BOOKS OF THE DAY
Epistle to the English
Capitalism, Socialism and Democracy. By Joseph A. Schumpeter. (Allen and Unwin. tss.) As the technical resources of economics have grown more refined, more truly scientific, the merits of the old political economy have
been largely lost. Many of the most acute modern economists seemed, to the outsider, to be begging the question, since they took for granted a number of social and political conditions which either did not in fact exist or, if they did, had consequences that affected the purity of the analysis. It is the first of many merits that Professor Schumpeter, himself a master of all the tricks of the trade, is here consciously writing political economy. It is this constant reference to the actual, to what can reasonably be expected with the present political and social institutions, men, and attitudes, that makes this book so lively, so wise and, of course, so controversial.
Professor Schumpeter argues, roughly, that Socialism is inevitable,
, is practicable and can be introduced without revolution, at any rate in England. Brit he also argues against the reasons given by other publicists for coming to the same conclusion. Thus he attacks, with all the resources of his economic expertise, what he consider to be illusions about the character and prospects of modern capitalism. He believes that our preoccupation with the evils of monopoly is silly. Monopoly is far rarer than we think and not self- evidently an evil. The advantages of large-scale production are so great that they far more than compensate for the loss of some of the advantages of competition, that competition dear to the laissez- f aire economist at all times and to so many Socialist intellectuals now that they think they can safely drop a few tears over its tomb. Professor Schumpeter does not think competition is dead nor would-_ he weep much if it were. But, unlike some of our apologists for cartels, he sees where this complacency leads. It leads to collectivism For Professor Schumpeter holds that one of the advantages of Socialism will be just the elimination of what is left of competitive vigilance even in the great trusts. Even the biggest trust has to work in semi-darkness, with consequent strain and consequent error ; both strain and error would be minimised if the great trusts were part of a common trust.
Not only does Professor Schumpeter attack this common belief, he attacks with even more weight the Marxian belief that capitalism no longer fulfils its historical role, that it is now a fetter on pro- duction. If certain conditions were fulfilled capitalism would con- tinue to perform as well as it performed in the past fifty years, and that means that the abolition of poverty, at any rate in countries like this, is technically feasible without any fundamental changes. Why then socialise? Because the necessary conditions are not going to be fulfilled. Above all, one necessary condition is not going to be fulfilled, the acceptance of capitalist leadership by the workers Ind the retention of the old capitalist faith by the capitalists. "We are all Socialists now," said Sir William Harcourt. "How true, how unfortunate," might be Professor Schumpeter's reply. But since this is so, we are making the worst of both worlds, by policies like the New Deal, by encouraging negative trade unionism, by giving a career to critical intellectuals whose role, Professor Schumpeter reflects with visible satisfaction, will be less gratifying in a Socialist society which will stand no nonsense from them. That Socialist society will, in fact, be much -"more like an expanded capitalist system, its economic logic must be basically the same. It need have no other than its economic content ; it need not be humane, equalitarian or free. Its artistic taste may be horrible and, a point not stressed enough, it need not be pacific. For Professor Schumpeter has *too much sense to see in capitalism the cause of war or in its abolition an immediate guarantee of peace.
What is the value of a book like this in our current controversies? First of all, its author's refusal to scrap the bourgeois virtues of industry, initiative, &c., makes an appeal to the managers more plausible than such appeals usually are coming from other quarters. Professor Schumpeter is no more shocked than was Professor Smith at the unromantic motives of extremely useful members of society like bakers and bankers. Secondly, if a Socialist society is a natural extension of Capitalist society, we had better take a realist and non-moralising or romantic view of Capitalist society. Lastly, by sticking to the view that Socialism is an economic arrangement, he avoids giving aid and comfort to the utopians who think it will abolish everything evil from hangovers to sexual jealousy and so driving off many reasonable persons who would like an increase of wealth and more equality in its distribution, but have no passion for nut cutlets or morns-dancing.
Not all of this long and acute argument seems to be equally convincing. The existence of the research laboratories of the great trusts only makes Professor Schumpeter's point if there are un- limited numbers of first-class research chemists available (on which point his own instance of the was of the talent of the corporation lawyer is relevant) and if the patent laws do not permit the sterilising of discoveries irrelevant to or hurtful to the interests of the employers of the discoverers. Both these things may be true, but they are not argued. And Cobden, if not Reel, could have answered the objection that there was no corn trade cartel. He did not know the word, but he thought he saw the thing in the
political organisation of landed interest based not merely on the corn laws but on the land laws. Obviously, this book has a close connexion with the controversies entered into by Professor Laski, but its main theme, the failure of the capitalists to get themselves accepted as political leaders recalled to my mind not any recent
economic treatise, but the passionate rhetoric of Georges Bernanos's " Lettre aux Anglais." This is a letter to the English people, an optimistic appeal to the governing class and, what is more bold, an actual programme of practical politics that Left and Right should
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