Date: Wed, 29 Nov 1995 14:42:50 -0800
From: djones-AT-uclink.berkeley.edu (rakesh bhandari)
Subject: Schumpeter/Gilder, pt I


Thanks to Lisa for the summary of Pack's essay on George Gilder's use of
Schumpeter. And more thanks as she has already commented on this post.  It 
is long and perhaps not of general interest. 

 This post is about Schumpeter's psycho-sociological theory of capitalist
breakdown and its influence on the lunatic right in the US.  In his 1941
review of Schumpeter's *Business Cycles* Henryk Grossmann was puzzled by
how Schumpeter could pronounce the capitalist mechanism in good order and
then still express agreement that the system was working towards breakdown.
 In other words, Grossmann missed Schumpeter's--let's say--superstructural
theory of collapse.  Some commentators have dismissed it as simply musings
of no importance to Schumpeter, certainly Schumpeter as pure economic
theorist.   At any rate, Pack has shown that Schumpeter's theory of
breakdown has been appropriated by Gilder.  

Schumpeter's actual work is quite independent of such appropriation, and 
the real comparative analysis of  Marx and Schumpeter is tremendously
interesting. In the NLR issue which included excerpts from Derrida's book,
there is a very stimulating discussion by George Catephores.    

For example, one way Schumpeter remained "Austrian"--and usually ignored by
those who emphasize his supposed Marxist affinities--is in his total 
neglect of  the actual labor process, so total that he could express awe at
the mass consumption of what once were luxuries, never minding to recognize
the torture of industrial workers in a system of mass production, never
asking whether high wages and mass consumption were at all sufficient
compensation for alienated and intensified labor.   At any rate, the
Marx/Schumpeter controversy is in my opinion one of the most interesting
questions in the social sciences, and in all honesty, I would rather talk
about that than Gilder's use of Schumpeter, as analyzed by Pack.  

However, I do think Pack is absolutely right to suggest that the lunatic
right  has strategically used Schumpeter's *Capitalism, Socialism and
Democracy* as an analysis of the socio-psychological process by which
capitalism works to destroy itself even as it putatively proves itself to
be economically efficient.    In other words, some neo-cons have learned
from Schumpeter where to look for 'the weak links' (so to speak) of the
capitalist system.  Indeed Schumpeter parenthetically bemoaned in his
theoretical work proper the absence of an 'equilibriating apparatus' which
presumably could be implemented to mend these links. As Schumpeter's theory
has been interpreted as a positive analysis of the tendencies of capitalist
development, it has never been asked in depth what would be the nature of
this 'equilibriating apparatus', as implied by his theory.    

 Whether it was Schumpeter's intention that this popularization of his
theory in *CSD* be read for strategic insight into the construction of a
such an apparatus is an altogether another question.  A true disciple of
his David McCord Wright  has suggested that this is indeed how Schumpeter
intended for CSD to be read.  

Let's just take the analysis of decomposition of the bourgeois family.
Capitalism slowly inculcates a rational mode of thought.    This
(instrumentalist) rationalism eventually invades the home sphere
(interesting contrast with Habermas who criticizes its colonization of
other spheres).  Women then apply the canons of such rationalism to
decisions about child-bearing; birthrates decline (Sombart had already
suggested such a 'culturalist' explanation for declining birth rates, which
Schumpeter does not cite).  Without domesticated women and dependent
children, the  heroic male bourgeoise begins to decompose, loses its
long-time horizon and gives into the (Keynesian) ressentiment against
bourgeois savings and thrift.   Capital does not fight labor's offensive,
state-led income redistribution,or the expansion of public investment. 
What obtains is what Schumpeter called 'premature socialization.' 

Of course as serious a threat to the bourgeois family as feminism is
homosexuality (though Schumpeter does not comment on this directly), and if
one reads Gilder's *Men and Marriage*  (1974 ed revised in 1986), one
cannot but get the sense that Gilder thinks AIDS was a form of divine
intervention to protect the natural family order of Kinder, Kuche and
Kirche.  Several 'economic' reasons can be given for this glorification of
the patriarchal bourgeois family:

--it leads men to work harder and save more
--it motivates bourgeois men to engage in entrepreneurial start-ups,
bequeath a kingdom to their children; and as embodiments of new production
functions, they raise the quality and quantity of output while saving
capitalist profitability from decling returns. 
--it gives them that long-time horizon necessary to fight off politically
other social classes and resume their heroic, yet socially beneficial, 
function of real investment and capital formation.   

Note Schumpeter is not giving the Fordist reason for the monogamous working
class family analyzed by Gramsci, that is, the importance of making sure 
workers' energy is not diverted through 'meaningless' sexual romps. 
Schumpeter's family is the bourgeois one, his concern here
Pareto-inspired--the solidity of the ruling class itself; and Gramsci's
analysis of the Fordist rationalization of the total social life of the
proletariat is ultimately much more relevant ( I believe) to understand the
contemporary onslaught of sexual conservatism.  




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