Capitalism, Socialism, and Democracy | Study Guide

Joseph A. Schumpeter

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Capitalism, Socialism, and Democracy | Part 2, Chapter 13 : Can Capitalism Survive? (Growing Hostility) | Summary

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Summary

Capitalist processes weaken the "protective strata" and "defenses" of capitalist society. Thus rendered defenseless, bourgeois society invites its own challengers and aggressors. Schumpeter scoffs at capitalists who suggest that it does not matter that capitalism is challenged because its successes will be enough to ward off challengers. "Rational argument" is an insufficient answer to "political criticism." People are not fully rational, and to disdain politics is to invite doom.

Schumpeter suggests that capitalism creates a class of intellectuals (which it needs) who develop an antagonism toward capitalism. In part, the rise of education, especially higher education, means that intellectuals feel underemployed in manual occupations or unemployable in anything but intellectual work. These dissatisfied intellectuals find a ready home in the labor movement, which they intend to enter and lead, despite the wishes of laborers. The ultimate result of all this is that "the social atmosphere" of hostility to capitalism grows and causes public policy also to grow more hostile to capitalism. Anti-capitalists enter politics and the bureaucracy, which is often already at least ambivalent about capitalism.

Analysis

The "growing hostility" to capitalism Schumpeter detects is another observation of trends in his contemporary society. Here he sums up two of the critical blows capitalism inflicts upon itself. Human action is involved very little in this process. This lack of human involvement is precisely why the process is considered inevitable and why Schumpeter is so disappointed with Marx's commitment to revolutionary politics. In a way, Schumpeter wishes Marx had stuck to his evolutionary guns because he is certain that the evolutionary pattern of capitalism is real and discernible—and that it needs nothing more than the normal functioning of capitalism and society to bear fruit.

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