Joseph Schumpeter 資本主義是創造性破壞

Joseph Schumpeter 資本主義是創造性破壞

資本主義能否生存？：創造性破壞和全球經濟的未來

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

作者：約瑟夫·A·熊彼特（作者）2009 年 9 月 1 日

“熊彼特是二十世紀最有遠見的經濟學家。他對資本主義和創造性破壞的關注使他成為全球化的先知。” — 《國家報》

在哈珀《常青現代思想》係列的這本新書中，傑出的經濟學家、《資本主義、社會主義和民主》一書的作者約瑟夫·熊彼特對現在每個人都在問的問題給出了他著名的答案：資本主義能否生存？他的回答是：“不。我認為它不能。”在這本哲學書中，你可以了解他令人著迷的理由，許多經濟學家認為這是有史以來對資本主義最精彩的分析。

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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熊彼特論創造性破壞

http://www.futurecasts.com/J)%20Schumpeter%20on%20Creative%20Destruction%201.htm
（附有對約瑟夫·熊彼特所著《資本主義、社會主義和民主》一文的“資本主義能否生存：創造性破壞和全球經濟的未來”的評論。）
2012 年 5 月 www.futurecasts.com

創造性破壞：

工業政策、社會主義和福利國家計劃以及道德風險信用擔保在私營經濟製高點的廣泛傳播，已成為應對近期經濟困難的普遍措施。

正是歐洲緊縮措施的痛苦和煎熬，而不是政府的揮霍，最終使得緊縮政策絕對必要。
政府政策和機構在信貸緊縮衰退的興衰中發揮了主要作用，政府的揮霍在歐洲主權債務危機中扮演主導角色的政府正悄然從媒體報道和評論中消失。指責和監管注意力集中在私人金融部門的真正過度行為上，而房利美和房地美、經濟適用房法律以及扭曲住房和抵押貸款市場的稅收和信貸政策仍然存在。（參見《了解信貸緊縮》。）人們強調的是歐洲緊縮措施的痛苦和苦難，而不是政府的揮霍無度，這最終使得緊縮絕對必要。

即使是遠非完美的競爭力量也能產生巨大的好處。即使在實現壟斷和寡頭壟斷的情況下，這些好處也適用。

資本主義是一個經濟變革的過程。

事實上，約瑟夫·A·熊彼特在《資本主義能否生存：創造性破壞和全球經濟的未來》一書中，本可以寫今天的經濟，而不是大蕭條時期的經濟。然而，又一次，所有因政府政策而導致的重大經濟危機的責任都集中在私營部門的不法之徒身上，而這樣的人不可避免地有很多。

熊彼特強調了私人市場的好處。即使是遠非完美的競爭力量也會在私人經濟中產生巨大的好處。即使在實現壟斷和寡頭壟斷的情況下，這些好處也適用。

靜態分析本質上是不合適的。單靠價格競爭不足以判斷私人市場的好處。即使在遠非完全競爭的市場中，質量競爭和銷售努力也必須包括在分析中。始終存在的是尚未存在的競爭——來自潛在新進入者的競爭。

始終存在的是尚未存在的競爭——來自潛在新進入者的競爭。

熊彼特強調，資本主義是一個經濟變革的過程。基於國內生產總值等總體指數的經濟分析受到熊彼特的批評。這些總量存在許多缺陷，會掩蓋其中的信息，而這些信息對於有效分析至關重要。

“[不僅]構建這種指數的材料和技術，而且以不斷變化的比例生產的不同商品的總產出這一概念本身也非常值得懷疑。”

政府部門擴張並不能充分替代私營部門的收縮，凱恩斯主義和其他左翼分析師在計算國內生產總值時忽略了這一點。基礎設施支出與軍事或福利支出對經濟的影響大不相同。投入指標無法很好地替代產出指標。

新商品以及質量改進以及“自願休閑”都不在這些指數的範圍內。作者指出，1940 年的汽車與 1900 年的汽車大不相同。

“[資本主義]進程並非偶然，而是憑借其[大規模生產]機製，逐步提高了群眾的生活水平。”

“畢竟，認為為盈利而生產和為消費者而生產之間幾乎沒有相似之處，認為私營企業不過是削減生產以勒索利潤的一種手段，而利潤被正確地描述為通行費和贖金，這種說法是不正確的。”

斷言中產階級在過去 30 年裏沒有取得任何進步顯然是愚蠢的。中產階級家庭擁有的物質享受現在包括以前沒有的各種物品，而以前擁有的這些物品的質量和種類都大大提高了。中產階級家庭不僅擁有 1980 年不存在的個人電腦和其他消費電子產品，而且他們現在往往擁有其中的幾台。即使階級內的平均收入沒有提高，大多數人也會隨著時間的推移在階級內進步。

資本主義經濟不是零和遊戲。窮人之所以窮，並不是因為富人有錢。

富人的財富不斷增加，但這並沒有阻止其他經濟階層在近幾十年取得令人矚目的進步。
無論如何，除了全球化和技術進步等自然的經濟發展之外，富人和中產階級之間日益擴大的差距很大程度上是長期人為的低利率和經濟金融化程度提高的結果，而經濟金融化是美聯儲銀行政策的結果，該政策從公眾那裏獲取收入並將其引導到華爾街。
創造性破壞的持續周轉並沒有出現在基於經濟總量的簡單分析中。

熊彼特強調了失敗權對於資本主義市場正常運轉的重要性。許多經濟學家忽視了創造性破壞的現實。創造性破壞的持續周轉並沒有出現在基於經濟總量的簡單分析中。然而，創造性破壞的浪潮不斷席卷資本主義經濟的各個領域，對於那些有眼睛的人來說總是清晰可見的。 （從馬克思到凱恩斯再到加爾布雷斯，左翼經濟學家們都堅決對這一現實視而不見。）

資本主義的批評者認為，競爭中普遍存在的不完善現象——壟斷、寡頭壟斷、產品差異化、壟斷競爭——破壞了均衡理論和資本主義福利最大化理論，而這些理論是利潤製度的正當理由。

“人們通常認為的問題是資本主義如何管理現有結構，而相關的問題是如何創造和摧毀這些結構。隻要不認識到這一點，調查人員的工作就毫無意義。”

價格剛性政策的影響對競爭壓力造成了各種各樣但本質上有限的阻礙。事實上，熊彼特指出：“從長遠來看，向下的靈活性就會顯現出來，這確實令人印象深刻。”

“創造性破壞的過程是資本主義的基本事實。”
在私有經濟中，壟斷行為與市場驅動行為大相徑庭，除非得到公共權力的支持，否則隻有在極少數情況下才能長期存在。

事實上，最重要的競爭類型是“來自新供應來源、新組織類型的競爭”。這種競爭“具有決定性的成本或質量優勢”，甚至會威脅到現有最主要因素的存在。即使是壟斷和寡頭也必須害怕這種競爭，並像麵對直接的價格和質量競爭一樣對其作出反應。（隻有偏執狂才能生存！）熊彼特注意到零售業的變化進程（這在現代導致了沃爾瑪和在線銷售）。

競爭市場的不完善既帶來了優勢，也帶來了劣勢，熊彼特對此進行了詳細分析。然而，所有人都麵臨著創造性破壞的競爭風暴，必須做出反應，否則就會滅亡。價格僵化政策的影響對競爭壓力造成了各種但本質上有限的阻礙。事實上，熊彼特指出：“從長遠來看，價格向下的靈活性會顯現出來，這確實令人印象深刻。”即使與價格固定和限製行為有關，價格僵化也是對市場失靈的一個誇張解釋。

“創造性破壞過程是資本主義的基本事實。”

競爭和生產遠非完美，但這並不破壞這一基本過程。創造性破壞不斷摧毀現有的供應商並創造新的供應商。

“啟動和保持資本主義引擎運轉的基本動力來自資本主義企業創造的新消費品、新的生產或運輸方式、新市場、新的工業組織形式。”

在私營經濟中，與市場驅動行為大相徑庭的壟斷行為隻有在極少數情況下才能長期存在，“除非得到公共權力的支持”。在“公用事業領域之外”，統治地位隻能通過競爭行為實現，如果在獲得統治地位後利用它，它將被新的競爭對手破壞。

政府可以通過專利政策、補貼、監管優勢、許可要求等方式來支持壟斷地位。當局總是會為此類行動提供理由，但隻有少數情況下它們才真正符合公眾利益，而且即使如此，通常也隻是在範圍和/或持續時間有限的情況下。專利保護無疑是合理的，但米老鼠式的版權保護延伸已經過分了，現在顯然適得其反。許多州和地方政府將許可要求擴大到遠遠超出經濟合理範圍的範圍。競爭性資本主義市場的經濟前景

顯然，市場主要受到政府的威脅，而政府在很大程度上創造了市場並促進了市場的發展。
政府的管理不善和浪費將始終限製其計劃的有效性。

事實上，正是資本主義為政府提供了用於社會福利目的的資源——包括失業、教育、衛生和老年人護理等資金。然而，政府的管理不善和浪費將始終限製其計劃的有效性。（正是政府的管理不善和浪費以及易受欺詐的影響，使其教育和醫療保健計劃日益陷入財務危機。）

利潤不得超過吸引新進入者的水平。壟斷優勢隻能通過“警惕和精力”來維持。
規模具有支撐主導地位的天然優勢。熊彼特指出，許多最具革命性的經濟進步都來自壟斷和寡頭壟斷。擁有無數小競爭對手的競爭性行業可能無法開發出更優越的方法，也可能更容易受到經濟衰退的影響。他指出，美國農業、英國紡織業和煤礦受大蕭條的打擊尤其嚴重。

大多數在行業中取得並保持一段時間主導地位的企業都是通過利用規模經濟和更好的信用評級來實現的。因此，它們可以以比小競爭對手更低的成本提供更高質量的產品。然而，為了保持主導地位，它們不能把所有這些好處都留給自己。它們必須將大部分好處讓給客戶，以阻止新競爭對手的進入。利潤不得超過吸引新進入者的水平。壟斷優勢隻能“通過警惕和精力”來維持。

大企業資本主義在顯著的生產力進步和生活水平提高方麵發揮了重要作用。熊彼特指出，美國鋁業公司在短短 40 年內就將鋁價降低了 90% 以上，並將鋁製品市場擴大了 3 1/3 倍以上。熊彼特質疑一群小型競爭生產商是否能夠如此成功地提高生產力並開發出這種金屬的新用途。美國鋁業公司（Aluminum of America）的動力來自於需要保持領先於甚至席卷鋁生產行業的創造性破壞浪潮。

ATT 壟斷顯然以相當大的優勢提供了世界上最好的大型電話係統。ATT 電話壟斷的優勢之一是來自傳奇貝爾實驗室的技術進步。然而，ATT 未能充分了解其自身技術進步的全部競爭機會。取消政府保護使 ATT 麵臨一些競爭，從而顯著展示了壟斷生產的成本和固有弱點。最初的 ATT 後來被其更敏捷的競爭對手之一收購。

社會主義的必然性：

從馬克思到凱恩斯再到加爾布雷斯，衰落主義觀點一直是左翼經濟理論的共同特征。熊彼特強調了馬克思和凱恩斯在熊彼特所說的“投資機會消失理論”方麵的相似之處。馬克思和凱恩斯都“強調資本積累和資本集聚對利潤率的影響，並通過利潤率對投資機會產生影響。”如果投資機會不可避免地減少，資本主義就無法維持下去。（資本利潤率的下降早在亞當·斯密時代之前就一直是資本主義製度增長的一個特征。）

熊彼特接受了資本主義將轉變為社會主義製度的普遍預期。

熊彼特徹底揭穿了大蕭條時期的衰退論者（通常是左翼）理論。他對一些關鍵的凱恩斯主義信念提出了嚴厲的批評。熊彼特正確地指出，正是大蕭條導致了“囤積”。儲蓄並不是大蕭條的原因。

然而，他接受了資本主義將轉變為社會主義製度的普遍預期。熊彼特預計，即使是技術進步也將變得如此自動化，以至於不再需要企業家才能。資本主義將因此降低自身的盈利能力和對資本主義本身的需求。

“完全官僚化的巨型工業單位不僅驅逐了中小型企業並‘剝奪’了它們的所有者，而且最終還驅逐了企業家並剝奪了資產階級，而資產階級在這個過程中不僅會失去收入，而且會失去更重要的職能。”

熊彼特在這裏幾乎是馬克思主義者，因為他認為這些假設是荒謬的。與 ATT 經曆的結果類似的結果在各種情況下都是常態取消政府監管限製後，占主導地位的企業將麵臨競爭。
學術經濟學家通常不知道管理到底是什麽。馬克思認為，管理隻不過是聘用專業經理人和發布“社會主義指令”。參見卡爾·馬克思的《資本論》（第二卷（I））導言。社會主義指令經常涉及那些“五年計劃”，這些計劃曾經是 20 世紀社會主義經濟舞台上如此熟悉的一部分，實際上在各個知識界都受到重視。

人們常常故意對政府管理的固有無能以及政府在經濟管理工作中表現出負麵學習曲線的頻率視而不見。參見《政府未來預測》第二部分。人們也常常故意對競爭在懲罰大型占主導地位的公司管理層自滿方麵的作用視而不見。

因此，大企業天生就容易受到煽動攻擊。短期衝動將戰勝繁榮所需的長期政策，政治現實將破壞資本主義製度。

熊彼特預計所有占主導地位的企業都會像通用電氣一樣。和馬克思一樣，他認為現代大公司的發展將所有權和管理利益分離，使股東失去職能，從而促進資本主義的滅亡和向社會主義的過渡。他預計他們能夠發展出主持創造性破壞過程的能力，排除獨立的企業家。這種能力將削弱小企業在創造性破壞過程中的重要性。（但大企業經常從小企業購買技術進步。）

和馬克思、凱恩斯和加爾布雷斯一樣，他認為股東毫無用處。工人，甚至管理層和小股東對任何大企業或其所有權形式都沒有強烈的忠誠度。他們不會為保護大企業的財產和合同利益而進行政治鬥爭。

熊彼特和亞當·斯密一樣，認識到公司組織中代理人利益和所有權利益之間存在固有的利益衝突。 （參見亞當·斯密的《國富論（II）》中“監管公司”一節。）管理階層越來越多地為自己和眼前的個人利益而工作，而不是為公司的未來而工作。

事實上，正是他們短期利益的強大，最近導致如此多的公司高管和員工不顧一切地損害其組織和整個經濟的利益。參見《信用危機中的道德風險利益衝突》。斯密無疑會驚訝於公司結構在我們現代經濟中運作得如此之好，以及經濟相對很少受到重大公司醜聞的打擊。他認為，合夥形式的組織最終將占主導地位。

股東集體用腳投票的能力——出售他們的股票——並對管理不善的公司施加低市盈率，是一種比任何管理監管替代方案更有效、效率無限高的紀律機製。

早在 20 世紀 30 年代，熊彼特就對資產階級家庭和生活方式價值觀的生存感到悲觀。他擔心，企業高管最終甚至可能認為孩子和私人住宅不值得負擔，或者不值得擔心經濟體係的未來。

因此，大企業天生就容易受到煽動性的攻擊。短期衝動將戰勝繁榮所需的長期政策，政治現實將破壞資本主義製度。

資本主義取得的成就越多，它就越有吸引力成為嫉妒和再分配狂熱的目標。總會有知識分子為這些攻擊提供借口、合理化和指導。

“嚴格來說，我們甚至不知道社會主義是否真的會到來。重複一遍：感知一種趨勢並設想它的目標是一回事，預測這一目標將真正實現，並且由此產生的狀態將是可行的，更不用說永久的了，則是另一回事。”

不可避免地，會有知識分子轉而攻擊資本主義階級和製度，為尋求資本主義財富再分配的大眾嫉妒和個人貪婪衝動提供方向。知識分子基本上是一個旁觀者和局外人，他們“主要的機會在於他實際或潛在的麻煩價值。”

“知識分子實際上是掌握口頭權力的人，他們與其他做同樣事情的人的區別之一是沒有對實際事務的直接責任。這種區別通常解釋了另一個——絕對

“隻有實際經驗才能提供對[實際事務]的第一手知識。”（熊彼特在這裏可能是在描述自己。）

資本主義取得的成就越多，它就越有吸引力成為嫉妒和再分配狂熱的目標。總會有知識分子參與、合理化並為這些攻擊提供方向。（這隻是承認煽動仍然是現代資本主義民主的主要威脅，就像它對前資本主義民主一樣。）

“[因此，]公共政策越來越敵視資本主義利益，最終以至於原則上拒絕考慮資本主義引擎的要求，並成為其運作的嚴重障礙。”

因此，今天的政策受到模糊的“公平”概念的指導，而不管經濟影響如何。

“[我們]目前還不知道社會主義可能以何種確切方式實現，隻知道一定有很多可能性，從逐漸的官僚主義到最生動的革命。嚴格來說，我們甚至不知道社會主義是否真的會實現。重複一遍：感知一種趨勢並設想其目標是一回事，預測這一目標將真正實現，並且由此產生的狀態將是可行的，更不用說永久的，則是另一回事。”

大蕭條對資本主義和資產階級利益的打擊清楚地反映在熊彼特的觀點中。在那段時間裏，幾乎沒有努力防禦各種左翼攻擊。然而，與馬克思、凱恩斯或後來的加爾布雷斯不同，熊彼特從未認為社會主義政策一旦被采納就會成功——甚至是可行的。

熊彼特的觀點得到了結果的證明。請參閱《熊彼特論社會主義》，以了解熊彼特《資本主義、社會主義和民主》中與社會主義相關的部分。在國外，社會主義事業確實取得了廣泛的勝利，直到它們證明了政府管理工作的巨大無能和社會主義成功的不可能性。參見 Muravchik 的《人間天堂》。隻有詹姆斯·麥迪遜設計明智地對聯邦政府的經濟權力施加憲法限製，使美國免受二戰後席卷歐洲的社會主義浪潮的影響。美國避免了最終伴隨社會主義而來的經濟災難。

今天，麥迪遜再次成為左翼災難——福利國家——的阻礙者。因此，麥迪遜被攻擊為過時的、與現代“需求”脫節的。在“活”憲法的標題下，知識分子敦促將憲法限製解釋為賦予聯邦政府滿足現代“需求”的權力。當心那些將形容詞附加到珍貴名詞上的人！
左翼再次獲勝，福利國家將其令人窒息的迷霧籠罩在許多發達經濟國家的經濟體上。然而，這些勝利將是暫時的。隻要政治民主本身發揮作用，選民就不會容忍左翼主要政策不可避免地導致經濟體係失靈。

選民總是會轉而反對那些破壞經濟的政策的責任人——隻要他們能正確識別出應負責任的政治團體。然而，最初破壞經濟表現的政策往往是自私自利的大政府保守派的政策，比如 20 世紀 20 年代和布什 (II) 政府的政策。並不總是很清楚——就像 20 世紀 70 年代末卡特政府時期一樣——左翼煽動家和右翼大政府政治替代方案中無原則的政治黑客應該承擔多少責任。選民隻能不斷更換現任者，直到他們賦予一個能夠正確行事的政治階層權力，就像 20 世紀 80 年代那樣。

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.