This book is extremely rich in ideas but the sections about the role of the intellectuals in society, the rationality of capitalism, along with the sections about the dynamism, entrepreneur, and self-adaptation of capitalism are amazing. Democracy, mainly a product of capitalism, is also turning against capitalism and towards communism according to Schumpeter. Fundamentally and like Marx, Schumpeter believes that capitalism will inevitably lead to communism/socialism because of its economic dynamics and contradictions.

As a true and non-dogmatic follower, Schumpeter dismisses Marx in several important respects, while retaining and developing him further in others. Then there are all the sociological, political, historical, prophetical, educational, and so on implications of this economic fundamentalism. In this book, Schumpeter goes back to economics and keeps everything anchored in it. Schumpeter was probably the best Marxist - as he truly stayed within the original and wide-ranging project initiated by Marx. An interesting work from an historical perspective but certainly neither prophetic nor very useful in addressing the issues of our day when democracy has failed to take root in much of the world and is at risk almost everywhere that it has been instituted. It seems to me that Schumpeter was no democrat. Nor could he have foreseen today's dilemma in America where a few billionaires have become so powerful that they are able to subvert the democratic process (ref.

With the benefit of hindsight I'm perhaps being unfair in judging the book on its merits, since Schumpeter could not have foreseen the calamitous outcome of the Soviet 'planned economy'. Lost in the titanic struggle between those two competing ideologies is democracy which, as it turns out today, cannot truly survive under either regime. The book is colored very much by the widespread debate of his day (WW2 era) as to whether capitalism or socialism would prevail.

Further, he naïvely discounted the authoritarian nature of the Russian experiment of his day, suggesting that the degree of coercion in the soviet model would be relaxed as conditions improved, which they did not. Schumpeter speculates about the possibility of a democratic socialist utopia, but he unconvincingly discounts the reality of human acquisitiveness and the desire for upward mobility. Schumpeter is best remembered for having coined the term 'creative destruction' a process well understood today whereby entire industries and the jobs that go with them are continually rendered obsolete as new products, new technologies, new ways to make money emerge.

Capitalism socialism and democracy book