Joseph A. Schumpeter, Die „positive“ Methode in der Nationalökonomie

First published in 1914 and supplied here in its 1952 republication, Schumpeter’s polemical review of François Simiand’s La méthode positive en science économique defends economic theory while arguing for methodological cooperation. He welcomes the achievements of the sociologists associated with the Année sociologique, but accuses Simiand of turning a valuable empirical approach into an exclusive scientific programme. The review’s central distinction is between challenging particular theoretical assumptions and attempting to displace theory through systematic observation.

Schumpeter organizes his response into three groups of objections, rather than discussing all seven essays in Simiand’s book. The first concerns deduction and its empirical foundations. Against the claim that psychological premises cannot determine economic conduct, Schumpeter argues that Simiand confuses general theoretical results with outcomes obtained by introducing more specific assumptions. His example is investment choice: return and security are not independent alternatives, he maintains, because anticipated returns can be weighted by risk. Different results following from different concrete data do not establish the indeterminacy of general theory.

The deeper issue is what theoretical knowledge contributes when facts are already familiar:

Von dem »daß« kann sich oft jedermann so leicht überzeugen, daß nur in der Untersuchung des »warum« eine Aufgabe liegen kann.

English translation: Of the "that" everyone can often convince himself so easily that a task can lie only in the investigation of the "why."

Theory’s value therefore lies partly in analytical explanation, not simply in discovering previously unknown facts. Schumpeter argues that ordinary and historical experience already establish many basic assumptions sufficiently for their theoretical use. Yet he leaves room for empirical correction, especially among specialized hypotheses: research may specify saving behaviour across social environments, the interests economic agents pursue, or the concrete relation between labour expenditure and marginal utility. His resistance is directed against indiscriminate demands for verification, not against empirical inquiry itself. He also distinguishes explaining an institution’s historical genesis from explaining its functioning.

The second group of objections concerns Simiand’s charge that economic theory prescribes rational conduct. Schumpeter accepts that economists’ value judgments and social commitments deserve criticism, but rejects the inference that a model of utility-maximizing behaviour necessarily establishes an ethical norm:

Er begeht also den heute kaum mehr entschuldbaren Irrtum, einen logischen Idealtypus mit einem ethischen zu verwechseln.

English translation: He thus commits the error, today scarcely excusable any longer, of confusing a logical ideal type with an ethical one.

This distinction separates rationality as an analytical construction from rationality as a recommended way of life. Schumpeter concedes that economists’ terminology can encourage confusion, without conceding that the confusion invalidates their method.

The third group concerns substantive economic propositions: price determination, the interdependence of prices, and diminishing marginal utility. Schumpeter reports these objections chiefly to dismiss them as elementary misunderstandings; he does not supply a full technical refutation. Likewise, Simiand’s insistence that supply and demand presuppose institutions such as private property, exchangeability, and contractual freedom is, for Schumpeter, already part of theoretical instruction. Institutional conditions qualify the application of theory; they do not eliminate the need to analyse causal relations within those conditions.

The conclusion makes the review’s constructive position explicit. Empirical sociology and statistical inquiry can investigate competition’s historical extent and cultural effects, market organization, collective psychology, and the concrete shapes of supply and demand curves:

Sie kann Probleme lösen, die der ökonomischen Theorie unzugänglich sind. Sie kann ihre Resultate mit konkretem Material füllen. Nur kann sie nicht ohne die Hilfe der »Theorie« im bisherigen Sinn auskommen.

English translation: It can solve problems that are inaccessible to economic theory. It can fill its results with concrete material. Only it cannot do without the help of "theory" in the hitherto accepted sense.

The concession is substantial: abstract theory offers only a limited contribution to understanding economic reality. Conversely, assembling data cannot by itself explain their consequences. Schumpeter’s methodological pluralism rests on this reciprocal dependence, not on the absorption of every inquiry into one comprehensive method:

Beide »Methoden« — und außerdem viele andere — sind gleich unentbehrlich für uns, wenn wir uns im Chaos der sozialen Welt zurechtfinden wollen.

English translation: Both "methods" — and many others besides — are equally indispensable to us if we wish to find our bearings in the chaos of the social world.

The review’s lasting relevance lies in its distinctions between explanation and observation, general models and concrete hypotheses, and analytical rationality and ethical prescription. Its sharp polemic ends in an appeal for a division of scientific labour: researchers should understand the tasks their neighbours perform, rather than mistake the limits of one approach for grounds to abolish it.