Joseph Schumpeter’s definition of Economic Sociology

joseph-schumpeterIn his monumental History of Economic Analysis, Joseph Schumpeter identified four fundamental fields of economic analysis: economic history, statistics, economic theory and economic sociology. According to Schumpeter, mastery in these four fields is “what distinguishes the ‘scientific’ economist from all the other people who think, talk, and write about economic topics” (2006: 10). At the beginning of this prominent book, first published posthumously in 1954, Schumpeter briefly describes all these fields; we will however turn our intellectual attention to the section on economic sociology:

“Our three fundamental fields, economic history, statistics and statistical method, and economic theory, while essentially complementing each other, do not do so perfectly. […] It is easy to see that when we introduce the institution of private property or of free contracting or else a greater or smaller amount of government regulation, we are introducing social facts that are not simply economic history but are a sort of generalized or typified or stylized economic history. And this applies still more to the general forms of human behavior which we assume either in general or for certain social situations but not for others. […] Borrowing from German practice, we shall find it useful, therefore, to introduce a fourth fundamental field to complement the three others, although positive work in this field also leads us beyond mere economic analysis: the field that we shall call Economic Sociology (Wirtschaftssoziologie). To use a felicitous phrase: economic analysis deals with the questions how people behave at any time and what the economic effects are they produce by so behaving; economic sociology deals with the question how they came to behave as they do. If we define human behavior widely enough so that it includes not only actions and motives and propensities but also the social institutions that are relevant to economic behavior such as government, property inheritance, contract, and so on, that phrase really tells us all we need.” (Schumpeter 2006: 18-19)

Schumpeter, Joseph. 2006 [1954]. History of Economic AnalysisRoutledge.

See also: Emile Durkheim’s definition of Economic SociologyFriedrich Engels’ definition of Political Economy, and Keynes’ definition of an economist and economics

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  1. Which hopefully helps us to remember that ‘the market’ is made up of people, whose personal ‘choices’ are determined by personal, social, political and historical factors often well beyond their own understanding.

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