Schumpeter and Galbraith: A Comparative Analysis on the Modern Corporate Economy

This investigation reveals certain modifications and extensions pertaining primarily to the disintegration of the social fabric of capitalist society developed by Schumpeter, with special emphasis on his writings between the years 1942 and 1949, just prior to his death in 1950. Three publications during the period which hold particular significance are Prime and Henderson (1975), “Schumpeter on Preserving Private Enterprise†(an address by Schumpeter to a group of Quebec businessmen in November 1945); J.A. Schumpeter, “The March into Socialism,†AER, May 1950 (a paper presented on December 30, 1949); and J.A. Schumpeter, notes on “American Institutions and Economic Progress,†(late 1949). These more recent views are exposed and compared with Galbraith's rationalizations on the contemporary corporate economy. It is well known that Schumpeter, the theorist, was willing to express tendencies but was hesitant to relate the specific outcome of the future of capitalism. However, Galbraith was quite precise in his interpretation of the transition to modern capitalism.