Democracy, Capitalism and “Creative Destruction”

A must-read essay by Harper’s Magazine editor Roger D. Hodge examines the state of politics in America through the lens of political economist Joseph Schumpeter, author of Capitalism, Socialism and Democracy.

Like Marx, with whom he had little else in common, Schumpeter understood that capitalism is a permanent revolution of the means of production, and he placed this insight at the center of his economic thinking with his account of capitalism’s “creative destruction.” He was also acutely aware of capitalism’s weaknesses, its tendency toward monopoly and bureaucracy, and the complacent neglect of its own conditions of success. In fact, Schumpeter was convinced that capitalism would probably not survive, that its upheavals would prove intolerable, and that government control of the economic sphere—socialism, in other words, though not the workers’ paradise of Marx’s fond imagining—would inevitably succeed it.

Modern democracy, Schumpeter argued, is a method of political decision in which individuals acquire the power to rule by means of a competitive struggle for the people’s vote. Far from being a system in which the people rule, it is best characterized as “the rule of the politician.”

The article requires a subscription or (probably) access through a University database (Lexis Nexus maybe?).

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