Capitalism, Socialism, and Democracy | Study Guide

Joseph A. Schumpeter

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Capitalism, Socialism, and Democracy | Part 3, Chapter 18 : Can Socialism Work? (The Human Element) | Summary



Schumpeter anticipates an argument from opponents of socialism that the system could work only in hopelessly ideal circumstances and that "human nature" means it could never work. Schumpeter thinks there is something to this argument. Because social systems exist in specific historical circumstances, socialism can work only in a society that has been structured and conditioned for it to exist.

Socialism can, moreover, recondition society, for example by absorbing and reorienting the minds of the bourgeois class. Schumpeter believes this reorientation of the bourgeoisie will be the hardest task for the socialist regime—partly because socialists might not recognize that it would be to their advantage. Such a process could be undertaken by setting up systems of selection for work based on aptitude. Aptitude-based work selection is a vital component of another necessary process Schumpeter identifies: transforming the bureaucracy into something vital and useful to a socialist society.

Finally, Schumpeter considers the functions of saving and discipline presently "discharged by the bourgeoisie." In a socialist system, saving is simply replaced by the socialist central authority. Indeed, it is exceeded by such an authority, as the Russian experience shows. Likewise for discipline. Moreover, the socialist order could command the "moral allegiance" so lacking for capitalism. Schumpeter delves into this further by considering the Soviet Union's lessons in "authoritarian discipline in socialism."


Schumpeter's answer to those who claim socialism could not work because of, broadly, "human nature" is of course that socialism would create its own culture and condition people to accept it and run it. Capitalism had performed the same task. Schumpeter's favor for the bourgeoisie is already evident by this point, but he stretches it perhaps to breaking point in his expectation that a socialist society could (even unwillingly) integrate and recondition the bourgeoisie. Also, his preference for the bourgeoisie rests slightly uncomfortably on his belief in variation in human intellectual capacity, implying that the bourgeoisie necessarily represented the "best minds."

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