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Capitalism, Socialism and Democracy

4.03  ·  Rating details ·  2,283 ratings  ·  102 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 predi ...more
Paperback, 460 pages
Published August 30th 2006 by Routledge (first published 1942)
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LiB I think this question is asking if the book discusses the advantages and disadvantages of the presidential system? Not much and only tangentially, alt…moreI think this question is asking if the book discusses the advantages and disadvantages of the presidential system? Not much and only tangentially, although there is some discussion of the US system of democracy. Schumpeter discusses English parliamentary democracy in much more depth actually.(less)
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E. G.

--Capitalism, Socialism and Democracy

Prefaces and Comments on Later Developments:
Preface to the First Edition, 1942
Preface to the Second Edition, 1946
Preface to the Third Edition, 1949
The March into Socialism


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
Jim Puskas
Jun 14, 2016 rated it it was ok
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. 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. Further, he naïvely discounted the authoritarian ...more
Apr 10, 2011 rated it really liked it
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
Mar 14, 2013 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
Eric Baldwin
It shows how democracy is a vast conspiracy, elections are fraudulent, individual votes are useless, and human nature is corrupt.
Otto Lehto
Feb 09, 2013 rated it liked it
Schumpeter was a fascinating character, and his essays and books are fascinating to read. They seem to elude easy categorization. This particular book evinces an almost Hegelian dialectical method, whereby socialism and capitalism are seen as two sides of the same modernist coin.

The section on capitalism contains the analysis of "creative destruction", which is justifiably well-known. But that only takes up a few pages, whereas the rest is devoted to a historical analysis of the conditions unde
Dec 06, 2014 rated it it was ok
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
Jun 22, 2019 rated it really liked it
I am finished with this book finally and I think I have read a glimpse into Marx a little more. I have read Marx's Communist Manifesto before, believe it or not, and it was one of the first books on economics I've read. Well that state of mind was very similar to many others in the early 20th century as they read the pamphleteering of various political party interests.

This work discounts some of the more radical notions but retains some of the core tenets of Marxist communism. A thorough look a
Whitlaw Tanyanyiwa Mugwiji
It is a great read, especially for those interested in the political economy. It is Schumpeter’s best book, which is famous for popularising his acclaimed theory on capitalism, "creative destruction". Definitely not a light read, it took me forever to finish. But it was worth the read. I must confess, it is a difficult read even for those with an economics background, or those who have read Hegel’s dialectics or Karl Marx’s interpretation of history through dialectic materialism, as these theori ...more
Oct 20, 2018 rated it liked it  ·  review of another edition
Having heard of Schumpeter mostly from conservative authors, and this book in particular for the introduction of the idea of “creative destruction”, I was tempted to read “Capitalism, Socialism and Democracy” after also finding out that in it, someone affiliated with the Austrian School was anticipating an upcoming end of capitalism.

The book has five major parts: Marx, capitalism, socialism, and democracy, plus a brief history of socialist parties. Having only negligible familiarity with Marx’s
Dec 08, 2016 rated it it was amazing
Schumpeter must have been a really shitty human being to hang out with. And his dating profile must have been intolerable to even read. Schumpeter does a better take-down of socialism and Marx than Hayek or Von Mises, but never gets into any libertarian sounding nonsense and his shtick about capitalism is the best pitch I've heard for it in awhile. Also for a book about economics, it's written in like, the most bitchy tone.
Sep 08, 2011 rated it it was amazing
Excellent. An Austrian economist I can read and agree with most of the time. One of the best analysts since Weber.
Jan Notzon
Sep 24, 2020 rated it liked it
WHEW! I'm sure this is a wonderful, scholarly piece. For dilettantes like myself, however, it was an incredible slog!

For those with a PhD in Economics, some sort of advanced degree in political philosophy and an encyclopedic knowledge of 19th and 20th century European and US history, I'm sure you would find it most interesting, even enlightening.

For those dilettantes like myself, however, I would suggest Thomas Sowell's "Basic Economics". Sowell has a unique ability to make the most esoteric th
Apr 16, 2018 rated it really liked it
For someone who criticizes others for being prolix, he sure can ramble. Visionary economic foresight though.
Sep 15, 2020 rated it really liked it
I only read the first part about Marx, as part of my project reading Marx and reactions to him.

In many ways, Schumpeter approaches Marx in a way very similar to Bohm-Bawerk's Marx and the Close of His System. He treats him as a titan in the history of economic thought, someone with a genuine interest in economic history and theory who read thoroughly and thought deeply, with an often brilliant mind. He also considers his ideas decisively wrong and sets out to sharply, ruthlessly demonstrate tha
Sean Rosenthal
Jun 14, 2013 rated it really liked it
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
Edward Tse
Jan 03, 2015 rated it really liked it
Shelves: economics
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Aug 30, 2011 rated it really liked it  ·  review of another edition
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
Jun 05, 2014 rated it it was amazing
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
Aug 08, 2014 rated it really liked it  ·  review of another edition
- 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.
Mehmed Gokcel
Dec 11, 2017 rated it really liked it
I got to read selective parts of this book and thought the analysis of Marxist thought was incredibly insightful and Schumpeter's prediction of capitalism's end compellingly argued. Particularly his analysis of Democracy as a mode of self-determination both politically and economically leads to the argument that it is inseparable from socialism. He is not a fan of this outcome, but is inclined to give credit to the power of this motive in determining systems of governing and economics.
Jan 12, 2011 rated it it was amazing  ·  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.
Apr 25, 2012 rated it it was amazing
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.
Vitaly Repin
Jun 28, 2014 rated it it was amazing
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.
Jun 03, 2013 rated it really liked it
Shelves: study
I didn't read the whole book; i enjoyed what i read, although the language was quiet difficult for me. . .
Philip Chaston
Oct 15, 2014 rated it really liked it
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.
Neil Rempel
Jan 18, 2016 rated it really liked it  ·  review of another edition
A hard book, will need to reread it in the future....slower!
Dec 05, 2019 rated it really liked it
Interesting. I was vaguely familiar with Schumpeter as a famous economist (he has a column named after him in The Economist) who talked about creative destruction, and picked this up to get some exposure to his though on that and the titular topics.

There's quite a bit more to his ideas around creative destruction than the sort of obvious "progress sometimes hurts" that the phrase sometimes reduces to. He makes a convincing case that capitalism at any given point in time, for areas where progress
Eugene Kernes
Jul 17, 2018 rated it really liked it  ·  review of another edition
Shelves: economics
This book is an artful explanation of Marxism, capitalism, socialism, and democracy. Always starting from the concepts intended purpose, the way the concept was meant to be. Followed by the criticism of the concept and the way the realities of the world interact with it. Schumpeter shows a critical eye towards everything he tries to explain.

Schumpeter can be described as eclectic, while at the same time point to how eclectic Marx was. Sociology and economics made Marx seem like a prophet. The e
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Joseph Alois Schumpeter 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.

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Did you set an extremely ambitious Reading Challenge goal back in January? And has this, uh, unprecedented year gotten completely in the way of...
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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.” 34 likes
“In one important sense, Marxism is a religion. To the believer it presents, first, a system of ultimate ends that embody the meaning of life and are absolute standards by which to judge events and actions; and, secondly, a guide to those ends which implies a plan of salvation and the indication of the evil from which mankind, or a chosen section of mankind, is to be saved.” 10 likes
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