Wednesday, May 30, 2012

schumpeter on the transition to capitalism

He wisely states in Capitalism, Socialism, and Democracy:
Economically all this [i.e. the transition] meant for the bourgeoisie the breaking of so many fetters and the removal of so many barriers. Politically it meant the replacement of an order in which the bourgeois was a humble subject [to the monarchy, aristocracy] by another that was more congenial to his rationalist mind and to his immediate interests. But, surveying that process from the standpoint of today, the observer might well wonder whether in the end such complete emancipation was good for the bourgeois and his world. For those fetters not only hampered, they also sheltered. (135)
That last sentence is important. For Schumpeter, the influence of "old money", so to speak, is vital for keeping capitalism stable. Otherwise, modern ideas of free contract, for example, have a powerful ideological effect on workers, forcing them to question why they should be obedient to their employers if they have complete freedom over themselves. Such ideas could of course become revolutionary -- leading the economy down the road to socialism that Schumpeter so lamented.

At some point later on Schumpeter responds to this by saying that the threat of unemployment (under various guises) becomes the main tool of social control in the period of "unsheltered" capitalism, when feudal norms of obedience no longer hold sway.

1 comment:

  1. As Joan Robinson noted: Schumpeter is Marx with the adjectives changed round.