Capitalism, Socialism, and Democracy | Study Guide

Joseph A. Schumpeter

Download a PDF to print or study offline.

Study Guide
Cite This Study Guide

How to Cite This Study Guide

quotation mark graphic
MLA

Bibliography

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/>.

In text

(Course Hero)

APA

Bibliography

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/

In text

(Course Hero, 2019)

Chicago

Bibliography

Course Hero. "Capitalism, Socialism, and Democracy Study Guide." April 26, 2019. Accessed August 7, 2020. https://www.coursehero.com/lit/Capitalism-Socialism-and-Democracy/.

Footnote

Course Hero, "Capitalism, Socialism, and Democracy Study Guide," April 26, 2019, accessed August 7, 2020, https://www.coursehero.com/lit/Capitalism-Socialism-and-Democracy/.

Capitalism, Socialism, and Democracy | Part 2, Chapter 11 : Can Capitalism Survive? (The Civilization of Capitalism) | Summary

Share
Share

Summary

Schumpeter turns from economics to sociology and the "socio-psychological superstructure" of capitalism. He discusses prehistoric ways of thinking before introducing the growth across time of rational thought and behavior. He defines this increase of rationalism as an expansion of the role of logical action in improving circumstances. Rationalism tends to overthrow the collective ways of thinking that prevailed before it, with the exception of religion.

Schumpeter ascribes the rise of rationalism to "economic necessity." Capitalism and rationalism grow together; moreover, capitalism conditions rationality in two ways. First, it "exalts the monetary unit ... into a unit of account." That is, capitalism turns money into a tool of cost-benefit analysis. Second, it produces "the mental attitude of modern science" by breaking up feudal society and creating space for the rise of an intellectual class. That intellectual class then produces inventions and innovations for capitalism.

Schumpeter argues that modern society is the society of capitalism, and its products constitute a capitalist culture. The prevalence of capitalism in modern society extends from technology to art and to democratic forms of politics. Schumpeter notes that this culture is pacifist and "unheroic." He sums up by saying that whatever one thinks of capitalist society ultimately does not matter because "things economic and social move by their own momentum."

Analysis

Schumpeter has remarked a couple of times already that he believes capitalism will tend to undermine itself. Here he begins to lay out exactly how. His is a sociological argument, which follows from the preceding defense of capitalism's economic performance and the weakness of economic arguments for capitalism's failure. One of the major ways Schumpeter agrees with Marx is in understanding capitalism as a fundamentally transformative social and economic system.

Capitalism had destroyed the culture and society of feudalism, and in doing so it created the culture of capitalism. This point foreshadows the following argument about what capitalism will do to its own culture and society. Schumpeter's final notes remind the reader that, like Marx's views, his is an evolutionary, rather than revolutionary, view of the future.

Cite This Study Guide

information icon Have study documents to share about Capitalism, Socialism, and Democracy? Upload them to earn free Course Hero access!

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes