The Austrian economist Joseph Schumpeter believed that the triumph of socialism was inevitable, but he rejected the Marxist view of how capitalism works. His ideas are a stimulating challenge for those seeking an alternative to capitalism today.
Joseph Alois Schumpeter was one of the most prominent political economists during the first half of the twentieth century. He published prolifically in both German and English on questions of economic theory, economic sociology, economic and social policy, and the history of ideas. A phrase Schumpeter coined to describe the essence of capitalism as he understood it, “creative destruction,” has become one of the most familiar terms in the economic lexicon.
In politics, Schumpeter was a liberal conservative — or perhaps a conservative liberal — but he was also deeply influenced by his Marxian contemporaries. As a student at the University of Vienna, Schumpeter was a member of Eugen von Böhm-Bawerk’s legendary graduate seminar, along with three leading Austro-Marxists — Rudolf Hilferding, Otto Bauer, and Emil Lederer — and the free-market liberal Ludwig von Mises.
This experience no doubt encouraged Schumpeter to explore many of the same questions that his Marxist contemporaries had posed, although the answers that he formulated differed sharply from theirs. He disagreed with the Marxist view of capitalism’s inner contradictions while believing that the ultimate victory of socialism was inevitable anyway. For Schumpeter, the drive toward imperialism and war that was so evident in his own time stemmed from precapitalist social forces that were still at work in European society rather than the logic of capitalism itself.
Life and Work
Schumpeter was born into a prosperous middle-class family in the Moravian town of Triesch on February 8, 1883, a month before the death of Karl Marx. He died in Cambridge, Massachusetts on January 7, 1950. Schumpeter’s father, a merchant, had died in 1887, and his mother soon remarried. His new stepfather was a general in the Austro-Hungarian army, so the young Joseph grew up in a distinctly upper-class environment.
He was educated in Vienna at the prestigious Theresianum Academy of Knights of Vienna. Schumpeter went on to spend five years at the University of Vienna between 1901 and 1906, where he studied law, mathematics, and philosophy in addition to economics. His first publication came in 1906, when he was only twenty-three years of age.
From 1909 to 1911, Schumpeter was professor of economics at the University of Czernowitz, moving first to the University of Graz (1911–1921) and then to the University of Bonn (1925–1932). In addition to these academic posts, he worked as a lawyer and a financial speculator — not to mention a brief stint as minister of finance in the new post-Habsburg Austrian republic between March and October 1919 — and spent some time in Britain and the United States.
Schumpeter spent the last eighteen years of his life at Harvard University, where he was president of the Econometric Society (in 1942) and the American Economic Association (in 1948). Were it not for his unexpected death, Schumpeter would also have served as the founding president of the International Economic Association in 1950.Schumpeter disagreed with the Marxist view of capitalism’s inner contradictions while believing that the ultimate victory of socialism was inevitable anyway.
Although there is a substantial literature on Schumpeter’s life and work, no comprehensive edition of his works has yet been published, whether in English or in German. Richard Sturn suggests that this may reflect the absence of a specific “Schumpeter school” of economics. Probably best known today as a historian of economic thought, Schumpeter was the author of two hundred journal articles and several influential books, two of which ran to more than a thousand pages: the two-volume Business Cycles and the posthumously published History of Economic Analysis.
However, those interested in Schumpeter’s thinking, especially from the left, will probably turn first to his most celebrated work, 1942’s
Capitalism, Socialism and Democracy, which is a mere 425 pages in length. The book consists of five parts, respectively titled “The Marxian doctrine,” “Can capitalism survive?” “Can socialism work?” “Socialism and democracy,” and “A historical sketch of socialist parties.”
It would be impossible in the space of a short article to give a satisfactory account of this complex, scholarly, and highly opinionated work. I will concentrate instead on Schumpeter’s analysis of the economics of imperialism, which provides an entry point into his broader approach to the capitalist mode of production, its history, and its prospects.
Explaining Imperialism
Twenty-three years before the appearance of
Capitalism, Socialism and Democracy, Schumpeter published a lengthy article on “The Sociology of Imperialism” in a German-language academic journal, which did not appear in English until just after his death. In the version that I have consulted, there are ninety-six pages of text, amounting to perhaps 35,000 words.
Schumpeter began with a brief introductory section outlining the nature of the problem, in which he argued that aggressive attitudes on the part of states need not be a simple reflection of the population’s concrete economic interests. Indeed, in the case of imperialism, we might say that nations and classes seek “expansion for the sake of expanding, war for the sake of fighting, victory for the sake of winning, dominion for the sake of ruling.” In this spirit, he defined imperialism as “the objectless disposition on the part of a state to unlimited forcible expansion.”
The author did acknowledge that “neo-Marxist theory” had attempted to provide an economic explanation for imperialism, reducing it to “the economic class interests of the age in question” (emphasis in original, and hereafter). Although he conceded that the Marxist view was “by far the most serious contribution” that had been made to the analysis of imperialism and agreed that there was “much truth in it,” Schumpeter proceeded to criticize it at some length.
He began by describing the strongly anti-imperialist sentiments that had prevailed in mid-nineteenth-century Britain in a section with the strange title “Imperialism as a catchphrase.” After a lengthy account of the way imperialism had operated in ancient times, the medieval period, and the age of absolute monarchy, Schumpeter devoted the final third of the essay to discussing the relationship between imperialism and capitalism.
At the start of this concluding section, Schumpeter returned to the prevalence of “non-rational and irrational, purely instinctual inclinations towards war and conquest.” He believed that many — and perhaps most — wars throughout history had been waged without any adequate reason. According to Schumpeter, this in turn was strong evidence that “psychological dispositions and social structures acquired in the dim past . . . tend to maintain themselves and to continue in effect long after they have lost their meaning and their life-preserving function.”
On the strength of this analysis, Schumpeter rejected the argument of Vladimir Lenin and other Marxist thinkers that there was a necessary link between imperialism and capitalism. Imperialism was in fact “atavistic in character” and stemmed from “the living conditions, not of the present but of the past — put in terms of the economic interpretation of history, from past rather than present relations of production.” In political terms, we should see imperialism as the product not of capitalist democracy but rather of the earlier stage of “absolute autocracy.”Schumpeter rejected the argument of Marxist thinkers that there was a necessary link between imperialism and capitalism.
Schumpeter insisted that under capitalism, there was “much less excess energy to be vented in war and conquest than in any pre-capitalist society.” In a capitalist society, the pursuit of profit absorbed the energies of the population, with wars of conquest rightly seen as “troublesome distractions, destructive of life’s meaning, a diversion from the accustomed and therefore ‘true’ task.”
The economist cited what he considered to be strong evidence of the powerful anti-imperialist tendencies at work in capitalist society. Those tendencies included deep opposition to militarism, military expenditure, and war, which were most powerful among industrial workers but also manifested in large sections of the capitalist class.
It was no accident, he suggested, that of all the capitalist nations, the United States was the one least inclined toward imperialist adventures and also “the least burdened with pre-capitalist elements, survivals, reminiscences, and powerful factors.” We should look upon the imperialist tendencies that could indeed be found within capitalism as “alien elements, carried into the world of capitalism from the outside, supported by non-capitalist factors in modern life.”
“Não devemos avançar” pelo caminho apresentado
Aspetos controversos/levantam dúvidas que merecem “atenção redobrada e paragem ou um prosseguimento muito cuidadoso da marcha”
Mesmo com eventuais discordâncias, o conteúdo é favorável e “podemos avançar"
“Semáforos fundidos”, em que as forças políticas terão de olhar com atenção em volta para não terem nenhum acidente.
𝗤𝘂𝗲𝗿 𝘀𝗮𝗯𝗲𝗿 𝗼 𝗿𝗲𝘀𝘂𝗹𝘁𝗮𝗱𝗼?
