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Western University
Political Science
Political Science 2102A/B

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 Central Themes: - Influences: collectivism o Late 19 / 20 century writings about elites o Good deal of liberal thought had been to emphasize significant of elites because their belief in the superior ability leads to the advance of people as a whole o Spread of the suffrage (right to vote) was in fact something that would destroy the advances up until that point o Focus on the need to defend were legitimized in politics and economics o Leading writers here was a man name Niche  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  Refers to these people as entrepreneurs  He thinks Adam Smith was wrong by being overly egalitarian  Smith is wrong here  The laws of supply and demand missed what is essential about capitalism: Dynamic transformation  It requires land labour capital and entrepreneurship  He wants to distingue the entrepreneur from management (or owner of capital) • Entrepreneur o Economic innovation o Who can think outside of the box o Can introduce new commodities or better versions of existing ones o Create new ways of producing things o Creative power that represents a leading spirit o Innovator starts up with a monopoly  Schumpeter doesn’t think this is a bad thing unlike Smith o Exception? Where do we legitimize monopolies?  Public utilities o 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. Once the new idea spreading through the economy people will take on the idea which is diminish the monopoly o Important for driving the economy forward and general well being that spreads to society o Physiological type: motivation of the entrepreneur  Motivation of anyone investing (Schumpeter entrepreneur) is to maximize profits  Everyone tends to maximize their utility whether you are in business or not • Which is always measurable in some way o For Schumpeter the motivation for an entrepreneur  Profit is a measure of success but not a goal  The goal : is to find a trans-generational (something that can be passed on from generation to generation) dynasty, to dream to found a private kingdom  Schumpeter: profit is namely value as an measure of success and a symptom of victory it’s the joy of creating of getting things done or exercising ones ingenuity ” o He also points out that these aptitudes are best recognizes in a context of a homogeneous society o These aptitudes where they exist assure there will always be upward mobility between classes o Schumpeter says: Marx was right to point out the significance of social rights, but his understand of how they came about and the degree of their mobility was wrong Theme 2: - Idea of resentment - The superior of few - An attempt to devalue the achievements of the few - The dynamism of the entrepreneurial spirit– subject of resentment - Those who are on top because of past developments find the
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