*This
refers to Hannah Arendt’s discussion of this section of ‘Zarathustra’ in her
essay on “Nietzsche’s Refutation of Free Will”.
Unlike
the waves of the ocean, the waves of the economy do not return to the same
level. They always tend to swing like a pendulum around a certain level, but
the level itself is not always the same. It is not just the observable facts
that change. The explanatory pattern, i.e. the ideal type, changes as well. Let
us grant that the first problem of economics was: how, based on its entire
circumstances of life, does a population reach a particular level of the
economy? Then [466] the second problem is the following: how does an economy
make the transition from one level-which itself was viewed as the final point
and point of equilibrium-to another level? This question takes us to the very
essence of economic development [wirtschaftlichen
Entwicklung]. (Schumpeter, TwE, ch.7,
pp465-6)
It is
quite simply impossible to over-estimate
the importance of this paragraph in the famous unpublished “Seventh Chapter” of
the Theorie der wirtschaftlichen
Entwicklung that Schumpeter “suppressed” for its second edition and the
English translation, owing to its “sociological” content – already sharply
criticized by Bohm-Bawerk, and liable to adverse review from the academic
censors at Harvard College whom he was lobbying for a job! [An infamous example
of the kind of “thought-policing” that goes on in academia when the interests
of the bourgeoisie are at stake!]
“It
is not just the observable facts that
change” as the capitalist economy “does not return to the same level”. It is “the
explanatory pattern - that is, the ideal
type - that changes as well”! The phenomenon of capitalist “growth” is not
one of a simple “quantitative, cumulative increment”, or even of a homogeneous
“steady-state” expansion as in the Cobb-Douglas function. There is no
“continuity”, no “smoothness” in this “growth”, in this “development”. The
phenomenon of capitalist “growth” is not a “quantitative” one at all! It is not
a problem of “magnitude”! It is a “qualitative leap”! It is a “quantum leap”
that challenges the incremental laws of physics and our notion of “continuous
space”! It is not an “increment” but much rather a “trans-form-ation”, a “becoming other
than before” – a Ver-ander-ung!... It
is a “meta-morphosis” whereby the
“change” cannot be described in the same terms as what existed before the change! Capitalist
growth-development-evolution is a “change”, a “trans-formation”, a
“meta-morphosis”, a “trans-crescence”
that destroys as much as it creates!! It
is a “creative destruction” (schopferische Zerstorung) that dis-integrates the
entities that it trans-forms into the new “creation”!
The
“growth” of the capitalist economy cannot
be homologated, it is quite simply not “com-parable” or “equalisable” (the
Nietzschean term is “Ver-gleich-ung”,
as-simil-ation) – it cannot be
“equated” with the “economy out of which
it has grown”! The Weberian ideal type
applicable to it, its “key of interpretation” or “understanding” (the
Weberian-Diltheyan Verstehen) has
changed as well! Swelling to a crest of almost Nietzschean inspiration that
recalls the Wille und Welle (Will and
Wave) in the Zarathustra, Schumpeter
poetically describes how “the waves of
the economy, unlike those of the ocean, do not return to the same level” – “level” understood here in
a “quantum”, not “quantitative” (!) sense . Like the “wave” that sweeps the
“will” in Zarathustra, so does the
“static” economy here carry the “spirit”, the “will to conquer”, the “will to
power” – the “entrepreneurial Spirit” (Unternehmer-geist)
that will trans-form the Statik
economy into the Dynamik.
No
economic “equi-librium” is possible in reality, then. Equilibrium analysis is
valid only for ana-lytical, for
heuristic and illustrative purposes! In reality instead the capitalist economy
is in a state of constant crisis, in
continuous trans-formation! Indeed, this is its differentia specifica – its historical specificity: - that the
capitalist economy is in a constant state of qualitative transformation, of
meta-morphosis, of “change” that destroys
in the process of creating! And this “process of creating” is called Innovations-prozess, a process of
“innovation” through which the “Will to Power” of the “entrepreneur” – the
“entrepreneurial Spirit” - utilizes the swelling, surging energy of the
existing economy – “the waves of the economy”! – to destroy and “overcome” (uber-winden) the old “level” of the
economy, its status quo ante.
Schumpeter
it is who makes “crisis” the
specific difference, the historical peculiarity of capitalist economies with
the publication of the ‘Theorie’ in 1911. Like Keynes, he perceives that
Classical and Neoclassical theories are “static” analyses because they cannot
account for the transformation of the means of production (intermediate goods)
and of consumption goods (primary goods) – and this is quite apart from the
fact that “want” is a purely passive and negative notion that must assume the
exogeneity of production techniques and of changes in consumption patterns.
Here he is:
What
we want to show now becomes obvious. The
development of wants, which we observe in reality, is a consequential creation
of the economic development that has already been present. It is not its motor. The fact that the
human economy has remained constant over centuries heavily weighs in favor of
our argument. But if the development is already under way, then it can, in
a concrete case, certainly be preceded by the development of needs and desires
which can trigger special economic transactions. In principle, needs sustain
their own demand through economic development, and it is economic development
that stirred them up in the first place. The amplification of needs is a
consequence and symptom of development. Insofar as truly new needs and desires
exist they will not have a practical effect on the economy. As has already been
shown in the discussion above, new needs and desires as such mean nothing. But
even then, if there were an original cause in the development of needs and
desires, this would still require creativity and energetic activity in order to
create anything new of importance, so that even the assumption of such a Law of
the Heterogeneity of Social Purposes would not have much to offer in the field
of economics. It is beyond doubt that in a single case a concrete demand can
bring forth an entire industry. [486] (TwE, 1st edition, ch.7)
What
then can explain “growth”?
Social economics has various factors. It's really about understanding how it works in the real world.
ReplyDelete