HOW WILL IT END? For centuries even the most sanguine of capitalism’s theorists have thought it not long for this world. Smith, Ricardo, and Mill pointed to a “falling rate of profit” linked to inevitable declines in agricultural productivity. Marx applied the same concept to industrial production, suggesting that the tendency to replace workers with machines would lead to a chronic and insurmountable lack of demand. Sombart saw the restive adventurousness of capitalism as the key to its success—and, ultimately, its failure: though the appearance of new peripheries had long funneled profits back to the center, the days of “stout Cortez” had ended and there would one day be no empires or hinterlands to subdue.
Schumpeter was the gloomiest of all. He opened a chapter titled “Can Capitalism Survive?” (in his Capitalism, Socialism, and Democracy) with the definitive answer, “No. I do not think it can.” Inspired by Marx, he imagined that the very success of capitalism—the creation of large enterprises through continuous innovation—would lead to profound fatigue as innovation came to be merely routine, and the bourgeoisie turned its attention toward the banalities of office life: “Success in industry and commerce requires a lot of stamina, yet industrial and commercial activity is essentially unheroic in the knight’s sense—no flourishing of swords about it, not much physical prowess, no chance to gallop the armored horse into the enemy, preferably a heretic or heathen — and the ideology that glorifies the idea of fighting for fighting’s sake and of victory for victory’s sake understandably withers in the office among all the columns of figures.”
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