ITis significant that Joseph Schumpeter entered our field in the year I906 with a study on mathematical methods in theoretical economics.' This, his very first work, contains the points from which his own original research took its departure. Reading it today, one gains not only an impression of its author's comprehensive familiarity with the literature on mathematical economics that had by then been published, but of the influence which the study of these works exerted on young Schumpeter. Reared in the atmosphere of the Vienna School, he was attracted far more by the views of such as Cournot, Jevons, Edgeworth, Marshall, and above all Leon Walras. What Walras meant to him is seen plainly from the obituary for the founder of the Lausanne School which he published four years later in the same journal. When look back today on the life of this scholar, he wrote, we are struck by the simple grandeur that lies in uncompromising devotion to a single task. The impression is as of a natural phenomenon, powerful, self-evident, of foreordained necessity. The study of problems in pure economics -such was the content of that career, to the exclusion of all else. Schumpeter was really describing his own scientific ideal, one to which he clung to the end of his life. Walras was his great model, the man whom he held in higher esteem than any other. He once told me that whoever failed to study and understand Walras was unlikely ever to become a good economist. And, indeed, his first great work, which attracted world-wide attention to him at the age of only twenty-five, came into being against a background of Walrasian thinking. His Das Wesen und Hauptinhalt der theoretischen Nationalokonomie (Nature and Main Content of Theoretical Economics, Leipzig, I908) breathes the spirit of Lausanne rather than Vienna. The book, written in the brilliant style peculiar to Schumpeter, is at once a program and a profession of faith. I hold aloof from practical politics and recognize no purpose other than knowledge. ... We seek to understand rather than to engage in polemics, to learn rather than to criticize, to work out the elements of truth in every theorem rather than simply to accept or reject (Preface, pp. vi, vii). The work is essentially a study in methodology and epistemology. One looks to it in vain for a systematic presentation of theory. It seeks, rather, to set forth the principles that should, in the author's view, govern the pursuit of theoretical economics as such. Solutions of concrete problems are presented only by way of example and in illustration of his methodological reasoning. The book, nevertheless, touches on all the central problems of theory, and foreshadows the approaches toward their solution which Schumpeter elaborated in his later works. Even this first outline contains nearly all the thoughts that only later came to full maturity. The concepts of statics and dynamics, the imputation problem, questions of price theory, the distribution theory, the principles of the theory of money, the method of variations, interest as a phenomenon in economic development -all these are found in this work. To be sure, much of what Schumpeter then had to say on these questions e.g., the definition of static and dynamic economies appears in a different light today and was viewed differently even by him later on. He still held at the time that the phenomenon of economic development was not susceptible to the same kind of exact treatment as the problem of static equilibrium, and in this respect the latest elaboration of dynamic theory has not upheld him. Nor has his thesis of the nonexistence of interest in a stationary economy proved tenable. But that is not what matters. The value of the book must be judged by the message it brought to its contemporaries at the time it was published. In a period that paid little heed to exact theory, 'The editor is indebted to Heinz Norden for translating this essay from the German. 2 Zeitschrift fur Volkswirtschaft, Sozialpolitik und Verwaltung, Volume I5 (I906), pp. 30-49.
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