Financial History 100th Edition Double Issue (Spring/Summer 2011) | Page 13
Educators’ Perspective
of irony. According to Miller, although
Schumpeter’s graduate students “were
reflexively hostile to his message, he nevertheless ‘slyly got across one point after
another’… Irony served as a battering ram
with which to open minds.”
By initially appearing to attack capital
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actually the driving force behind Schumpeter. However, the prevailing sentiment
during the 1930s, especially at universities such as Harvard, favored socialism
over capitalism. Schumpeter, realizing
that a direct assault on socialism would
have little effect, resorted to a strategy
Economist Joseph Alois Schumpeter (1883–1950).
ism, he was able to put arguments across in
favor of capitalism that the unsuspecting
left-leaning intellectual would never have
had the patience to consider in a work that
was obviously attacking socialism. One of
Schumpeter’s students described this as
the Mark Anthony technique. “By coming first to ‘bury Caesar not to praise him’
(capitalism is doomed) he was able to get
people to read him who would otherwise
not have sat still for a moment under his
teaching. ‘Brutus’ moreover is ‘an honorable man’ (socialism is workable). Having
conceded that much he was then able to
insinuate one of the most able defenses of
capitalism ever published.”
Muller notes that in irony “the stated
may be the opposite of the intended.”
Thus when someone reads CSD without
recognizing the ironic intent, the message
is totally lost and Schumpeter appears to
be contradictory and illogical. Though
many of today’s quantitatively trained
economists have little use or patience for
irony, they could benefit from a reading
of CSD in its proper context. Schumpeter
gave the best reason for reading CSD in
the preface to the second edition (1946)
where he wrote, “Now this is precisely
where I wanted to serve the reader. I did
want to make him think.”
At least one reviewer of CSD in the 1940s
understood Schumpeter’s ironic intent.
Fritz Machlup’s review in The American Economic Review described CSD as
“a humorous-ironic rococo.” While the
humor in CSD is obvious, the irony is
not. Let’s look at a couple of examples
of Schumpeterian humor. When commenting on Marx’s contempt for the idea
that those with superior intelligence, who
are more energetic workers and savers,
become capitalists, Schumpeter hilariously asserts that “to call for a guffaw is
no doubt an excellent method of disposing of an uncomfortable truth, as every
politician knows to his profit.” Later on
he takes another jab at Marx: “…there is
little reason to believe that this socialism
[as defined by Schumpeter] will mean
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