The Hegelian Dialectic and Evolutionary Economic Change

The Hegelian dialectic of thesis-antithesis-synthesis can provide a perspicacious framework for analyzing the evolutionary process of economic change as envisaged in many theories of growth and development from David Hume and David Ricardo to Joseph Schumpeter. An evolution of economic structure is a perpetual sequence of change with constant contradictions, self-transformation, and self-organization. The same dialectic is applied to the “flying-geese” paradigm of industrial upgrading (an emended version of Akamatsu’s original model) that explains Japan’s postwar process of structural transformation and upgrading, a process full of contradictory developments and incessant adjustments occurring at both the market (unconscious coordination) and the policy (conscious coordination) level.