_The Quotable Schumpeter_ 


                            Compiled by
      
                            Bryan Caplan

	I have tried to show that a socialist form of society will
inevitably emerge from an equally inevitable decomposition of capitalist
society...[W]hile most of us agree as to the result, we do not agree
as to the nature of the process that is killing capitalism.  Believing
that most of the arguments offered - both on Marxian and on more popular
lines - are wrong, I felt it my duty to take, and to inflict upon the
reader, considerable trouble in order to lead up effectively to my
paradoxical conclusion: capitalism is being killed by its achievements.

Joseph Schumpeter, _Capitalism, Socialism, and Democracy_, xiv


[Marx] contemptuously rejects the bourgeous nursery tale (Kinderfibel)
that some people rather than others became, and are still becoming every
day, capitalists by superior intelligence and energy in working and
saving.  Now he was well advised to sneer at that story about the good
boys.  For to call for a guffaw is no doubt an excellent method of
disposing of an uncomfortable truth, as every politician knows to his
profit.
		_C,S,&D_, p.16


If we list the items that enter the modern workman's budget and from
1899 on observe the course of their prices...in terms of the hours of
labor that will buy them...we cannot fail to be struck by the rate
of the advance which, considering the spectacular improvement in
qualities, seems to have been greater than not smaller than it ever
was before [the rise of big business].  If we economists were given
less to wishful thinking and more to the observation of facts, doubts
would immediately arise as to the realistic virtues of a theory that
would have led us to expect a very different result.  Nor is this all.
As soon as we go into details and inquire into the individual items in
which progress was most conspicuous, the trail leads not to the doors of
those firms that work under conditions of comparatively free competition
but precisely to the doors of the large concerns...and a shocking
suspicion dawns upon us that big business may have had more to do with
creating that standard of life than with keeping it down.

		_C,S,&D_, pp.81-82

Capitalism, then, is by nature a form or method of economic change and
not only never is but never can be stationary...The fundamental impulse
that sets and keeps the capitalist engine in motion comes from the new
consumers' goods, the new methods of production or transportation, the
new markets, the new forms of industrial organization that capitalist
enterprise creates.

		_C,S,&D_, pp.82-83

The opening up of new markets, foreign or domestic, and the
organizational development from the craft shop and factory to such
concerns as U.S. Steel illustrate the same process of industrial
mututation - if I may use that biological term - that incessantly
revolutionizes the economic structure _from within_, incessantly
destroying the old one, incessantly creating a new one.  This process of
Creative Destruction is the essential fact about capitalism.

		_C,S,&D_, p.83


Modern pacifism and modern international morality are nonetheless
products of capitalism.

		_C,S,&D_, p.128 


[C]apitalism stands its trial before judges who have the sentence of
death in their pockets.  They are going to pass it, whatever the defense
they may hear; the only success victorious defense can possibly produce
is a change in the indictment.
		
		_C,S,&D_, p.144


[T]he success of the indictment becomes quite understandable as soon as
we realize what acceptance of the case for capitalism would imply.  The
case, were it even much stronger than it actually is, could never be
made simple.  People at large would have to be possessed of an insight
and a power of analysis which are altogether beyond them...[R]ational
recognition of the economic performance of capitalism and of the hopes
it holds out for the future would require an almost impossible moral
feat by the have-not.  That performance stands out only if we take a
long-run view; any pro-capitalism argument must rest on long-run
considerations.  In the short run, it is profits and inefficiencies that
dominate the picture.  In order to accept his lot, the leveler or
chartist of old would have had to comfort himself with hopes for his
great-grandchildren.  In order to identify himself with the capitalist
system, the unemployed of today would have completely to forget his
personal fate and the politician of today his personal ambition.  The
long-run interests of society are so entirely lodged with the upper
strata of bourgeois society that it is perfectly natural for people to
look upon them as the interests of that class only.  For the masses, it is
the short-run view that counts.  Like Louis XV, they feel _apres nous le
deluge_.

		_C,S,&D_, p.145


Thus the typical citizen drops down to a lower level of mental
performance as soon as he enters the political field.  He argues and
analyzes in a way which he would readily recognize as infantile within
the sphere of his real interests.  He becomes a primitive again.

		_C,S,&D_, p.262


The ways in which issues and the popular will on any issue are being
manufactured is exactly analogous to the ways of commercial advertising.
We find the same attempts to contact the subconscious.  We find the same
technique of creating favorable and unfavorable associations which are
the more effective the less rational they are.  We find the same
evasions and reticences and the same trick of producing opinion by
reiterated assertion that is successful precisely to the extent to which
it avoids rational argument and the danger of awakening the critical
faculties of the people.  And so on.  Only, all these arts have
infinitely more scope in the sphere of public affairs than they have in
the sphere of private and professional life.  The picture of the
prettiest girl that ever lived will in the long run prove powerless to
maintain the sales of a bad cigarette.  There is no equally effective
safeguard in the case of political decisions.  Many decisions of fateful
importance are of a nature which makes it impossible for the public to
experiment with them at its leisure and at moderate cost.  Even if that
is possible, however, judgment is as a rule not so easy to arrive at as
it is in the case of the cigarette, because effects are less easy to
interpret.

		_C,S,&D_, p.263


Once more: it is only socialism in the sense defined in this book that
is so predictable.  Nothing else is.  In particular there is little
reason to believe that this socialism will mean the advent of the
civilization of which orthodox socialists dream.  It is much more likely
to present fascist features.  That would be a strange answer to Marx's
prayer.  But history sometimes indulges in jokes of questionable taste.

		_C,S,&D_, p.375