Capitalism, Socialism, and Democracy | Study Guide

Joseph A. Schumpeter

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Capitalism, Socialism, and Democracy | Part 1, Chapter 2 : The Marxian Doctrine (Marx the Sociologist) | Summary



Schumpeter intends to analyze Marx but notes that doing so is "very objectionable to the faithful." To analyze Marx, Schumpeter will chop his work into thematic segments, salvaging "important and stimulating truth" that would otherwise be "tied to hopeless wreckage." He considers Marx an economist and praises Marx's "extensive command over historical and contemporaneous fact." The fruits of Marx's knowledge, the "economic interpretation of history," do not result in only economic determinism (the idea that the economy is the driving force behind all history) but in a more delicate and subtle interpretation. Schumpeter provides a two-part definition of Marx's interpretation of history:

  1. The form of production in a society is the "fundamental determinant of social structures" that shape attitudes, actions, and civilizations.
  2. Forms of production have a "logic of their own." A society in which most production is agriculture will be different from one in which most production is steam-powered industry.

Schumpeter considers the extent to which this interpretation is useful. "To the faithful," he says, "it is the master key to all the secrets of human history." However, Marx's interpretation was a major step ahead of the historical arguments it replaced. Schumpeter then discusses Marx's conception of class society and class struggle, outlining the reasons he thinks Marx's interpretation is insufficient.

Schumpeter notes also how Marx's sociological interpretation of capitalism ("private control over means of production") is married to his understanding of economic theory, which considers only the "mechanics" of capitalist society. Schumpeter notes that this fusion of the sociological and the economic is a source of pride to Marx's faithful. However, he means to show the shortcomings of that approach by considering them separately.


Once again Schumpeter digs at the Marxist "faithful" and notes that they would hate his approach of chopping Marx's analysis into bits to analyze it. Famously, Marxist analysis was a purported "synthesis" that integrated the economic with the social. But Schumpeter, who has no such qualms about considering separate parts of an argument, finds it most useful to analyze the different strands of Marxist thought one at a time. Schumpeter patterns the structure of his own book on his dissection of Marx, making distinct arguments about economics, sociology, and political theory.

It is clear that Schumpeter finds Marx insufficient in many ways. But Schumpeter's arguments in Capitalism, Socialism, and Democracy are a respectful analysis. He is careful to place Marx in his proper context, and to rescue good ideas from the bad. Even in this chapter, it is clear that Schumpeter's real problems with Marx rest with the latter's conception of economics, which he will deal with in the following chapter.

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