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Capitalism, Socialism and Democracy (1947) Paperback – September 14, 2010
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“The most influential economist of the 20th century.” (Peter Drucker, Fortune)
“The great economist Joseph Schumpeter highlighted the role of innovation in powering the rise of new industries, the creative destruction of existing ones, and the growth in prosperity of economies.” (Richard Florida, Atlantic)
“Schumpeter gave us stunning insights into how the world really works. We are now living, it is said, in the Age of Schumpeter. . . . Schumpeter was a powerful prophet, and he now offers dazzling insights into everything from the rise of Wal-Mart to prosperity’s discontents.” (Robert J. Samuelson, Newsweek)
“The greatest defense of capitalist, European civilization ever penned. . . . Schumpeter did more than anyone to persuade American leaders to preserve the capitalist system” (American Conservative)
“Schumpeter may well be the most important economist of the 21st century.” (J. Bradford DeLong, Chronicle of Higher Education)
“Schumpeter was the most farsighted of twentieth-century economists. His focus on capitalism and creative destruction made him the prophet of globalization.” (The Nation) --This text refers to an out of print or unavailable edition of this title.
Excerpt. © Reprinted by permission. All rights reserved.
Marx The Prophet
It was not by a slip that an analogy from the world of religion was I permitted to intrude into the title of this chapter. There is more than analogy. In one important sense, Marxism is a religion. To the believer it presents, first, a system of ultimate ends that embody the meaning of life and are absolute standards by which to judge events and actions; and, secondly, a guide to those ends which implies a plan of salvation and the indication of the evil from which mankind, or a chosen section of mankind, is to be saved. We may specify still further: Marxist socialism also belongs to that subgroup which promises paradise on this side of the grave. I believe that a formulation of these characteristics by an hierologist would give opportunities for classification and comment which might possibly lead much deeper into the sociological essence of Marxism than anything a mere economist can say.
The least important point about this is that it explains the success of Marxism. Purely scientific achievement, had it even been much more perfect than it was in the case of Marx, would never have won the immortality in the historical sense which is his. Nor would his arsenal of party slogans have done it. Part of his success, although a very minor part, is indeed attributable to the barrelful of white-hot phrases, of impassioned accusations and wrathful gesticulations, ready for use on any platform, that he put at the disposal of his flock. All that needs to be said about this aspect of the matter is that this ammunition has served and is serving its purpose very well, but that the production of it carried a disadvantage: in order to forge such weapons for the arena of social strife Marx had occasionally to bend, or to deviate from, the opinions that would logically follow from his system. However, if Marx had not been more than a purveyor of phraseology, he would be dead by now. Mankind is not grateful for that sort of service and forgets quickly the names of the people who write the librettos for its political operas.
But he was a prophet, and in order to understand the nature of this achievement we must visualize it in the setting of his own time. It was the zenith of bourgeois realization and the nadir of bourgeois civilization, the time of mechanistic materialism, of a cultural milieu which had as yet betrayed no sign that a new art and a new mode of life were in its womb, and which rioted in most repulsive banality. Faith in any real sense was rapidly falling away from all classes of society, and with it the only ray of light (apart from what may have been derived from Rochdale attitudes and saving banks) died from the workman's world, while intellectuals professed themselves highly satisfied with Mill's Logic and the Poor Law.
Now, to millions of human hearts the Marxian message of the terrestrial paradise of socialism meant a new ray of light and a new meaning of life. Call Marxist religion a counterfeit if you like, or a caricature of faith--there is plenty to be said for this view--but do not overlook or fail to admire the greatness of the achievement. Never mind that nearly all of those millions were unable to understand and appreciate the message in its true significance. That is the fate of all messages. The important thing is that the message was framed and conveyed in such a way as to be acceptable to the positivistic mind of its time--which was essentially bourgeois no doubt, but there is no paradox in saying that Marxism is essentially a product of the bourgeois mind. This was done, on the one hand, by formulating with unsurpassed force that feeling of being thwarted and ill treated which is the auto-therapeutic attitude of the unsuccessful many, and, on the other hand, by proclaiming that socialistic deliverance from those ills was a certainty amenable to rational proof.
Observe how supreme art here succeeds in weaving together those extra-rational cravings which receding religion had left running about like masterless dogs, and the rationalistic and materialistic tendencies of the time ineluctable for the moment, which would not tolerate any creed that had no scientific or pseudo-scientific connotation. Preaching the goal would have been ineffectual; analyzing a social process would have interested only a few hundred specialists. But preaching in the garb of analysis and analyzing with a view to heartfelt needs, this is what conquered passionate allegiance and gave to the Marxist that supreme boon which consists in the conviction that what one is and stands for can never be defeated but must conquer victoriously in the end. This, of course, does not exhaust the achievement. Personal force and the flash of prophecy work independently of the contents of the creed. No new life and no new meaning of life can be effectively revealed without. But this does not concern us here.
Something will have to be said about the cogency and correctness of Marx's attempt to prove the inevitability of the socialist goal. One remark, however, suffices as to what has been called above his formulation of the feelings of the unsuccessful many. It was, of course, not a true formulation of actual feelings, conscious or subconscious. Rather we could call it an attempt at replacing actual feelings by a true or false revelation of the logic of social evolution. By doing this and by at tributing--quite unrealistically--to the masses his own shibboleth of "class consciousness," he undoubtedly falsified the true psychology of the workman (which centers in the wish to become a small bourgeois and to be helped to that status by political force), but in so far as his teaching took effect he also expanded and ennobled it. He did not weep any sentimental tears about the beauty of the socialist idea. --This text refers to an out of print or unavailable edition of this title.
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Top Customer Reviews
Most economists commit the fatal error of regarding capitalism as a mere economic phenomenon, explicable by economic laws alone. But this view is palpably erroneous. Capitalism both influences and is influenced by political and sociological factors. Any account of the Capitalist system which ignores these non-economic factors must be regarded as short-sighted and incomplete.
This book is probably most famous (or most infamous, depending on your point of view) for its prediction (circa. 1942) that capitalism would eventually be replaced by some form of socialism. With the collapse of communism in Eastern Europe and the revival of market economics in East Asia and South America, it might appear that Schumpeter's prediction has been refuted. But this conclusion would be premature and superficial. Keep in mind Schumpeter's broad vision of capitalism. For Schumpeter, capitalism is much more than a free market acting under the guidance of supply and demand and consumer sovereignty. In Schumpeter's vision, capitalism is entire order of civilization, embracing the old-fashioned "bourgeois" code of ethics (see Thomas Mann's "Buddenbrooks" for a concrete illustration of bourgeois civilization) and entrepreneurial innovation (or "creative destruction," as Schumpeter calls it in his famous theory of the business cycle).Read more ›
Part I: The Marxian Doctrine
Part II: Can Capitalism Survive?
Part III: Can Socialism Work
Part IV: Socialism and Democracy
Part V: A Historical Sketch of Socialist Parties
Obviously, the world which Schumpeter surveyed more than 50 years ago has undergone significant changes. (This book was first published in the US in 1942; a revised second edition appeared in 1957; and an expanded third edition appeared in 1950, the year in which he died.) Nonetheless, after a recent re-reading of the book, I am amazed at how stable its intellectual infrastructure remains. Bottomore explains the book's continuing appeal to readers "by the fact that it undertakes a serious and thorough examination of the great social transition of the present age, from capitalism to socialism, (and prefaces this with an illuminating critical appraisal of Marx's theory, as the only social analysis of the transition that merits attention) rather than by the kind of judgement that it makes about the consequences of this process of social transformation.Read more ›
CS&D is an extended defense of Marx's conclusion that capitalism would collapse on itself and be replaced with socialism, but without propagating Marx's errors. CS&D is written by someone with neoclassical economic training, including the marginalist revolution that refuted Ricardo's "Iron Law of Wages" which formed the basis of Marx's own system. Schumpeter states early on that the interesting part is not his conclusion, but rather the observations and arguments that support that conclusion.
In order to make his argument, Schumpeter introduces several ideas that will be at odds with common understanding. For example, many victims of one or two semesters of college economics will have noted that the atomistic theory of competition almost never holds true, so the seductive criticism that capitalism tends toward monopoly is easily accepted. Fortunately, Schumpeter makes a valiant early attempt at showing that this is not the easy argument that Marxists hoped it would be. Likewise, most of us have noted that democracy - except in Classical Greece and small towns in New England - is hardly ever practiced the way we were taught, where citizens guide public policy and politicians carry it out. Instead, Schumpeter reminds (or teaches) that democracy is commonly practiced as a competition among leaders for votes, and voters select the politician whose program most closely matches their idea of the "correct" mix of policies.Read more ›
Most Recent Customer Reviews
I bought this book just to have a classical in my collection. Never had enough patience to read it in full. Its old fonts and spacing turn to be very uncomfortable for an old guy.Published on July 4, 2013 by Amazon Customer
The book is really over my head. I'm much too uneducated for this read. Given the subject matter, I can understand some of the vocabulary is not going to be common every day... Read morePublished on December 13, 2011 by pipedream
CS+D is one of the greatest books on political economy in the twentieth century. Schumpeter wrote this book when his generation was about to reach a fork in the road. Read morePublished on May 22, 2008 by D. W. MacKenzie
For economy,political science, law and sociology students, this is the mandatory Schumpeter title.Published on March 8, 2007 by Patricia F. Da Silva
Like Marx, Schumpeter predicts the inevitable disintegration of the capitalist system. However, where Marx foresees the collapse as stemming from proletariat revolution,... Read morePublished on February 3, 2007 by Matthew P. Arsenault
As to the best of my knowledge, there were two major intellectual responses to the seemingly endless and insuperable crisis which the capitalist system had got itself into after... Read morePublished on March 1, 2006 by Dr. Gerhard Volz
Despite its age (published in 1942), Schumpeter's book remains a classic. If I have one dominant complaint, it's that he uses the Ubiquitous terms "rational" and "rationality" to... Read morePublished on December 13, 2005 by D. S. Heersink
Like Hayek's Road to Serfdom, this book was written during the Secon World War when Keynes was busy crafting the post war peace. Read morePublished on October 3, 2005 by Declan Hayes