THE MARKET ISN'T GOD, JUST REQUIRES HIM:

Economist of the Empire: a review of Prophet of Innovation by Thomas McCraw (ANGUS BURGIN, April 18, 2007, NY Sun)

Those who write about Schumpeter rarely resist the temptation to compare his abundant charisma — both intellectual and interpersonal — to the force of a rushing wind, but it remains a challenge to write a narrative worthy of the metaphor. Mr. McCraw's prose successfully captures the heroic energy of his subject's life and thought. He does so by embracing, rather than attempting to tame or conceal, the relentlessly paradoxical quality of Schumpeter's ideas.

Like his contemporary Frank Knight at the University of Chicago, the other great center of American economic thought in the decades following World War I, Schumpeter abhorred the dogmatism of economic "schools" and the corresponding pretension that simple solutions could be found for the economic problems of the modern world. His thought, like his life, remained suspended between apparently contradictory poles.

Schumpeter championed the innovation, productivity, and material abundance engendered by capitalist economies, but remained deeply pessimistic about the instability, moral skepticism, and insatiable desires they inspired. He extolled the roughedged entrepreneur who generated new ideas and applied unyielding energy in the pursuit of their adoption, while at the same time admiring (and imitating) the aristocratic mien and noble disinterest of the disappearing European elite. Schumpeter's students recall that he would take over an hour to assemble his exquisitely tailored outfits each morning before his lectures on the benefits of capitalism's creative destruction. He admired the modern world's spectacular pace of change even as he mourned the very qualities these changes destroyed.

Perhaps John Kenneth Galbraith had this paradox in mind when he called Schumpeter "the most sophisticated conservative of this century." Schumpeter harnessed the two central concepts of modern conservatism — embracement of the dynamic change enabled by the free market economy, and suspicion of its cultural effects — in a social analysis that did not disguise or pervert its ironical nature. That he did so while transcending a range of disciplines with a mix of massive erudition and academic daring makes his achievement all the more striking, and inimitable, today.

That ambivalence about markets is vital to conservatism and why Adam Smith tried, unsuccessfully, to come up with a rational ground for morality to undergird capitalism.

Posted by Orrin Judd at April 18, 2007 11:07 AM