Capitalism, Socialism and Democracy

“Preaching in the garb of analysis and analyzing with a view to heartfelt needs, this is what conquered passionate allegiance.”

Schumpeter describes the underlying reason for Marx’s appeal. Marx concealed the emotional aspect of his message behind a façade of objectivity. This allowed his followers to enjoy the conviction and faith of a religion while believing they were merely accepting a science.

“The history of society is the history of class struggles.”

Schumpeter quotes from Marx’s economic interpretation of history as outlined in the Communist Manifesto. Schumpeter admired Marx’s ambition in this statement and his foregrounding of the importance of economics in understanding historical and sociological development. However, he regarded Marx’s specific analysis of class as too simplistic and apocalyptic.

“There are no doubt some things available to the modern workman that Louis XIV himself would have been delighted to have yet was unable to.”

Schumpeter gives an account of the advantages that capitalism has brought humanity. Part of this has involved a massive expansion of the quantity of goods available to most people. It has also involved an expansion in the diversity and quality of goods. Modern workers enjoy certain products, such as cars, previously unavailable to kings.