The novel metabolic framework of social analysis that we are outlining here allows

the assessment of the capitalist mode of production not from the theoretically
meaningless viewpoint of economic science which, as we have demonstrated, is
an absurdity but from a materialist and immanentist standpoint which is conscious
of its political foundations without, in its turn, reducing the Political to its humanist
and phenomenological that is to say, to its transcendentalist distortion. Because
chumpeter shares the atomicism or methodological individualism of !eoclassical
Political "conomy which seeks to determine welfare purely in terms of individual
contributions, then it is obvious that he must cling desperately to the e#uilibrium
model to maintain theoretical what he calls scienti$c consistency for his
economic analysis. chumpeter fails to see, however, that the very fact that we
have an option as to whether we choose the atomistic or the organicist framework
of politico%economic analysis can mean only one thing& % and that is that the choice
of theoretical frame%work can only be ethico-political and never scienti$c in an
absolute or ob'ective sense(

This is a point that Max Weber perceived and examined far more acutely and assiduously than Schumpeter
ever did. But Weber committed the mistake of believing that once a goal Zweck! "as selected according
to a value Wert!# then the means of achieving that goal Zweck-rationalitat! could be prescribed and
determined scientifically. This then became the basis of the science of choice that $ayek and %obbins
theori&ed for 'olitical (conomy. What none of these theoreticians perceived is that the very selection of the
means for achieving a goal is also an ethico)political *uestion + and this is a reali&ation that *uite clearly
undermines the entire notion of scientific rationality. The end does not ,ustify the means. -f. .eo
Strauss/s biting criti*ue of Weber in Natural Right and History.!

The aim of the above elucidation is simply to illustrate the absurdity on the part of
chumpeter of adopting the methodological individualism of the )ustrian chool
that is, the approach whereby all social concepts must be derived from individual
actions in pursuit of sub'ective individual interests in the conte*t of his proposed
dynamisch analysis of capitalist economic Entwicklung. The untenability the
absurdity of this theoretical position becomes starkly evident once chumpeter
endeavours to shift +and this is a mark of his intellectual honesty, his analytical
frame%work from the Statik to the Dynamik. -et us see how.

.n the previous sections we established what is the main thrust of our thesis to this
point, namely, that chumpeter is #uite aware of the conceptual inconsistency
of the distinct processes of Statik and Dynamik, but he must continue with
his theory of Entwicklung as if they could be combined, as if they were
distinct processes of a single mechanism or process of economic
change+Veranderungsmechanismus, because otherwise, without the
assistance of Statik analysis, he could not present the Dynamik as a pure
economic theory of economic change as a conse#uence of the
indeterminateness of pricing. )s the following e*tract shows, despite being
aware that the logico%mathematical framework of e#uilibrium analysis is
wholly inapplicable to his Dynamik, from beginning to end chumpeter always
held fast to the centrality of the problem of equilibrium. as the foundation
to the claim of economics to be a science, for the almost e*clusive reason
that it is the only means of lending e*actitude to economic analysis&

0ast m1chte ich sagen# dass die konkreten %esultate f2r meinen 3"eck von nur sekund4rer Bedeutung sind.
5edenfalls strebe ich# "ie gesagt# nicht systematische 6ollst4ndigkeit an. 7ur eine verh4ltnism48ig kleine
3ahl von grundlegenden S4t&en soll vorgef2hrt "erden. 9m 3entrum steht das Gleichgewichtsproblem#
dessen Bedeutung vom Standpunkte praktischer :n"endungen der Theorie nur gering# das aber
fundamental fr die Wissenschaft ist. 9n ;eutschland ist ihm nicht hinl4ngliche Beachtung geschenkt
"orden und es ist von Wichtigkeit hervor&uheben# da8 es die Basis unseres exakten Systemes ist. ;ie
Tausch)# 'reis)und <eldtheorie und deren "ichtigste :n"endung# die eakte !erteilungstheorie# basieren
darauf und ihnen ist der gr18te Teil der folgenden :usf2hrungen ge"idmet. ;iese ;inge bilden ,enen Teil
der =ational1konomie# der f2r eakte Behandlung reif und dem eine solche bisher &uteil ge"orden ist.
Meine ;arstellung beruht auf der fundamentalen Scheidung &"ischen >Statik? und >;ynamik? der
6olks"irtschaft# ein 'unkt# dessen Bedeutung nicht genug betont "erden kann. "ie #ethoden der reinen
$konomie reichen %orl&ufig nur fr die erstere aus' und nur fr die erstere gelten ihre wichtigsten
Resultate( "ie )"ynamik* ist in +eder Be,iehung etwas %on der )-tatik* %.llig %erschiedenes' methodisch
ebenso wie inhaltlich( <e"i8 ist ,ene Scheidung nicht neu. "as Wesen# 6or"ort.!

The methods of pure economics, claims chumpeter, apply most fully and yield their
best and most important results only for Statik analysis/ they are separate in
nature and content from those of Dynamik analysis. !evertheless, he does
not see the necessity of discarding the pure laws of economics on what
would be the very valid and incontrovertible ground that if such laws are in
con0ict with the theoretical necessity for any valid economic theory to be able
to comprehend economic change, then those pure laws of economics
must be completely spurious( .nstead, chumpeter is #uite happy to go along
with the pretence that Statik and Dynamik can co%e*ist.

1e will e*amine closely the methodological and ultimately political reasons or
pre'udices, if you like behind chumpeter2s atavistic attachment to
1alrasian e#uilibrium in a later section. 3et we may claim to have
demonstrated already why in reality economics can be said to be scienti$c
only to the etent that it acknowledges its ethico-political origins because
otherwise it degenerates into the logico%mathematical tautology of 1alrasian
e#uilibrium or else, in the case in which the ethico-political element becomes
absolute and millenarian, into a prophetic teleology or, to be more precise,
either into a conceptual hypostasis or else into an eschatology. To repeat&
despite the fact that chumpeter clearly perceives by this stage of his analysis
the untenable status of the conceptual elements he has adopted most
importantly, the conceptual inconsistency of Statik and Dynamik %, he is
nevertheless unwilling to 'ettison the deterministic framework of neoclassical
e#uilibrium theory. 4onversely put, despite his staunch reluctance to
acknowledge his departure from the scienti$c logico%mathematical
mechanical paradigm of !eoclassical and 1alrasian e#uilibrium analysis, what
chumpeter has clearly introduced with his Dynamik is precisely this ethico-
political dimension in economic theory that e5ectively transforms +to invert
-enin2s most incorrect dictum, economics into a speci$c concentrate of
politics. But we ought to point out at this 'uncture that by politics we do not
mean a wholly ideological or purely ethical sphere. "conomics is a
concentrate of politics only if by economics we mean the theory of social
relations of production. But the actual real relations of production are
political also in a physio%logical, and not 'ust an ideo%logical, sense.

The crucial point that was absolutely essential to chumpeter2s reasoning behind the
need for a Dynamik to correct the unreality of the Statik was that the latter
arti$cially separated the economic system as a collection of atomistic
individuals co%ordinated e*ternally like inert bodies under the laws of
mechanics from other spheres of social life. Therefore, the Statik treated the
economic system as an independent totality, as a closed system, with its
own mechanical or scienti$c logico%mathematical operation. Parado*ically,
by seeking to demonstrate that the sphere of pure economic theory can also
produce endogenously innovations that have far%reaching conse#uences for
other spheres of social life principally science and technology %, chumpeter
was already pointing to the fact that this separation of the social process
was entirely arti$cial and that, as he himself comprehensively put it, the
social process is really one indivisible whole.

3et in this formulation lay hidden a fallacy that chumpeter most certainly
committed. 1hat chumpeter meant to do with the Dynamik was to theori6e
an economic system that could mutate from within, through the
innovative decisions and actions of true economic agents. 3et we have
shown that his theory of economic development refers to economic agents as
atomistic individuals operating within an economic system that is seen as a
totality, that is, without reference to the physical environment with which
this presumed system or totality must metaboli6e and therefore cannot
remain as a closed system or totality( 7uite evidently, chumpeter
neglected this essential fact though admittedly a di8cult one to theori6e % in
his transition from Statik to Dynamik& to the e*tent that the members of a
living organic community can in0uence or mutate its metabolic interaction
with its physical environment, to that e*tent the decisions and actions of the
members of such a living organism cannot be theori6ed as individual
decisions and actions that can be measured by any scienti$c or
ob'ective absolute standard as if such a living organism could be analy6ed
or theori6ed as a closed system or in its totality.


chumpeter2s Dynamik, as we have shown, can be theorised only in an organicist
framework and not in an atomistic one because there can be no Dynamik,
no mutation or evolution, no meta-morphosis, in an economic system whose
science can determine only relative values between its individual
components. Evolution in the chumpeterian sense of Entwicklung can be
understood and have meaning only from the standpoint of a living organic
community for the simple reason that the mutation of the economic system
can be 'udged as such as a mutation, as a meta%morphosis only with
regard to a pro-ductive frame of reference only as meta-bolism and not
as a system or a totality whose internal values and prices can be
determined ob'ectively +in an absolute scienti$c sense, % not as stasis, as
is the case for e#uilibrium theory and indeed also for 4lassical Political
"conomy. The organic community can be trans%formed from within by its
economic agents, but this trans-formation can be com-prehended only with
regard to pro-duction, that is, only with regard to how this living organism
metaboli!es with its physical environment of which it is an unseverable and
indissoluble part.

This is a realisation of the highest importance for social theory and for our
critique of bourgeois economic theory, - and the reason why we are
insisting on this point to lengths that may seem extreme to some. In
the specifc case concerning Schumpeters Theory of Economic
Development, this point is absolutely ital because it constitutes the
central and fatal plan! of our critique of his entire theoretical
framewor!. "hat we are saying here is that economic relations
cannot be regarded as pure relations of #exchange between
indiiduals$ % whether this be exchange of goods, of plans, or of
ideas -, but are and must be theorised as social relations of pro-
duction. They must include the immanently physio-logical reality of
human liing actiity.

"hat this means is that what is most important in social life is not so much
how #the product$ is distributed between indiiduals and classes. &y
far more important instead is precisely what is produced and how it
is produced' (uman reality must be theorised by ta!ing into account
not merely the #inter-personal$ or psychological relations between
indiiduals or classes, but aboe all by considering how human
beings satisfy and produce their needs by interacting metabolically
with their enironment. The question of #physis$, )what (eidegger
called #the question of the thing$ % die Frage nach dem Ding* is ital
to a truly reolutionary praxis because the critique of capitalism
must inest more than +ust the #unequal distribution of the product$,
it must be concerned above all with what the product is and how it is
produced!

-nce again, this is so because human being ta!en phylogenetically cannot
be #separated$ from its physical enironment. (uman praxis must
not be #reifed$ into #sub+ectie$ concepts that hypostatise it into
hieroglyphic #alues$, it must be regarded as #liing actiity$.
"ithout the essential #metabolic interaction$ of human beings not
+ust with one another but with their physical enironment economic
relations would boil down to mere exchange, to mere inter-personal
relations that concern psychology and ethics rather than the
production and satisfaction of human needs. "e would be bound to
the sphere of the .antian Sollen )/-ught* which is antinomically
separated from the sphere of the Sein )/Is* precisely because human
being is regarded contemplatiely, philosophisch - transcendentally
rather than immanently. This is the interpretatie !ey to our
immanentist approach to social theory and praxis as against the
transcendentalism of bourgeois economic theory.

+-ucio 4olletti, in .deologia e ocieta2 at p.9:, remarks on how ;ar*2s ability to
combine economic facts and theory in one indissolubly uni$ed in#uiry
something that attracted chumpeter2s greatest admiration was due
precisely to this strict connection in ;ar*ian economic theory between the
interpersonal human side and the relation of human beings as a species to
their physical environment, in such a way that economics is never seen as a
#uestion of mere e*change but is indeed treated as a theorisation of the
satisfaction of physiological human needs in which pro%duction not
e*change( is the most important aspect. Bourgeois economic theory,
4lassical and !eoclassical, must do away with the sphere of production for the
simple reason that economics is seen as a neutral science, one in which
the only possible facts that can interfere with its laws are political and
can a5ect only the distribution of goods, not the making of pro%ducts. )nd
that is why, as chumpeter genially observes <in 4apitalism, ocialism and
=emocracy> orthodo* economic theory can abstract from economic facts
and concentrate on pure economic laws( The process of production,
therefore, is seen as technology that is, as a neutral scienti$c process,
and not as the very embodiment of political antagonism over the production
and satisfaction of human needs. ?ur ne*t section will be devoted entirely to
these theoretical matters that arise from this realisation the endogeneity of
the methods of production to the capitalist economic system that
provoked chumpeter2s shift from tatik to =ynamik.,

)s we are about to demonstrate, chumpeter2s conception of the "nnovationspro!ess
as the transformation mechanism of the capitalist economy is entirely one%
sided because, for one, it attributes the transformation of the capitalist
economy to the innovative or creatively destructive initiative and
"ndividualitat the pirit( of the "nterpreneur and leaves to one side the
political antagonism that induces capitalist innovation and is contained by and
in it( )nd for another because once we accept that capitalism amounts to a
process of creative destruction due to the innovative or creative
individuality of entrepreneurs, then there is simply no way how this
oppressive economic system can ever be destroyed % creatively or not(
and be replaced with a superior system of production and satisfaction of
human needs.


1ithin these premises, because chumpeter treats the organic community as a
totality that can evolve endogenously but then fails to consider its metabolic
change, he ends up with a framework of economic analysis in which there is
con0ict between the individual components of the economic system but there
can be no resolution or supersession of this con0ict. There is a pendulum
in and out of e#uilibrium, but no dialectical spiral( .n chumpeter2s Entwurf,
there is con0ict and opposition between the individual members of the organic
community and this con0ict drives the economic system out of its stasis
and on to a new e#uilibrium. But there is no supersession of this pendular
movement between the static poles of e#uilibrium and evolution,
competition and adaptation, Statik and Dynamik, innovation and conservation,
entrepreneur and capitalist, pro$t and interest. The con0ict is never capable of
resolution, it can never be overcome because economic activity is de$ned
as an ineluctable psychological con0ict pitting atomistic individual against
atomistic individual and oscillating between the polar opposites. 4learly, here
it is not the facts that inform the theory but the theory that 'ams the facts
into the strait'ackets of antithetical concepts. )nd therefore chumpeter2s
economic system or social process can never be e*amined as a living
organic community/ it can never escape the gravitational centre of static
e#uilibrium which then sets the asymptotic limits of the theoretical analysis.
"#uilibrium becomes a negative utopia that can never be allowed to be
reached on pain of bringing society to a complete standstill, to total paralysis,
to stasis/ and yet it is a necessary tool of analysis for the ideological
trans$guration of the bestial reality of capitalist e*ploitation into an
empyrean of pure competition and welfare ma*imisation or Pareto
optimality.