Capitalism, Socialism, and Democracy | Study Guide

Joseph A. Schumpeter

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Capitalism, Socialism, and Democracy | Part 4, Chapter 21 : Socialism and Democracy (The Classical Doctrine of Democracy) | Summary

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Summary

Schumpeter considers the "classical definition" of democracy, that it is an expression of the "popular will." Schumpeter believes that there is no such thing as the common good, much less the common will. Neither are necessarily evident in a democracy. Moreover, Schumpeter argues that a leader such as French emperor Napoleon Bonaparte (1769–1821) can resolve issues afflicting the body politic that a democratic state could not. Napoleon was able to hold all the various interests in French society in balance, while a body politic cannot. He argues that such leadership is surely more representative of government "for the people" than most democracies have achieved.

Schumpeter then considers the question of "human nature in politics." He notes that the work of psychologists such as Sigmund Freud (1856–1939) have eroded the idea of a homogenous human personality and will. Moreover, economists have chipped away at the idea that economic actors always act rationally. Another problem of democratic systems is that people who might be able to make decisions that impact those systems are not necessarily equipped to make rational decisions about foreign or wider policy. Politics thus becomes illogical and irrational. Schumpeter points out a similarity between political campaigning and advertising in the way psychological techniques are deployed to shape and guide individual preferences.

Having dispensed with the classical doctrine, Schumpeter considers why that doctrine has survived. One answer is that it is supported by its association with religious belief. Democracy, in a word, acquires the strength and purpose of an ideal. Another reason is that democracy becomes associated with events that are widely approved. Schumpeter uses the example of the United States, whose founding myth is the triumph of democracy over monarchical tyranny. A final reason is that democratic "phraseology" flatters the masses and provides a toolkit for campaigning by appealing to the "popular will."

Analysis

Schumpeter is flatly dismissive of notions that politics reflects reason, which is partly why he rejects the "reasoned" accounts of the popular will and rational choices. Indeed, his points about the irrationality of economic actors and decision makers in capitalist systems remain poignant in political debates today.

His assessment of the appeal of democracy is probably more astute than many would like to admit. Democracy's real force for Schumpeter derives from an almost religious sentiment and the rhetorical ammunition it provides. Schumpeter makes this point several times about Marxism as well, and this similarity is not coincidental. It is emerging by this point also that capitalism is the only system Schumpeter will accept as truly "rational."

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