Joseph Schumpeter’s
Capitalism, Socialism, and Democracy
is above all an exer-
cise in prediction. Born in the English Industrial Revoluti
on and thrust into promi-
nence by its successes in France, Germany, and the United Sta
tes, capitalism had
existed for more than a century when Schumpeter began to asse
mble the material
for his book. Socialism had a much shorter history. A constan
t theme in workers’
movements, socialism first became tangible through the esta
blishment of the Soviet economic system scarcely twenty-fiveyears before Schumpeter wrote. Despitethis disparity in age, and with no empirical indication of th
e newcomer’s practicalviability, Schumpeter boldly proclaimed socialism the new
order, while judgingcapitalism as doomed to extinction