The twentieth century’s dominant myth was that of a rational capitalism. The two economists who did the most to promote this idea were John Maynard Keynes and Joseph Schumpeter. Both were responding to the great historical crisis of capitalism manifested in the First World War, the Great Depression, and the Second World War. In the wake of the greatest set of horrors the world had ever seen, accompanied also by the rise of an alternative, contending system in the Soviet Union, it was necessary for capitalism following the Second World War to reestablish itself ideologically as well as materially. In terms of the ideological requirement, the two economists who accomplished this most effectively were Keynes and Schumpeter—not simply because they epitomized the best in bourgeois economic ideology, but also because they were the leading representatives of bourgeois economic science. What they set out in their analyses were the requirements of a rational capitalism and at least the hope that these requirements would be achieved.
Let us consider Keynes first. Keynes, located at Cambridge in England, was the embodiment of rational capitalism. He not only perceived contradictions of the system but also believed they were subject to rational management. This was true with regard to both the relations between capitalist states and the regulation of internal contradictions of the accumulation process. In his Economic Consequences of the Peace (1919) he criticized the Versailles peace agreement for the predatory war reparations imposed on a defeated Germany, which might lead, he suggested, to another world war. In response to the Great Depression Keynes wrote his magnum opus The General Theory of Employment, Interest and Money (1936) overthrowing Say’s Law (the orthodox supply-side view that supply creates its own demand). For the first time in the establishment economic literature serious consideration was given to the nature of structural economic crisis under capitalism and what states might do about it. For Keynes the key was to get the state to intervene to ensure sufficient effective demand to guarantee full employment. As Paul Sweezy pointed out at the Istanbul University ten years ago (see The Triumph of Financial Capital, Monthly Review, June 1994), Keynes also believed that a rise to dominance of financial capital as in the 1920s spelled the end of capitalist rationality, turning productive enterprise, in his words, into a bubble on a whirlpool of speculation. He therefore called for the euthanasia of the rentier. He argued for a tempering of free trade and a degree of national self-sufficiency, in response to the globalizing influences of his time. He was one of the principal architects of the Bretton Woods system, designed to stabilize world trade and finance through the creation of the General Agreement on Tariffs and Trade, the International Monetary Fund, and the World Bank. In general Keynesianism is thought to have pointed toward social democracy and the welfare state as manifestations of capitalist rationality. It seemed to portend a reformation rooted in a political compromise between capital and labor.
At the outset of the Great Depression in 1930 Keynes wrote an essay entitled Economic Possibilities for Our Grandchildren in which he declared that the economic problem, in the sense of meeting subsistence needs of everyone in the rich societies, might be solved in a hundred years. The issue would then become one of how to deal with leisure as the work week declined to three hours a day, a total of fifteen hours a week. At that point, he claimed, a new moral code might develop to bring society out of the tunnel of economic necessity into the daylight. Until then, however, the world would have to stick to an alienated moral code in which fair is foul and foul is fair, that is, one based on the greed and exploitation associated with the accumulation of capital.
Schumpeter, located at Harvard in the United States, was a more conservative figure opposed to Keynes and Keynesianism. He promoted the notion of the rational entrepreneur as the essence of capitalism, insisting that the further growth of monopolies/oligopolies though inevitable could lead to the eventual demise of capitalism. He argued against notions of a structural economic crisis of capitalism, employing long cycle theory—the fifty-year Kondratieff cycle—to rationalize the long downturn associated with the Great Depression. Nothing was more objectionable to Schumpeter than the argument of Alvin Hansen, Keynes’s leading American follower, that capitalism was tending to economic stagnation for economic reasons. Capitalism’s problems, Schumpeter believed, were sociological: the demise of the necessary external conditions for the free development of the entrepreneurial function. In a chapter on Crumbling Walls in his great work, Capitalism, Socialism and Democracy (1942) he explained how dematerialized, defunctionalized and absentee ownership together with the mechanization of progress under the regime of concentrated capital took the life out of entrepreneurship, undermining its vital function and with it the capitalist system.
Schumpeter also argued that capitalism as a rational economic system was opposed to imperialism, which came about in contemporary times as in the past through the development of a war machine—and, in terms of economic factors, through the emergence of monopolistic corporations. Capitalism, he observed in The Sociology of Imperialisms (1919), is by nature anti-imperialist….We cannot readily derive from it such imperialist tendencies as actually exist, but must evidently see them only as alien elements, carried into the world of capitalism from the outside, supported by non-capitalist actors in modern life.
Neither Keynes nor Schumpeter was so naïve as to think that capitalism could simply develop unconstrained according to its own logic—a view associated with the myth of the self-regulating market, which has now displaced the myth of rational capitalism within the dominant ideology, and is associated with the name of Friedrich Hayek and contemporary neoliberalism. In Schumpeter’s words, no social system is ever going to survive when allowed to work out according to its own logic. You need only look at the present situation. There is no firm, no industry, no country, which can live under those rules which it would assuredly live under if it were allowed.* The same was true of capitalism as a whole. If left to its own devices it would so thoroughly impose its economic logic on everything existing that it would undermine the sociological-cultural elements without which its con tinuance was impossible. In Schumpeter’s pessimistic account, capitalism was destined to undercut itself in this way, since attempts to regulate it, to save it from itself, would also lead to the same end and not necessarily more slowly. Capitalism, he concluded, would not survive. Still, Schumpeter, no less than Keynes, articulated some of the conditions of what was conceived as a rational capitalism.
Of course the new mythology of a rational capitalism did not simply emerge from the heads of two economists. It reflected the spirit of an age of restored capitalism under the leadership of the United States, which had emerged virtually unscathed from the Second World War with half of the world’s output, 60 percent of its manufacturing, a currency that was thought to be as good as gold, and a monopoly of nuclear weapons. The United States, by far the most powerful economic, political, and military force following the Second World War, seemed to stand for this new capitalist rationality. The construction of the Bretton Woods system for international trade and finance and the location of the new United Nations in New York promised a different, more stable capitalism. The relatively benign approach to occupied Germany and Japan and the introduction of the Marshall Plan to aid the western European states in rebuilding their economies seemed to point to the benevolence of the new world power. The United States established the Atlantic Alliance and beyond that an alliance between the triad of the United States, Western Europe, and Japan. In Western Europe social democracy flourished in a seemingly comfortable and mutually reinforcing partnership with capital. The growth of the welfare state became emblematic of the new organized capitalism.
The European and Japanese economies were quickly rebuilt. Rapid economic growth ushered in a new golden age, reminiscent of the best years of capitalism’s youth. European colonialism receded in the face of anticolonial movements and revolutions in the third world. The United States, presenting itself as an anticolonial power, took the lead in promoting a new development ideology for export to the periphery.
In the United States itself antitrust measures were adopted to ensure continuing competition. Fiscal and monetary fine-tuning were seen as keys to management of the economy. A little over two decades after the Second World War leading American economists, such as Paul Samuelson, recipient of the first Nobel Prize in economics, proclaimed the end of the business cycle. Pundits in the United States adopted the term Pax Americana to describe the new era of supposedly benign American hegemony. At other times they referred to the American Century. Social scientists throughout the West celebrated the new rational-functional capitalist order.
All of this was occurring in the environment of the Cold War, including two hot wars in Asia. In the United States the anticommunist witch hunt known as McCarthyism was used to break the back of the New Deal coalition of labor, civil rights supporters, and small farmers. In An Essay for Our Times (1951) critical cultural historian H. Stuart Hughes called the United States the new Byzantium, preferring this to the new Rome. He sought to emphasize the conservative and religious-moralistic nature of its empire, as well as the notion that the United States had become the last bastion of a fading civilization. Washington intervened throughout the globe, and unleashed death and destruction on millions to prop up dictatorial regimes that it said were bulwarks for the free world. But all of this was justified in the dominant ideology as the necessary defense of a new rational capitalist civilization—not a reaffirmation of capitalist empire of old.
Naturally not all economists succumbed to the idea of a new rational capitalism. Criticism was particularly strong in the Marxist tradition. One such dissenting view arose from what has often been called monopoly capital theory associated with Paul Baran and Paul Sweezy and Monthly Review in the United States, but which grew out of economic critiques developed by Michal Kalecki and Josef Steindl in Europe. At the height of the golden age of post-Second World War capitalism in 1966, Baran and Sweezy’s Monopoly Capital was published, which argued that far from being a reflection of a more rational, more organized capitalism, the prosperity of the post-Second World War years was a transitory product of special development factors to be sought in the larger historical environment. The normal tendency of capitalism in its monopoly stage was one of economic stagnation due to the inability to absorb the enormous actual and potential surplus at its disposal. Given a tendency to stagnation in monopoly capitalism, what needed to be explained was not stagnation as much as prosperity. They thus focused on the counteracting forces to stagnation that had served to prop up the capitalist economy. Some of these were entirely transitory such as:
1. The buildup of consumer liquidity in the United States during the Second World War, which immediately after the war fed a consumer spending boom.
2. The second great wave of automobilization in the United States, which was associated with the growth of suburbs and the building of the interstate highway system and powered the steel, glass, and rubber industries.
3. The rebuilding of the European and Japanese economies following the war.
4. The stability associated with unchallenged U.S. hegemony over the world economy, marked by the absolute dominance of the dollar.
In addition to these more transitory factors, however, there were also longer-term structural changes in the working of capitalism, and particularly U.S. capitalism. These included:
5. The emergence of massive and continuing military spending in the United States, justified originally in terms of the Cold War arms race, but geared principally to the maintenance of the imperialist system.
6. The development of the modern sales effort—or an economy geared to high consumption, and supported by marketing and the development of a system of consumer credit or mass indebtedness.
7. The rise of a qualitatively new financial superstructure operating somewhat independently from the productive base of the capitalist economy, and leading to a financial explosion.
For Baran and Sweezy this new regime of accumulation was, in contrast to the myth of a new rational capitalism, an Irrational System (the title they gave to the closing chapter of Monopoly Capital). Under monopoly capitalism few if any of the characteristics of rational capitalism, as conceived by Keynes and Schumpeter, pertained. Capitalism had not become less imperialistic, rather militarism and imperialism were built into the very fiber of its day to day operations—integrated with its economic functioning as never before. U.S. hegemony was maintained only through wars in Asia and elsewhere. State promotion of effective demand through civilian government spending and fiscal and monetary fine-tuning—the hallmarks of Keynesian policy—were completely inadequate to counter the tendency toward stagnation under capitalism. The welfare state celebrated by Keynesians and social democrats was undeveloped in the most developed, most stable capitalist state—the United States—blocked by vested interests. What were viewed as successes in economic growth and stability were the product of fortuitous historical circumstances and artificial economic stimulants. Rather than relying primarily on productive investment the system was dependent for its growth on the sales effort and financial expansion. The Schumpeterian entrepreneur was no longer at the center of the system but had been displaced by the giant, monopolistic corporation. The limited quid pro quo of capitalism—its idealized system of equal exchange—had broken down almost completely under monopolistic pricing and output arrangements. High profit margins were maintained in the face of shortfalls in demand by idling plants and machinery instead of lowering prices, resulting in continuing high levels of excess capacity. Wage exploitation rather than decreasing, leading to greater leisure time as Keynes had envisioned, was becoming more severe. Meanwhile leisure itself became just another form of exploitation—passively absorbable amusement—designed to reinforce an economic system that while encompassing a vast productive capacity was unable to allow for a meaningful transformation of human existence or ease the chains on the individual worker.
At the center of Baran and Sweezy’s analysis was the view that the monopoly capitalist system, despite all of the massive, irrational means being used to shore it up, could not continue crisis free. The forces of stagnation constantly threatened to reassert themselves. In the early 1970s, within a few years of the publication of their book, the United States was once again caught in a serious economic crisis. This return of economic crisis was complicated by the fact that it overlapped with an energy crisis arising from OPEC’s actions in response to the Yom Kippur War, and by the decline of U.S. hegemony, as the United States encountered more economic competition from abroad. The entire U.S.-centered global economic system was proving to be unstable.
The crisis of the early 1970s was complicated still further by the U.S. defeat in Vietnam. The war had contributed to serious imbalances in the position of the dollar, leading to a vast flow of dollars abroad, and the build-up of a huge Euro-dollar market. The result was the end of the dollar-gold regime in 1971 as Nixon delinked the dollar from gold. Meanwhile the defeat in Vietnam placed constraints on the ability of the United States to continue to utilize its war machine to ease its economic problems by increasing its ascendancy abroad.
At the outset of the economic crisis Paul Sweezy together with Harry Magdoff, his coeditor at Monthly Review and the author of The Age of Imperialism (1969), not only emphasized all of the factors presented earlier in Baran and Sweezy’s Monopoly Capital, but insisted even more adamantly that stagnation was the normal state of monopoly capitalism, so that what needed to be explained were the bases of the rapid growth that had vanished, rather than stagnation itself. The fact that stagnation had reappeared in spite of all the vast means used to sustain the economy showed the full depth of the contradiction. The crisis was therefore irreversible within the given structure of things.
Now almost four decades after the publication of Monopoly Capital there is no doubt that this assessment was in its essentials correct. The per capita growth rate of world output (world GDP) was obviously slower in the 1970s than the 1960s. But the problem did not end there: it was slower in the 1980s than in the 1970s, slower in the 1990s than in the 1980s, and so far has been slower in the 2000s than in the 1990s (see The Stagnation of Employment, Monthly Review, April 2004). The experience of the U.S. economy and that of the other wealthy states is similar to the world economy as a whole in this respect, with decades of deepening stagnation.
The response of the advanced capitalist states to the reemergence of stagnation was fairly immediate and uniform across the board and by the late 1970s had taken a definite form at both the national and global levels. If rational capitalism (in its Keynesian version) had been something more than an ideological mirage an attempt would have been made to adopt more radical Keynesian and social democratic programs in response to the crisis. This would presumably have taken the form of a redistribution of wealth and income from the top of society to the bottom, the enhancement of the welfare state, the promotion of full employment and economic security in general—even what was sometimes envisioned as a global Marshall plan designed to aid the third world. The fact that none of this was tried and the much-vaunted Keynesianism vanished instantly without a fight the moment capital felt pressure on its bottom line is eloquent in itself.
As Joyce Kolko observed in her Restructuring the World Economy in 1989, capital restructures by accretion, not by strategy. What quickly emerged was a supply-side discourse that reflected capital’s attempt to purify its accumulation logic, abandoning all previous attempts to rein in and regulate the system. Thus the 1970s and 1980s saw the emergence of a host of terms that have now become all too familiar: rigidities, restructuring, deregulation, privatization, the free market system, globalization, and (from a more critical standpoint) neoliberalism. The goal became one of forcing down wages, breaking unions, eliminating state supports for workers and subsidies for consumers, the removal of barriers to the mobility of capital, the redistribution of income and wealth from bottom to top, and like measures clear across the globe. In areas as fundamental as employment, health, education, retirement, food availability, the environment, etc. the principles of a no-holds-barred capitalism took over. The presumption of rationality, associated with thinkers like Keynes and Schumpeter—and before them the sociologist Max Weber, who had described capitalism as the rational tempering of an irrational impulse—appeared suddenly only a distant memory, the rhetoric of a bygone age.*
Despite the continued slowing down of capitalist economies market fetishism became more not less ascendant in each passing decade. With capitalism performing at a rate well below what it had achieved in its immediate post-Second World War period, and with class organization at the bottom of society far weaker than before, the system reverted to a more directly exploitative form, which, if it did not do much to boost the fortunes of whole nations, nonetheless enhanced the wealth at the top. The ruling ideas, that is, the ideology of the ruling class, shifted accordingly. With a renewed belief in the system’s self-regulation, Hayek was suddenly seen as superior to Keynes.
Not only did raw capitalism reemerge, but also, following the fall of the Soviet bloc, naked imperialism suddenly loomed forth, as the United States took advantage of the vacuum created by the Soviet Union’s demise to attempt to reestablish and even expand its global hegemony. If for Schumpeter imperialism was a byproduct of a war machine and monopolization rather than the intrinsic properties of capitalism, reality today suggests this distinction is either irrelevant or false. The most powerful state of the global capitalist system and the one claiming to best represent its logic, the United States, has openly adopted a strategy of retaining its economic and political hegemony through military means—and went so far as to announce this to the entire world in the National Security Strategy of the United States released in 2002. Simultaneously with this declaration Washington began to beat the drums for an invasion of Iraq—the country with quite possibly the largest share of the world’s unexploited oil reserves and hence conceivably the largest potential for an expansion of oil production—under the pretense of defending against nonexistent weapons of mass destruction. Within months the invasion had taken place followed by a prolonged occupation and continuing war. In this case the exercise of power became its own justification. Empire was now to be glorified. The terrorist attacks of 2001 had turned the greater part of the world into nests of barbarians, to be dominated at will by the United States in coalition with those lesser countries willing to subordinate themselves to its interests.
Economically, global stagnation gave rise to a global casino economy as capital sought an outlet for its surplus. Rather than Keynes’s euthanasia of the rentier the system has seen the relative decline of production in the advanced capitalist states, where it has been subordinated to a process of financialization. Although this was an effect rather than a cause of stagnation it has generated a real transformation in the form of the dominance of finance capital and a more unstable, uncontrollable capitalism. As Sweezy observed in The Triumph of Financial Capital, In earlier times no one, Keynes included, ever dreamed that speculative capital, a phenomenon as old as capitalism itself, could grow to dominate a national economy, let alone the whole world. But it has. One consequence of this, according to Sweezy, was to remove power from the boardrooms of the giant corporations and to place them in financial markets (a sphere in which the corporations themselves are major actors). States have also found themselves increasingly captive to capital markets. Hence, Adam Smith’s invisible hand, Sweezy stated, is staging a comeback in a new form and with increased muscle. The result, however, has not been the generation of a more rational capitalism, but a less rational one. The invisible hand is now that of finance capital orbiting the globe, as an outgrowth of globalized monopoly capitalism.
These same decades of economic stagnation and financial explosion have also been decades in which capital has become more and more parasitic on the global environment. The system of accumulation under globalized monopoly capitalism is undermining the basic biogeochemical processes of the planet in the process of promoting conspicuous waste and growing inequality. Not only has global warming emerged since the 1980s as the greatest threat yet to the biosphere as we know it, but the problem has gotten rapidly worse. The prospect of only a very limited rise in average world temperature—one that society might easily adapt to—now appears highly unlikely. An increase in average global temperatures of 2° C (3.6° F) above preindustrial levels—an amount of increase thought to separate non-catastrophic from catastrophic levels of global warming—will soon become unstoppable. Further, there is a growing fear among scientists of runaway global warming due to cumulative effects associated with a lessening of the carbon-absorbing capacities of the oceans and forests—a probable consequence of global warming itself. In Antarctica glaciers are melting and ice shelves thinning, pointing to a rise in world sea levels. All ecosystems on earth are now in decline. Species are facing extinction at levels not seen for 65 million years. Global shortages of fresh water are looming. The toxicity of the earth is increasing. All this and more is to be expected now that the rational regulation of the environment under capitalism has been shown to be a dangerous fantasy. Moreover, rather than any direct attempt to stop these trends we are now told in the age of neoliberal globalization that all such attempts are useless—witness the U.S. refusal to sign the Kyoto Protocol. Instead we are asked to rely on the magic of the market to save the environment. Yet, there is nothing in the nature of a capitalist society, which has no logic other than that of accumulation, that could possibly produce such a result.
All of this flies in the face of Keynes’s expectation that the economic problem (and the material problem in general) might be solved in a hundred years. On the one hand, the economic problem—the existence of hunger and inequality—is perpetuated and in many ways made worse by capitalism itself. On the other hand, the pretense that foul is fair, advocated by Keynes, is resulting in a rapid deterioration of the material conditions of existence. It is now rational, as Jared Diamond explains in his new book Collapse, to consider the possibility of the ecological collapse of global capitalist society, in ways analogous to earlier ecological collapses of civilizations.
In short, in a world where everything has been turned over to the market, that is, to capital accumulation, the fundamental problems dividing and endangering human society and the planet are bound to worsen.
The political significance of the foregoing is apparent when we recognize that the postwar politics of the left in the West were predicated from the beginning on the idea of rational capitalism. This was the case for both social democracy and what was called Eurocommunism. What was proposed was radical reform in the context of a new, stable, organized, consensual, and rational capitalism. As Lucien Goldmann, a leading European Marxist intellectual, expressed this belief: By the term organized capitalism,’ we mean the contemporary period which, through the creation of regulative mechanisms owing to state interventions, has made possible a continual economic growth and the diminution, not to say the total elimination, of internally generated social and political crises.* Yet the material assessment underlying this was, as we have seen, all wrong. If Keynes and Schumpeter presented the dangerous contradictions of the capitalist order laced with the hopes for a rational capitalism it was the dangerous contradictions that in the end prevailed. Capitalism in its monopoly stage, faced once again with stagnation, reverted to its essential nature: the ruthless pursuit of accumulation at all costs. Dispensing with any meaningful promises of social betterment for the vast majority it simply had recourse to the language of power: there is no alternative.
The result of this sea change has been a dramatic decline of social democracy as a political movement. In 1981 Francois Mitterrand was elected the first Socialist president of France. But his classically social democratic strategy of nationalization and demand promotion quickly collapsed in the face of opposition by capital. Within just a few years with Mitterrand still at the helm France turned back toward neoliberalism. Mitterrand’s failure was widely presented as a failure of socialism, but what it pointed to instead was the barriers that now existed to a social democratic politics once the post-Second World War boom had faded and capitalism had reverted to its elemental form. Without a mass movement mobilization drawing on the strength of the population left politics had relied on implementing rational reforms compatible with a rational capitalism. Yet the room for meaningful reforms that were acceptable to the system had narrowed to the point of nonexistence.
The fall of the Soviet bloc made matters worse in the sense that there were now seemingly no obstacles to the universalization of capitalism, and thus no reason for the system to present itself any longer in sheep’s clothing. Beginning in the 1990s the world witnessed an even more dramatic shift toward naked capitalism, heartless both in its treatment of workers and its domination of those countries at the bottom of the global hierarchy. Both class struggle from above and imperialism were intensified in the wake of capitalism’s triumph in the Cold War.
Of course not all is yet lost. Europe still holds on to remnants of the welfare state and social democracy. These historic working class achievements, however, are rapidly fading in the face of the neoliberal onslaught. As the European Union (EU) expands countries entering it or with prospects of doing so, such as Turkey, still imagine themselves joining a more rational capitalist order, tempered by social democracy. Yet, the EU itself is rapidly moving in the other direction: toward a more elemental capitalism. To forge a strategy built on joining European social democracy is to adopt a creed shorn of its attractions and to reach out to a set of promises that can no longer be fulfilled, even momentarily. The result is bound to be disillusionment. The persistence of stagnation has made a middle way (such as Britain’s Third Way) impossible, except as a way of facilitating neoliberalism itself. Social democracy as a rational politics for a rational capitalism has turned into unbridled capitalist politics for an unbridled capitalism.
The obvious conclusion is that there is no space for a rational politics of the left in line with the logic of capital. All pretensions to the contrary have proven illusory. Yet it is equally true that capitalism is unable to accommodate anything that could be considered a rational politics of the right. With the return of stagnation, and the rise of neoliberal global restructuring, conservatism has been reduced to making free market capitalism work by removing all barriers to the accumulation of capital in every sphere. The result is a commodification of all aspects of social and cultural life, creating deep crises in family, community, and society. Moreover, the system continues to stagnate with no visible way out, demanding ever larger cuts in the social infrastructure that supports it and ever greater human sacrifices. No economic system, particularly capitalism, left to follow its own logic unrestrained can possibly survive, as Schumpeter stressed. In the end it will undermine itself. The idea of free market capitalism is a dangerous illusion in a time of growing class polarization, monopolization, speculation, militarism, and imperialism. The politics of the right, lacking any substantial or rational basis, has increasingly turned to a predatory culture of open barbarism: the resurgence of open racism, war, imperialism, sexism, religious fundamentalism. Eventually such a society, trapped in stagnation and left to follow its own downward logic, will destroy itself and everything else within its reach—not through economic breakdown but through an intensification of barbarism on a global scale.
This takes us back to the essential truth that the problem is capitalism. The only solution, as difficult as this may be to contemplate at the present time, is socialism; socialism, that is, as the socialist movement always meant it to be: revolutionary, democratic, egalitatarian, environmental, necessitating mass participation and mobilization. The difficulties in creating such a society are immense. But immense, as Daniel Singer once said, is not synonymous with impossible.* If we want a stable, just, egalitarian, sustainable world in which the free development of each is the condition for the free development of all there is no alternative but a long march to socialism propelled forward by a growing socialist movement. There are already signs of a new dawn—a spectrum that ranges from the antiglobalization movement to the brave revolutionary youth in the hills of Nepal. It is to this new arc of revolution that we must now dedicate ourselves and lend our support.
* Joseph Schumpeter, The Economics and Sociology of Capitalism (Princeton, New Jersey: Princeton University Press, 1991), 194, 301; Capitalism, Socialism and Democracy (New York: Harper and Brothers, 1950), 13142. Schumpeter’s argument on monopoly in Capitalism, Socialism and Democracy is often misconstrued as a simple, straightforward defense of economic concentration. As was his wont, Schumpeter defended to a considerable extent the economic basis of the giant firms, while at the same time seeing them as undermining the sociological foundations of capitalist society.
* The Protestant Ethic and the Spirit of Capitalism (New York: Charles Scribner’s Sons, 1958), 17.
* Quoted in István Mészáros, The Power of Ideology (New York: New York University Press, 1989), 63.
* Is Socialism Doomed? (New York: Oxford University Press, 1988), 277.