Joseph Alois Schumpeter Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

Economist Joseph Schumpeter (1883–1950) was born in Austria-Hungary. After the death of his manufacturer father, his mother married a retired army officer with an aristocratic title. Schumpeter was thus able to attend an exclusive Viennese school and then the University of Vienna, where he studied with both neoclassical and historically minded economists. After World War I (1914–1918), despite sympathies with the defunct monarchy, he served briefly as finance minister in an Austrian government led by social democrats. Following the emergence of almost-inevitable conflicts, Schumpeter went into banking and then eventually returned to scholarly life. In 1932 he accepted a position at Harvard, where he sealed his reputation among English and American social scientists.

Schumpeter made his mark on political science with his conception of democracy as method. Contrary to what he termed the classical doctrine, he insisted that democracy was no more than an institutional arrangement or a political method that allowed elite politicians to engage in electoral competition for decision-making power. For many political scientists, this conception had several attractive features. It seemed to banish normative elements and made it easy to distinguish democratic governments. It was congenial to the predominant mood of researchers who downplayed the political sophistication of ordinary citizens. And it posited as the driving force of politics the hard-headed competition of elite politicians, which produced substantive law and policy as mere “byproducts.” The conception, however, soon attracted critics, who argued that it devalued participation, deprived the term democracy of its critical power, and inappropriately treated contingent observations about voters as evidence of inalterable human psychology.

Schumpeter elaborated his conception of democracy in Capitalism, Socialism, and Democracy (1942), a work focused on what he perceived as the historical tendencies leading toward the demise of capitalism. The significance of this fact has not always been appreciated. Democratic theory could be, for Schumpeter, only a part of a broad science of social development. As an economist, he greatly admired neoclassical models, which focused on systematic relationships between economic quantities and on the tendency toward equilibrium. But as early as 1911, he expressed dissatisfaction with the implicit neoclassical assumption that the equilibrating capitalist system contained within it no drive toward change. Early on, Schumpeter posited entrepreneurial innovation as an internal source of disruption, constantly remaking the economy—a process he later summed up as creative destruction. As his thought developed, he also began to stress that the capitalist system was surrounded by an institutional framework he termed the capitalist order. A fully articulated theory of capitalist development required an economic sociology that could elucidate this framework and the tendencies toward change embodied in it. As an economic sociologist, Schumpeter argued that the entrepreneurial function would likely disappear, crucially weakening the capitalist order. He also argued that democratic ideologies were part of a broad cultural challenge to the capitalist order—even while elsewhere arguing that the democratic method was a form of elite rule under which the economy was protected from popular interference.

Bibliography:

Allen, Robert L. Opening Doors: The Life and Work of Joseph Schumpeter, 2 vols. New Brunswick, N.J.:Transaction, 1991.
Medearis, John. Joseph Schumpeter’s Two Theories of Democracy. Cambridge, Mass.: Harvard University Press, 2001.
Schumpeter, Joseph A. Capitalism, Socialism, and Democracy. 3rd ed. New York: Harper and Row, 1976.
Essays on Entrepreneurs: Innovations, Business Cycles, and the Evolution of Capitalism, edited by Richard Clemence. New Brunswick, N.J.: Transaction, 1989.
The Economics and Sociology of Capitalism, edited by Richard Swedberg. Princeton, N.J.: Princeton University Press, 1991.
Swedberg, Richard. Schumpeter: A Biography. Princeton, N.J.: Princeton University Press, 1991.

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