Schumpeter’s Early Vision of Social Dynamics and His Ideology

Ability, Heredity, and Social Classes

Abstract

This study examines the relationship between debates in the biological and evolutionary sciences in the late 19th and early 20th centuries and J. A. Schumpeter's theories of socio-economic dynamics. In the late 19th century, the idea that differences in individual ability had created the hierarchy of social classes was gradually accepted among conservatives, and traditional egalitarianism came to be rejected. Schumpeter's theories of socio-economic dynamics were also based on the idea that entrepreneurial success was to be attributed not to the possession of property, as assumed by Marx, but to entrepreneurs' innate ability to persistently accomplish their plans. Schumpeter's assumption that “the function of the entrepreneur itself cannot be inherited” is also investigated as the most important basis for refuting Marx’s view of class. The current study suggests that the idea Schumpeter employed in trying to challenge Marx's class theory has interesting similarities to Galton's idea of “regression.” However, although Schumpeter addressed the idea that entrepreneurial ability does not persist over generations, he did not propose any clear mechanism to explain why this ability cannot be inherited but only highlighted an observable tendency in his theory of economic development. The reason for his failure to offer a conclusive theory was derived from his strategy of using confusing biological assumptions about heredity. As a result, his explanation of the inheritance of entrepreneurial ability is quite confused. This weakened his counterargument to Marx's theory to some extent. The study also examines the ideology behind Schumpeter's vision. Although he denied the ordinary principle of equal chance, his ideology is considered as a variant of the concept of equality of opportunity based on a multigenerational perspective.