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Joseph Schumpeter – Methodological Individualism

Having disposed of the queries associated with the hypothesis of value and with the problem of human motivation, all we still need to prove is that our assumptions are based on the possession of wealth by the individual. This is bound to evoke some criticism because, in this day and age, tha validity of the individualistic concept is strongly queried. Indeed, atomism is most frequently disputed by the opponents of the theory. Classical theory places great importance on the individual; more recent economic systems, by and large, followed this pattern, so exposing themselves as the same criticism. As a rule, the opponents of the theory do not realise that there is a difference between the old and the new economic system, and if they do, they do not know what the difference is and, in most cases, attach both systems indiscriminately.

Theoreticians have not been backward in voicing their viewpoints, and we are faced with a controversy that, as with so many discussions concerning the fundamentals of our discipline, fails to reach any conclusion: both parties throw up general arguments and defend them with a tenacity based on the degree of their political and social convictions. Of course, it is impossible to reach any agreement such as this, and often it seems that agreement is not even wanted. Yet all that is needed to settle the dispute is to consider which problems actually need to be solved and what end-results are wanted from these opposing systems. By doing this the dispute loses its controversial character and the difficulties tend to resolve themselves. To achieve this let us first consider the objections made by opponents of the theory of the “individualistic conception of things,” and then discus various tendencies within the theory which pursue the same end.

Joseph Schumpeter
Methodological Individualism

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