Chapter 11: Continuity, Change and Socialism
Schumpeter said it was very likely that capitalism would self-destruct. He also said it was very likely that socialism would take its place. His evolutionary schema was therefore the dual prediction that the success of capitalism would be the failure of capitalism and that the antithesis of capitalism would in the end be its phoenix and its rising star: ‘Its very success undermines the social institutions which protect it, and “inevitably” creates conditions in which it will not be able to live and which strongly point to socialism as the heir apparent.’ (Schumpeter, 1942a:61). The blue tendency is sunset capitalism, bleeding from a thousand wounds, ‘decaying, shading off into something else, or tottering toward a violent death’ (Schumpeter, 1939:II, 908). The red tendency is sunrise socialism which knows that yesterday’s decline and fall is also today’s viable new start: ‘Things and souls are transformed in such a way as to become increasingly amenable to the socialist form of life.’ (Schumpeter, 1942a:162). The blue tendency and the red tendency are not separate developments, two things apart. Instead they are a continuing skein, as closely intertwined as today and tomorrow, as much a single whole as creative destruction: ‘The capitalist process not only destroys its own institutional framework but it also creates the conditions for another.’ (Schumpeter, 1942a:162). Because capitalism is, therefore socialism will be. Schumpeter, looking to the future, anticipated that red would win and blue would lose. It was not a forecast that inspired in him...
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