Thorstein Veblen and Joseph Schumpeter as precursors of economic sociology

Abstract

This work is designed in order to compare the ideas of two of the twentieth century's most influential economists, Thorstein Veblen and Joseph Schumpeter. Veblen and Schumpeter's works are analyzed and compared to each other in order to examine fundamental similarities and differences about important questions upon methodology and Capitalism. The questions, which are asked, are derived from modern explorations into Economic Sociology and are designed to place the works of Veblen and Schumpeter into that region of thought but this study should appeal to anyone interested in twentieth century economic thought. One of this study's major purposes is to fill a gap in the current literature of the history of economic thought. Presently research into the literature shows that there is no extensive comparison of the works of Veblen and Schumpeter and such a comparison would allow a better understanding of the two authors with respect to their beliefs. There are many articles that have been written about either Veblen or Schumpeter that will mention the other author in passing, but there are few articles that have actually attempted to compare the two authors. This study is motivated by the belief that the works of Veblen and Schumpeter still offer many insights to modem social scientists. Many within Economic Sociology are questioning the usefulness of neoclassical analysis and this study will serve to offer a countering method of observing the economy more in line with modem Economic Sociology. Another important purpose of this study is to offer into evidence the similarities that exist in the works of the two authors. The comparison of Veblen and Schumpeter, which is at the heart of this work, would be difficult, if not impossible if such similarities were not present. In this regard it will be shown that the works of Schumpeter diverge dramatically from mainstream theory. His concept of the individual, methodology, and Capitalism clearly place him closer to Veblen than to the economic mainstream. This study offers the close examination of his work that is needed in order to make clear this distinction.