Hans Mayer’s review of Josef Schumpeter’s Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie (1908) examines a reconstruction of economic theory through functional relations and mathematical equilibrium. Mayer accepts the need to develop marginal-utility analysis but questions whether Schumpeter’s foundations preserve the phenomena they seek to explain. His central distinction is between abstraction that isolates essential economic relationships and assumptions that alter those relationships to fit a formal system.
Mayer defends Austrian value theory while acknowledging its unfinished tasks. Subjective valuation is an element of economic phenomena, not a sufficient explanation of every concrete event. Exact theory and empirical investigation consequently serve complementary purposes: empirical inquiry establishes how additional forces, including social relationships, modify the connections isolated by theory. Confidence in the foundations remains compatible with substantial further development.
Aber die grundlegenden Sätze dürften wohl kaum eine Änderung erfahren.
English translation: But the fundamental propositions are hardly likely to undergo any change.
This distinction between durable principles and incomplete elaboration frames Mayer’s engagement with Schumpeter. More precise quantitative investigation is necessary, but it need not displace needs and subjective valuations from economic explanation.
Auch er meint, daß die Grenznutzenlehre in ihrer jetzigen Gestalt für die Erlangung mancher nicht unwesentlicher Resultate insbesondere für die Durchführung einer eingehenden quantitativen Analyse der wirtschaftlichen Erscheinungen nicht ausreiche.
English translation: He too holds that the doctrine of marginal utility in its present form does not suffice for the attainment of certain not insignificant results, in particular for carrying out a thorough quantitative analysis of economic phenomena.
Mayer reconstructs Schumpeter’s progression from theoretical foundations through static equilibrium, distribution, and the method of variations. Quantities of goods constitute an interdependent system, exchange ratios connect its elements, and maximum demand prices supply value functions. Small variations disclose the consequences of disturbances to equilibrium. Mayer recognizes the construction’s ambition but challenges the empirical validity of the assumptions supporting its mathematical treatment.
His first objection concerns universal quantitative interdependence. An income change may affect expenditure on some goods without changing expenditure on others. Needs differ in their intensity scales: some end abruptly, others contain gaps, and others become effective only after prior wants have been satisfied. These differences undermine the supposition that consumption can everywhere be represented through continuous relations. Indivisible goods pose a further difficulty.
A second objection distinguishes subjective value from demand price. Willingness to buy an additional quantity does not exhaust valuation: a person may value a possession without wanting more of it. Exchange ratios likewise cannot simply express equal subjective valuations, since differences in valuation motivate exchange. Moreover, a demand-price curve incorporates changes in the valuation of what is surrendered, not merely diminishing utility from what is acquired.
Mayer also rejects the argument that subjective foundations make economics dependent on psychological theory. Introspection, communicated self-observation, and observed conduct can establish facts about valuation without settling questions concerning free will, physiology, or the ultimate origin of needs. His defense of marginal utility rests on the accessibility of these facts to ordinary experience.
The equilibrium critique turns on the inference from successive choices to an equal marginal-utility level.
Schumpeter beobachtet nun, daß von den Wirtschaftssubjekten, „welches Gut immer zuerst erzeugt werden mag, stets bei einer gewissen Menge desselben Halt gemacht und zu dem Erwerbe eines andern übergegangen wird“ usw.
English translation: Schumpeter now observes that, on the part of the economic subjects, "whichever good may be produced first, a halt is always made at a certain quantity of it and a transition is made to the acquisition of another," and so forth.
Mayer disputes what such switching proves. Differential analysis presupposes continuity and divisibility, whereas dividing a durable good may destroy its usefulness. Treating inferior qualities as fractions of superior goods confuses qualitative and quantitative differences. Rental and shared ownership introduce institutional arrangements rather than establish a universally valid principle.
Drawing on Wieser, Mayer offers an allocation rule in place of universal marginal equalization: an agent should not obtain a lower utility by sacrificing a higher utility elsewhere. This rule accommodates discontinuities instead of excluding them. The methodological implication is that legitimate abstraction must permit analysis to approach reality as simplifying assumptions are relaxed. If relaxing those assumptions eliminates both the explanatory principle and the equilibrium solution, the construction has transformed its object rather than clarified it.
Mayer nevertheless credits Schumpeter’s methodological intelligence and contributions to distribution and imputation. His review combines appreciation with a foundational objection: mathematical exactness becomes economically explanatory only when its relations preserve the needs, valuations, and choices constituting their object.
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