ABSTRACT
Neo-economics has to be understood as an evolutionary economic program to fulfil the greater vision of the Schumpeterian economic system. Schumpeterian economics is about the driving forces for economic growth — or more exactly — the driving forces for economic change. Change and development is something different from growth at a deeper perspective, change lies on a lower systematic layer than growth; it needs change for growth, but growth is not needed for change. This is a very crucial point in Schumpeterian analysis, because innovation primarily induces change and development. In orthodox economic terms change is induced via an exogenous shock, changing the equilibrium state of the economy. It is exactly this process that carries the dynamics of an economy in heterodox terms. The Schumpeterian economic system exhibits a progressive analysis of what may change and how it may change; it is about innovation dynamics leading to disequilibria. Orthodox economic theory is inappropriate to describe and explain these specific dynamics.
As we stressed in Chapter 2, analysis of Schumpeterian competition has proved a difficult task using orthodox theoretical premises. … Although these models [models with orthodox premises of profit maximization and equilibrium] have yielded some illuminating insights, they ignore essential aspects of Schumpeterian competition — the fact that there are winners and losers and that the process is one of continuing disequilibrium. An evolutionary analysis seems required if the model is to recognize those facts.
(Nelson and Winter 1982, p. 276)