“Joseph Schumpeter’s classic  Capitalism, Socialism and Democracy  explains the process of capitalism’s 'creative destruction' — a key principle in understanding the logic of globalization." — Thomas L. Friedman, Foreign Policy In this definitive third and final edition (1950) of his prophetic masterwork, Joseph A. Schumpeter introduced the world to the concept of “creative destruction,” which forever altered how global economics is approached and perceived. Now featuring a new introduction by Pulitzer Prize-winning Schumpeter biographer Thomas K. McCraw,  Capitalism, Socialism and Democracy  is essential read­ing for anyone who seeks to understand where the world economy is headed. “If Keynes was the most important economist of the 20th century, then Schumpeter may well be the most important of the 21st. . . . . his economic understanding was brilliant . . . he tried to set long-term economic growth--entrepreneurship and enterprise—at the top of the discipline’s agenda. . . .  Capitalism, Socialism, and Democracy  is superb.” — J. Bradford DeLong, Chronicle of Higher Educatio n “The most influential economist of the 20th century. . . . The years since this book first appeared have surely proved Schumpeter to be a major prophet.” - Peter Drucker, Fortune “In his classic work, Capitalism, Socialism and Democracy, Schumpeter described how unexpected innovations destroyed markets and gave rise to new fortunes.” - New York Times “If Keynes was the most important economist of the 20th century, then Schumpeter may well be the most important of the 21st. . . . . His economic understanding was brilliant . . . He tried to set long-term economic growth--entrepreneurship and enterprise--at the top of the discipline’s agenda. . . . Capitalism, Socialism, and Democracy is superb.” - J. Bradford DeLong, Chronicle of Higher Education “Among the great economists.” - Harper's Magazine “Joseph Schumpeter’s classic Capitalism, Socialism, and Democracy explains the process of capitalism’s 'creative destruction'–a key principle in understanding the logic of globalization.” - Thomas L. Friedman, Foreign Policy “An economic prophet.” - The Economist "The most important economist of the twenty-first century might actually turn out to be not Adam Smith or Keynes, but Joseph Schumpeter. One of Schumpeter’s most important contributions was the emphasis he placed on the tremendous power of innovation and entrepreneurial initiative to drive growth through a process he famously characterized as ‘creative destruction.’.” - Lawrence H. Summers, former Secretary of the Treasury “Schumpeter gave us stunning insights into how the world really works. We are now living, it is said, in the Age of Schumpeter. . . . Schumpeter was a powerful prophet, and he now offers dazzling insights into everything from the rise of Wal-Mart to prosperity’s discontents.” - Newsweek “The greatest defense of capitalist, European civilization ever penned. . . . Schumpeter did more than anyone to persuade American leaders to preserve the capitalist system” - American Conservative “The 20th century’s foremost economist.” - Steve Forbes, Forbes “Schumpeter was the most farsighted of twentieth-century economists. His focus on capitalism and creative destruction made him the prophet of globalization.” - The Nation “The great economist Joseph Schumpeter highlighted the role of innovation in powering the rise of new industries, the creative destruction of existing ones, and the growth in prosperity of economies.” - Richard Florida, The Atlantic In this definitive third and final edition (1950) of his masterwork, Joseph A. Schumpeter introduced the world to the concept of “creative destruction,” which forever altered how global economics is approached and perceived. Now featuring a new introduction by Schumpeter biographer Thomas K. McCraw, Capitalism, Socialism and Democracy is essential read­ing for anyone who seeks to understand where the world economy is headed. Joseph A. Schumpeter (1883-1950) served as Austria's first finance minister, made and lost a fortune as an investment banker, and taught economics for many years at Harvard. Capitalism, Socialism and Democracy is his best-known work. Capitalism, Socialism, and Democracy By Joseph A. Schumpeter HarperCollins Publishers, Inc. Copyright © 2008 Joseph A. Schumpeter All right reserved. ISBN: 9780061561610 Chapter One Marx The Prophet It was not by a slip that an analogy from the world of religion was I permitted to intrude into the title of this chapter. There is more than analogy. In one important sense, Marxism is a religion. To the believer it presents, first, a system of ultimate ends that embody the meaning of life and are absolute standards by which to judge events and actions; and, secondly, a guide to those ends which implies a plan of salvation and the indication of the evil from which mankind, or a chosen section of mankind, is to be saved. We m