Schumpeter's Paradox: The Success of Capitalism and the Challenges of the AGI Era

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Schumpeter's Paradox: The Success of Capitalism and the Challenges of the AGI Era

Introduction

This article analyzes Joseph Schumpeter's thesis on the self-destructive nature of capitalism. You will learn how creative destruction undermines the system's foundations and why economic success leads to a civilizational shift. We examine the role of artificial general intelligence (AGI) as an accelerator of these changes and explore various adaptation models—from the American neo-oligopoly to the European participatory economy.

The Success of Capitalism: The Decline of the Entrepreneurial Function

The Schumpeterian paradox posits that capitalism perishes because of its own successes. The system's efficiency has routinized innovation, replacing the heroic entrepreneur with bureaucratic teams of specialists.

Creative Destruction Shatters Bourgeois Institutions

The logic of constant change strikes at the normative foundation: private property and class prestige. The system destroys the world where the entrepreneurial ethos was "self-evident."

Bureaucracy Paves the Way for Socialism

Schumpeter considered socialism to be economically feasible. Central planning can simulate the price mechanism, eliminating the waste of business cycles and oligopolies.

Proceduralism: Democracy as a Political Market

Democracy is merely a method for selecting leaders in the struggle for votes. The "will of the people" is a construct manufactured by elites rather than a rational pursuit of the common good.

Schumpeter vs. Marx: A Sociological Vision of Collapse

Schumpeter drew from Marx the vision of the historical variability of modes of production. However, he rejected the theory of exploitation, pointing out that capitalism collapses due to rationalization, not the misery of the masses.

Intellectuals: The Engine of Capitalist Delegitimization

The education system creates a class of intellectuals who, bearing no responsibility for the economy, professionally question and deconstruct the narratives that legitimize the market order.

AI: Automating the Process of Creative Destruction

Artificial intelligence is a general-purpose technology that intensifies Schumpeterian dynamics, redefining business models and competitive paradigms on a global scale.

USA, UE, and Arab Countries: Three Models of AI Development

Regions differ in their approach: the USA focuses on the market, the EU on ethical regulations, and Arab countries on state-led modernization projects funded by natural resources.

Big Tech: The North American Data Neo-Oligopoly

In the US, AGI favors the concentration of power. A neo-oligopoly is emerging, where a few corporations control key data resources and computing infrastructure.

Ordosocialism: The European Participation Model

Europe strives for an inclusive economy. It combines innovation with data protection and the dignity of labor, treating AGI as a piece of public infrastructure subject to oversight.

Asian Capitalism: AGI in State Planning

Asian models utilize AGI as an instrument of geopolitical strategy and internal control, where the state designs technological trajectories and manages development.

Schumpeter, Kalecki, Mączyńska: A New Synthesis of Thought

The modern era requires combining creative destruction with Kaleckian concerns for demand and Mączyńska’s ideal of a participatory economy, infused with an axiological dimension.

AGI: A New Infrastructure for Market Coordination

AGI can take over the coordination functions of both the market and the state, simulating the effects of decisions in real-time, which allows for precise management of global demand.

Algorithmization Destroys Autonomy and Professional Ethos

Widespread algorithmization carries the risk of de-skilling. If AI replaces human thinking instead of augmenting it, an erosion of competence and responsibility within the professional class will occur.

Full Employment Under Conditions of Innovation

Maintaining full employment requires a democratically controlled AGI architecture that supports the selection of innovations without destroying social stability and purchasing power.

Summary

In a world of algorithmic coordination, can efficiency be reconciled with the dignity of labor? Creative destruction may prove to be a force too powerful to harness without a new institutional order. We face a critical question: will we become the architects of this future, or merely pawns in a game controlled by algorithms? The success of capitalism necessitates its own transcendence.

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Frequently Asked Questions

What is the Schumpeterian paradox in the context of capitalism?
The paradox is that capitalism does not collapse because of its inefficiency, but is destroyed by its own successes, which undermine its social and institutional foundations.
According to the author, is socialism economically feasible?
Yes, Schumpeter argues that from a purely economic point of view, central planning is feasible as long as the bureaucracy can simulate the market mechanism.
How does artificial intelligence impact the theory of creative destruction?
AI intensifies Schumpeterian dynamics, becoming a universal transformative force that increases productivity but also accelerates the obsolescence of old structures.
How does Schumpeter define the role of citizens in a democratic system?
The role of citizens is limited to selecting leaders by accepting or rejecting the ruling teams, and not to formulating political programs independently.
How does Schumpeter's vision differ from Karl Marx's theory?
Schumpeter rejects the Marxist theory of exploitation and inevitable economic collapse, pointing instead to a cultural and social transformation towards socialism.

Related Questions

Tags: creative destruction AGI capitalism socialism productivity rationalization bureaucracy innovation pricing mechanism political elites the will of the people technological transformation economy institutional structure innovation dynamics