TAFKAS will be honest. He has not read as many of the “classics” as he would have liked to. Too many great books, too many other distractions, too little time. Perhaps it is too late with the coming book burning festivals.
One book TAFKAS has always meant to read was Joseph Schumpeter’s Capitalism, Socialism, and Democracy. He knows of some of the content and themes, but was never sufficiently across the detail to write about it.
Then he stumbled across this wonderful piece by The Streetwise Professor (SWP) who writes:
Witnessing the current tumult in the United States, and the West more generally, makes me appreciate the book and its insights all the more. We are experiencing a Schumpeter moment. The factors that he identified as the sappers that would undermine capitalism (and liberal democracy, as distinct from social democracy) are in clearly in operation today: large scale corporate enterprise and intellectuals.
The essence of Schumpeter’s message, at least as translated by the SWP, put words around some of the thoughts TAFKAS has had of late.
Schumpeter, like Marx, predicted the end of capitalism. But for different reasons. Schumpeter suggested that the seeds of the demise of capitalism are built into its DNA:
Schumpeter identified two major dynamics. The first was the destruction of the entrepreneurial function and the entrepreneur, and the dominance of the bureaucratic corporation. The second was the rise of an intellectual class, a rise that could only occur due to the massive wealth created by capitalism.
Written in 1943, this prediction seems to be, sadly, bearing truth.
The slow destruction of entrepreneurship, in no small part because the regulatory state both kills it and increases the returns to scale, which also kills it, should be apparent. Yet the thing that TAFKAS has deep felt for a while was this:
Schumpeter’s most piquant critiques focus on intellectuals. He has something of a difficulty in defining exactly what they are. In the end, he comes to something like Potter Stewart’s definition of pornography: you know them when you see them.
Schumpeter argues that intellectuals are hostile to capitalism because under it they do not receive the economic rewards–and crucially, the status–that they believe that their (allegedly) superior intellectual attainments deserve. But the massive wealth that capitalism creates permits the extension of higher education, and the support of a group of individuals (Schumpeter does not believe they truly represent a “class”) who are inveterately hostile to the system that allows them to exist in the first place.
According to Schumpeter, the essence of the intellectuals is the:
absence of direct responsibility for practical affairs. This touch in general accounts for another—the absence of that first-hand knowledge of them which only actual experience can give. The critical attitude, arising no less from the intellectual’s situation as an onlooker—in most cases also as an outsider—than from the fact that his main chance of asserting himself lies in his actual or potential nuisance value.
Another near 80 year old scribble.
Can this be reversed? If yes, how?