From the Schumpeterian entrepreneur toward modern evolutionary economics: Schumpeter’s core works revisited

This paper argues that Schumpeter’s core books are organised in three groups.
The first of them is the programmatic duology that consists of his two early German
books. The second is the evolutionary economic duology that consists of The Theory of
Economic Development and Business Cycles. The third is the socioeconomic synthesis
that is found in parts of Capitalism, Socialism and Democracy. The paper considers
the internal logic of and the interconnections between these groups of works. This analysis
is supported by the distinction between Schumpeter’s three different models of
evolutionary processes and by the distinction between microevolution and macroevolution.
The Mark I model describes economic evolution as the outcome of the interaction
between individual innovative entrepreneurs and routine-based incumbent firms.Mark II
describes economic evolution as the outcome of the innovative oligopolistic competition
between incumbent firms. Mark III describes socioeconomic evolution as a coevolutionary
process between the major sectors of society. Two of these models can be used for the
analysis of microevolution as well as macroevolution, but Schumpeter used them in an
unbalancedway.Microevolution is the process of evolution that takes place within a population
of entities that face more or less uniform selection pressures, like the firms of an
industry.He studied the microevolutionary process bymeans of Mark II.Macroevolution
is the long-term transformation of the complex system of evolving and branching populations.
Schumpeter used Mark I for an abstract analysis of macroevolutionary processes.
This unbalanced way of using the models created many difficulties for Schumpeter and
still provides challenges for evolutionary economists.