Epistemological and ontological indeterminism: Hayek and Schumpeter

The aim of this article is to compare and contrast the ideas of Friedrich von Hayek and Joseph Alois Schumpeter, who both adopted an indeterminist approach in their economic analyses, through a discussion of their relative strengths and weaknesses. The analysis makes extensive references the ideas of Karl Popper and Roy Bhaskar because of their profound impact on philosophical as well as economic thought. The article examines the indeterminism that marks the theories of Hayek and Schumpeter from an ontological and epistemological standpoint. More specifically, it addresses Popper and Hayek on the side of epistemological indeterminism as they theorized indeterminacy on the basis of the uncertainty of the future, and temporality in general, as well as the ever-changing and always incomplete nature of knowledge, whereas it analyzes Bhaskar and Schumpeter as ontological indeterminists who saw indeterminacy as resulting from the nature of economic and social systems. The article?s conclusion is that epistemological approaches to the study of indeterminacy are bound to remain within a static framework and that an ontological reasoning is needed for a transition to a dynamic framework. In other words, the reasons lying behind discontinuity in economic systems can be found only within the inherent characteristics of those systems. Therefore, any economic analysis should start with a careful assessment of the social reality?s nature, because faulty assumptions about it will inevitably lead to disconnect between theory and practice.