Rationality, behavior, institutional, and economic change in Schumpeter

Journal of Economic Methodology 15 (4):365-390 (2008)
Abstract
In 1940 Schumpeter wrote a paper entitled: ?The Meaning of Rationality in the Social Sciences?, which was intended as a contribution to one of the meetings of a seminar including Talcott Parsons, Wassily Leontief, Paul Sweezy and other Harvard scholars, that he initiated. In this paper Schumpeter develops thoroughly his own conception of rationality in economics. First, this paper is interesting in itself because it relates to contemporary methodological debates on rationality in the social sciences. Second Schumpeter?s conception of rationality is linked to his methodological background (both individualistic and holistic), which is rooted in his economic sociology and explains the relationships he stresses between individual behavior and collective entities. In this contribution we present the arguments developed by Schumpeter in his 1940 paper and analyze the reason why his notion of rationality can be seen as a key component of his conception of economic and institutional change.
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