CAPITALISM, SOCIALISM AND DEMOCRACY
Joseph A. Schumpeter
Harpercollins, paperback reprint (1984)
(first published in 1942)

"It was not by a slip that an analogy from the world of religion was I permitted to intrude into the title of this chapter. There is more than analogy. 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. We may specify still further: Marxist socialism also belongs to that subgroup which promises paradise on this side of the grave....

...The least important point about this is that it explains the success of Marxism. Purely scientific achievement, had it even been much more perfect than it was in the case of Marx, would never have won the immortality in the historical sense which is his. Nor would his arsenal of party slogans have done it. Part of his success, although a very minor part, is indeed attributable to the barrelful of white-hot phrases, of impassioned accusations and wrathful gesticulations, ready for use on any platform, that he put at the disposal of his flock. All that needs to be said about this aspect of the matter is that this ammunition has served and is serving its purpose very well, but that the production of it carried a disadvantage: in order to forge such weapons for the arena of social strife Marx had occasionally to bend, or to deviate from, the opinions that would logically follow from his system....

...But he was a prophet, and in order to understand the nature of this achievement we must visualize it in the setting of his own time. It was the zenith of bourgeois realization and the nadir of bourgeois civilization, the time of mechanistic materialism, of a cultural milieu which had as yet betrayed no sign that a new art and a new mode of life were in its womb, and which rioted in most repulsive banality. Faith in any real sense was rapidly falling away from all classes of society, and with it the only ray of light...died from the workman's world, while intellectuals professed themselves highly satisfied with Mill's Logic and the Poor Law....

...Something will have to be said about the cogency and correctness of Marx's attempt to prove the inevitability of the socialist goal. One remark, however, suffices as to what has been called above his formulation of the feelings of the unsuccessful many. It was, of course, not a true formulation of actual feelings, conscious or subconscious. Rather we could call it an attempt at replacing actual feelings by a true or false revelation of the logic of social evolution. By doing this and by at tributing–quite unrealistically–to the masses his own shibboleth of 'class consciousness,' he undoubtedly falsified the true psychology of the workman (which centers in the wish to become a small bourgeois and to be helped to that status by political force), but in so far as his teaching took effect he also expanded and ennobled it. He did not weep any sentimental tears about the beauty of the socialist idea." Joseph Schumpeter, Capitalism, Socialism and Democracy (1984 edition), Chapter One, "Marx the Prophet," (quoted on Amazon.com)

BOOK DESCRIPTION
In this famous book, first published in 1942, Schumpeter predicts that capitalism will be crippled by its own achievements and will naturally evolve into socialism.

BOOK REVIEW
Thomas K. McCraw, Harvard Business School
"Does Joseph Schumpeter's Capitalism, Socialism and Democracy rank with the most important works of economic history of the twentieth century? Of course it does. Has there been a more penetrating analyst of capitalism than Joseph Schumpeter? No, I do not think there has....

...Capitalism, Socialism, and Democracy was Schumpeter's most popular success by far. Translated into at least sixteen languages, it still sells widely in paperback editions. Although the author often compared it unfavorably with his more scholarly books, it retains its seminal quality three generations after it appeared.

Despite the book's title, it contains little of lasting interest about either socialism or democracy. But it bursts with ideas about capitalism, and as a 'performance'—a term Schumpeter liked to apply to others' works—it may be the best analysis of capitalism ever written...." (from essay in Economic History Services, Sep[t.] 1, 2000, quoted on eh.net, Economic History Services, Project 2001-Significant Works in Twentieth-Century Economic History)