"Capitalism, Socialism and Democracy" is the most famous book by Joseph Schumpeter in the which he deals with capitalism, socialism and creative destruction. First published in 1942, it is largely unmathematical, compared with neoclassical works, focusing on the unexpected, rapid spurts of entrepreneurial-driven growth models instead of static.

The book is unusual insomuch as it was written to Appear sympathetic to socialism, beginning with an account of Karl Marx, in order to Encourage socialists to read it. They hoped would Schumpeter Achieve self-recognition of the problems with socialism in the light of the book, without having to be explicitly toll: if the book Appeared to be favourible to capitalism, he feared socialists, his target audience, would not bother to read it.

Schumpeter's theory Is that the success of capitalism Will lead to a form of corporatism and a fostering of values ​​hostile to capitalism, ESPECIALLY Among intellectuals. The intellectual and social climate needed to allow entrepreneurship to Thrive Will not exist in advanced capitalism; it Will be replaced by socialism in some form. There will not be a revolution, but merely a trend in Parliaments to elect social democratic parties of one stripe or another. He Argued That capitalism's collapse from within will of come about as democratic majorities vote for the creation of a welfare state and place restrictions upon entrepreneurship That Will burden and eventually destroy the capitalist structure. Schumpeter emphasizes throughout this book That he is analyzing trends, not Engaging in political advocacy. "If a doctor Predicts That Will die Presently his patient," he wrote, "this does not mean That he desires it."

In his vision, the intellectual class Will play an Important role in capitalism's Demise. The term "intellectuals" denotes a class of persons in a position to develop critiques of societal matters for the which They are not directly Responsible and Able to stand up for the interests of strata to the which They themselves do not belong. One of the great advantages of capitalism, he argues, is that as compared with pre-capitalist periods, Pls education was a privilege of the few, more and more people acquire (higher) education. The availability of fulfilling work is however limited and this, coupled with the experience of unemployment, produces Discontent. The intellectual class is then Able to organize protest and develop critical ideas against free markets and private property, even though these institutions are Necessary for Their existence. This analysis is similar to That of the philosopher Robert Nozick, WHO Argued That intellectuals were the resource persons so bitter That the skills rewarded in school were the resource persons less rewarded in the job market, and so turned against capitalism, even though They enjoyed vastly more enjoyable lives under it than under alternative systems.

In Schumpeter's view, socialism Will Ensure That the production of goods and services is directed Towards meeting the 'authentic needs' of people [citation needed] and Will Overcome some innate tendencies of capitalism Such as conjecture Fluctuation, unemployment and waning acceptance of the system. [citation needed] It is interesting to note That Schumpeter's theories of the transition of capitalism into socialism is, According to some analysts, 'Nearly right'.

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Capitalism, Socialism and Democracy