Joseph Alois Schumpeter, Entwicklung [Eine Festgabe für Emil Lederer] (2002)

Schumpeter’s posthumously published essay, edited from an unpublished typescript, investigates development as the emergence of genuinely new forms rather than the continuous modification of existing ones. Its scope extends from economics to painting, science, religion, biology, and physics, but its starting point is a problem internal to empirical inquiry: how can science understand a transition that changes the very framework within which changes ordinarily become explicable? The essay moves from terminological clarification through an example from art to an economic definition, then examines the limits of prediction and the logical difficulty underlying them.

Schumpeter first separates development from the associations carried by its name. “Unfolding” suggests that something remains identical throughout change; belief in progress introduces positive valuations that have no scientific standing; evolutionism risks turning an explanatory instrument into an autonomous power supposedly responsible for everything it names. His objection is not simply to an unfashionable doctrine but to the substitution of a concept for an explanation:

Höchster Erfolg eines Instruments ist es zum Fetisch zu werden. Aber dann ist es aus mit ihm.

English translation: An instrument’s greatest success is to become a fetish. But then it is finished.

Against that conceptual reification, he distinguishes three legitimate inquiries: describing what changed, identifying circumstances that brought about change, and considering prospective outcomes or goals. His own question cuts across them. None necessarily explains how a new organizing form arises. An increasingly comprehensive inventory of causes can produce the illusion that becoming and transformation have been explained, while leaving the decisive emergence of novelty untouched.

Florentine painting supplies the initial model. The painting of the Ducento and that of the Quattrocento each exhibit a relatively stable, internally coherent form, yet their forms differ. Changes in wealth or social structure cannot uniquely determine this transformation. Crucially, Schumpeter does not attribute that failure to an absolute gulf between artistic meaning and measurable circumstances. If artistic forms and norms remained constant, relationships between social conditions and artistic responses might still be established, even without an interpretive understanding of their operation. The difficulty arises when a new technique or way of seeing changes how the material responds to circumstances. Calling its source a creative personality names and locates the problem without explaining it.

This establishes a restricted, rather than universal, indeterminism. Novelty coexists with extensive domains of determinate processes. Environmental changes remain occasions or conditions of innovation, and some are necessary to its concrete content; they do not thereby necessitate the new form itself. Schumpeter consequently asks how people depart from what they have learned, how innovations prevail among practitioners and audiences, and what mechanisms transmit their effects. These are substantive sociological questions, although the essay’s purpose is to delimit their common problem rather than answer them.

Economics makes the distinction especially precise because some of its objects, above all prices, are numerical in their very constitution. Schumpeter uses the Walrasian system of interdependent quantities to define an economic “norm”: the relationships corresponding to complete adaptation to given data. Equilibrium is thus an idealized endpoint through which actual adjustment becomes intelligible. Reversible deviations and continuous alterations of the norm remain accessible to this mode of analysis. Development begins where a discontinuous change of the norm erupts from within the system.

Aber man vermehre die Postkutschen soviel man will, nie erwächst eine Eisenbahn daraus.

English translation: But however much one increases the number of stagecoaches, a railway never grows out of them.

The example distinguishes qualitative transformation from quantitative enlargement. Population and wealth growth can explain better roads and more stagecoaches; their continuous increase does not yield the railway. Development, in Schumpeter’s stipulated sense, is a transition between economic norms that cannot be decomposed into infinitesimal steps. He acknowledges that this usage conflicts with accounts that reserve “development” for lawful, predictable continuity. He calls such continuous change growth, which can also involve a negative increment.

The distinction does not make innovation wholly inaccessible to science. Its occurrence, points of entry, means of establishment, consequences, and repercussions can be described and theorized. Much can even be predicted. The limit concerns the nature and magnitude of the new element itself, not every feature of the process surrounding it:

Nie aber kann im Rahmen einer Einzelwissenschaft eine Norm aus einer anderen abgeleitet werden, wenn wir von dem absehen was oben Wachstum genannt wurde.

English translation: But within an individual science, one norm can never be derived from another, if we leave aside what was called growth above.

This limit grounds Schumpeter’s rejection of a theoretically warranted extrapolation of economic trends across development. A fitted curve records what happened and may serve practical purposes, but it cannot supply a law determining future transformations of the norm. Even observed regularities remain dependent on knowledge of the historical sequence. Better information may improve anticipation without resolving this specific obstacle.

Nor can a discipline escape by classifying novelty as an external disturbance: the unexplained transition simply reappears in the field to which it has been transferred. Across the social sciences, that strategy becomes circular. Schumpeter therefore identifies a difficulty of logic, not merely an incomplete command of facts:

Allein das Wesen der Sache wird damit nicht getroffen. Mögen wir, besonders wenn wir mit- oder nachfühlen können und uns in einen Handelnden transformieren, im einzelnen Fall noch so gut vorahnen können was geschehen wird, rational und wissenschaftlich bleibt die Trias Indeterminiertheit, Neues, Sprung nichtsdestoweniger unüberwindlich.

English translation: Yet this does not grasp the essence of the matter. However well we may anticipate what will happen in a particular case, especially when we can feel with others or reconstruct their feelings and put ourselves in an actor’s place, rationally and scientifically the triad of indeterminacy, novelty, and discontinuity nevertheless remains insurmountable.

The closing comparisons extend this argument beyond economics: adaptation, recombination, and the naming of mutations do not themselves explain novelty. Scientific logic, as Schumpeter characterizes it, grasps adjustment within an invariant framework more readily than the emergence of another framework. The essay ends by recasting apparent impossibility as a new task for logic and mathematics, perhaps ultimately rooted in economics. Its distinctive contribution is this precise separation of explaining an innovation’s conditions and effects from deriving the innovation itself.