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Why Joseph Schumpeter Hated Democracy

John Medearis

Joseph Schumpeter saw firsthand the transformative power of democracy in Red Vienna Austria and New Deal America. But as a conservative, he recoiled at workers' challenges to traditional hierarchies — reminding us that the Right has always loathed democracy.

A 1938 strike in San Antonio, Texas.

Interview by
Shawn Gude

The Right does not like democracy.

It is easy to forget that basic fact, given their regular participation in elections, their occasional statements praising totems of popular struggle, and their brazen attempts to cloak anti-democratic moves in the rhetorical garb of democracy.

But if the political right got its start defending monarchy and traditional hierarchies during the French Revolution, it never strayed from its roots.

Joseph Schumpeter, the eminent conservative intellectual and Austrian economist, exemplifies the ever-evolving-but-ever-present anti-democratic impulse that animates the conservative mind. Best known for his theory of “creative destruction,” Schumpeter outlined in the early 1940s an enormously influential definition of democracy that stripped the term of its egalitarian tones. According to Schumpeter, democracy is a system of governance where elites compete through elections for the right to rule the populace.

Schumpeter was well acquainted with the more radical side of democracy. First in post-World War I Austria and then in New Deal America, he witnessed workers organizing en masse and challenging the prerogatives of those with political and economic power. He identified in their actions a historical trend of democratization, which he thought would push the advanced capitalist world, almost inevitably, toward democratic socialism.

And he was appalled. It was this revulsion, more than any fidelity to social science or value-neutral empiricism, that led Schumpeter to redefine democracy as an elite-centered game. No longer, as political scientist John Medearis writes, was democracy about storming the citadels of privilege or ordinary workers collectively determining their destinies. It was a hum-drum method where the demos — the ostensible star of a system established in its name — was demoted to spectator. As mass democracy took hold in the 1930s, Schumpeter was so aghast he began to harbor sympathies for the Nazis as a bulwark against popular rule.

Jacobin‘s Shawn Gude recently spoke with Medearis, a political scientist at University of California Riverside, about Schumpeter’s politics and political activities, his flirtations with Naziism, and how his elite-friendly approach to democracy has left a mark on the contemporary landscape.


SG

Schumpeter’s “elite” conception of democracy is his most famous. Can you start by laying out what he had in mind there and explain why it’s been so influential?

JM

This is the theory of democracy that Schumpeter articulated most clearly in Capitalism, Socialism, and Democracy in 1942, although it has roots in an approach he outlined decades earlier. The fundamental argument is that democracy can never mean anything more than electoral competition among elites.

There are a couple of main ideas, or claims, behind that. One is his attack on what he calls the “will of the people,” and by that he means the ability of ordinary people to deliberate, to decide, to act reasonably in politics. He takes this to be an attack on the “classical theory of democracy,” as he calls it — the view that individual citizens have political opinions that are stable, autonomous, and that can be derived from higher-level abstract principles. Schumpeter’s view is that if you can disprove this set of assumptions about political psychology, then the “classical theory” has to be rejected. It’s a bit of a straw man, but that’s the main argument.

The second element of the elite theory of democracy is an argument that democracy is really nothing more than a method, and that method is the method of elites competing for the power to make decisions. The significance of this is twofold. One is that democracy is just another form of elite rule: for Schumpeter, every form of society involves some kind of elite rule, and democracy just happens to be the latest form. On the other hand, his focus on method means that democracy isn’t about any kind of substantive commitments to freedom and equality — so much so that Schumpeter argued that democracy could be consistent with religious persecution, even violent religious persecution, because the traditional values of equality and freedom really don’t define democracy.

Schumpeter’s elite conception came to be influential because it seemed to a certain generation of political scientists to be a skeptical, value-neutral, formalistic approach to democracy. They looked around in the 1950s, ’60s, ’70s, and even later, and they saw that the only thing that could pass for democracy in the world was different forms of electoral competition among elites. And so they adopted a Schumpeterian view because it seemed to them a good portrayal of the world as they found it. But they purchased apparent realism at the cost of critical edge.

SG

Right, so that’s Schumpeter’s well-known view of democracy. Can you talk about his “transformative” conception?

JM

His transformative theory dates back to the period around the end of World War I, in writings that most people don’t tend to look at. And it’s a view that emphasizes the really radical and far-reaching implications of democracy, even though Schumpeter himself was no radical.

The core is the argument that introducing democratic practices into realms of society that are structured undemocratically can transform those realms and transform society itself. The early version of Schumpeter’s transformative view focused on the council movement, which began with the revolt of German sailors in Kiel in November 1918. The mutinying sailors formed a council — an elected democratic body to take over management of the naval base — and this spontaneous movement started to spread around Germany, with different kinds of councils. The most crucial, from Schumpeter’s standpoint, were factory councils: elected democratic bodies that took over, or aspired to take over, factories.

This movement was looked upon very favorably by people in the Austrian Social-Democratic Party, people like Otto Bauer. They tended to reject the idea that socialism could come about sort of automatically, through severe crisis or a top-down stroke of state socialization. And they embraced the idea that something like the council movement could democratize the economy from within and bring about not just democratic workplaces, but democratic socialism as a whole. Again, Schumpeter doesn’t favor this, but he buys the idea that this is the viable path to socialism, to democratic socialism.

His reaction to the council movement and other democratic challenges to the existing order is best understood from the standpoint of his conservatism.

And Schumpeter’s conservatism should be understood against the backdrop of the political and historical environment in which he grew up: the late Austro-Hungarian Empire — the centuries-old, multinational empire that included Austria, but also parts of what are now the Czech Republic, Slovakia, Hungary, Romania, even parts of Italy and which was dominated by a nobility of feudal origins.

The crucial focus in Schumpeter’s earliest political writings was on preserving the political role and leadership of that aristocracy. His views shared aspects of the self-image of the Austro-Hungarian nobility — their sense of their own importance in the empire — and his conservatism shared aspects of the ideology of the Christian Social Party, which was profoundly antidemocratic and hostile to the rise of the working class in Austria-Hungary.

Schumpeter had this view that even as capitalism developed, it wasn’t really modern beliefs, but premodern ones supporting deference to traditional leadership, that preserved society. So from this standpoint, the rise of political democracy, especially in the form of socialist parties, was a profound threat.

You might ask, “Well, if in order to understand Schumpeter’s conservatism you have to understand this long-gone Austro-Hungarian Empire and its nobility, is there just nothing to learn from Schumpeter’s conservatism?” And my answer would be no, if you take the view of conservatism of someone like Corey Robin: that the common thread of conservatism is theoretical improvisation designed to resist democratic challenges of many kinds — including by workers and by disfavored ethnic and racial groups. Because Schumpeter’s conservatism is a really relevant example of that.

SG

This dovetails with Schumpeter’s idea of “Tory democracy” and his political efforts to trying to preserve the monarchist forms from the old state.

JM

As the first World War proceeded, Schumpeter was a professor of economics in the city of Graz and he wrote a series of letters and memos he hoped would be circulated among members of the Austro-Hungarian nobility. He laid out in these memos a vision of elite democracy, although it was a different vision from that in Capitalism, Socialism, and Democracy. Here, as opposed to later, elite democracy is presented as just a political program rather than a necessary vision of what democracy is or what it must be, based on an understanding of political psychology and ordinary people’s political abilities.

Schumpeter’s advice for the nobility is basically, you can’t ignore democracy. Don’t try to ignore these new democratic spheres — parliament, public debate. Instead, try to dominate them. He had two main pieces of advice. One was to form a conservative party and reconvene parliament (which had been suspended during the war) and then try to gain public support through this conservative party. The second was to establish a conservative newspaper.

Schumpeter was drawing on the experience of both Tories and Whigs in late-nineteenth century England, who co-opted the rise of the working-class movement, at least temporarily.

SG

Let’s talk about Schumpeter’s experience in the United States, where he was living during the rise of the New Deal. What didn’t he like about the New Deal, and how did it shape his thinking about democracy?

JM

Schumpeter witnessed one of the most robust periods of labor activism in the history of the United States, with massive citywide strikes, sit-downs in the auto industry, and the achievement of collective bargaining, which had been a goal of labor for decades. And so in the United States in the 1930s, he came to see these democratic forms of New Deal labor activism as the new key for a transformative type of democracy, and very threatening to traditional workplace discipline — rather than seeing councils as the key, as he had in Austria around 1920.

Schumpeter saw the New Deal not really as socialist per se, but “laborite”: a transitional form of society in which labor and the working class were coming to preside over capitalism. You might think that he would simply accept this, since he thought that democratic socialism was the likely outcome of these profound and important historical tendencies that he’s theorizing — but he hated it.

And so at this time especially, you see an increasingly bitter imagining on his part of what democratic socialism would or could be. What’s strange and perverse about this is that his vision of democratic socialism shifts. His earliest vision of democratic socialism was based on the transformative conception of democracy: in that vision, democratic socialism was based on a thorough democratization of the economy, and so you have a fully democratic society as the basis of democratic socialism.

But at this point, he switches so his new vision of democratic socialism is based on elite theory. Indeed, it’s based on the most authoritarian possibilities within an elite conception of democracy. Instead of involving a truly democratized workplace, he comes to argue quite expressly about the importance of suppressing democracy in the workplace and of developing severe new “socialist” forms of workplace discipline. In fact, he even argues that it’s going to be possible in the coming forms of democratic socialism for state managers to use factory discipline to control the political expression of workers in an elite-dominated form of democracy.

SG

This might be a good time too to bring up what Schumpeter admitted was his “astonishing sympathy” for Nazism. I’m glad you mentioned Corey Robin before, because I see Schumpeter’s view in that light: the rising tide of democracy so horrified him that he was pushed from his already deep conservatism toward something like Nazism.

JM

In fairness to Schumpeter, I don’t think he ever adopted a lot of the substance of Nazi theory, and in particular I don’t think he ever adopted what Saul Friedländer calls “redemptive anti-semitism” — the idea that somehow the redemption of German society would come through the elimination of Jews. And also, much if not all of the material that we can recover to see this sympathy for the Nazis is not published but found in diaries. Nevertheless, during World War II, he’s coming to the view that the Nazis might be able to block the democratizing change that in his heart he deplored.

So you might ask, “Well, okay, does that mean that he’s not really a Nazi, that this sympathy for Nazism reflects an attitude that is just instrumental and not really substantive?” That, I think, would be going too easy on Schumpeter, because in combining a form of antisemitism — even if it’s not the kind of antisemitism of the Nazis and of Hitler — with a form of anti-Bolshevism, he really adopts a vision that shares two main structural elements of Nazism, and that’s pretty disturbing and profound.

It’s also true that we have to recognize, here as elsewhere, the contradictions that run through Schumpeter’s thinking. While he’s developing these ideas, recording them in his diaries, and sometimes enunciating them to friends and colleagues, he also at the same time does try to help German-Jewish academics get positions in the United States as they’re fleeing Nazis. But even while he’s doing this, he insists that he doesn’t want to be associated with any kind of protest against Hitler. So it’s this strange and really troubling contradiction.

SG

Yeah, and in your book you say that he was horrified by the prospect of Germany losing the war, too.

JM

Yes, he did imagine a future world in which there were blocs, and one of them would be a German Nazi bloc that dominated Europe. And so at least temporarily, that’s part of his vision of the future.

SG

I wanted to jump up to the present. There’s lots of talk these days about democracy in crisis, and although Schumpeter doesn’t always come up explicitly, I think a lot of the conversations are informed by his ideas about democracy. I wonder if you could talk about that: to what extent has Schumpeter succeeded in helping drain democracy of its radical, egalitarian implications and principles, and how have his ideas shaped the current conversation we’re having about the contemporary crisis of democracy?

JM

The way I see it, there are two main aspects to the contemporary democratic crisis. One is the way that profound economic inequality threatens democracy. And the other is the threat to democracy from “right-wing populists.”

I think that Schumpeter has affected the way lots of people think about those problems. Schumpeter became influential in political science from World War II on, and lots of the most crucial figures in political science in the 1950s, ‘60s, and ‘70s were deeply influenced by Schumpeter. And as I said before, they came to see Schumpeter as offering a kind of formalistic and realistic understanding of democracy.

I want to focus on people who I think of as “behavioral Schumpeterians.” These are people who study political behavior and are influenced by Schumpeter’s view of the ordinary capacities of typical voters. In fairness, you have to say they’re unlike Schumpeter in a very important sense — their own values are egalitarian, they’re opposed to political domination. But they nevertheless see Schumpeter’s account of political psychology, his account of the behavior of ordinary citizens and voters, as fundamentally correct.

These people tend to treat political judgment in an implausibly dichotomous way — they posit on the one hand what they call “ideological thinking,” which would be sophisticated and autonomous. But they think this is rare. And then they talk about the way most people think about politics as “pseudo-thinking” — as group-influenced pseudo-thought.

This approach creates some real problems for grappling with contemporary democratic crisis.

The tendency to see group thought and identity as not really thinking at all, the tendency to not really take it seriously as an ideology, but just to see it as a thoughtless reflex — on the one hand, this makes it hard for behavioral Schumpeterians to grapple with right-wing populism as an ideology, as a fairly well-developed set of views about how the world works and what kinds of change people want in it. It makes it really hard to conceptualize that challenge.

SG

Right, and on the first point, it also tends to end up being a project of elites saving democracy, which seems rather contradictory given the ethical underpinnings of democracy as popular rule.

JM

Yes, I think that’s the second problem. If you really believe that ordinary citizens are incapable of thinking for themselves about politics or formulating a coherent view of the political world, it’s hard to understand why you wouldn’t just adopt a view that elites must dominate politics. If you have such a thoroughgoing skeptical view of the capacities of ordinary people, and think that that’s a fixed property that can’t be changed, it’s hard to know who’d possibly be the agents who would resist domination by economic elites.

What’s needed, I think, is an approach that is completely clear-eyed about all the obstacles to a robust democratic politics — and there are many — without treating the obstacles as eternal and unchallengeable. We need an approach that tries to understand how it may be possible to mobilize democratic publics themselves to meet those challenges, even though such mobilizations will always be difficult to sustain, fraught, and imperfect.