Joseph Schumpeter

Capitalism, Socialism, and Democracy

Like "Cleavage Structures,..." by Lipset and Rokkan, this selection is also from the Political Sociology course but the assigned pages have been shortened in a way that makes it more difficult to grasp the flow of the overall argument. The summary here covers all the materials from the chapters 20 to 23, notice how they are interrelated with each other.

The Main Flow of the Argument

Can socialism be congenial to democracy? This is the basic question Schumpeter is trying to address in this work. However, in order to answer such questions it is first necessary to answer clearly as to what democracy is - and it is this exposition that is actually most interesting in these texts for the assigned pages. Very briefly, the argument is that democracy is actually more of an elitist institution, and that some of the characteristics needed to effectively conduct governmental affairs in a democracy are the traits, such as limitation of the number of those who actually participate in direct legislation and executive processes, that would be considered "undemocratic" in principle. Because of this conception, Schumpeter harshly argues against the utilitarian ideal of democracy that held the presence of ultimate collective goal of the society and that democracy is a way to attain that goal through the direct rule by the people themselves. Instead, in Schumpeter's view people are not the rulers in any direct sense in a "democratic" regime but merely act to give legitimacy to the regime through the process of election. With this basic view of democracy in mind, Schumpeter then goes on to identify several characteristics that are necessary in effective functioning of democracy - before finally taking up the task of deciding on whether socialism can indeed go together with democracy or not. Basically, his view is that while socialism and democracy are not ininimical to each other, any form of socialist government will probably not be any better off in terms of democratic functioning than bourgeois regime and in fact, would probably be worse off in many respects. Let's look at what points have been made chapter by chapter.

Chapter XX

This chapter sets up the problem of, first, difficulty of characterizing the relationship between socialism and democracy and, second, difficulty of describing what characteristics exactly make certain political structure "a democracy". For the first problem, Schumpeter notes that while socialism has always tried to assert its championing of democracy, they have actually been rather opportunistic in their actual behavior in the sense that they have tried to observe democratic ideal only when they perceived that ideal as congenial to their own ideal of socialism. For the second problem, several issues in the difficulty of defining democracy is brought up. First, democracy is to be understood as the method, a means to ends, and not as an end in itself. This is quite simple, yet, Schumpeter notes that confusing democracy for ends have tended to lead to definitional problems of democracy quite often. Next consideration is the fact that definition of democracy should be based on whether the regime gives participatory rights to those who are designated as "citizens" - but not necessarily on the basis of whether it excludes certain people on the basis of social, religious, racial, etc., characteristics. The latter is the different social issue based on those social, religious, or racial discrimination issues, but does not directly impinge on the definition of what democracy is. Even more serious problem is the problem of what exactly to make out of the concept of "rule by the people". If the regime is a small direct participatory democracy as in the Greek city state, that is one thing, but for all other types of regimes how can in all practicality people actually rule in any real sense? Simply substituting "government approved by the people" for "government by the people" for definition will not do, for number of authoritarian regimes at least on the surface were approved fervently by majority of people in history. So how can democracy be defined? 18th century founders of "democratic" regimes tried to define it legally, in an attempt to "link certain actual or ideal form of government to the ideology of the Rule of the People". The way they conceived of democracy, which Schumpeter labels the Classical Doctrine of Democracy, is actually the source of the definitional problem for democracy, he asserts. With this Schumpeter moves on to next chapter.

Chapter XXI

In this chapter we come to look at what Schumpeter calls the Classical Doctrine of Democracy. This is basically seen as the culprit in confounding the precise definition of democracy. Schumpeter here criticizes what he sees as the pillars of this CDD - the notion of so-called the Common Good and the Will of the people. That is, while utilitarians thought that out of the aggregates of individual wills what could be conceived of as the common good for all - a commonly shared goal all citizens should aspire for - can be derived on which people's rule based on that Common Good stands, Schumpeter flatly denies the possibility that such thing could exist. The other assumption regarding the individuals utilitarians made, their capacity to make rational volitions, also comes under attack. Whether people indeed are capable of such rational decision making, he notes, is a complex empirical question that cannot easily be answered. So, in short, the Classical Doctrine of Democracy is rather problematic. So, following this exposition Schumpeter instead delves into the notion of the Human Nature in Politics. Basically, this concept views people as more or less capable of rational volition so long as decisions they are facing are related to their everyday concerns which they can concretely identify with, but claims that their capacity to rationally act progressively declines as they enter abstract realm of politics. Because of this "human nature", Schumpeter notes that it is possible for the rulers to exploit this fact and fool people, thereby fabricating the "will of the people" as they like. Finally, four reasons as to why this CDD remained in tact for so long is given (See pp. 265-8).

Chapter XXII

So, after dispensing with the CDD, Schumpeter in this chapter develops a new theory of what democracy is. At the most fundamental level, it turns the conception of the CDD upside down. Whereas in the CDD people were perceived to be ruling via the electorate, in this new theory elites are perceived to be ruling via people's selection of them through voting. So, "the democratic method is that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people's vote" (p. 269). So, now people's sole role is to produce a government, or else an intermediate body which in turn will produce a national executive or government. Merits of this conception of democracy are then noted (See pp. 269-73). Among them, what I consider most notable are: we now obtain reasonable criterion of delineating democracy from others, for the problem of CDD was that Common Good or Will of the People could have been served by other forms of government than democracy; we now have ample room to play with to talk about the leadership, not just vague notion of Common Will. The rest of this chapter tries to apply this conception of democracy concretely to describe the actual working of democracy. First, it is noted that, as said before, the main role of the people in a democracy is to produce government, usually through the parliament. However, the qualification is that parliament does not choose the Prime Minister, the highest sovereign of the state, completely freely, but in turn tends to be controlled by the Minister who are supposed to be "elected". Also, an analogy between the war battles and political battles is made. The process of political decision making through democratic system is likened to the process of winning battles in a war by making successive advances, compromises, negotiations, etc. Then, this competition for power is seen as the driving force of the political mechanism. Instead of resorting to functional analysis of what sort of social ends politics serve, Schumpeter asserts we must analyze politics of democracy through the perspective of power struggle taking place among self-interested peoples and groups. Similarly, political parties are seen as struggling for political power, not promoting certain public welfare in search of some Common Good which the CDD speaks for. Anyhow, while this conception may not be new at all for contemporary sociology, it must have been quite original at the time of Schumpeter's writing.

Chapter XXIII

Finally, this chapter tries to answer the question of whether socialism and democracy can go together. Before that however, several implications from his theory of democracy is further derived as an introductory. First, politicians are seen as the distinctive professionals of doing politics. Then, administrative and technical difficulty of democracy, as well its efficiency being dependent on personal qualities of individual politicians, are noted of. However, for these implications Schumpeter notes that any alternative form of government other than democracy could very well face similar sort of problems and, therefore, these cannot be considered as peculiar problems associated with democracy.

Following this, conditions thought to be necessary for the successful working of democracy is then mentioned. There are four (pp. 289-96), which here are to be listed only very briefly. Overall, it is important to note that Schumpeter does not regard democracy as being any more functional than any other forms of political arrangements, but rather imputes the potential success of democracy to extrinsic factors. So, these factors are:

1. human material - those who holds office - must be sufficiently high in political capacity and "quality". Schumpeter also notes that only viable means to secure professional politicians of sufficiently high quality is the existence of the social stratum - a product of highly selective process - that is engaged in the politics professionally and pass on the knowledge and training needed to do so. Obviously, this is another clear expression of fundamentally elitist conception Schumpeter has of democratic polity.

2. Effective range of political decisions should not be extended too far.

3. Service of well-trained bureaucracy.

4a. electorates and parliaments must have intellectual and moral level high enough to exercise "Self-control".

4b. politicians must resist the temptation to upset or embarrass government each time it could do so.

4c. Voters must respect the division of labor between themselves and politicians - note that this is one of the key element in this chapter here.

4d. large measure of tolerance for difference of opinion.

Finally, the question of congeniality of socialism and democracy. Basically, there is no intrinsic difficulty of reconciling these two elements. However, Schumpeter describes contemporary democracy as distinctively a product of bourgeois culture. However, he notes that bourgeois is quickly losing its advantage in his contemporary times in terms of favorability to democracy. Schumpeter then sees the ideology of classical socialism as the offspring of bourgeois ideology, in the sense that socialism shares the rationalist and utilitarian conception of the world. However, what about the actual practice that could take place in socialism? Schumpeter says that public management of economy does not have to mean extension of political management (how this could be possible is not made entirely clear). However, in socialism political management could be inherently more difficult, since there is no intrinsic limit placed on the range of things government should do, in contrast to capitalism. Yet, Schumpeter overall seems to think that socialism could indeed be quite favorable to democracy. Not only democratic processes of leader selection and decision making could remain, but he even suggests that politics may be "purified" as clashing capitalist interests might be eliminated. However, in this concluding part Schumpeter is rather vague and does not give a clear picture as to how such condition may be achieved concretely. He does not forget to add, however, that socialism also tends to show inclination toward despotism and the overall difficulty of attaining socialist democracy. Either way, whether capitalist or socialist, the ideals CDD once upheld are utterly unrealistic.

Critique, Relevance

The basic idea is simple, that democracy has always been and is an elitist construction due to its very own nature, whatever the mask it may have wore (such as the classical CDD mask) historically. This is an example of the elitist theory of democracy in the tradition of Mosca, and as such, no other selections in our reading list are as elitist as this one. It is really astounding the contrast of the writings as this one and those stressing the democratic control of the government through the majority rule (e.g., Downs) is so stark such that the contrast has as much to do with the philosophical as empirical questions.