Ideology and Economic Thought

...Yet, his Wealth of Nations was not only "the most successful of all books on economics but, with the possible exception of Darwin's Origin of Species, of all scientific books that have appeared to this day...

...though, in this case, Schumpeter believes it to be less general than the title of Keynes's great book, The General Theory, would indicate...

...Part IV opens with a discussion of the "defeat of liberalism" and the emergence of protectionism, the regulation of business and the development of the welfare state, and takes the story to 1914...

...It required three years of unremitting labor by his widow, Elizabeth Boody Schumpeter, to put the manuscript into publishable form...

...A history of economic thought, he maintained, is not a history of ideology, but ideology in the sense of an intuitive, artistic, non-scientific "vision" of society has "conditioned" all economic thought...

...and, in particular, to interpose between the changing fact and the development of techniques of analysis found useful in explaining fact, an account of the growth of "ideologies" or "social visions" from which new departures in economic analysis have sprung...

...Marshall was the Adam Smith of his time, with a similar conception of the nature of the economic process and a similar balancing of fact and theory...

...To a substantial extent, the judgments reflect his own personal and intellectual characteristics: aristocratic, pessimistic, Continental and, at least in his later years, definitely anti-British...

...Nevertheless, by Schumpeter's standards his analysis "still is, owing to its intellectual quality, the basis of practically all the best work of our own time...

...Schumpeter asserts that this is a history of economic analysis, not of broad systems of economic thought, and he announces a primary concern with the development of those intellectual tools that constitute the kit-bag of technical economics rather than with the schemes of social and political reform that have so frequently emanated from people called economists...

...Schumpeter's evaluation of the relative importance to economic analysis of the great figures discussed in these pages is, of course, debatable...

...And, indeed, the most original of Schumpeter's works, the Theory of Economic Development, was written when he was in his twenties...

...He suggests that this conception of a stagnant economy not only establishes the problems for the Keynesian analysis but guides the political advice prescribed by Keynes and his followers...

...Both, in Schumpeter's opinion, were highly insular Englishmen...

...Consequently, in order to write a history of economic analysis Schumpeter finds it necessary to write history...

...Consequently, the full measure of Schumpeter as an intellectual historian and economist is to be found only in Parts III and IV...

...The highest pedestal in Schumpeter's gallery is assigned to Walras, the purest of pure theorists...

...On the other hand, the great systematizers, Aristotle, Adam Smith and Alfred Marshall, come off relatively well even though their personal values and social outlook were antipathetic to the author...

...Ricardo and Keynes, in particular, come off badly??which, in a way, is surprising, since their personalities were much more to Schumpeter's taste than the more pedestrian but solider virtues of those he extols...

...Aristotle was a pedestrian fellow, incapable of following the imaginative flights of "his tutee" Alexander, but he developed an embryonic "pure" economics, based on wants and their satisfaction, that moved away from ethical concepts of the "natural" and the "just...

...Both Ricardo and Keynes, however, had one unforgivable weakness: They were addicted to the Ricardian Vice???°the habit of piling a heavy load of practical conclusions" and political recommendations upon a theoretical structure too simple to take all relevant considerations into account...

...In fact, however, this is a history of thought on a much broader scale...

...Reviewed by Edward S. Mason Dean, Graduate School of Public Administration, Harvard University The third decade of a thinker's life, according to Joseph Schumpeter, is the "fruitful period...

...Part V is a sketchy treatment of modern developments...

...All scientific discovery??at least in the social sciences??is, in Schumpeter's view, preceded by an intuitive picture of society that may be called ideology...

...Schumpeter finds, for example, Keynes's vision of "England's aging capitalism" clearly expressed in the first few pages of the Economic Consequences of the Peace: "the arteriosclerotic economy whose opportunities for rejuvenating venture decline while the old habits of saving formed in times of plentiful opportunity persist...

...Part II carries the discussion from the beginnings to about 1790...

...As it stands now, the book is, except in minor respects, a finished piece of work...

...he had very little contact with what any good businessman would call the "real world...

...Not only had Walras no addiction to the Ricardian Vice...

...Although the development of technical economics is all there, it is intertwined with intellectual history and the whole established in careful relationship to the history of institutional change which Schumpeter??in common with Marx??considered primary...

...By any standard, these sections, which comprise some two-thirds of the book, must be judged masterly...

...The History of Economic Analysis occupied the major part of the last nine years of Schumpeter's life and remained unfinished at his death...

...If we took seriously the author's estimate of what he was trying to do, it would be impossible to recommend this gigantic book to anyone but professional economists, and, within the profession, only to those interested in the development of techniques of analysis...

...The relationship between ideology and science engages his attention throughout the study...

...To Adam Smith, "the glamours and passions of life were just literature...

...Apart from a relatively short??and relatively unsatisfactory??methodological introduction, the main divisions of the book are chronological...

...Part III covers the "classical liberal" period (1790 to 1870...

...In each instance, they earn their high marks by reason of their contribution to the forging of usable intellectual tools...

...The treatment of the early period is informed and erudite, but it is not too different from a conventional "history of thought...

...To write the history of a science, however, is not a young man's task...

...The last part is interesting and suggestive but unfinished...

...It does not follow that, because the intellectual impetus to the analysis is a necessarily non-scientific "view" of society, the analysis is therefore non-scientific...

...We know," he said, that Marx's "analysis started from a criticism of the current (and apparently immortal) error that the behavior that produces history is determined by ideas...