Capitalism, Socialism and Democracy

Schumpeter explains how he will sketch the development of socialist parties in Europe and the US. He also states that he will focus on parties that are Marxist in character.

Schumpeter discusses pre-Marxist socialism, often referred to as “utopian socialism.” The main problem with this type of socialism was that its ideas were “unimplemented and unimplementable” (306). Out of touch with social reality and any significant social movement, there was no perceivable process which would bring its ideas into being. Seminal figures in utopian socialism included Thomas Moore (1478-1535), with his Utopia (1516), and English socialist Robert Owen (1771-1858). Neither was able to show how existing society, or the forces within it, might lead toward the ideal societies they envisaged.

Nevertheless, Schumpeter argues that Marxists unduly dismissed utopian socialists. Utopian socialists paved the way for Marxism in articulating a dream and the mass’s hunger for change. Unlike Marx, they saw that it was not just the working classes who would be the prime movers in a socialist revolution, but governments and intellectuals.