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Capitalism, Socialism and Democracy
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Themes
Conservatism, Reason, and Tradition
On one level, Capitalism, Socialism and Democracy can be seen as a descriptive work of sociology and economics. The text analyzes social phenomena and extrapolates predictions about the future. At the same time, it can be read as the articulation of conservative political philosophy. It gives voice to a specific set of values, and how the author thinks the world should be, rather than just describing it.
Schumpeter’s constellation of values can be seen at many points throughout the text. It is present in Schumpeter’s criticisms of Marx. Discussing Marx’s theory of the relation between classes, Schumpeter says that “it should be obvious that their relation is, in normal times, primarily one of cooperation” (19). He objects to Marx’s emphasis on class antagonism and resulting revolution. Instead, Schumpeter stresses the traditional and necessary character of certain hierarchical relations. This is also why he is highly critical of anarchism and direct democracy. Such ideas try to do away with respect for leadership and authority altogether. Schumpeter expresses admiration for traditional institutions like the family and childrearing. As he says, it represents “the greatest of assets,” namely “the contribution made by parenthood to physical and moral health—to ‘normality’ as we might express it” (158). The family, he suggests, grounds people in tradition and responsibility. It also underpins what is noble and vital about the capitalist class.
When this institution fades the capitalist class does too. Schumpeter argues that bourgeois couples are too focused on themselves. They fail to see the importance of family to a broader and deeper purpose. The same process occurs in the political sphere. Capitalism works best, he says, when capitalists can draw upon the “mystique” of previously feudal leaders to govern. Ordinary people are often dominated by irrational forces which can only be checked by appeal to something irrational. This could be belief in a religious or semi-religious authority, like a pope, a lord, or a king. In its rush to spread reason and remove such leaders, capitalism digs its own grave. As in the case of the family, the excessive reliance on reason ultimately destroys it.
Bureaucracy and Democracy
In his discussion of socialism, Schumpeter says that he “cannot visualize, in the conditions of modern society, a socialist organization in any form other than that of a huge and all-embracing bureaucratic apparatus” (206). This may put many people off. Like “monopoly,” “bureaucracy” is one of those terms which is almost universally criticized. Even socialists, as Schumpeter says, are often at pains to deny that socialist society would be bureaucratic. This has been encouraged by the sense that bureaucracies are unaccountable and undemocratic. They seem to wield significant power. Yet they are typically beyond either public scrutiny or recall, existing in their own obscure world of impenetrable, and often arbitrary, rules and regulations. Indeed, this is certainly the image that comes to mind when thinking of Soviet-era bureaucracy or that of the Austro-Hungarian empire. Both seem encapsulated in the nightmare world portrayed in Franz Kafka’s The Trial, antithetical to human freedom and reason.
However, this impression may be misleading. As Schumpeter says, “such an administrative apparatus may or may not deserve all the derogatory comments which some of us are in the habit of passing upon bureaucracy” (185). Of course, there can be bad, oppressive, and corrupt bureaucracies. But there can also be bureaucracies like Germany’s in the late-nineteenth century, which was “entirely devoted to its duty, well-educated and informed, highly critical of the capitalist bourgeoisie” (341). More importantly, argues Schumpeter, “bureaucracy is not an obstacle to democracy but an inevitable complement to it” (206). He sees a good, well-trained bureaucracy as essential to effective democracy in modern industrial society.
This is for several reasons. First, “such a bureaucracy is the main answer to the argument about government by amateurs” (294). What makes a good politician, and someone electable, is not necessarily what makes a good administrator. In a modern society with highly complex technological and economic issues, the average politician simply cannot be expected to be competent in all fields. Nor do they have the time. The demands of seeking re-election, courting public opinion, and maneuvering for power within their own party means that they need significant help with policy and administration. A good bureaucracy serves an essential role. At the same time, argues Schumpeter, bureaucracy can serve as an effective counterbalance to the implicit short-termism built into democracies. Politicians, argues Schumpeter, are inevitably forced to think in terms of four- or five-year election cycles. Unsurprisingly, this means that their policy solutions and thinking rarely extends outside this time frame. In contrast, an effective bureaucracy could have longer-term aims in view and communicate with politicians to maintain some continuity.
Intellectuals and Anti-Intellectualism
Schumpeter seems by any ordinary standards to be an “intellectual.” He went through the university system and became a professor. He “wield(ed) the power of the spoken and the written word” (147)—namely, by writing multiple works and making his living through ideas. It may seem puzzling then that he demonstrates a strain of anti-intellectualism. This is seen in his criticisms of philosophical interpretations of Marx. Schumpeter insists that Marx was not at root a philosopher. He also criticizes intellectuals, depicting them as unproductive outsiders motivated by personal resentment to criticize a system which supports them. Lastly, Schumpeter lays the blame for the tragedy in Russia at the feet of intellectuals: “the further removed the actual situation was from the state of maturity which Marx visualized, the more ready were the Russian intellectuals—not only the professed socialists among them—to look to him for a solution of their problems” (328).
Schumpeter wants to draw a distinction among intellectuals—those who merely write or think for a living and the figure with a “critical attitude.” With those having a critical attitude, there is “the absence of direct responsibility for practical affairs” (147). This type of intellectual is unproductive economically and seek a career through irresponsible and self-serving criticisms of existing institutions. Such criticism often calls itself “philosophical,” but this is usually an excuse for a lack of true intellectual rigor.
In contrast, Schumpeter has no problems with the idea of the “social scientist.” This is someone who works humbly and systematically to uncover objective truths about the social world. Certainly, this is how Schumpeter envisaged the role of the economist in the 1930s and 1940s, a time when economists, and economics as a discipline, seemed to positively influence public policy.
