History of Economic Analysis

Schumpeter argues that all analytic effort in economics is preceded by a 'preanalytic cognitive act' that he calls Vision. This Vision supplies the raw material—the conceptualization of phenomena—that analysis then refines and tests. The history of economics is therefore the history of successive visions, from Plato and Aristotle through Adam Smith, Marx, and Keynes, each generating analytic work that gradually strips away ideological contamination. Schumpeter sees the discipline's progress as the ongoing effort to eliminate ideological delusions from what he calls the 'analytic core' .

Schumpeter introduced the distinction between 'economic analysis' and 'economic thought.' For Schumpeter, the proper subject of the history of economics is analytic techniques—the tools economists use to reason about economic phenomena—not popular ideas about wealth or policy. He also formalized the concept of 'Vision' as the preanalytic cognitive act that precedes all analysis. This framework, alongside his division of economics into history, statistics, theory, and economic sociology, shaped how later historians of economic thought approached the discipline's past .

Schumpeter was working on the manuscript at the time of his death in 1950. His wife, Elizabeth Boody Schumpeter, edited it from manuscript and saw it through publication in 1954 . Despite being incomplete, the book's scope is unprecedented: it covers economic analysis from ancient Greece to the end of World War II, integrating history, philosophy, sociology, and psychology . As one reviewer put it, 'we read Ricardo to learn from Ricardo, we read Schumpeter on Ricardo to learn from Schumpeter'—the book's value lies in Schumpeter's own distinctive perspective as much as in the historical facts it presents .

Schumpeter's History is distinguished by its exclusive focus on 'analysis' rather than 'thought.' He deliberately excludes popular economic ideas, policy proposals, and the economic philosophies of non-economists, concentrating instead on the techniques and tools economists develop to reason about economic phenomena . He also refused to treat the history of economics as a simple record of errors and achievements, arguing that even economists with strong philosophical views—Locke, Hume, Marx—were not influenced by them when doing their analytic work. This austere, technique-focused approach makes the book unlike standard histories of economic ideas.

The most common misconception is that Schumpeter claims economists' philosophical opinions directly shape their economic analysis. In fact, he explicitly argues the opposite: 'Economic analysis has not been shaped at any time by the philosophical opinions that economists happened to have' . He acknowledges that Vision—the preanalytic cognitive act—is ideologically laden, but insists that the analytic work itself operates independently of philosophy. The danger, for Schumpeter, is not philosophical influence but ideological contamination of Vision, which analysis must then work to eliminate.

Schumpeter felt that history, statistics, and theory did not sufficiently complement each other, so he added economic sociology as a fourth field. Economic analysis asks how people behave and what effects they produce; economic sociology asks how they came to behave as they do, including the social institutions relevant to economic behavior such as government, property, inheritance, and contract . Schumpeter's own articles on imperialism and social classes, as well as Capitalism, Socialism and Democracy, fall within this field. History of Economic Analysis gave economic sociology its methodological grounding as a necessary complement to analytic work.