the phenomenal forms.  This is very much
in line with your comments on categories and Marx's critique of the
categories of political economy as a paradigm to understand (in full) the
reality of living in and under capitalist relations.

This may help explain his worship of interest as an universal category.

If capital is a social relation than so is interest and profits on
capital.  So even if interest is an historical ever-present category it
is still specific to capitalism, or takes on a specific universal form in
capitalist social relations.

hans d.


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