Political Science 2102A/B Study Guide - National Industrial Recovery Act, Creative Destruction, Joseph Schumpeter
31 Jan 2014
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Document Summary
Most famous book: capitalism, socialism & democracy 1942. Depression lead to the rise of fascism and nazism in germany. Depression was not grounds enough to give up on capitalism. Capitalism would in fact fail because it was doing so well. Role of the few superior as a source of creativity. Effects of resentment of the many against the few who are creative. Schumpeter makes use of the first one as central of his understanding of capitalism. Idea of creative elites is a central part of schumpeter understanding of how economics works. He thinks adam smith was wrong by being overly egalitarian. The laws of supply and demand missed what is essential about capitalism: dynamic transformation. Public utilities: monopoly leads to profits which make further innovation possible, but they are never going to be long lasting, so they will never be a problem. Motivation of anyone investing (schumpeter entrepreneur) is to maximize profits.
