Siegmund Feilbogen · 1913
Feilbogen’s French article presents Schumpeter as evidence of the Austrian School’s continuing vitality against Landry’s claim that its brilliant career had ended. The intervention extends an earlier defense:
Nous avons, au contraire, affirmé l'existence de toute une seconde génération d'économistes autrichiens.
English translation: We have, on the contrary, affirmed the existence of an entire second generation of Austrian economists.
Schumpeter exemplifies this renewal through the originality of his theoretical writings. Examining his two principal books, Feilbogen recognizes an encounter between Austrian economics, American theory, and Walrasian equilibrium analysis. His assessment nevertheless distinguishes the analytical power of Schumpeter’s constructions from their adequacy as explanations of economic life.
The discussion of Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie (1908) begins with Schumpeter’s organizing distinction:
La distinction d'Auguste Comte, si chère aux économistes américains, entre la Statique et la Dynamique sociale, a pris une importance capitale pour l'auteur autrichien.
English translation: Auguste Comte's distinction between social Statics and Dynamics, so dear to American economists, has taken on capital importance for the Austrian author.
Static theory treats economic quantities as an interdependent system in equilibrium. Exchange, wages, rent, and production become relations among quantities; production itself appears as an exchange of productive means for products. Feilbogen explains the underlying analogy:
Dans les sciences naturelles, la statique part de cette hypothèse qu'il existe des systèmes de quantités dont chacune est en fonction des autres: en d'autres termes, il y a une interdépendance de ces quantités, condition de l'équilibre de tout le système.
English translation: In the natural sciences, statics proceeds from the hypothesis that there exist systems of quantities each of which is a function of the others: in other words, there is an interdependence of these quantities, the condition of the equilibrium of the whole system.
This formalization promises mathematical precision and the removal of familiar controversies. For Feilbogen, however, its purification risks severing theory from its social significance and empirical object. Excluding needs, value, and technical or social premises does not establish independence from them. Equilibrium rests on demanding assumptions about competition, divisibility, stable needs and goods, minimal variations, and subsistence throughout exchange. Schumpeter’s clarity about these conditions exposes the limits of his explanatory claims. Psychology also returns through individuals’ exchange ratios, which presuppose knowledge of their needs: the mathematical account remains dependent on the valuation it seeks to put aside.
Feilbogen next disputes the exclusion of entrepreneurial profit and interest from static incomes. A static analytical framework need not describe a stationary economy. On Schumpeter’s own analogy between production and exchange, production must yield a utility surplus for its organizer; Feilbogen identifies this with profit, part of which may become interest when capital is scarce. Against the equivalence of productive means and products before production is complete, he argues that their successful combination adds value. Its magnitude depends on the scarcity of that combination, while entrepreneurs can act to preserve their margin.
Time likewise cannot be eliminated from a complete description of the present. Current payments, such as the realization of a coupon, express the consequences of earlier commitments. Static analysis must therefore accommodate the past’s continuing economic effects. Despite these objections, Feilbogen regards the first book as indispensable for serious theoretical study, provided readers maintain critical distance from its author’s confidence.
The discussion of Theorie der wirtschaftlichen Entwicklung (1912) turns to development through the problem of crises. New productive combinations disturb equilibrium; their accumulated effects produce interruption and liquidation, followed by a new stationary configuration. Schumpeter contrasts the customary, pleasure-preserving individual with the creative individual who actively reshapes economic circumstances.
Credit supplies the means of transformation. Capital, in Feilbogen’s account of Schumpeter, is purchasing power rather than a pre-existing stock of goods. Bank credit allows entrepreneurs to divert productive resources from established uses. Competition between newly created purchasing power and purchasing power acquired through stationary activity unsettles prices and values. Feilbogen praises the connection this establishes between development and crisis.
His concluding reservations concern the theory’s exclusiveness. Exceptional personalities cannot alone explain transformations such as Japan’s; collective changes in population, needs, capital, techniques, and organization also matter. Nor is bank-created purchasing power the only source of capital: productive goods can accumulate through regular production. Feilbogen preserves the distinctive effects of dynamically created capital while rejecting their elevation into a universal explanation. His selective appreciation of early Schumpeter defends psychological valuation, temporal continuity, and collective change alongside the originality of credit-financed innovation.
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