Bootstrap capitalism or complex reform?

A sizable segment of America, many of whom are investors, now look for guidance to Rush Limbaugh, a highly-successful broadcaster and talk show host. For Limbaugh and his followers, the way out of any financial crisis or economic problem is individualism, private ownership, free markets, and capitalism in its purest form. For them, capitalism and markets solve all problems.

One view of reform

Economist Joseph Schumpeter is someone Limbaugh and his followers probably don't know a great deal about. Like Marx, Schumpeter argued that capitalism's demise is inevitable. But unlike Marx, Schumpeter theorized that capitalism's end would stem not from revolution or even agitation, but from a peaceful, domestic majority that forms and votes for reforms. The reformers create a social safety net and social welfare state that removes capitalism's harshness -- and in the process eliminates the incentives that both drive entrepreneurship and that form the foundation for the capitalist structure. Paraphrasing T.S. Eliot, for Schumpeter, capitalism will end not with a bang but with a whimper.


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