I’ve discovered the Teaching Company and have purchased some of their lectures. One in particular “The Legacies of Great Economists” struck a chord when I got to the eighth lecture Joseph Schumpeter and the concept of entrepreneurialism. Schumpeter, a proponent of free market capitalism and entreprenuerialism, predicted that capitalism would eventual die from it’s success. Sounds eerily what’s going on now.
Prof. Timothy Taylor, blew me away when describing Schumpeter’s view that someday people, especially intellectual elites, would begin to disdain capitalism becase it treated them so well and wouldn’t be able to take the pain of capitalism when things go bad in a down cycle. It’s exactly what’s going on now, yet Schumpeter wrote in the 30’s and 40’s and this lecture was made well before the current economic crisis and Obama’s election.
You GOT to listen to this excerpt. (mp3, right click and download it to your ipod or other mp3 player)
Here’s a summary of the same thought from a different author summarizing Schumpeter’s view (not as good as the lecture though.
The success of capitalism will destroy, moreover, the old conception of private property and the willingness to fight for it, Schumpeter contended. Once the entrepreneur is gone, the paid manager and the stockholdÂers will no longer defend the concept of private property. Their attitude will also prevail among the working class and public at large. “Eventually there will be nobody left who really cares to stand for it—nobody within and nobody without the precincts of the big concerns.”5 Again, the success of capitalism will speed this process, for the increases in income and wealth produced by capitalism will permit the growth of an intellectual group in the society who “wield the power of the spoken word” and who have “no direct responsibility for practical affairs.”6 The success of capitalism will permit these intellectuals to live off the fruits of the system but, at the same time, to criticize it. They will radicalize the labor movement; although they will not usually run for public office, they will work for and advise the politician. Occasionally they will become part of the government bureaucracy; but most important, with the ever-increasing growth of mass communication, they will be able to disseminate throughout the society a discontent with and resentment of the institutions of capitalism.
Schumpeter envisioned the end of the system he loved approaching slowly but surely. He feared that with the demise of the entrepreneur and the end of laissez faire, government would intervene more and more in the economy. Some, like Keynes, welcomed this intervention as a way of saving capitalism, but to Schumpeter it was a sign of the imminent end of capitalism. Because of what he called “Evaporation of the Substance of Property” and the end of the entrepreÂneur, Schumpeter predicted that the dynamic element in the economy that accounted for its past growth would disappear.
(emphasis added)
I highly recommend the lecture series (also check out his Economics course.