Joseph A. Schumpeter, Die Wirtschaftslehre und die reformierte Referendarprüfung

Originally published in 1929 and reprinted in 1952, this journal article intervenes in the debate over Prussian examination reform and the professional standing of economics graduates. A preliminary statement and five sections move from the incentives created by examinations to the distinction between judicial and administrative careers, proposed institutional changes, employers’ resistance, and economists’ own educational shortcomings. Schumpeter’s central argument is deliberately double-edged: separating legal and economic training is necessary, but economics cannot obtain professional recognition merely by demanding access to positions traditionally occupied by lawyers. It must develop a distinctive, practically effective education.

The first section treats examination regulations as forces shaping intellectual formation, not simply as procedures for certifying it. Most students organize their work around what examinations actually require. Consequently, a subject’s formal inclusion in a curriculum means little if the examination makes serious engagement unnecessary. Schumpeter welcomes the reform of the economics diploma but predicts that the revised legal examination will effectively eliminate economics from most law students’ education. Its designation as a subsidiary subject, elementary expectations, and uncertain appearance before examination commissions make neglect a rational strategy. Nor can attendance certificates compensate for the absence of sufficient intellectual space in the curriculum.

Interesse am Gegenstand ist in aller Regel erst Konsequenz der Beschäftigung damit.

English translation: Interest in the subject is generally only a consequence of engaging with it.

This observation reverses the assumption that students must first possess an independent interest before demanding study becomes worthwhile. Examination arrangements help produce that interest by inducing sustained engagement. Schumpeter’s accompanying discussion also distinguishes knowledge merely presented in lectures from knowledge incorporated into the student’s usable intellectual apparatus. Effective education requires the latter; passive exposure cannot substitute for mastery.

The second section nevertheless endorses the reform for future judges, lawyers, and other specifically legal practitioners. Thorough legal formation leaves economics a marginal place, and acknowledging this is preferable to pretending that incidental instruction produces economic competence. The problem arises when the same legal qualification governs entry into administrative and economic occupations. For these careers, social-scientific understanding may be foundational rather than supplementary. Schumpeter therefore directs his criticism away from judicial authorities pursuing legitimate professional purposes and toward the assumption that everyone entering higher public service requires the same education. Legal training’s exceptionally broad occupational entitlement attracts students while placing people trained for one kind of work in positions demanding another.

The third section considers both interim remedies and a more decisive alternative. Economics teachers should publicly state that passing the legal examination no longer guarantees even minimal social-scientific training. Additional requirements for administrative candidates could attach to an existing option for examination in a special subject or extend earlier requirements for evidence of economic study. Schumpeter regards such measures as possible without abandoning examination unity, but not as a satisfactory resolution:

Persönlich glaube ich freilich, daß jeder solche Weg das Problem nicht löst, sondern im Gegenteil zu neuen Problemen und darunter solchen führt, die überhaupt keine befriedigende Lösung zulassen.

English translation: Personally, however, I believe that every such approach fails to solve the problem and, on the contrary, leads to new problems, including some that admit of no satisfactory solution at all.

His objection rests on limited study time, the different intellectual techniques of law and economics, and the difficulty of maintaining competence in both during professional life. The appropriate principle is occupationally differentiated formation. Concretely, he proposes admitting holders of the economics diploma to preparatory training for higher administrative service alongside successful legal candidates. A specifically economic traineeship would combine further scientific education with practical experience in institutions such as chambers of commerce, arbitration offices, interest organizations, and municipal administrations, concluding with a state examination.

This proposal is deliberately modest. Schumpeter does not initially demand reserved posts or compulsory employment of economists. He seeks to make properly prepared candidates available to employers who want them. Administrative resistance, the burden of organizing unfamiliar training, and the possibility of damaging early failures make gradual implementation preferable to imposing an untested arrangement.

The fourth section examines resistance that legal eligibility alone cannot remove. Against officials who regard administration as merely interpreting prescribed rules, Schumpeter argues that economic understanding matters both for execution and for advancement into policy-making. Specialized knowledge of tax, labour, or tenancy law need not depend on comprehensive civil-law training. Similarly, industrial employers underestimate economists because they fail to recognize the importance of diagnosing economic, industrial, financial, and social situations. Business knowledge and statistical series become more useful through economic interpretation. Alongside these misconceptions stands senior lawyers’ deeply rooted attachment to legal education as the basis of sound judgment.

The final section turns the argument back upon economics itself:

Was wir bieten, reicht nicht aus. Unser Volkswirt kann zu wenig.

English translation: What we offer is insufficient. Our economics graduate can do too little.

Resistance is therefore not reducible to prejudice. Economics has not yet earned the authority enjoyed by the sciences underlying medicine and engineering; teaching also fails to transmit much of what economic science already offers. Statistical competence supplies Schumpeter’s concrete test: graduates’ inadequate command of elementary methods makes employers’ preference for training recruits themselves understandable. The diploma represents progress, but disciplinary advancement requires better instruction as well as practical preparation.

Leisten wir genug auf diesem Weg, so werden alle Wünsche in Erfüllung gehen, die man vernünftigerweise hegen kann — wenn nicht, dann nicht.

English translation: If we accomplish enough along this path, all the wishes one can reasonably entertain will be fulfilled — if not, then not.

The article’s relevance lies in this connection between examination incentives, occupational access, and demonstrated expertise. Schumpeter defends economics’ institutional independence while refusing to confuse entitlement with competence: recognition must ultimately rest on what its graduates can understand and accomplish.