Joseph Schumpeter, one of the brightest economists of the 20th century, allegedly said socialism will never die because it has three constituencies who will forever advocate for it. It appears Schumpeter’s analysis has come true so far, as socialism remains en vogue, even though it has a history of mass murder, poverty, and misery everywhere it has been implemented.
Schumpeter argues that the three constituencies who will keep socialism afloat are victims of creative destruction, intellectuals, and bureaucrats. Although Schumpeter penned his thoughts in the middle of the 20th century, when socialism was advancing throughout the world, his theory rings as true today as it did in the 1940s.
Schumpeter is credited with devising the term “creative destruction” in reference to capitalism. According to Schumpeter, creative destruction is the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
Schumpeter coined the term as he observed Henry Ford’s assembly line upend the manufacturing process. More recent examples of this phenomenon include the advent of the internet, automation in the form of robotic assembly lines, and ATMs.
In every one of these examples, society as a whole is better off because the standard of living has improved. However, there is a downside to creative destruction. It almost instantly deems an entire group of people obsolete. As technology progresses exponentially, the dynamic nature of capitalism is accelerated, making more and more people vulnerable to creative destruction.
And, according to Schumpeter, this means there will always be a large group of people who are opposed to capitalism, because they view themselves as the “victims” of creative destruction.
The second constituency that Schumpeter identifies as essential to the eternal nature of socialism is the group of intellectuals, namely academics, who fantasize about creating a socialist utopia. These central planners, who are immune to the free market because they live in the nether world known as academia, are completely captivated by the siren call of socialism.
In their minds, socialism is the inevitable paradise that humanity will reach, if only they are allowed to tinker and experiment enough with their central planning ideas. Ivory tower elites, who are totally out-of-touch with economic reality, will forever advocate for socialism because it is the only way they can enforce their progressive vision of the world.
Third, and arguably most insidious, is the large number of bureaucrats who will always be eager to increase the size and scope of government. For these people, socialism is a vehicle for them to constantly justify their own existence, as well as push for more power. Unfortunately, for these bureaucrats—whom some refer to as “the swamp” in the United States—it is in their best interest to band with those who seek more central power, which is the heart of socialism.
Like the intellectuals, bureaucrats, by nature, are also immune to the miracle of “the invisible hand” of capitalism. In their world, the market must be massaged and regulated, and they are just the people to do this. Sadly, this means that these people—there are millions of them in the United States—will constantly advocate for less freedom (economic, social, etc.) and more government control. In other words, they are skewed to support socialism, whether they are aware of it or not.
When these three permanent constituencies are coupled with ordinary voters who think socialism sounds good in theory, it is a recipe for the effervescence of the sordid ideology known as socialism.
