Capitalism, Socialism and Democracy
First edition
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| Author | Joseph Schumpeter |
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| Country | United States |
| Language | English |
| Published | 1942 (Harper & Brothers) |
| Pages | 431 |
| ISBN | |
| OCLC | 22556726 |
Capitalism, Socialism and Democracy is a book on economics (and in other levels, on sociology and history) by Joseph Schumpeter, arguably the most (or one of the most) famous, debated and important book by Schumpeter, and one of the most famous, debated and important books on social theory, social sciences and economics, in which he deals with capitalism, socialism and creative destruction. First published in 1942, it is largely unmathematical compared with neoclassical works, focusing on the unexpected, rapid spurts of entrepreneur-driven growth instead of static models.
Schumpeter devotes the first 56 pages of the book to an analysis of Marxian thought and the place within it for entrepreneurs. Noteworthy is the way that Schumpeter points out the difference between the capitalist and the entrepreneur, a distinction that he claims Marx would have been better served to make (p. 52). The analysis of Marx is broken down into four roles that Schumpeter ascribes to the writer (prophet, sociologist, economist, and teacher). The section Marx the Prophet explains that if nothing else Marx would have been received well by people who needed a theory to explain what was happening in their society. The section Marx the Sociologist focuses on how Marx's theory of class fits in with the larger intellectual traditions of the day and how it superseded them in at least its ability to synthesize sociological thought. The section Marx the Economist focuses on Marx's economic theory and judges it excessively "stationary" (pp. 27, 31). He also deals with the concept of crisis and business cycle, two economic theories that Marx pioneered (p. 39). The last section, Marx the Teacher, evaluates the usefulness of Marx's thought to interpret the events of his time and those between his death and Schumpeter's time. Schumpeter claims that any theory of crisis gains support when crises occur, and points to some areas where Marx's theories have failed to predict. On page 53 he argues that the theory better predicts English and Dutch colonial experiences in the Tropics but fails when applied to New England for example.
Schumpeter answers "no" in the prologue to this section. But he says, “If a doctor predicts that his patient will die presently,” he wrote, “this does not mean that he desires it.” The section consists of 100 pages with the following ten topics: The Rate of Increase of Total Output, Plausible Capitalism, The Process of Creative Destruction, Monopolistic Practices, Closed Season, The Vanishing of Investment Opportunity, The Civilization of Capitalism, Crumbling Walls, Growing Hostility, and Decomposition. Of these, Creative destruction has been absorbed into standard economic theory. This section constructs a view of capitalism which ultimately tends toward corporatism which, he suggests, will be its own undoing.
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