Talcott Parsons
Neoclassical economics vs. institutionalists

In the discussion between neoclassical economics and the institutionalists, which was one of the conflicts that prevailed within the field of economics in the 1920s and early 1930s, Parsons attempted to walk a very fine line. He was very critical about neoclassical theory, an attitude he maintained throughout his life and that is reflected in his critique of Milton Friedman and Gary Becker. He was opposed to the utilitarian bias within the neoclassical approach and could not embrace them fully. However, he agreed partly on their theoretical and methodological style of approach, which should be distinguished from its substance. He was thus unable to accept the institutionalist solution. In a 1975 interview, Parsons recalled a conversation with Schumpeter on the institutionalist methodological position: "An economist like Schumpeter, by contrast, would absolutely have none of that. I remember talking to him about the problem and.. I think Schumpeter was right. If economics had gone that way it would have had to become a primarily empirical discipline, largely descriptive, and without theoretical focus. That's the way the 'institutionalists' went, and of course Mitchell was affiliated with that movement."
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