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Edited by Ulrich Hedtke (Berlin)

 

 

*  *  * *  *

 

 

Development*

 

 

Joseph A. Schumpeter

 

 

Festschrift offered to Emil Lederer in honour of his 50th birthday on 22 July, 1932.

 

So far unpublished.

 

 

Translated by

Markus C. Becker and Thorbjørn Knudsen**

 

11 October 2002

 

* The original text is in German and titled “Entwicklung”. It was uncovered by Hans Ulrich Eßlinger at its present archival location: SPE XMS Lederer, Box 1, 82.1. Lederer, Emil, Papers, German Intellectual Emigre Collection. M. E. Grenander Department of Special Collection and Archives, University Libraries, State University at Albany, State University of New York. The original text is available on www.schumpeter.info.

 

**Both located at the University of Southern Denmark, Department of Marketing, Campusvej 55, DK-5230 Odense M, Denmark. Emails mab@sam.sdu.dk and tok@sam.sdu.dk. We thank Meta Andrés for linguistic assistance and Ulrich Hedtke for comments. Thanks to CESPRI, Università L. Bocconi, and to the Zirpoli family for hosting one of us while working on this article. For the permission to publish the English translation of Entwicklung (as Development), we thank the Lederer, Emil, Papers, German Intellectual Emigre Collection. M. E. Grenander Department of Special Collection and Archives, University Libraries, State University at Albany, State University of New York.


 

A preliminary remark is in order to protect the following unpretentious considerations from obvious misunderstanding: Everything I will have to say is to be understood from the perspective of each particular science, and not in a philosophical sense – if not exclusively from the perspective of one particular empirical science, then, solely from the general perspective of working in the particular sciences. If what is said here, in any case, turns out to be of some interest, it is because it has emerged from an altogether concrete problem found in one particular science. It is further because the awareness that a formally analogous situation is found in all the other particular fields of science and the supposition that such a situation is rooted in the structure of our mental apparatus, were in neither case merely postulated, but emerged afterwards, and step by step.

 

The ambiguity of the unfortunate term "development" requires a second preliminary remark. With an associative power that might prove to us how little our thinking is different from primitive thinking, expressions such as development[1] or unfolding suggest the idea that some of what is developing has to remain identical, an idea that can readily be the source of prejudice and aberration. Furthermore, it is probably not superfluous to keep out of our way two other associations that are responsible for the scientific discredit of the term "development", especially within historical circles[2], but also outside those. These two associations can be characterised by the terms "faith in progress" and "evolutionism". "Faith in progress" entails stating and predicting changes that are valued positively and, precisely because of such valuation, it has no right of place in science. Why the rising stratum of industrial and commercial capitalists, in the light of a prospering ledger, has brought forth "faith in progress", why the contemporary anti-intellectual intellectuals reject it, and how long this will last, – also Dahlia wither – does not seem too difficult to understand or grasp from a sociological point of view. But it does not concern us. Because of its real or supposed alliance with all kinds of materialism, many disapprove of evolutionism, which, not fully correctly, is ascribed to the 19th century. Even if this fashion[3] has a logic to it, and we believe in this fashion-logic, we might have little reason, pro futuro, to protest against such an alliance. Nevertheless, we still have the other reason to protest, namely, that materialism is a metaphysic like any other and, therefore, is none of our business. Even more important is what makes researchers in each particular science, especially historians, ethnologists and biologists, oppose evolutionism: failures in the specific cases, bending, even disfiguring of facts in the service of evolutionism, careless crediting of confidence to series of individual characteristics that are built on shaky ground, but most of all, however, the fate awaiting any concept that conquers its time: to become the plaything of dilettantism and to be hypostatised to an agens that has to render the same service as the vis soporifica[4] of opium. Sufficient reason, also for us, to reject this term – no matter how many flibustiers[5] should be fighting on our side in the battle against it. The greatest success an instrument can have is to become a fetish. But then it is done for.

 

Strictly scientifically, of course, there could be three other perspectives on the question of development that we woulddo not want not to denounce, but merely distinguish from ours. Together with ours, these perspectives originate from the awareness that things come into existence, and from the experience that things change. This awareness and this experience have a different reach in different cultural circumstances, and even among different people. Nevertheless, the always repeated attempts – whose pragmatic nature will soon be at the centre of our attention – to include not only what is obviously existing and changing, but also uncreated and unchangeable railings in that which becomes trivialised with the word "Weltbild", bear witness to the fear of both, to the element of horror lurking behind even the most comforting historical narrativestory. Scientifically, one can first and foremost investigate the "process", i.e., the content of the changes that have occurred, or more precisely, the concrete characteristics of the historical time of distant circumstances, and the differences between these characteristics. Often, and predominantly in the social field, the attempt of solving such a task resonates with the motive of another, which logically lies beyond a deep divide, namely the task of identifying the concrete circumstances, in the most favourable case measurable quantities[6], of which it can be said, in one sense or another, that they have "caused" the change. This is what is widely called historical explanation, and which leads to a scientific and, in any case, non-metaphysical notion of the meaning of a particular change. Of course, to this we must add that any change has as many meanings as there are perspectives among all the particular sciences. Moving along in the direction of increasing abstraction, one finally arrives at, in this sense, "effective"[7] elements of such great span that, again and again, one is reassured and suffersexperiences the illusion that one would havehas causally explained coming into existence and change, an illusion that finds its most naive expression in most theories of history. Finally, the third perspective that belongs here does not bring anything new to the causal explanation. From the present standpoint, it is, so to say, forward-, rather than backward-looking, and can, therefore, apply the notion of a goal within a particular science and in a non-metaphysical way. Teleological points of view in a narrow sense will not be taken into consideration in more detail, or in any other sense, than they were in the second perspective on development[8].

 

From this I now abstract[9], and that is what matters here. Let us consider, for instance, the paintings of a particular cultural system that locally and historically is homogenous to a sufficient degree, say, the Florentine Ducento. We then face an "imprinted form"[10][11] whose inner logic can be recognized as a distinct whole and as remarkably stable. Florentine paintings of the Quattrocento also exhibit such an "imprinted" form – it would not at all be difficult to draw an average Madonna that could easily be identified by anyone – but it is a different form. If I want to refrain from any value-judgment regarding the change that has taken place and thus perceive change neither as progress nor as regress, or if I do not want to interpret change from the perspective of a line of development beyond the empirical realm that contains a transempirical meaning, and if I nevertheless want to leave the realm of the first of the perspectives mentioned above, then, almost inevitably, I operate along the lines of the second or third perspective. It is a commonplace, however, that in doing so, I discover that no list of identifiable environmental elements would suffices in order to uniquely determine how the change that took place actually happened. Rather, artistic creation – as most of us would probably say in such a case – and also other elements of the process, could have reacted differently than they actually did to the changes in the environmental elements. Of all that could be said on this topic, only one thing is of interest here:

The reason why precisely this kind of indeterminacy must be accepted is not found in the circumstance one would immediately reach for, namely, that artistic creation and its meaning belongs to a different world than the identifiable environmental elements. It is neither found in the circumstance that artistic creation would be incommensurable with these environmental elements, and it would thus be the peak of materialistic ignorance to infer  artistic contents from things such as changes in wealth or shifts in the social structure. It is further the case that we cannot be consoled by an, in the nature of the case, un-scientific belief in an objective and, nevertheless, omnipresent and necessary determination, which only avoids shuns revelation because ofdue to our poor understanding, nor is a working hypothesis of the same content permissible. Even if artistic creation belonged to a different world than the environmental elements and were also incommensurable with these – this would not impede us from establishing constant connections between elements of the social milieu and artistic contents, at least not if the forms and the norms of the latter would always remain the same. We could then interpret the changes that were still possible within these limits as adaptations to changes, for instance by perceiving the objective social facts and thereby inferring descriptive propositions of these adaptations, even if the relations themselves, and the way in which they are carried out, resist verstehende perception, and for this reason will always remain a secret. In doing so, we would not in any way find ourselves in a worse situation than the one we always find in the sphere of physical activity, where a verstehende perception is indeed impossible, which in no way hinders our linking of one class of changes with another class. As a matter of fact, this can of course be impossible in specific cases, but only the experiment can show whether it is impossible – for any particular science, no philosophical inquiry into the essence of matters could possibly decide this question. Now, what renders this attempt unavailing in our case is not only the nature of the subject matter – the way in which matters conform to laws in the Humanities, or the general unlawfulness of humanistic subject matters – but the appearance of the new interpretation, the appearance of the new technique, and the appearance of novelty as such. This changes the previously considered matter and substitutes it with another one that reacts in a different manner to changes in the data. In a different sense, it might still be possible to interpret this as an adaptation, not as a passive and determined adaptation, however. From the methodological standpoint of any adaptation-theory, novelty is incomprehensive, not only in the above usage but in every sense.[12] A designation, in our case "creator personality", merely provides a name, and at best a locality, for novelty, but nothing has been explained. Novelty is the true centre of everything that must be accepted as indeterminate in the most profound sense, and always coexists with a wide area of, in principle, determined circumstances and processes – a distinction to which I attach a certain importance because it appears to provide the essential solution to the opposition of determinism and indeterminism, as far as such a contradistinction makes sense in each particular science. Of course, this does not concern the many problems of determination that the technique of each science has to confront even in its "most determinate" fields such as for instance the case of the bilateral monopoly in economics etc. Neither does it concern the questions encompassing the concept of the Real object (Realobjekt)[13].

 

Note that regularly, changes of the environment nevertheless remain as causes or conditions, and no research of historical phenomenology can dispense with such environmental changes. Consider the case of novelty as such, however. For once, one would in this case make the attempt to abstract from trivial dependence, and consider novelty independent of the mentioned causes and conditions. It seems obvious to generate the "energy"[14] to accomplish this abstraction from the fact that environmental changes and changes in the data neither force new ways of perceiving and expressing oneself by way of painting – in our example –, nor are these changes, whenever they appear, uniquely determined. This is so, even if we do[15] know that environmental change is not a sufficient condition, but at the same time do not[16] know whether it is a necessary condition for the appearance of the new construction as such – certain environmental conditions are, of course, always necessary for the concrete contents of the new construction. If we further note that the change transmuting one imprinted form into another one must represent a crack, a jerk, a leap if the problem that I tried to identify should arise – that starting from the old one, the new form must not be reachable by adaptation in small steps – then we have impregnated the following questions with the right meaning: How does this come about? How come some people happen to paint in a different way than they learned to, and how is this carried through to other painters and the public? What is, on the one hand, the "energy", if one is permitted to say so, and on the other hand the "mechanism"[17] of this process, which does not require concrete external drivers of change, but through which contingent present factors must nevertheless operate? How, in detail, do people change their ways of thinking, and what is it that causes them to do so, how does novelty operate, what of it is perceived, and what reactions and vibrations does it trigger?

 

For each intellectual sphere, sciences, religion etc. that could be characterised by a group of persons, these questions could be posed. It seems to me that the answer to these questions offer a substantial part of what could be called the sociology of these spheres. But we are not concerned about the answers to these questions here, rather about the fundamental meaning of phenomena of this kind, which are first and foremost of fundamental similarity in all spheres of the social sciences. Like everywhere else and in no other sense than elsewhere, we find these phenomena in the economic sphere. But as usual, also in the present case, our vision is sharper in the economic sphere than elsewhere, because the economy is the most quantitative of all sciences. Of all[18] sciences, not just the social sciences, which would be taken for granted. Even if the processes described by mechanics can be measured and counted, but in fact have to be measured first, fundamental economic phenomena exist, first and foremost price, which already according to their very nature are numerical values[19] and only make any sense to the extent that they are numerical values and are related to similar phenomena in determined numerical relationships. One day, I hope to prove that number and value chiefly are of a genuinely economic nature and originate in the economic sphere, not only genetically – which is once more almost taken for granted – but also logically, and that the notion of equilibrium has been transferred from the economic sphere to the image of nature, and clearly not vice versa. This surely makes it much easier to define the economic expression of the – as I said before, everywhere identical – phenomenon considered here in an exact manner.

 

This quantitative character, not only of the science[20] of the economy, but of the economic fact itself, is precisely what, exactly in this field, has propelled the specifically scientific problem into the foreground and secured ample space for it, despite all the protestations from the scientific community resisting exact thinking. This scientific problem finds its purest expression in the Walrasian system of interdependent variables, notwithstanding the extent of the road that today separates us from the work of the greatest economist. Whatever the historical or imaginable economic state we actually face – to be realised only in a thought experiment – we actually face, the fundamental economic truth, which is primarily accessible to observation, can be formulated as follows: all observable variables seek to place themselves in a certain relation to each other, or in other words, they at all times react adaptively to changes in data. We interpret the changes in value from the perspective of such adaptation, and it is due to nothing but the precise framing of this principle, and ultimately the framing of the observation, when we construct the image of a state in which such[21] relationships were set forth so continuous adaptation would bere realised. We thus describe by identifying an idealised final result. It would be easy to show that, not only is this the correct way of deriving the fundamental economic theorems, but also the method that any economist, who is not engaged in economic sociology, does in fact use and has used, just to very different degrees of perfection. We would like to imagine all of the concrete relationships amongst the concrete data (at a historical point in time) that correspond to the Walrasian system as akin to a matrix, whose elements would have to be interpreted as the components of a vector. In what follows, we summarily refer to these components as the "norm"[22] of the economy.

 

Now, changes that occur can in principle be interpreted as reversible variations from the norm in question, or as irreversible changes of the norm itself. Among these reversible variations we can distinguish between virtual and real variations, a difference that has exactly the same methodological importance as in physics, precisely because it is a purely logical category with no particular internal relationship to any realm of facts at all, the sole exception being economics as the seedbed of all logic. Although it is only small reversible changes – and really, only small virtual reversible changes – that we control in a similar sovereign manner[23], we are not powerless in the face of any change of norms. The reason is that the mental procedure outlined above can without any problem be applied to all those changes of norms, which allow an interpretation of the changes of norms as adaptations of the economy to continuous changes in data, i.e. in practical terms, small[24] data changes at each time point. The historical time entering here instead of theoretical time endures treatment as if it were theoretical time. Countless examples of the possibility, necessity, and fruitfulness of this procedure could be given, from the times of the classical laws of motion of income, and onwards. Obviously, the point at which this procedure fails is where a leap-like change of the norm occurs. Where such a leap-like change of the norm follows a leap-like change in the data, we cannot say anything about what will happen in our subject area, except for some trivialities or vague conjectures. From the perspective of each particular science, however, we can consider ourselves excused – we will shortly see that from a more general standpoint the matter is not quite the same – which is why we now want to part with phenomena of this class. In the case of a jerky change of the norm that erupts spontaneously from the system itself, the same problem is much more serious. An example can best show what we have to think of in the economic sphere: Without further ado, a continuous increase in population and wealth explains an equally continuous improvement of roads and an increase of the mail coaches in circulation in a step-wise adapting manner. But add as many mail coachespost carriages as you pleasewish, never you will never get a railroad by so doinga railway emerge from them. This kind of "novelty" constitutes what we here understand as "development"[25], which can now be exactly defined as: transition from one norm of the economic system to another norm[26] in such a way that this transition cannot be decomposed into infinitesimal steps.[27] In other words: Steps between which there is no strictly continuous path. I have to admit that when I termed this notion "development" – I had not yet found this exact form of definition – I produced a similar mess as I did with the term "dynamics", which I originally used as synonym. This term was completely misplaced and has entailed misleading associations, and is by the way usefully connected to an altogether different set of problems in economics. Only recently, have I also become aware of the fact that precisely the kind of change defined above is often excluded from the notion of development and is indeed considered the abrupt termination of what many want to understand as development, i.e. change that in some sense or another is "lawlike" and predictable, essentially continuous, and within which each state becomes intelligible when it is based on the previous one. In this sense, I have heard the shortened Christ of Mantegna[28] to be considered a break of development precisely because it was so immensely novel (in the sense the term is used here). I mention this just to prevent misunderstandings. What is called development in the sense just mentioned, I usually call growth – which may, of course, also have a negative increment.

 

Our definition accomplishes the exact separation between what in our sphere is determinate or at least in principle can be determined, from the perspective of each particular science – and without taking any notice of such standpoints that might be the result of metaphysical attitudes – and what is indeterminate. As opposed to the separation in all other spheres of the social sciences, the separation in the economic sphere is distinguished only by its precision and by the possibility of numerical implementation when confronting the facts. It is however obvious that the separation in the economic sphere is of the same nature as those in the other spheres, and may therefore serve to illuminate the nature of the matter also for those spheres. Moreover, what can be done when facing a phenomenon delimited in such a way, is in qualitative terms everywhere the same, even if there are gradual differences regarding how much can be done, depending on the degree to which the individual spheres lend themselves to a precise framing. We can register the appearance of phenomena, which are covered by the notion of development in the sense defined here, we can observe and describe the jerks and leaps in detail, we can estimate their importance amongst the phenomena of each sphere and we can comprehend the effects and counter-effects they trigger not only descriptively, but also theoretically. We can do even more: We can, so to say, identify the entry points of novelty not only in the specific case, but also generally, and thus build a theory of the mechanism involved in carrying out changes of the norm. As a by-product, such a theory yields specific theories of phenomena that would otherwise be unintelligible. As a rule – and nowhere more than in the economic sphere – we can therefore also predict a great deal about the phenomena associated with development. Only in one instance is prediction impossible, – i.e. a uniquely determined understanding of a state characterised by a determined norm, or a uniquely determined understanding of a system based on the norm of the system[29] preceding it in time, even where such a norm be known with the utmost precision – namely, regarding the substance of the matter, the kind and intensity of the novelty itself that might be arriving. We can also express it in this way: States can be derived from one another only within the same norm, that is, if the respectively earlier state is a variation[30] from the image of an equilibrium representation of the norm of the equilibrium, and the following state appears to nothing but gravitate towards precisely this equilibrium. But within the scope of any particular science, one norm can never be derived from another[31], with the sole exception of what above was termed growth.

 

Hence follows the fundamental impossibility of extrapolating trends, which brings us back to focus our discussion on the economic case.  Of course, fitting the simplest possible functional form to a time series by way of the method of least squares or a similar method, does not mean anything but a report, in terms of an empirical curve, on events that have actually occurred in terms of an empirical curve. Today, it is more or less common knowledge that such a procedure is theoretically just about meaningless, even though in specific cases it might well serve a practical purpose. Clearly, the function to be fitted would have to articulate an economic theory, or at least would have to express the movement of a feature acknowledged as theoretically relevant – for instance, for the most general purpose, the rate of change of the national product. Presently we are, however, not interested in that[32][33], neither in the significance of the fact that in discrete points of historical time, the cross-section of the data points of all time series[34], possibly arranged in a suitable manner, have to be in the relationship described in the Walrasian system – two circumstances that in my opinion represent the major problem of today's theoretical economics. Rather, according to what has been saidtated above, our only interest is that a theory that would generate the formula for a trend is impossible[35] because of the nature of the matter, not simply because of the element of external interferences that from time to time topple our carriage. To the extent that we are engaged in economic theory at all, within any adaptive perspective, the most necessary component parts of the interdependencies are given to us, and we have to appeal to the statistical[36] facts only in order to acquire more precise knowledge about specific cases. In the analysis of trends, on the other hand, we require the knowledge of a concrete sequence even in order to say anything about that sequence – always under the precondition that we manage sufficiently well to statistically separate growth, interference, and development. What we can say about it is furthermore valid only for the period of observation, even where remarkable invariances do indeed become evident, as seems to be the case. Even if an analogous tenet to the relativity postulate is possibly valid also in our sphere, this does not give us any comfort about the decisive point.

 

To many, it will seem obvious to statesay that the "in-explicability"[37] of development sketched above might perhaps just be an effect of the imperfect mastering of the facts, and will disappear with its perfection. Such an interpretation musters apparent support fromby the fact that the better we master a state and the apprehensible factors of change, the sooner we develop an idea of things to come. It is just that you do not reach the essence of the matter in this way. Even if we might be able to sense to the utmost possible extent what will happen, in particular when we can sympathise with the actor, or reconstruct feelings, and can put ourselves into the shoes of an actor rationally and scientifically, the trias "indeterminacy, novelty, leap" remains unconquerable all the same. Would one, furthermore, from the standpoint of rational science want to remedy the situation by relegating to the external interferences that which causes the leap, one would have formally cleaned up one's own sphere, whatever that might be, from that which cannot be mastered. But the problem would be back again at the place where the element in question has been relegated to. This is the reason why we statedsaid that the right to appeal to changes in the data has its limits and ends exactly when we consider the social sciences as a whole, because in this case, such a procedure leads us into something of a circle.

 

Once it has been recognised why these two bearers of hope[38] are deceptive, you realise that previous insights are only dressed in new clothes when it is said that development is a problem, not simply of the facts, but of our mental apparatus and presents a difficulty not of empirical research but of logic. This circumstance can be demonstrated in any sphere you please,wish as in any sphere of the social sciences. The theory of descent is particularly close at hand. Whether it operates according to the Darwinian type, with adaptation – which in the wider sense also, of course, includes decay – or according to the Mendelian type, with mixtures of constant elements, it always fails when it comes to the inaccessibility and indeterminacy of novelty and of the leap, even the more so when such a theory of descent acknowledges the leap and gives a name to it, e.g. sport[39] or mutation. It is always logical[40] limits that it[41] runs into, or to put it differently, the fact that our logic is a logic of the adaptation process and can only deny or dismiss development. And precisely that[42] explains what remains unsatisfying about the matter, as can easily be seen. This is not any different in the sphere of physical events. In the individual case, it is exclusively the focus on partial analysis that misleads us in the way that adaptations to a fundamentally unchanged norm are all that we can observe in a scientific manner. Partial analysis where the in-escapability of ceteris paribus comes to stand out much clearer, as a life jacket that was resisted with a stupidity that was reserved for us economists. Neither is this[43] any different in everyday thinking. The infinitesimal-method, which excludes the leap, is just a rigorous expression of such everyday thinking. And so[44], most importantly, invariance, the basic mental instrument of humankind, becomes intelligible. Invariance represents the only essential attribute of God, while all others arise accidentally from very disparate sources. Any world formula (Weltformel) that boils down to setting a function with a large number of variables, about which not much is known, to zero is equally metaphysical, and fulfils just the same function. This is what Mach has done, unknowingly caricaturing himself. Apart from pointing to this example, we cannot make any clearer what we mean.

 

It has now become unnecessary to elaborate on the nature of the connection between (fundamental) indeterminacy, novelty and the jerk or leap. It is clear enough. In its most general contours, it apparently was already clear to Aristotle. Above, I have used the word "impossible"[45]. I think it is more correct to speak of a new task. This task obviously involves the logical and mathematical, but, at least if there is any truth in what has been said in the above statement, eventually economics[46], the source of all concepts.


End notes

 



[1] The German terms for "development" and "unfolding" are "Ent-wicklung" and "Ent-faltung". The meaning of these terms suggest a process of unfolding an entity, i.e., a process that preserves identity.

[2] The expression "historischer Kreis" could mean the Historical School, but in a somewhat downplayed way, i.e. without using the term. On the other hand, it could also mean, "with historians (and historically inclined researchers)". The term "Kreis" has been translated in the plural because this reflects both possibilities.

[3] Linking evolutionism to materialism.

[4] A "soporific" is "a drug or other substance that induces sleep; a hypnotic" (American Heritage Dictionary).

[5] A "flibustier" is a freebooter, a person "who pillages and plunders, especially a pirate" (American Heritage Dictionary).

[6] The original term "Grössen" could also have the meaning of "features", "values". At issue here is how much the term chosen points to "empty shell" (variable), vs. a concrete expression of that shell (value).

[7] JAS added quotation marks on the type-written manuscript by hand.

[8] The second perspective refers to causality.

[9] JAS wants to go beyond all the 3 different ways in which the problem of development has been conceived before.

[10] JAS added quotation marks on the type-written manuscript by hand.

[11] "Imprinted form" is a translation of "geprägte Form". Schumpeter’s choice of phrase is a reference, not only to an Aristotelian conception (of essence), but also to a famous expression in Goethe’s poem "Urworte". "Geprägte Form" refers to "the unchangeable element of human life, the old Adam as Goethe explained" (Gray, 1966, p. 181).

 

Daimon, Dämon

"Wie an dem Tag, der dich der Welt verliehen,
Die Sonne stand zum Grusse der Planeten,
Bist alsobald und fort und fort gediehen
Nach dem Gesetz, wonach du angetreten.
So musst du sein, dir kannst du nicht entfliehen,
So sagten schon Sibyllen, so Propheten;
Und keine Zeit und keine Macht zerstückelt
Geprägte Form, die lebend sich entwickelt.
" J.W. Goethe; Urworte, Orphisch.

 

See Gray (1966, pp. 179-181): "Poems of Goethe", Cambridge, Cambridge University Press. 

 

[12] The sense of intelligibility that JAS has used above and refers to here is "verstehende perception" (verstehende Erfassung). The point he makes is that even with a less demanding criterion of intelligibility than understanding, it does not make sense to interpret the new thing as an adaptation. This is the reason why the road to explaining the new thing by way of explaining (incremental) adaptation is barred. 

[13] We have interpreted the term "Realobjekt" as in opposition to "technique".

[14] JAS added quotation marks on the type-written manuscript by hand.

[15] Emphasis added.

[16] Emphasis added.

[17] JAS added quotation marks on the type-written manuscript by hand.

[18] JAS added underlining on the type-written manuscript by hand.

[19] Above, we argued that the original term "Grössen" could also have the meaning of "features", "values" and that at issue were how much the chosen term points to "empty shell" (variable), vs. a concrete expression of that shell (value). Here, the term "Zahlengrössen" seems to carry the second meaning.

[20] JAS added underlining on the type-written manuscript by hand.

[21] JAS added underlining on the type-written manuscript by hand.

[22] JAS added quotation marks on the type-written manuscript by hand.

[23] The comparison here is with physics.

[24] JAS added underlining on the type-written manuscript by hand.

[25] JAS added quotation marks on the type-written manuscript by hand.

[26] "Norm" added for more clarity. The German sentence is unambiguous that "another" refers to another norm.

[27] JAS added underlining on the type-written manuscript by hand.

[28] Andrea Mantegna (1430 - 1506). Italian painter and engraver who was a pioneer in the Renaissance style. The work Schumpeter refers to is The Dead Christ (tempera on canvas, 68x81) currently located at the museum Pinacoteca di Brera, Milan. The dating of the painting is debated, there are several assumptions ranging from the end of the Paduan period of the artist (c. 1457) to 1501. The most remarkable aspect of the painting is the perspective construction whereby the image of the Redeemer appears to "follow" the spectator around the room through the use of an illusionistic technique.

[29] "Norm of the system" is a redundant expression, as according to the exposition in this text, JAS understands norms always as norms of systems. The handwritten changes in the manuscript show that specifying "of the system" occupied him until he put the very last touch to the document. See endnote 43.

[30] Remember that as explained above, for JAS, variation is understood as variation within one norm, and is opposed to changes of the norm itself.

[31] JAS added underlining on the type-written manuscript by hand.

[32] JAS added underlining on the type-written manuscript by hand.

[33] "That" refers to the first of three points that JAS makes in this section: the limitations of fitting functions to empirical data, and the requirements that have to be fulfilled for that to make sense from a theoretical point of view. The second point is the requirement regarding the data, but JAS puts the emphasis on the third point – that a theory of extrapolating trends is impossible. This supports his notion of novelty as a crucial wedge in the theory of development, which enables the separation of growth, external interference and development.

[34] The uncorrected manuscript read "Ziffern aller Zeitreihen eines Systems". JAS deleted by hand "eines Systems"

[35] JAS added underlining on the type-written manuscript by hand.

[36] "Statistischen" inserted manually by JAS.

[37] JAS added quotation marks on the type-written manuscript by hand.

[38] The two "bearers of hope" are that it might become easier to explain development with more (knowledge of the) facts, and that the problem might be "solved" by relegating the causes of leaps to the environment.

[39] "Sport" is the actual term used by Schumpeter (…and Darwin).

[40] JAS added underlining on the type-written manuscript by hand.

[41] The theory of descent.

[42] Emphasis added.

[43] "This" refers to "that adaptations to a fundamentally unchanged norm are all that we can observe in a scientific manner".

[44] JAS refers here to recognizing that all we can do is investigate subsets, that is, always be bound by ceteris paribus.

[45] JAS added qoutation marks on the type-written manuscript by hand.

[46] JAS added "-slehre" to "Wirtschaft". This alters the meaning of the term from "economy" to "economics".

 

 

 

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