Re: Re: RE: Re: RE: Krugman.........faux Schumpeterian

[Rakesh Bhandari <rakeshb@xxxxxxxxxxxx>]

> ----- Original Message -----
> From: "Devine, James" <jdevine@xxxxxxx>
>
> >  What was Schumpeter's quote about the rationality developed
> >  within capitalism turning against the rationality *of*
> >  capitalism?
>
> I don't know that line, but PK sounds more like the growing view (e.g., of
> Stiglitz) that capitalism needs a lot of supporting institutions (e.g., good
> accounting) to keep it going.
>
> ===============
>
> Here's one of Schumpeter's assertions from C,S & D; its not the
> exact one I was thinking of which I
> haven't tracked down in my papers yet but it's close to it and
> springs from the same issues:
>
> "Thus the modern corporation, although the product of the capitalist
> process, socializes the
> bourgeois mind; it relentlessly narrows the scope of capitalist
> motivations; not only that, it will
> eventually kill its roots." (Schumpeter 1942, p. 156.)
>
> Ian


I think this particular theory of Schumpeter's is--well--rather far stretched.

Entrepreneurial function of innovation endogenized within the large
corporation, depriving capitalism of its often most ardent new
champions and mechanism by which talent from the working class is
coopted.

Rational calcuation yields feminism and discourages child bearing
which had given heroic male entpreneurs the incentive to create and
fight to maintain a business kingdom to bequeath to their  children.

Bourgeoisie weaken from within; do not fight to protect their
historic priviliges. Allow economy to be socialized, the state to
encroach on profits and private enterprise to be hemmed in.

And to the extent that innovation has been taken over by large,
bureaucratic corporations, capitalism produces no entrepreneurial
heroes whose mystique inspires the awe of the stupid masses

The capitalist mechanism does not weaken because it fails in any
objective sense; there is just no one left to defend it, and few
remain in awe of the ruling class.

The bourgeoisie decompose from within.
.
David McCord Wright, Schumpeter's student, suggests that he painted
such a dire picture in hopes of rallying his elite readers to the
defense of the bourgeois system.

Schumpeter has been read by the American New right as cultural
diagnostician of the threats to the bourgeois system and the New
Right attempted to fix the cultural problems to which he pointed, as
Spencer Pack has argued in the early 80s.

Gilder now runs the American Spectator; Schumpeter is his patron
saint, and it is bit interesting that the govt deficits that
Schumpeter thought would ruin bourgeois society were not imposed for
the sake of labor in the least but run up by people like Gilder in
the Reagan era in the sole interests of the bourgeoisie themselves.

Schumpeter was probably rolling over in his grave that what he would
have perceived as a crisis of the tax state was brought on by the
action of those in the ruling class who draped themselves in his
legacy.

RB