Schumpeter on Democracy

Abstract

The aim of this paper is to discuss the main features of a theory of democracy as developed by Schumpeter in his famous book entitled Capitalism, Socialism and Democracy. In contradistinction to the classical theory of democracy which defines it as“that institutional arrangement for arriving at political decisions which realizes the common good by making the people itself decide issues through the election of individuals who are to assemble in order to carry out its will, ”Schumpeter defines the democratic method as“that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people's vote.”
Instead of stressing the ideal or the aim of democracy, Schumpeter treats it entirely as a method of“public choice”so to speak. The political leaders who are elected to make choice in democratic politics may be said to be the conceptual counterpart of the entrepreneurs in Schumpeterian economics.
Just as the profit motive working through the market mechanism succeeds in attaining welfare objectives of an economic society, so the competitive struggle for power and office fulfills incidentally the social function of political choice for a society. This may be said to be in the same vein of thought as that of the“public choice”school.
However, the thesis of“democracy in deficit”as propounded by some proponents of this school, notably James Buchanan and Richand Wagner, is an one-sided view of the political process of democracy. At least in the classical English practice, to which Schumpeter mainly alludes in his book, the general election is fought by means of policy programmes or“manifestoes”of different political parties. And it is by no means centain that inflationary programmes always win the majority of votes, if the evils of rising prices become widely understood among the people.