Course Hero. "Capitalism, Socialism, and Democracy Study Guide." Course Hero. 26 Apr. 2019. Web. 7 Aug. 2020. <https://www.coursehero.com/lit/Capitalism-Socialism-and-Democracy/>.
Course Hero. (2019, April 26). Capitalism, Socialism, and Democracy Study Guide. In Course Hero. Retrieved August 7, 2020, from https://www.coursehero.com/lit/Capitalism-Socialism-and-Democracy/
(Course Hero, 2019)
Course Hero. "Capitalism, Socialism, and Democracy Study Guide." April 26, 2019. Accessed August 7, 2020. https://www.coursehero.com/lit/Capitalism-Socialism-and-Democracy/.
Course Hero, "Capitalism, Socialism, and Democracy Study Guide," April 26, 2019, accessed August 7, 2020, https://www.coursehero.com/lit/Capitalism-Socialism-and-Democracy/.
Schumpeter discusses the "unusual severity and duration" of the Great Depression. He notes also that most economists disagree with him about whether the depression indicated a break with "capitalist evolution." Some, he says, have come to believe that the depression shows a "permanent loss of vitality" in capitalism, meaning its past performance cannot be projected into the future. According to the Marxian argument, in its final stage, capitalism enters a "permanent crisis." This crisis would be marked by the tendency of the rate of profit to fall and an accompanying reduction of investment opportunity.
Although Schumpeter does not think the "vanishing of investment opportunity" will kill capitalism, it offers him an opportunity to discuss whether it has really been the cause of the problems of the past decade. He needs to show whether those problems can be expected to persist into the next 40 years.
Schumpeter considers the vanishing of investment opportunity in a structured argument:
Schumpeter's discussions of Marx suggest he did not think much of economic arguments for capitalism's demise. He deals in detail with a major one here, the vanishing of economic opportunity. His treatment of that argument is important for setting up the subsequent chapter. Schumpeter does not believe capitalism's demise is a result of economic failure—quite the opposite.
In this chapter, Schumpeter also demonstrates fully his dedication to a strong rhetorical argument. He considers the main idea and then lays out its elements and his responses to them in well-structured fashion, ultimately reaching a conclusion that leads to his next point.