CAPITALISM, SOCIALISM AND DEMOCRACY

Capitalism, Socialism and Democracy is one of the great classics in
twentieth century social science. What makes Schumpeter’s book so brilliant
are three things in particular: its novel view of democracy; its heretic
analysis of the workings of the capitalist economy; and its provocative
argument that capitalism is bound to disappear—not because of its failure,
but because of its success. Schumpeter’s style, it should be emphasized,
also makes the book a pleasure to read: “Even if, in places, you may dislike
what Schumpeter says”, as one reviewer put it, “you will like the way he
says it”.1 In this introduction I shall say, first, a few words about the writing
of Capitalism, Socialism and Democracy and its place in Schumpeter’s
output as a whole (Part I). I shall provide then a reader’s guide to
Schumpeter’s book, which may be of assistance to those who are
approaching it for the first time. This will also enable the hurried reader
to go straight to the most important parts of Capitalism, Socialism and
Democracy (Part II). The third and final part of the introduction deals with
the contemporary relevance of Schumpeter’s work. Schumpeter, for
example, argued that socialism is about to replace capitalism—an opinion
that seems totally wrong today, especially after the disintegration of state
socialism in the Soviet Union and East-Central Europe (Part III).