Joseph Schumpeter – Capitalism, Socialism, and Democracy

Joseph Schumpeter – Capitalism, Socialism, and Democracy

Schumpeter was famously pessimistic about capitalism’s long-term prospects. But he was equally dismissive of Marxian socialism as a viable replacement. He instead foresaw a long slide into Fabian-style socialism-lite. Such a system is benign and boring for the most part, which seems harmless enough.

The trouble is that prosperity comes from taking risks–starting a business, inventing new products or business models, and displacing the old and replacing it with something better. People seem to prefer safe mediocrity to risking excellence, and in the long run, Schumpeter thinks that is what people will get.

A lot of people hope Schumpeter was wrong. He seems to have hoped so, at least.

Schumpeter also outlines his famous theory of creative destruction, which is easily his most influential idea.

Haughty in tone with occasional flashes of wit, this 1942 book is a classic for a reason, though I can only hope its flaws are deeper than I suspect they actually are.


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