schumpeter

jones/bhandari djones at uclink.berkeley.edu
Mon Jul 3 12:32:07 MDT 1995


Richard Swedberg, 1991. Schumpeter: A Biography. Princeton University Press.

This book has been highly praised and in my opinion unduly so.  Its most
significant contribution seems to me to be its discussion of Joseph Alois
Schumpeter's Weber-inspired conception of *Sozialokonomik*, in particular
how Schumpeter attempted to broaden the domain of economics beyond price
formation in his work on the tax state, class formation and imperialism.
Schumpeter is thus presented as a forerunner of a true social science, a
transciplinary economic science.  Schumpeter's efforts to synthesize
theory, economic statistics and economic history is also touted as one of
the great social scientific projects of this century. Schumpeter's
methodological contributions are seen as key to his brilliant work on
"today's most important puzzles: the role of technology in the economy; how
to incorporate social factors into economic theory; and how to develop a
truly dynamic theory."

In my opinion Swedberg underestimates the extent to which Schumpeter's work
was a severe critique of Marx's theory.

In an interesting footnote, RS does say that it is possible that Max Weber
(who read Russian) may have conveyed to Schumpeter Lenin's argument in
Imperialism: the highest stage of capitalism before he  penned his own
famous essay on the matter.  And RS also does note that JAS was always
inspired by Marx's theorization of dynamics as immanent to the capitalist
system.

But the polemical  nature of Schumpeter's work is underemphasized;
Schumpeter's self-professed scientific detachment is treated with kid
gloves, and the work which has critiqued Schumpeter's positivist
self-conception (e.g., Manuel Gottlieb, Allen Sievers, Robert Heilbronner
and Murray Greene, among others) is either ignored or consigned to short
footnotes.

Very disturbing about Swedberg's treatment is how little reflection
Schumpeter's vicious statements about various minority groups provokes.
After citing some of Schumpeter's comments on various "subnormal" groups,
all Swedberg can say is that Schumpeter's universe is "inhuman", and this
"lets us understand how Schumpeter must have suffered from having to live
in it."

One can safely conclude however that one suffers much more when actually
treated as a ... n..g..r(Schumpeter's language is disturbing) than when one
merely contemptuously thinks of human beings in such terms, seeing them
ultimately, as Schumpeter did, as "the great threat to humanity."

Having already found the secret of profit in supernormal personalities,
Schumpeter seems to have substituted the Keynesian theory of subnormal
economic activity (an unemployment equilibrium) with diatribe against
subnormal people, presumably the beneficiaries of the inflationary
Keynesian programs which he maintained were undermining the self-generative
capacities of the capitalist mechanism. So it is not surprising that
Schumpeter would bring it all together thusly: "Just as the nigger dance is
the dance of today, so is Keynesian economics the economics of today."

RS notes that at this point that Schumpeter was mentally out of balance but
somehow at the same point RS reminds us of what a monumental achievement
the History of Economic Analysis, written at the same time,  remains.
Moreover, RS himself notes that Schumpter consciously and strategically
reminded himself not to express such sentiments  openly.

Swedberg does not what to make of Schumpeter's fear of the high birthrate
outside of white humanity, especially of Slavic ethnic groups, and Swedberg
takes it on JK Galbraith's authority that JAS was not an anti-semite,
though Schumpeter was sure that the extent of the Holocaust had been
doubled...as if that would still make it less of crime against humanity.

 Schumpeter's contempt for ordinary people is also manifest  in his
assumption that labor radicalism can only be the product of spoiled
intellectuals.

Of course Schumpeter was actually drawn to Hitler for his interest in
recomposing what Schumpeter saw as a weakened bourgeois class and
protecting strata, as evident in Schumpeter's approval of Hitler's
promulgation of middle class family values and a pro-savings mentality:
Kinder, Kuche and Kirche. He saw Hitler as presenting an opportunity for
Catastrophe and Glory, a phrase Haberler told him to change to Catastrophe
or Glory.  As already suggested, one can only wonder how much of his
private diaries and correspondence remain unquoted or ellipsed by Swedberg
or Robert Loring Allen.  It is not for gossip purposes that this is
important;   we may be denied insight into Schumpeter's conscious strategic
intent in his theoretical work proper.

This may seem to even some Marxists as a politically correct dismissal of
someone who did make some great contributions to social science, including
of course that monumental history of economics, written as Schumpeter was
urging amnesty for  NAZI war criminals.   That he was one of the greatest
hired prize fighters of this century no one can honestly deny, I believe.
For example, Robert Heilbronner has shown that Schumpeter's early economic
theory was a critique of subjective value theory (or marginalism) mainly in
the service of an elite theory of history.

Knocking away at the foundations of contemporary economic ideology can
always be done from the Radical Right, something the famous technology
historian Nathan Rosenberg also does not recognize as he brackets
Schumpeter's reactionary politics and treats Schumpeter's critique of
neo-classical economics as a scientific contribution to the understanding
of capitalism, instead of what it really was: a reactionary defense of a
putatively dynamic and self-regulating "trustified", i.e., monopoly,
capitalism whose real contribution to humanity has been the barbarism so
manifest in  Schumpeter's peculiar "cultured conservativism" as RS puts it
or "Schumpeter's curious politics" as Bernard Semmel called it  in the
Public Interest...of all places.

Rakesh Bhandari




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