Schumpeter [was "An end to history?"]

[Rakesh Bhandari]

There has been quite a bit of controversy about Schumpeter's politics of
late. But what is almost always forgotten is that Schumpeter himself
argued that a fascist state was an excellent  instrument to ensure a
politics consistent with long term economic rationality. Consider his
analysis of Nazi economic policy, in particular in regards to public
works:

"The sums disbursed were comparatively moderate. They were expended with
great economy. Creation of purchasing power was an incident, but it was
not pursed as an end. Speculation was not encouraged. Infraction of social
discipline was discouraged. Monetary wage rates...were regulated with a
vew to stability at a level not much above the depression minimum...Saving
and accumulation were encouraged..and in many instances enforced...The
strength of the 'fascist state' as against group interests, and its
fundamental attitude to economic life--which for it is not an end itself
but a subordinate servant of extra-economic natinal goals--in this case
faciliated a behavior in accordance with the rules of long-run economic
rationality. Business Cycles, p. 975f. 

Of course by Schumpeter's criterion of coming to power through elections,
Hitler's rule was a 'democratic' one. 

I think Hoov is right that Schumpeter had no fear of socialism as he
reasned  it would have to be led by those qualified to lead. As Eduard
Maerz puts it,schumpeter's socialism displays the characteristics of 
Plato's state  rather than those of the community of Sir Thomas More,
Robert Owen or Karl Marx. 

"A society in which every cook is potentially qualified to conduct the
affairs of the state was not only alien to Schumpeter; he also thought it
Utopian and unfeasible."

best, rakesh