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Capitalism, Socialism and Democracy

4.0 of 5 stars 4.00  ·  rating details  ·  1,127 ratings  ·  47 reviews
Capitalism, Socialism and Democracy remains one of the greatest works of social theory written this century. When it first appeared the New English Weekly predicted that for the next five to ten years it will cetainly remain a work with which no one who professes any degree of information on sociology or economics can afford to be unacquainted.' Fifty years on, this predic ...more
Paperback, 464 pages
Published August 28th 2006 by Routledge (first published 1942)
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Brilliant at times, but also pigheaded — my star rating would only detract from a more comprehensive understanding of the book — deserves more time and effort than I can spare here, so I'm going to instead present a fraction of my notes

Schumpeter might be loosely grouped with the other Austrian School of economists, but I see traces of him in some neo-Marxist thought, including Wallerstein and Sweezy, as well as many of the neo-Keynesians—

Schumpeter is arguably most famous for his phrase and ide
This is a classic of economics and of entrepreneurship that lots of people have read in their undergraduate economics or business classes. It is worth reading to get the full perspective of Schumpeter's view of how the economy works. This is perhaps the most articulate statement on the role of of "creative destruction" and innovation as critical to the success of capitalism. It is also also very cynical of Marxist approaches to economics. Strangely enough, the section on socialism suggests that ...more

In the end it will be seen that the greatest enemy of capitalism was always democracy, i.e. the will of the people. Once the people turn anti-capitalistic, under the influence of a disaffected intelligencia, there is absolutely nothing that can stand against them. Schumpeter at one and the same time believes that Capitalism is the most adequate description of economic reality and that it is doomed. How is this possible? - But it is exactly as the Savior of the Christians said so long ago
Eric Baldwin
It shows how democracy is a vast conspiracy, elections are fraudulent, individual votes are useless, and human nature is corrupt.
Mar 19, 2013 Andrew added it
Shelves: economics
In the wake of the Second World War, Joseph Schumpeter wrote an exceptionally intriguing book that everyone, capitalist or socialist in persuasion, should read, and will probably enjoy reading. Heavily inspired by Marx and especially his theory of history, as much a sociological as an economic text, and broad-ranging in its analysis of the relationship between capital and society, it's a difficult book to pin down, and clearly the product of a remarkable thinker.

The question-- which all propheti
A tough book, but a vitally important book for understanding the subtle relationships between capitalism, socialism and democracy, especially in its explanation of how capitalism works through 'creative destruction'. Originally published in 1942, 1947 and 1950, this book still has wide applications for today, especially those sections dealing with entrepreneurship, central planning, and democratic processes. But beware, the points Schumpeter makes in this book are extremely subtle, and one canno ...more
Edward Tse
This review has been hidden because it contains spoilers. To view it, click here.
Gregory Sun
One of the biggest problems with Schumpeter's book is that its theory of entrepreneurship is so prevalent that it overshadows all other competing theories. Many would consider him to be the only economist to ever grapple with the issue of the entrepreneur. But this is, in fact false. The neoclassical entrepreneur is the equilibrator, who brings the economy towards equilibrium through arbitrage action. Schumpeter, meanwhile, an intellectual descendant of Walras trivializes the process of equilibr ...more
Chapters 21 and 22. I do really like his two conceptions of democracy. Perhaps a little too pessimistic when it comes to the stupidity of the population, especially in political matter. Chapter 22 was great, and I think the role of leadership in a democracy is too often overlooked. Conception of democracy as the power struggle between the political elite very interesting.
Mar 13, 2011 David rated it 5 of 5 stars  ·  review of another edition
Recommends it for: Eggheads
The man can turn a phrase. Very enjoyable, though the economics content is rather minimal beyond Chapter 8. After wrestling with the question over the past few months, I have to disagree with McCraw's thesis that this was a satire. And with that, the logic on the end of capitalism seems weak. Most of my colleagues loved reading this, but certainly not all.
Schumpeter lived a very, well, Schumpeterian lifestyle, battered up and down and around the world by the winds of economic turmoil. He argues that this undulating dynamism is in fact the defining attribute of capitalism and the reason it has been so undeniably successful at achieving economic growth. Unlike most economists he defends capitalism warts-and-all: He fully recognizes that we have never lived in anything like a perfectly-competitive efficient market, and goes on to say that we wouldn' ...more
Excellent. An Austrian economist I can read and agree with most of the time. One of the best analysts since Weber.
Sep 02, 2013 Radwa rated it 4 of 5 stars
Shelves: study
I didn't read the whole book; i enjoyed what i read, although the language was quiet difficult for me. . .
Alex MacMillan
CS&D is as dry as you can get, and hindsight about Marxism's future failure spoils most of the read. A couple chapters are excellent, namely the section on creative destruction, but these are few and far between. Unless you are working towards an Economics PhD, you are not missing out if you only skim the book's summary on Wikipedia.

His accurate prediction of a Fabian socialist future for capitalist countries was dead-on, and the multifaceted explanations foreseen as factors bringing this tr
Joseph Schumpeter’s Capitalism, Socialism and Democracy analyzes the relationship between economic systems and democracy, including the viability of socialism and democracy’s role. Among other noteworthy points, Schumpeter argues that capitalism is inherently dynamic and the process of “Creative Destruction” is at the core of capitalism. Additionally, he contests the Malthusian philosophy that overpopulation will result in starvation, as well as the notion that finite resources will eventually u ...more
Gde Dwitya
Evaluating Capitalism as an economic modality, Schumpeter asserts that it is inherently progressive and self-evolving. In his words: “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumer goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates….[capitalism] incessantly revolutionizes the economic structure from within, incessantly destroying the old one, ...more
Stan Murai
This was Joseph Schumpeter's most popular and well-known book in English. It opens with a discussion of Karl Marx. Although he is very sympathetic with Marx's theory that capitalism will collapse and be replaced by socialism, Schumpeter believes that this will not happen in the way Marx had predicted. To describe the process of capitalism's demise, he made the phrase "creative destruction" famous whereby the old ways of doing things that characterize capitalism will be destroyed and replaced as ...more
Žydrūnas Jonušas
Pagaliau perskaičiau tą knygą, kuri mane po truputį smaugė visą vasarą. Aišku, vasara ir nėra tas metas, kai geriausiai knygos skaitosi, tai čia gal ir buvo mano klaida, kad pasirinkau ją vasarai.
Galiausiai turiu pripažinti, kad žiauriai trūko ekonominių žinių skaitant šį traktatą, ypač pirmoje dalyje. Skaitydavau po keletą kartų, kol pagaliau pavykdavo suprasti, ką autorius nori pasakyti, Žadėjau jau kaltinti vertėją, kad baisiai sudėtingai ir nesuprantamai išvertė, bet visgi reikia pripažinti,
Sean Rosenthal
Interesting Quotes:

"The...process of industrial mutation...incessantly revolutionizes the economic structure FROM WITHIN, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism...The problem that is usually...visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them."

-Joseph Schumpeter, Capitalism, Socialism, and Democracy

"There are ultima
Nick Anderson
Famous for two things, creative destruction and the theory of democratic elitism. Most of the work is about socialism, its history and why he thought it would triumph over capitalism. His democratic elitism, which I used for a paper, is a lot like Woodrow Wilson's idea of presidential leadership, of the will of the people being incoherent and contradictory, and the necessity of elites to present coherent visions of leadership through open competition.
Ethan Jacobs
- His writing style is a little tough to engage with at times, but his astute and eye-opening analysis of the progression of capitalism certainly made this book worth reading. The ouline of socialism with its somewhat arduous details, while necessary to appeal to his audience, was a bit... dull. I guess that the reality of a potentially effective socialism just isn't very romantic. All in all, worth the read.
Rightly considered a classic, this book contains some amazing one-liners that still hold true today. Unlike Adam Smith, it does not rise above its time completely, and Schumpeter's laws didn't hold up empirically.
Vitaly Repin
Great book.

I think that this is "must read" book for everybody who is interested in the perspectives of capitalism and socialism and their connections with democracy. The book was published in the middle of XX century but it is still very valid for our time.
Marts  (Thinker)
Schumpeter's comparisons of the capitalist and socialist systems in the realm of democratic thinking... He first briefly outlines Marx's doctrine then analyses capitalism, saying in brief that such a system cannot survive in the long term but if desired can be employed only to be advanced into a form of corporatism. He then explores various socialism theories and incorporates that into democratic society, he also posits that advances in capitalist entrepreneurship will gradually be replaced by s ...more
Nir Haramati
Demeaning of people; malcontent to colleges; simplistic view of democracy; faulty logic in argumentation, and false, or at best partial, claims as to facts; biased to capitalism.
An amazing book. If after reading this you continue to sport the fashionable liberal mindset (which seems to be all-too-common among those confident individuals in possession or in progress of an undergraduate degree) then it appears that you'll need some sound reasoning on a practical level in support. Anyways, the book offers some convincing arguments and grounded insight and requires a backward and forward reading so to be sufficiently understood--which I'm far from.
If pulled into its separate pieces this book would easily be a five star book. Some of the chapters are so fascinating with their insight I could not put it down while others seemed to be only rambling. My favorite parts of this book is its discussion of democracy. It takes you through different theories and tendencies of democracy.
Nick Black
Nov 24, 2008 Nick Black marked it as to-read
Recommended to Nick by: Bryan Cantrill
Shelves: to-acquire
I found Schumpeter referenced in Cantrill's The Inculcation of Systems Thinking , a brilliant presentation at Brown (Cantrill's blog at Sun, "The Observation Deck", is awesome). He seems worth reading. ...more
Philip Chaston
An interesting exploration of how Schumpeter tried to reconcile socialism and democracy. Like Marx, the trends he identified did not last ten years. He thought they might outlive the C20th.
An enormously powerful and influential book. It really rewards close reading, which, alas, I didn't really give it. The much-noted idea of creative destruction is only one of the insights here; but the way in which Marxist theorists have failed to grapple with it suggests that it's noted for a reason.
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Joseph Alois Schumpeter (8 February 1883 – 8 January 1950) was an Austrian American economist and political scientist. He briefly served as Finance Minister of Austria in 1919. One of the most influential economists of the 20th century, Schumpeter popularized the term "creative destruction" in economics.
More about Joseph Alois Schumpeter...
The Theory of Economic Development: An Inquiry Into Profits, Capital, Credit, Interest, and the Business Cycle History of Economic Analysis: With a New Introduction Can Capitalism Survive? Creative Destruction and the Future of the Global Economy Essays: On Entrepreneurs, Innovations, Business Cycles, and the Evolution of Capitalism Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process

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“Geniuses and prophets do not usually excel in professional learning, and their originality, if any, is often due precisely to the fact that they do not.” 18 likes
“Please do not think that I am accusing socialists of insincerity or that I wish to hold them up to scorn either as bad democrats or as unprincipled schemers and opportunists. I fully believe, in spite of the childish Machiavellism in which some of their prophets indulge, that fundamentally most of them always have been as sincere in their professions as any other men. Besides, I do not believe in insincerity in social strife, for people always come to think what they want to think and what they incessantly profess. As regards democracy, socialist parties are presumably no more opportunists than are any others; they simply espouse democracy if, as, and when it serves their ideals and interests and not otherwise. Lest readers should be shocked and think so immoral a view worthy only of the most callous of political practitioners, ...” 5 likes
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