Joseph Schumpeter 资本主义是创造性破坏

资本主义能否生存？：创造性破坏和全球经济的未来

https://www.amazon.ca/Can-Capitalism-Survive-Creative-Destruction/dp/0061928011

作者：约瑟夫·A·熊彼特（作者）2009 年 9 月 1 日

“熊彼特是二十世纪最有远见的经济学家。他对资本主义和创造性破坏的关注使他成为全球化的先知。” — 《国家报》

在哈珀《常青现代思想》系列的这本新书中，杰出的经济学家、《资本主义、社会主义和民主》一书的作者约瑟夫·熊彼特对现在每个人都在问的问题给出了他著名的答案：资本主义能否生存？他的回答是：“不。我认为它不能。”在这本哲学书中，你可以了解他令人着迷的理由，许多经济学家认为这是有史以来对资本主义最精彩的分析。

Can Capitalism Survive?: Creative Destruction and the Future of the Global Economy  

by Joseph A. Schumpeter (Author) Sept. 1 2009

“Schumpeter was the most farsighted of twentieth-century economists. His focus on capitalism and creative destruction made him the prophet of globalization.” — The Nation

In this new addition to the Harper Perennial Modern Thought series, preeminent economist Joseph Schumpeter, author of Capitalism, Socialism, and Democracy, offers his celebrated answer to question everyone is now asking: Can Capitalism Survive? His answer: “No. I do not think it can.” Learn his fascinating reason why in this book of philosophy, considered by many economists to be the finest analysis of capitalism ever written.

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熊彼特论创造性破坏

http://www.futurecasts.com/J)%20Schumpeter%20on%20Creative%20Destruction%201.htm
（附有对约瑟夫·熊彼特所著《资本主义、社会主义和民主》一文的“资本主义能否生存：创造性破坏和全球经济的未来”的评论。）
2012 年 5 月 www.futurecasts.com

创造性破坏：

工业政策、社会主义和福利国家计划以及道德风险信用担保在私营经济制高点的广泛传播，已成为应对近期经济困难的普遍措施。

正是欧洲紧缩措施的痛苦和煎熬，而不是政府的挥霍，最终使得紧缩政策绝对必要。
政府政策和机构在信贷紧缩衰退的兴衰中发挥了主要作用，政府的挥霍在欧洲主权债务危机中扮演主导角色的政府正悄然从媒体报道和评论中消失。指责和监管注意力集中在私人金融部门的真正过度行为上，而房利美和房地美、经济适用房法律以及扭曲住房和抵押贷款市场的税收和信贷政策仍然存在。（参见《了解信贷紧缩》。）人们强调的是欧洲紧缩措施的痛苦和苦难，而不是政府的挥霍无度，这最终使得紧缩绝对必要。

即使是远非完美的竞争力量也能产生巨大的好处。即使在实现垄断和寡头垄断的情况下，这些好处也适用。

资本主义是一个经济变革的过程。

事实上，约瑟夫·A·熊彼特在《资本主义能否生存：创造性破坏和全球经济的未来》一书中，本可以写今天的经济，而不是大萧条时期的经济。然而，又一次，所有因政府政策而导致的重大经济危机的责任都集中在私营部门的不法之徒身上，而这样的人不可避免地有很多。

熊彼特强调了私人市场的好处。即使是远非完美的竞争力量也会在私人经济中产生巨大的好处。即使在实现垄断和寡头垄断的情况下，这些好处也适用。

静态分析本质上是不合适的。单靠价格竞争不足以判断私人市场的好处。即使在远非完全竞争的市场中，质量竞争和销售努力也必须包括在分析中。始终存在的是尚未存在的竞争——来自潜在新进入者的竞争。

始终存在的是尚未存在的竞争——来自潜在新进入者的竞争。

熊彼特强调，资本主义是一个经济变革的过程。基于国内生产总值等总体指数的经济分析受到熊彼特的批评。这些总量存在许多缺陷，会掩盖其中的信息，而这些信息对于有效分析至关重要。

“[不仅]构建这种指数的材料和技术，而且以不断变化的比例生产的不同商品的总产出这一概念本身也非常值得怀疑。”

政府部门扩张并不能充分替代私营部门的收缩，凯恩斯主义和其他左翼分析师在计算国内生产总值时忽略了这一点。基础设施支出与军事或福利支出对经济的影响大不相同。投入指标无法很好地替代产出指标。

新商品以及质量改进以及“自愿休闲”都不在这些指数的范围内。作者指出，1940 年的汽车与 1900 年的汽车大不相同。

“[资本主义]进程并非偶然，而是凭借其[大规模生产]机制，逐步提高了群众的生活水平。”

“毕竟，认为为盈利而生产和为消费者而生产之间几乎没有相似之处，认为私营企业不过是削减生产以勒索利润的一种手段，而利润被正确地描述为通行费和赎金，这种说法是不正确的。”

断言中产阶级在过去 30 年里没有取得任何进步显然是愚蠢的。中产阶级家庭拥有的物质享受现在包括以前没有的各种物品，而以前拥有的这些物品的质量和种类都大大提高了。中产阶级家庭不仅拥有 1980 年不存在的个人电脑和其他消费电子产品，而且他们现在往往拥有其中的几台。即使阶级内的平均收入没有提高，大多数人也会随着时间的推移在阶级内进步。

资本主义经济不是零和游戏。穷人之所以穷，并不是因为富人有钱。

富人的财富不断增加，但这并没有阻止其他经济阶层在近几十年取得令人瞩目的进步。
无论如何，除了全球化和技术进步等自然的经济发展之外，富人和中产阶级之间日益扩大的差距很大程度上是长期人为的低利率和经济金融化程度提高的结果，而经济金融化是美联储银行政策的结果，该政策从公众那里获取收入并将其引导到华尔街。
创造性破坏的持续周转并没有出现在基于经济总量的简单分析中。

熊彼特强调了失败权对于资本主义市场正常运转的重要性。许多经济学家忽视了创造性破坏的现实。创造性破坏的持续周转并没有出现在基于经济总量的简单分析中。然而，创造性破坏的浪潮不断席卷资本主义经济的各个领域，对于那些有眼睛的人来说总是清晰可见的。 （从马克思到凯恩斯再到加尔布雷斯，左翼经济学家们都坚决对这一现实视而不见。）

资本主义的批评者认为，竞争中普遍存在的不完善现象——垄断、寡头垄断、产品差异化、垄断竞争——破坏了均衡理论和资本主义福利最大化理论，而这些理论是利润制度的正当理由。

“人们通常认为的问题是资本主义如何管理现有结构，而相关的问题是如何创造和摧毁这些结构。只要不认识到这一点，调查人员的工作就毫无意义。”

价格刚性政策的影响对竞争压力造成了各种各样但本质上有限的阻碍。事实上，熊彼特指出：“从长远来看，向下的灵活性就会显现出来，这确实令人印象深刻。”

“创造性破坏的过程是资本主义的基本事实。”
在私有经济中，垄断行为与市场驱动行为大相径庭，除非得到公共权力的支持，否则只有在极少数情况下才能长期存在。

事实上，最重要的竞争类型是“来自新供应来源、新组织类型的竞争”。这种竞争“具有决定性的成本或质量优势”，甚至会威胁到现有最主要因素的存在。即使是垄断和寡头也必须害怕这种竞争，并像面对直接的价格和质量竞争一样对其作出反应。（只有偏执狂才能生存！）熊彼特注意到零售业的变化进程（这在现代导致了沃尔玛和在线销售）。

竞争市场的不完善既带来了优势，也带来了劣势，熊彼特对此进行了详细分析。然而，所有人都面临着创造性破坏的竞争风暴，必须做出反应，否则就会灭亡。价格僵化政策的影响对竞争压力造成了各种但本质上有限的阻碍。事实上，熊彼特指出：“从长远来看，价格向下的灵活性会显现出来，这确实令人印象深刻。”即使与价格固定和限制行为有关，价格僵化也是对市场失灵的一个夸张解释。

“创造性破坏过程是资本主义的基本事实。”

竞争和生产远非完美，但这并不破坏这一基本过程。创造性破坏不断摧毁现有的供应商并创造新的供应商。

“启动和保持资本主义引擎运转的基本动力来自资本主义企业创造的新消费品、新的生产或运输方式、新市场、新的工业组织形式。”

在私营经济中，与市场驱动行为大相径庭的垄断行为只有在极少数情况下才能长期存在，“除非得到公共权力的支持”。在“公用事业领域之外”，统治地位只能通过竞争行为实现，如果在获得统治地位后利用它，它将被新的竞争对手破坏。

政府可以通过专利政策、补贴、监管优势、许可要求等方式来支持垄断地位。当局总是会为此类行动提供理由，但只有少数情况下它们才真正符合公众利益，而且即使如此，通常也只是在范围和/或持续时间有限的情况下。专利保护无疑是合理的，但米老鼠式的版权保护延伸已经过分了，现在显然适得其反。许多州和地方政府将许可要求扩大到远远超出经济合理范围的范围。竞争性资本主义市场的经济前景

显然，市场主要受到政府的威胁，而政府在很大程度上创造了市场并促进了市场的发展。
政府的管理不善和浪费将始终限制其计划的有效性。

事实上，正是资本主义为政府提供了用于社会福利目的的资源——包括失业、教育、卫生和老年人护理等资金。然而，政府的管理不善和浪费将始终限制其计划的有效性。（正是政府的管理不善和浪费以及易受欺诈的影响，使其教育和医疗保健计划日益陷入财务危机。）

利润不得超过吸引新进入者的水平。垄断优势只能通过“警惕和精力”来维持。
规模具有支撑主导地位的天然优势。熊彼特指出，许多最具革命性的经济进步都来自垄断和寡头垄断。拥有无数小竞争对手的竞争性行业可能无法开发出更优越的方法，也可能更容易受到经济衰退的影响。他指出，美国农业、英国纺织业和煤矿受大萧条的打击尤其严重。

大多数在行业中取得并保持一段时间主导地位的企业都是通过利用规模经济和更好的信用评级来实现的。因此，它们可以以比小竞争对手更低的成本提供更高质量的产品。然而，为了保持主导地位，它们不能把所有这些好处都留给自己。它们必须将大部分好处让给客户，以阻止新竞争对手的进入。利润不得超过吸引新进入者的水平。垄断优势只能“通过警惕和精力”来维持。

大企业资本主义在显著的生产力进步和生活水平提高方面发挥了重要作用。熊彼特指出，美国铝业公司在短短 40 年内就将铝价降低了 90% 以上，并将铝制品市场扩大了 3 1/3 倍以上。熊彼特质疑一群小型竞争生产商是否能够如此成功地提高生产力并开发出这种金属的新用途。美国铝业公司（Aluminum of America）的动力来自于需要保持领先于甚至席卷铝生产行业的创造性破坏浪潮。

ATT 垄断显然以相当大的优势提供了世界上最好的大型电话系统。ATT 电话垄断的优势之一是来自传奇贝尔实验室的技术进步。然而，ATT 未能充分了解其自身技术进步的全部竞争机会。取消政府保护使 ATT 面临一些竞争，从而显著展示了垄断生产的成本和固有弱点。最初的 ATT 后来被其更敏捷的竞争对手之一收购。

社会主义的必然性：

从马克思到凯恩斯再到加尔布雷斯，衰落主义观点一直是左翼经济理论的共同特征。熊彼特强调了马克思和凯恩斯在熊彼特所说的“投资机会消失理论”方面的相似之处。马克思和凯恩斯都“强调资本积累和资本集聚对利润率的影响，并通过利润率对投资机会产生影响。”如果投资机会不可避免地减少，资本主义就无法维持下去。（资本利润率的下降早在亚当·斯密时代之前就一直是资本主义制度增长的一个特征。）

熊彼特接受了资本主义将转变为社会主义制度的普遍预期。

熊彼特彻底揭穿了大萧条时期的衰退论者（通常是左翼）理论。他对一些关键的凯恩斯主义信念提出了严厉的批评。熊彼特正确地指出，正是大萧条导致了“囤积”。储蓄并不是大萧条的原因。

然而，他接受了资本主义将转变为社会主义制度的普遍预期。熊彼特预计，即使是技术进步也将变得如此自动化，以至于不再需要企业家才能。资本主义将因此降低自身的盈利能力和对资本主义本身的需求。

“完全官僚化的巨型工业单位不仅驱逐了中小型企业并‘剥夺’了它们的所有者，而且最终还驱逐了企业家并剥夺了资产阶级，而资产阶级在这个过程中不仅会失去收入，而且会失去更重要的职能。”

熊彼特在这里几乎是马克思主义者，因为他认为这些假设是荒谬的。与 ATT 经历的结果类似的结果在各种情况下都是常态取消政府监管限制后，占主导地位的企业将面临竞争。
学术经济学家通常不知道管理到底是什么。马克思认为，管理只不过是聘用专业经理人和发布“社会主义指令”。参见卡尔·马克思的《资本论》（第二卷（I））导言。社会主义指令经常涉及那些“五年计划”，这些计划曾经是 20 世纪社会主义经济舞台上如此熟悉的一部分，实际上在各个知识界都受到重视。

人们常常故意对政府管理的固有无能以及政府在经济管理工作中表现出负面学习曲线的频率视而不见。参见《政府未来预测》第二部分。人们也常常故意对竞争在惩罚大型占主导地位的公司管理层自满方面的作用视而不见。

因此，大企业天生就容易受到煽动攻击。短期冲动将战胜繁荣所需的长期政策，政治现实将破坏资本主义制度。

熊彼特预计所有占主导地位的企业都会像通用电气一样。和马克思一样，他认为现代大公司的发展将所有权和管理利益分离，使股东失去职能，从而促进资本主义的灭亡和向社会主义的过渡。他预计他们能够发展出主持创造性破坏过程的能力，排除独立的企业家。这种能力将削弱小企业在创造性破坏过程中的重要性。（但大企业经常从小企业购买技术进步。）

和马克思、凯恩斯和加尔布雷斯一样，他认为股东毫无用处。工人，甚至管理层和小股东对任何大企业或其所有权形式都没有强烈的忠诚度。他们不会为保护大企业的财产和合同利益而进行政治斗争。

熊彼特和亚当·斯密一样，认识到公司组织中代理人利益和所有权利益之间存在固有的利益冲突。 （参见亚当·斯密的《国富论（II）》中“监管公司”一节。）管理阶层越来越多地为自己和眼前的个人利益而工作，而不是为公司的未来而工作。

事实上，正是他们短期利益的强大，最近导致如此多的公司高管和员工不顾一切地损害其组织和整个经济的利益。参见《信用危机中的道德风险利益冲突》。斯密无疑会惊讶于公司结构在我们现代经济中运作得如此之好，以及经济相对很少受到重大公司丑闻的打击。他认为，合伙形式的组织最终将占主导地位。

股东集体用脚投票的能力——出售他们的股票——并对管理不善的公司施加低市盈率，是一种比任何管理监管替代方案更有效、效率无限高的纪律机制。

早在 20 世纪 30 年代，熊彼特就对资产阶级家庭和生活方式价值观的生存感到悲观。他担心，企业高管最终甚至可能认为孩子和私人住宅不值得负担，或者不值得担心经济体系的未来。

因此，大企业天生就容易受到煽动性的攻击。短期冲动将战胜繁荣所需的长期政策，政治现实将破坏资本主义制度。

资本主义取得的成就越多，它就越有吸引力成为嫉妒和再分配狂热的目标。总会有知识分子为这些攻击提供借口、合理化和指导。

“严格来说，我们甚至不知道社会主义是否真的会到来。重复一遍：感知一种趋势并设想它的目标是一回事，预测这一目标将真正实现，并且由此产生的状态将是可行的，更不用说永久的了，则是另一回事。”

不可避免地，会有知识分子转而攻击资本主义阶级和制度，为寻求资本主义财富再分配的大众嫉妒和个人贪婪冲动提供方向。知识分子基本上是一个旁观者和局外人，他们“主要的机会在于他实际或潜在的麻烦价值。”

“知识分子实际上是掌握口头权力的人，他们与其他做同样事情的人的区别之一是没有对实际事务的直接责任。这种区别通常解释了另一个——绝对

“只有实际经验才能提供对[实际事务]的第一手知识。”（熊彼特在这里可能是在描述自己。）

资本主义取得的成就越多，它就越有吸引力成为嫉妒和再分配狂热的目标。总会有知识分子参与、合理化并为这些攻击提供方向。（这只是承认煽动仍然是现代资本主义民主的主要威胁，就像它对前资本主义民主一样。）

“[因此，]公共政策越来越敌视资本主义利益，最终以至于原则上拒绝考虑资本主义引擎的要求，并成为其运作的严重障碍。”

因此，今天的政策受到模糊的“公平”概念的指导，而不管经济影响如何。

“[我们]目前还不知道社会主义可能以何种确切方式实现，只知道一定有很多可能性，从逐渐的官僚主义到最生动的革命。严格来说，我们甚至不知道社会主义是否真的会实现。重复一遍：感知一种趋势并设想其目标是一回事，预测这一目标将真正实现，并且由此产生的状态将是可行的，更不用说永久的，则是另一回事。”

大萧条对资本主义和资产阶级利益的打击清楚地反映在熊彼特的观点中。在那段时间里，几乎没有努力防御各种左翼攻击。然而，与马克思、凯恩斯或后来的加尔布雷斯不同，熊彼特从未认为社会主义政策一旦被采纳就会成功——甚至是可行的。

熊彼特的观点得到了结果的证明。请参阅《熊彼特论社会主义》，以了解熊彼特《资本主义、社会主义和民主》中与社会主义相关的部分。在国外，社会主义事业确实取得了广泛的胜利，直到它们证明了政府管理工作的巨大无能和社会主义成功的不可能性。参见 Muravchik 的《人间天堂》。只有詹姆斯·麦迪逊设计明智地对联邦政府的经济权力施加宪法限制，使美国免受二战后席卷欧洲的社会主义浪潮的影响。美国避免了最终伴随社会主义而来的经济灾难。

今天，麦迪逊再次成为左翼灾难——福利国家——的阻碍者。因此，麦迪逊被攻击为过时的、与现代“需求”脱节的。在“活”宪法的标题下，知识分子敦促将宪法限制解释为赋予联邦政府满足现代“需求”的权力。当心那些将形容词附加到珍贵名词上的人！
左翼再次获胜，福利国家将其令人窒息的迷雾笼罩在许多发达经济国家的经济体上。然而，这些胜利将是暂时的。只要政治民主本身发挥作用，选民就不会容忍左翼主要政策不可避免地导致经济体系失灵。

选民总是会转而反对那些破坏经济的政策的责任人——只要他们能正确识别出应负责任的政治团体。然而，最初破坏经济表现的政策往往是自私自利的大政府保守派的政策，比如 20 世纪 20 年代和布什 (II) 政府的政策。并不总是很清楚——就像 20 世纪 70 年代末卡特政府时期一样——左翼煽动家和右翼大政府政治替代方案中无原则的政治黑客应该承担多少责任。选民只能不断更换现任者，直到他们赋予一个能够正确行事的政治阶层权力，就像 20 世纪 80 年代那样。

Schumpeter on Creative Destruction

http://www.futurecasts.com/J)%20Schumpeter%20on%20Creative%20Destruction%201.htm

(with a review of "Can Capitalism Survive: Creative Destruction and the Future of the Global Economy," a  segment of "Capitalism, Socialism, and Democracy by Joseph A. Schumpeter.)

May, 2012  www.futurecasts.com

Creative Destruction:

Industrial policy, socialist and entitlement welfare state programs and the spreading of moral hazard credit guarantees broadly over the commanding heights of the private economy have been widespread as responses to recent economic difficulties.

It is the pain and anguish of European austerity efforts that is emphasized rather than the government profligacy that ultimately makes austerity absolutely essential.

That government policies and agencies played a primary role in the boom and bust of the Credit Crunch recession, and that government profligacy plays the predominant role in Europe's sovereign debt crises, is quietly disappearing from media coverage and commentary. Blame and regulatory attention is concentrated on the very real excesses of the private financial sector, while Fannie Mae and Freddie Mac, the affordable housing laws and tax and credit policies that distort the housing and mortgage markets remain in existence. (See, Understanding the Credit Crunch.) It is the pain and anguish of European austerity efforts that is emphasized rather than the government profligacy that ultimately makes austerity absolutely essential.

Even competitive forces that are far from perfect generate massive benefits. These benefits apply even where monopoly and oligopoly dominance is achieved.

Capitalism is a process of economic change.

Indeed, Joseph A. Schumpeter, in "Can Capitalism Survive: Creative Destruction and the Future of the Global Economy," could have been writing about today instead of the economy of Great Depression. Yet once again, all blame for a major economic crisis caused predominantly by government policies is being focused on private sector miscreants, of whom there are inevitably many.

The benefits of private markets are emphasized by Schumpeter. Even competitive forces that are far from perfect generate massive benefits in the private economy. These benefits apply even where monopoly and oligopoly dominance is achieved.

Static analysis is inherently inapt. Price competition alone is an inadequate factor in judging the benefits of private markets. Even in markets that may be far from perfectly competitive, quality competition and sales effort must be included in the analysis. Always in existence is competition that is not yet in existence - the competition from potential new entrants.

Always in existence is competition that is not yet in existence - the competition from potential new entrants.

Capitalism is a process of economic change, Schumpeter emphasizes. Economic analysis based on aggregate indices like Gross Domestic Product is criticized by Schumpeter. These aggregates have many flaws and have the effect of obscuring the information within them, much of which is essential for valid analysis.

"[Not] only the material and the technique of constructing such an index, but the very concept of a total output of different commodities produced in  ever-changing proportions, is a highly doubtful matter."

Government sector expansion is not an adequate substitute for private sector contraction, something omitted from the gross domestic product calculations of Keynesian and other left wing analysts. Infrastructure expenditures have far different economic impacts than military or welfare expenditures. Measures of inputs are poor substitutes for measures of outputs.

New commodities as well as quality improvements escape these indices, as does "voluntary leisure." The auto of 1940 was far different from the auto of 1900, the author points out.

"[The] capitalist process, not by coincidence but by virtue of its [mass production] mechanism, progressively raises the standard of life of the masses."

"It is not true after all, that there is little parallelism between producing for profit and producing for the consumer and that private enterprise is little more than a device to curtail production in order to extort profits which then are correctly described as tolls and ransoms."

Assertions that the middle class has made no progress in the last 30 years are clearly stupid. The creature comforts possessed by middle class households now include a variety of items not previously available and those possessions previously available have vastly increased in quality and variety. Not only do middle class households now possess personal computers and other consumer electronics that did not exist in 1980, but they now often possess several of them. Even when average income within the class does not improve, most individuals advance within the class over time.

Capitalist economics is not a zero sum game. Th e poor are not poor because the rich are rich. Th e rapid pace at which the wealth of the rich is increasing has not prevented the other economic classes from making impressive advances in recent decades.

In any event, in addition to natural economic developments like globalization and technological advance, much of the increasing gap between the rich and the middle class is the result of long periods of artificially low interest rates and the increasing financialization of the economy that is the result of Federal Reserve Bank policy that takes income from the public and directs it to Wall Street.

The ongoing turnover of Creative Destruction does not show up in the simplistic analyses based on economic aggregates.

The importance of the right to fail for properly functioning capitalist markets is highlighted by Schumpeter. Many economists ignore the reality of Creative Destruction. The ongoing turnover of Creative Destruction does not show up in the simplistic analyses based on economic aggregates. However, the wave of Creative Destruction that continuously washed over all segments of the capitalist economy was always clearly observable for those with eyes to see. (Left wing economists from Marx to Keynes to Galbraith determinedly remained blind to this reality.)

The widespread incidence of imperfections in competition - monopoly, oligopoly, product differentiation, monopolistic competition - are viewed by critics of capitalism as undermining the equilibrium theory and the capitalist welfare maximization theory that are used as justifications for the profit system.

"[The] problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them. As long as this is not recognized, the investigator does a meaningless job."

The impacts of price rigidity policies pose varied but essentially limited obstruction to competitive pressures. Indeed, Schumpeter notes that: “A long run downward flexibility is then revealed that is truly impressive.”

"The process of Creative Destruction is the essential fact about capitalism."

In a private economy, monopolistic practices that depart substantially from market-driven practices can in only the rarest cases persist for any extended length of time "unless buttressed by public authority."

It is "competition from the new source of supply, the new type of organization," that is actually the most important type of competition. Such competition "commands a decisive cost or quality advantage" that will threaten the existence of even the most dominant existing factors. Even monopolies and oligopolies must fear this competition and react to it as if facing immediate price and quality competition. (Only the paranoid survive!) Schumpeter notes the progression of changes in retailing (that has in modern times led to Walmart and online sales).

Imperfection in competitive markets create both advantages and disadvantages that are analyzed at some length by Schumpeter. However, all are exposed to the competitive gale of creative destruction and must respond or die. The impacts of price rigidity policies pose varied but essentially limited obstruction to competitive pressures. Indeed, Schumpeter notes that: “A long run downward flexibility is then revealed that is truly impressive.” Even in relation to price fixing and constraining practices, price rigidity is a much exaggerated explanation for market failures.

"The process of Creative Destruction is the essential fact about capitalism."

That competition and production are far from perfect does not undermine this essential process. Creative Destruction incessantly destroys existing providers and creates new ones.

"The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumer goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates."

In a private economy, monopolistic practices that depart substantially from market-driven practices can in only the rarest cases persist for any extended length of time "unless buttressed by public authority." "Outside the field of public utilities," domination can be attained only by competitive behavior and if domination is taken advantage of after it is obtained, it will be undermined by new competitors.

Government support for monopoly positions can be provided by patent policy, subsidies, regulatory advantages, licensing requirements and so forth. The authorities will always provide justifications for such actions, but in only a few cases are they really in the public interest and even then usually only if limited in scope and/or duration. Patent protection is undoubtedly justified but the Mickey Mouse extensions of copyright protection have gone way overboard and are now clearly counterproductive. Many state and local governments have extended licensing requirements far more broadly than economically justified. The economic prospects of competitive capitalist markets are clearly threatened predominantly by the governments that in substantial part created and facilitate them.

Government mismanagement and waste will always limit the effectiveness of its programs.

Indeed, it is capitalism that provides the resources that governments draw on for social welfare purposes - including funds for the unemployed, education, hygiene and care for the aged, etc. However, government mismanagement and waste will always limit the effectiveness of its programs. (It is indeed government mismanagement and waste and vulnerability to fraud that increasingly leaves its education and health care programs in a state of financial crisis.)

Profits must not exceed the point where they induce new entrants. Monopolistic advantage can be maintained "only by alertness and energy."

There are natural advantages to size that support dominant positions. Schumpeter points out that many of the most revolutionary economic advances have come from monopolies and oligopolies. Competitive industries with myriad small competitors may be unable to develop superior methods and may also be more vulnerable to economic recessions. He points out that American agriculture and English textiles and coal mines were especially hard hit by the Great Depression.

Most businesses that achieve and for some time maintain dominance in an industry do so by taking advantage of economies of scale and better credit ratings. They thus may provide higher quality goods at lower costs than smaller competitors. However, to maintain their dominant position, they cannot retain all of these benefits for themselves. They must pass on most of such benefits to their customers to deter the entrance of new competitors. Profits must not exceed the point where they induce new entrants. Monopolistic advantage can be maintained "only by alertness and energy."

Big business capitalism has played major roles in observable productivity advances and living standard gains. Schumpeter notes that the Aluminum Company of America in just 40 years reduced the price of aluminum by over 90% and increased the market for aluminum products more than 3 1/3 times. Schumpeter question whether a bunch of small competitive producers could have so successfully increased productivity and developed new uses for the metal. The Aluminum Company of America was driven by the need to stay ahead of the wave of Creative Destruction that was flowing through even the aluminum production industry.

The ATT monopoly clearly provided by some considerable margin the best large-scale telephone system in the world. Among the advantages of the ATT telephone monopoly were the technological advances that flowed from the legendary Bell Laboratories. However, ATT failed miserably to understand the full competitive opportunities of its own technological advances. The removal of government protection exposed ATT to some competition and thus dramatically demonstrated the costs and inherent weaknesses of monopoly production. The original ATT has since been absorbed by one of its more agile rivals.

The inevitability of socialism:

Declinist views have been a common feature of left wing economic theory from Marx to Keynes to Galbraith. The similarities between Marx and Keynes in what Schumpeter calls "the theory of the vanishing investment opportunities," is emphasized by Schumpeter. Both Marx and Keynes "stress the effects of capital accumulation and capital agglomorization on the rate of profits and, through the rate of profits, on the opportunity to invest." If investment opportunities are in inevitable decline, capitalism cannot sustain itself. (The decline in the profit rates of capital have been a feature of the growth of capitalist systems from even before Adam Smith's times.)

Schumpeter accepts the widespread expectation that capitalism will metamorphose into a socialist system.

Schumpeter thoroughly debunks the declinist - generally left wing - theories of the Great Depression period. He expresses harsh criticism of some key Keynesian beliefs. In particular, it was the Depression that caused "hoarding," Schumpeter correctly points out. Savings did not cause the Great Depression.

He nevertheless accepts the widespread expectation that capitalism will metamorphose into a socialist system. Schumpeter expects that even technological advancement will become so automatic that entrepreneurial talent will no longer be required. Capitalism will thus reduce its own profitability and the need for capitalism itself.

"The perfectly bureaucratized giant industrial unit not only ousts the small and medium-sized firm and 'expropriates' its owners, but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class which in the process stands to lose not only its income but also what is infinitely more important, its function."

Schumpeter here is almost Marxist in the ridiculousness of these assumptions. Results similar to that experienced by ATT have been the rule in a variety of industries where the removal of government regulatory constraints exposed dominant businesses to competition.

Academic economists frequently have no idea of what management is all about. Marx thought that management involved little more than the hiring of professional managers and the issuing of "socialist directives."  See the Introduction to Karl Marx, Capital (Das Kapital) (vol. 2 (I)). Socialist directives frequently involved those "Five Year Plans" that were once such a familiar part of the 20th century socialist economic scene and that were actually taken seriously in various intellectual circles.

There is often intentional blindness about the inherent ineptness of government management and the frequency with which governments exhibit a negative learning curve in their economic management efforts. See Part II of Government Futurecast. There is also frequently intentional blindness about the roles of competition in punishing managerial complacency in large, dominant corporations.

Thus, big business is inherently vulnerable to demagogic attack. Short term impulses will triumph over the long term policies needed for prosperity, and political realities will undermine the capitalist system.

Schumpeter expects all dominant businesses to be like General Electric has become. Like Marx, he views the modern large corporation as a development that separates ownership and managerial interests and renders shareholders functionless, thus facilitating the demise of capitalism and its transition to socialism. He expects them to develop the ability to preside over the Creative Destruction process to the exclusion of the independent entrepreneur. This capacity will undermine the importance of small businesses in the Creative Destruction process. (But frequently, big businesses buy their technological advances from small businesses.)

Like Marx, Keynes and Galbraith, he views the shareholder as useless. Workers and even management and small shareholders have no intense loyalty to any big business or to its form of ownership. They will not fight the political battles to protect the property and contract interests of big business.

Schumpeter, like Adam Smith, recognizes the inherent conflict of interest between the agent interest and ownership interest in the corporate organization.  (See, Adam Smith, " The Wealth of Nations (II)," at section on "Regulatory companies.") The managerial class works increasingly for itself and immediate personal benefits rather than for the future of the corporation.

Indeed, it is precisely the strength of their short term interests that recently led so many corporate officers and employees to  heedlessly undermine the interests of their organizations and the entire economy. See, Moral Hazard  Conflicts of Interest in the Credit Crunch,. Smith would undoubtedly be amazed at how well the corporate structure works in our modern economy and how relatively rarely the economy is hit with major corporate scandals. He thought that partnership forms of organization would ultimately predominate.

The ability of shareholders to collectively vote with their feet - to sell their shares - and impose low p/e ratios on poorly managed corporations is a far more effective and infinitely more efficient disciplinary mechanism that any administered regulatory alternative.

Schumpeter is already, in the 1930s, pessimistic about the survival of bourgeois family and lifestyle values. He fears that corporate officials may ultimately not even consider children and private homes as worth the burden, or as a reason to be concerned about the future of the economic system.

Thus, big business is inherently vulnerable to demagogic attack. Short term impulses will triumph over the long term policies needed for prosperity, and political realities will undermine the capitalist system.

The more that capitalism achieves, the more attractive it is as a target for envy and redistributionist fervor. There will always be intellectuals who will play to and rationalize and provide direction for these attacks.

"Strictly speaking we do not even know whether socialism well actually come to stay. For to repeat: perceiving a tendency and visualizing the goal of it is one thing and predicting that this goal will actually be reached and that the resulting state of things will be workable, let alone permanent, is quite another thing."

Inevitably, there will be intellectuals who will turn on the capitalist class and system and provide direction for the mass impulses of envy and personal greed that seek redistribution of capitalist wealth. The intellectual is basically an onlooker and outsider, whose "main chance of asserting himself lies in his actual or potential nuisance value."

"Intellectuals are in fact people who wield the power of the spoken word, and one of the touches that distinguish them from other people who do the same is the absence of direct responsibility for practical affairs. This touch in general accounts for another -- the absence of first-hand knowledge of [practical affairs] which only actual experience can give." (Schumpeter here could be describing himself.)

The more that capitalism achieves, the more attractive it is as a target for envy and redistributionist fervor. There will always be intellectuals who will play to and rationalize and provide direction for these attacks. (This is just recognition that demagogy remains the primary threat to modern capitalist democracies as it was to pre-capitalist democracies.)

"[Thus,] public policy grows more and more hostile to capitalist interests, eventually so much so as to refuse on principle to take account of requirements for the capitalist engine and to become serious impediments to its functions."

Thus, policy is today guided by nebulous concepts of "fairness" regardless of economic impact.

"[We] know nothing as yet about the precise way by which socialism may be expected to come except that there must be a great many possibilities ranging from a gradual bureaucratization to the most picturesque revolution. Strictly speaking we do not even know whether socialism well actually come to stay. For to repeat: perceiving a tendency and visualizing the goal of it is one thing and predicting that this goal will actually be reached and that the resulting state of things will be workable, let alone permanent, is quite another thing."

The demoralization of capitalist and bourgeois interests by the Great Depression is clearly reflected in Schumpeter's views. During that time, there was little effort at defense against left wing attacks of all kinds. However, unlike Marx or Keynes or later, Galbraith, Schumpeter never assumed that socialist polices, once adopted, would be successful - or even viable.

Schumpeter's view was proven by results. See Schumpeter on Socialism   for a review of the socialism related parts of Schumpeter, "Capitalism, Socialism, and Democracy." Abroad, socialist causes did indeed triumph widely until they demonstrated the vast incompetence of government management efforts and the impossibility of socialist success. See, Muravchik, "Heaven on Earth." Only the James Madison design that wisely imposes Constitutional limits on the economic powers of the Federal government saved the U.S. from the socialist tide that was sweeping over Europe in the post WW-II period. The U.S. was spared the economic horrors that ultimately always accompanies socialism.

Today, it is again Madison who stands in the way of a left wing disaster - the entitlement welfare state. Madison is accordingly under attack as archaic and out of touch with modern "needs." Under the rubric of  the "living" Constitution, intellectuals urge that constitutional constraints be interpreted away to empower the federal government to meet modern "needs." Beware of those who attach adjectives to cherished nouns!

Again, the left wing triumphs and the entitlement welfare state spreads its smothering fog over many of the economies of the advanced economic states. Again, however, these triumphs will be temporary. As long as political democracy itself functions, electorates will not tolerate the malfunctioning economic systems inevitably produced by major left wing policies.

Electorates will always turn on those responsible for the policies that undermine the economy -- once they correctly identify the responsible political groups. However, the policies that initially undermine economic performance are often those of self-interested big government conservatives, such as those of the 1920s and the Bush (II) administration. It is not always clear - as it was during the Carter administration at the end of the 1970s - how much responsibility lies with left wing demagogues and how much with the unprincipled political hacks of right wing big government political alternatives. The electorate can only churn incumbents until, as in the 1980s, they empower a political class that can get it right.