Abstract

Many scholars are familiar with Joseph Schumpeter's elite model of democracy as an institutional arrangement or a political method. Throughout his life, however, Schumpeter actually theorized about democracy in two ways. Although he wrote about the ways in which elites may preside over a formally democratic institutional arrangement, the background to such writings was his view that democracy was a historical tendency capable of transforming society in ways he deplored. Schumpeter's vision of a science of social transformation underpinned his transformative conception of democracy. And both of Schumpeter's conceptions of democracy had their origins in the years surrounding the establishment of the first Austrian republic, 1926 to 1921. Specifically, his elite conception of democracy stemmed from his attempt to initiate a "Tory democracy" movement of Austro-Hungarian aristocrats. A few years after this attempt, Schumpeter advanced a transformative conception of democracy, agreeing reluctantly with Austro-Marxist theorists that economic democratization would build the foundation of a democratic socialist society. After moving to the United States, Schumpeter continued to develop his transformative conception of democracy, arguing that democracy was one of the tendencies propelling liberal capitalist societies toward "democratic" socialism. In this period, he regarded labor politics and the reorientation of state policy in the New Deal era as evidence of these tendencies. Schumpeter's elite conception of democracy also developed in these years, from the vision of "Tory democracy" in his early work into his later model of democracy as an "institutional arrangement" or a "method." He framed this elite model of democracy as method by adopting certain assumptions about "human nature in politics" that limit democratic possibilities. But Schumpeter's resort to these assumptions led to many of the most severe problems and contradictions in his work that have been pointed out by critics. Interpreters have rightly noted that Schumpeter's model of democracy as a method contains elements similar to neoclassical equilibrium models. Anthony Downs developed this feature of Schumpeter's work into his own equilibrium vision of democratic politics. Schumpeter's own approach to social science, however, makes clear the limits of equilibrium as a conceptual framework for understanding democracy