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An Analysis on Neoclassical and Schumpeterian Approaches: Competition and Human Behavior

Year 2023, Volume: 7 Issue: 2, 599 - 612, 31.05.2023
https://doi.org/10.29023/alanyaakademik.999285

Abstract

The aim of this study is to scrutinize the close relationship between the type of competition and the conceptualization of human behavior by taking into consideration neoclassical and Schumpeterian competition approaches. To this end, the linkages between static competition and methodological individualism, and dynamic competition and institutional individualism are discussed. While methodological individualism is embraced by the neoclassical approach in parallel to the static analysis of perfect competition, Schumpeter analyzes human behavior within the framework of institutional individualism, and embraces dynamic competition. This study shows that perfect competition of the neoclassical approach does not take into consideration the very crucial characteristics of capitalism, and its conceptualization of human behavior falls short of explaining real world phenomena and cannot link social, historical and economic reality. Most importantly, the human being wih his/her real incentives and motives are absent from the analysis in the neoclassical approach. Since economic reality cannot be analyzed independent of society, history and social individual, Schumpeter's institutional individualism provides a richer analytical framework. To our knowledge, the relationship established in this study between competition and human behavior is a novel approach and contribution.

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References

  • AGASSI, J. (1960). “Methodological individualism”. The British Journal of Sociology, 11(3): 244-270.
  • AKYÜZ, Y. (1977). Sermaye bölüşüm büyüme. Ankara Üniversitesi Basımevi.
  • ANDY, D. (2015). Schumpeter and the Roots of Methodological Individualism SSRN: https://ssrn.com/abstract=2613477 or http://dx.doi.org/10.2139/ssrn.2613477
  • BAS-DINAR, G., & GULER-AYDIN, D. (2010). “Why institutional economics is a better alternative to the neoclassical economics than the new institutional economics?”. International Journal of Economic Research, 7(2): 277-288.
  • CHIPMAN, J. S. (1971). The nature and the meaning of equilibrium in economic theory. H. Townsend (Ed.), Price theory, Penguin Books (41-271).
  • DURKHEIM, E. (1982). The rules of sociological method. Translated by W. D. Halls. The Free Press, New York.
  • EATWELL, J. (1982). “Competition”. I. Bradley and M. Howard (Eds.), Classical and Marxian political economy, Macmillan (203-228).
  • ERTÜRK, K. (1996). “On the Keynesian notion of equilibrium”. Cambridge Journal of Economics, 20: 371-386.
  • FAGERBERG, J. (2003). “Schumpeter and revival of evolutionary economics: An appraisal of the literature”. Journal of Evolutionary Economics, 13(2): 125-159. https://doi.org/10.1007/s00191-003-0144-1.
  • FESTRE, A., & GARROUSTE, P. (2008). “Rationality, behavior, institutional, and economic change in Schumpeter”. Journal of Economic Methodology, 15(4): 365-390. https://doi.org/10.1080/13501780802507222.
  • FORTMAN, B. G. (1966). The theory of competition policy. North Holland Publishing Company.
  • GULER-AYDIN, D., & OZER-IMER, I. (2019). “At the Crossroads of History and Theory: Weber, Schumpeter and Economic Sociology”. Panoeconomicus, 66(4): 465-485.
  • HODGSON, G. M. (1998). “The approach of institutional economics”. Journal of Economic Literature, 36(1): 166-192.
  • HODGSON, G. M. (2007). “Meanings of methodological individualism”. Journal of Economic Methodology, 14(2): 211-226. https://doi.org/10.1080/13501780701394094.
  • HOLLIS, M., & NELL, E.J. (2007). Rational economic man: A Philosophical Critique of Neo-Classical Economics. Cambridge University Press, Cambridge.
  • HOWELLS, J. (2003). “Technological competition, creative destruction and the competitive process”. Working Papers from Aarhus School of Business, 4, 1-23.
  • HUNT, E. K. (1992). History of economic thought: A critical perspective. Harper Collins Publisher.
  • KALDOR, N. (1972). “The irrelevance of equilibrium economics”. Economic Journal, 82(328): 1237-55.
  • KIRDINA, S. (2015). “Methodological individualism and methodological institutionalism for interdisciplinary research”. Montenegrin Journal of Economics, 11(1): 53-67.
  • MCNULTY, P. J. (1967). “A Note on the history of perfect competition”. The Journal of Political Economy, 75(4): 395-399. https://doi.org/10.1086/259295.
  • O’DENNEL, L.A. (1973). “Rationalism, capitalism and the entrepreneur: The views of Veblen and Schumpeter”. History of Political Economy, 5(1): 199-214. https://doi.org/10.1215/00182702-5-1-199.
  • OZER-IMER, I., & GULER-AYDIN, D. (2020). “The political economy of the market,” I. Akansel (ed.), in Comparative Approaches to Old and New Institutional Economics, 57-69 USA: IGI Global.
  • PAPAGEORGIOU, T., & MICHAELIDES, P. G. (2016). “Joseph Schumpeter and Thorstein Veblen on technological determinism, individualism and institutions”. The European Journal of the History of Economic Thought, 23(1), 1-30.
  • SAMUELS, W. J. (1995). “The present state of institutional economics”. Cambridge Journal of Economics, 19(4): 569-590.
  • SCHUMPETER, J. A. (1908). “Der methodologische Individualismus (Methodological individualism)” in Das wesen und der hauptinhalt der theoretischen nationalökonomie (The essence and principal content of theoretical economics). J.A. Schumpeter. München und Leipzig: Duncker und Humblot.
  • SCHUMPETER, J. A. (1909). “On the concept of social value”. The Quarterly Journal of Economics, 23(2): 213-232.
  • SCHUMPETER, J. A. (1926). The theory of economic development. Harvard University Press.
  • SCHUMPETER, J. A. (1943). Capitalism, socialism and democracy. George Allen and Unwin Ltd.
  • SCHUMPETER, J. A. (1954). History of economic analysis. Oxford University Press. https://doi.org/10.4324/9780203983911.
  • SCHUMPETER, J. A. (1989). “The instability of capitalism”. R. V. Clemence (Ed.), Essays on entrepreneurs, innovations, business cycles, and the evolution of capitalism, Transaction Publishers (47-72).
  • SCHUMPETER, J. A. (2005). “Development”. Journal of Economic Literature, 43(1): 108-120.
  • WALRAS, L. (1954[1877]). Elements of pure economics. Translated by Jaffe, W. Allen and Unwin, London.

An Analysis on Neoclassical and Schumpeterian Approaches: Competition and Human Behavior

Year 2023, Volume: 7 Issue: 2, 599 - 612, 31.05.2023
https://doi.org/10.29023/alanyaakademik.999285

Abstract

Bu çalışmanın amacı, rekabetin türü ile insan davranışının kavramsallaştırılması arasındaki yakın ilişkiyi neoklasik ve Schumpeterci rekabet teorilerini dikkate alarak incelemektir. Bu amaçla, bir yandan statik rekabet ve metodolojik bireycilik, diğer yandan ise, dinamik rekabet ve kurumsal bireycilik arasındaki bağlantılar tartışılmaktadır. Tam rekabetin statik analizine paralel olarak, neoklasik yaklaşım, metodolojik bireyciliği benimserken, Schumpeter insan davranışını kurumsal bireycilik çerçevesinde inceler ve dinamik rekabeti benimser. Bu çalışma, neoklasik yaklaşımın tam rekabet analizinin, kapitalizmin çok önemli özelliklerini dikkate almadığını ve insan davranışını kavramsallaştırmasının gerçek dünya olaylarını açıklamakta yetersiz kaldığını ve sosyal, tarihsel ve iktisadi gerçekliği birbirine bağlayamadığını göstermektedir. En önemlisi, neoklasik yaklaşımda, gerçek eğilim ve güdüleri ile insan analizde yer almamaktadır. İktisadi gerçeklik toplumdan, tarihten ve sosyal bireyden bağımsız olarak analiz edilemeyeceği için Schumpeter'in kurumsal bireyciliği daha zengin bir analitik çerçeve sağlamaktadır. Bildiğimiz kadarıyla, bu çalışmada rekabet ve insan davranışı arasında kurulan bu ilişki yeni bir yaklaşım ve katkıdır.

Project Number

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References

  • AGASSI, J. (1960). “Methodological individualism”. The British Journal of Sociology, 11(3): 244-270.
  • AKYÜZ, Y. (1977). Sermaye bölüşüm büyüme. Ankara Üniversitesi Basımevi.
  • ANDY, D. (2015). Schumpeter and the Roots of Methodological Individualism SSRN: https://ssrn.com/abstract=2613477 or http://dx.doi.org/10.2139/ssrn.2613477
  • BAS-DINAR, G., & GULER-AYDIN, D. (2010). “Why institutional economics is a better alternative to the neoclassical economics than the new institutional economics?”. International Journal of Economic Research, 7(2): 277-288.
  • CHIPMAN, J. S. (1971). The nature and the meaning of equilibrium in economic theory. H. Townsend (Ed.), Price theory, Penguin Books (41-271).
  • DURKHEIM, E. (1982). The rules of sociological method. Translated by W. D. Halls. The Free Press, New York.
  • EATWELL, J. (1982). “Competition”. I. Bradley and M. Howard (Eds.), Classical and Marxian political economy, Macmillan (203-228).
  • ERTÜRK, K. (1996). “On the Keynesian notion of equilibrium”. Cambridge Journal of Economics, 20: 371-386.
  • FAGERBERG, J. (2003). “Schumpeter and revival of evolutionary economics: An appraisal of the literature”. Journal of Evolutionary Economics, 13(2): 125-159. https://doi.org/10.1007/s00191-003-0144-1.
  • FESTRE, A., & GARROUSTE, P. (2008). “Rationality, behavior, institutional, and economic change in Schumpeter”. Journal of Economic Methodology, 15(4): 365-390. https://doi.org/10.1080/13501780802507222.
  • FORTMAN, B. G. (1966). The theory of competition policy. North Holland Publishing Company.
  • GULER-AYDIN, D., & OZER-IMER, I. (2019). “At the Crossroads of History and Theory: Weber, Schumpeter and Economic Sociology”. Panoeconomicus, 66(4): 465-485.
  • HODGSON, G. M. (1998). “The approach of institutional economics”. Journal of Economic Literature, 36(1): 166-192.
  • HODGSON, G. M. (2007). “Meanings of methodological individualism”. Journal of Economic Methodology, 14(2): 211-226. https://doi.org/10.1080/13501780701394094.
  • HOLLIS, M., & NELL, E.J. (2007). Rational economic man: A Philosophical Critique of Neo-Classical Economics. Cambridge University Press, Cambridge.
  • HOWELLS, J. (2003). “Technological competition, creative destruction and the competitive process”. Working Papers from Aarhus School of Business, 4, 1-23.
  • HUNT, E. K. (1992). History of economic thought: A critical perspective. Harper Collins Publisher.
  • KALDOR, N. (1972). “The irrelevance of equilibrium economics”. Economic Journal, 82(328): 1237-55.
  • KIRDINA, S. (2015). “Methodological individualism and methodological institutionalism for interdisciplinary research”. Montenegrin Journal of Economics, 11(1): 53-67.
  • MCNULTY, P. J. (1967). “A Note on the history of perfect competition”. The Journal of Political Economy, 75(4): 395-399. https://doi.org/10.1086/259295.
  • O’DENNEL, L.A. (1973). “Rationalism, capitalism and the entrepreneur: The views of Veblen and Schumpeter”. History of Political Economy, 5(1): 199-214. https://doi.org/10.1215/00182702-5-1-199.
  • OZER-IMER, I., & GULER-AYDIN, D. (2020). “The political economy of the market,” I. Akansel (ed.), in Comparative Approaches to Old and New Institutional Economics, 57-69 USA: IGI Global.
  • PAPAGEORGIOU, T., & MICHAELIDES, P. G. (2016). “Joseph Schumpeter and Thorstein Veblen on technological determinism, individualism and institutions”. The European Journal of the History of Economic Thought, 23(1), 1-30.
  • SAMUELS, W. J. (1995). “The present state of institutional economics”. Cambridge Journal of Economics, 19(4): 569-590.
  • SCHUMPETER, J. A. (1908). “Der methodologische Individualismus (Methodological individualism)” in Das wesen und der hauptinhalt der theoretischen nationalökonomie (The essence and principal content of theoretical economics). J.A. Schumpeter. München und Leipzig: Duncker und Humblot.
  • SCHUMPETER, J. A. (1909). “On the concept of social value”. The Quarterly Journal of Economics, 23(2): 213-232.
  • SCHUMPETER, J. A. (1926). The theory of economic development. Harvard University Press.
  • SCHUMPETER, J. A. (1943). Capitalism, socialism and democracy. George Allen and Unwin Ltd.
  • SCHUMPETER, J. A. (1954). History of economic analysis. Oxford University Press. https://doi.org/10.4324/9780203983911.
  • SCHUMPETER, J. A. (1989). “The instability of capitalism”. R. V. Clemence (Ed.), Essays on entrepreneurs, innovations, business cycles, and the evolution of capitalism, Transaction Publishers (47-72).
  • SCHUMPETER, J. A. (2005). “Development”. Journal of Economic Literature, 43(1): 108-120.
  • WALRAS, L. (1954[1877]). Elements of pure economics. Translated by Jaffe, W. Allen and Unwin, London.
There are 32 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Makaleler
Authors

İtır İmer 0000-0002-7779-1440

Derya Güler Aydın 0000-0001-5110-7578

Yıldız Sağlam Çeliköz 0000-0003-3791-2524

Project Number -
Publication Date May 31, 2023
Acceptance Date March 8, 2023
Published in Issue Year 2023 Volume: 7 Issue: 2

Cite

APA İmer, İ., Güler Aydın, D., & Sağlam Çeliköz, Y. (2023). An Analysis on Neoclassical and Schumpeterian Approaches: Competition and Human Behavior. Alanya Akademik Bakış, 7(2), 599-612. https://doi.org/10.29023/alanyaakademik.999285