Schumpeter’s theory of self‐restoration: a casualty of Samuelson’s Whig Historiography of science

This article in the [special edition of Cambridge Journal of Economics] on Samuelson’s Whig History Project argues that his influential 1987 call for a ‘Whig History of Economic Science’ rests  on a Whig Historiography of the natural sciences. This contrasts with how science actually works:  Samuelson neglects the critical role of controversy in the development of knowledge, leading to the  misleading idea that scientists pursue discovery at the expense of reflection on the foundation and  history of their subject. The consequence is institutional delegitimation: the exclusion of legitimate  contrary hypotheses when economists test their theories, invalidating the test.

Samuelson further confuses the history of ideas with the history of texts. This expands the scope of  institutional delegitimation to a systematic misrepresentation of the actual ideas at stake in the  economic controversies, erecting a permanent obstacle to the discovery of truth.

I illustrate this with Samuelson’s exclusion from consideration of two ‘non‐ignorable’ contributions to  Macroeconomic Theory: Schumpeter’s ‘Business Cycles’, which he failed to recognize as a theory of  endogenous capitalist self‐restoration, and the concept of endogenous decline, excluded by his Whig re‐ interpretation of Marx’s theory of value.

Schumpeter and Marx offered opposed, but legitimate, alternatives to the postwar macroeconomic  consensus of which Samuelson was a major architect. In particular, both recognised that deep and  prolonged crises were a natural product of capitalism, not an inexplicable exception. To respond to the  2008 downturn, economics needs a to re‐open a wide discussion without excluding, a priori, any of  these opposed theoretical explanations, instead seeking to understand clearly what each of them  actually says, and testing them against the empirical evidence of history.

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