Schumpeter/Gilder, pt II

rakesh bhandari djones at
Wed Nov 29 15:43:32 MST 1995

At any rate,  I would say to Steve that note that Schumpeter is also
attempting to give reasons  why a "decadent" bourgeoisie may not fight
attacks on its standing: progressive taxation, public investment, labor
regulation.   In her review of CSD, Joan Robinson also expressed surprise
that Schumpeter thought the bourgeoisie would simply accept interventionism
and the march to socialism. As already suggested,  Schumpeter did argue
that capital has no long-term perspective; it is childless and its
perspective short-term. There is no incentive to increase, hold onto and
put savings into long-term investments, the harvest of which will be reaped
only by one's children.  So the bourgeosie accepts the taxation and
encroachment of the Keynesian state.   

Ultimately it is the political nature of the bourgeois class which is of 
interest to Schumpeter; while Gilder denies it, Schumpeter emphasized that
the entrepreneurial function had been internalized at any rate by monopoly
capital, and he was more interested with why the capitalist class did not
organize,as he claims it could have,  a more successful political
counter-offensive against the New Deal--in short, with why the bourgeoisie
had become decadent.   For this he blames the feminist decomposition of the
bourgeois family, the radical defection of intellectuals and, in a more
correct and Marxist manner, the loss of attachment of the bourgeoisie to
its property as it is ousted from control of production and converted into
psychologically passive income receivers.    So I would argue that his
concern here is more political than economic. And it is easy to see the
importance of such themes to the lunatic right today.  

Of course, given this analysis, it is not surprising that Schumpeter was
actually attracted to the Nazis exactly because of their support of family
values and savings, as noted by another of one his biographers Robert
Loring Allen.  (This is of course another fascinating question in
intellectual history:  how Schumpeter the famous Anglophile champion 
became symapthetic to national socialism, to the point politically where he
urged concessions to Hitler and theoretically where he seems to have
repudiated his analysis of aggressive imperialism as but a feudal
hangover).  Also note Schumpeter's commentary on Pareto's support of the
self-appointment to dictatorship by Mussolini in the context of a "decadent
bourgeoisie."   Schumpeter seems to support it.   

There is another topic of importance, how Schumpeter reached the conclusion
that "subnormals" represent the great threat to humanity.  This belief of
Schumpeter's has received attention by another biographer Richard Swedberg
and by George Catephores in his recent essay on Schumpeter in New Left
Review. How  Schumpeter reached this conclusion is not yet clear to me.  

It is interesting that in his Brittanica encyclopedia entry on capitalism
(by the way,this summing-up is a stunning indication of  how self conscious
a prize-fighter Schumpeter was, e.g., he thought his cycle theory pretty
much explained the negative aspects of capitalism not as the symptoms of
its tendency towards increasing misery, more severe crises and objective
breakdown but as the  necessary short-terms aspects of an economically
progressive, albeit socio-psychologically weak, system) Schumpeter seems to
admire Trotsky's use of the state to break strikes and impose discipline
upon the subnormal elements of the working class. Perhaps for him the
crushing of the Kronstandt strike sounded a tocsin for ruling classes

 Like Irving Fischer, Schumpeter also seems to have been sympathetic to
eugenics, but unlike his support of family values, it is difficult to see
how such sympathy is grounded in his theory proper.  

But in the context of declining birth rates among the middle classes,
perhaps Schumpeter began to fear the social power of the so-called
subnormals whose influence could only grow as the elites biologically and
psychologically decomposed.  This is of course nothing more than jejune
concern over the post-histoire represented by mass society, so common among
European intellectuals.  His fear of the dimunation of the middle class
then was simply expressed in the language of race suicide and racial
degeneration (see Schumpeter's Lowell lectures).  

And for today's lunatic right, AIDS can only be God's tool--or God's
punishment, as Reagan called it-- to strengthen the weak links: it serves
to discourage homosexuality and strenghten the ideal of the monogamous
patriarchal bourgeois family; and it works to eliminate those subnormals
who otherwise pose "the great threat to humanity". With that, I hope to
change topics and raise the question of the political uses to which AIDS
has been put, for example by Gilder, the same fanatic who for more than two
decades has wished the political domination of the Nation of Islam over


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