Book Review: Joseph Schumpeter — The Sociology of Imperialism

Leiden, a.d. XIV Kal. Ian. MMDCCLXVIII A.U.C.,
A couple of weeks ago I found this old gem in a book shelf of my granddad, so I decided to give it a try. Originally published in 1919, and republished in 1951, The Sociology of Imperialism aims to explain why imperialism exists. The ‘problem’ for Schumpeter is that aggressive behaviour by states cannot be explained solely by their vital interests, states are also imperialistic. Imperialism is the conquering of other nations for the conquering per sé. Schumpeter argues that imperialism is inherently anti-capitalist, because only small groups gain from it. Capitalism, left undefined, fosters pacifist movements, due to its processes of rationalization, individualization and democratization, and it fosters free trade, which removes the need for imperialism.

Capitalist societies only become imperialist due to a combination of two pre-capitalist structures in these societies. Firstly, the presence of a pre-capitalist violent culture, perpetuated by groups which have emanated from pre-capitalist political-economic structures. This, however, is not reducible to the mode of production: “The explanation lies, instead, in the vital needs of situations that molded peoples and classes into warriors – if they wanted to avoid extinction – and in the fact that psychological dispositions and social structures acquired in the dim past in such situations, once firmly established, tend to maintain themselves and to continue in effect long after they have lost their meaning and their life-preserving function.”1

Secondly, persisting mercantilist political-economic structures contribute to imperialist policies: “[…] trusts and cartels can attain their primary purpose – to pursue a monopoly policy – only behind protective tariffs, […]. But protective tariffs do not automatically grow from the competitive system. […] Tariffs sprang from the financial interests of the monarchy.”2 Cartels and trusts need imperialism, because it expands the area in which they are protected, while giving them access to new markets.

Only this combination of atavistic cultural and political-economic structures leads to imperialism, neither of the two is individually a sufficient or necessary factor, according to Schumpeter: “[…] export monopolism, […], is not yet imperialism. And even if it had been able to arise without protective tariffs, it would never have developed into imperialism in the hands of an unwarlike bourgeoisie. If this did happen, it was only because the heritage included the war machine […], the pro-military interests in the bourgeoisie were able to ally themselves with it. This alliance kept alive war instincts and ideas of overlordship, male supremacy, and triumphant glory – ideas that would have otherwise long since died. ”3

Such pre-capitalist, imperialism inducing characteristics, are not corollaries of capitalism, they are the result of the non-predetermined way in which societies switch from pre-capitalist to capitalist.4 Schumpeter, thus, views reality as contingent, rather than preordained. Meanwhile, the persistence of pre-capitalist cultural attitudes, such as jingoism and bellicosity, as well as pre-capitalist political-economic structures, such as trade barriers and monopolies, lead to imperialist tendencies in capitalist societies. Schumpeter, thus, uses a structure to structure narrative, as his narrative is void of agents with true choice, they are all driven forward by culture and export monopolism, so in his own words: “The only point at issue here was to demonstrate, […], the ancient truth that the dead always rule over the living.”5

While I liked the essay, it is certainly worth reading, I had some issues with it. Firstly, Schumpeter’s methodology was: “ […] simple: we propose to analyze the birth and life of imperialism by means of historical examples which I regard as typical.”6 Seeing that Schumpeter does not merely try to refute Marxist theories, which due to their deterministic nature can be refuted by one deviant case, but tries to build his own theory on the relation between capitalism and imperialism, he should have put more effort in explaining why the cases he uses are typical. Even then the conclusion that imperialism is always the result of pre-capitalist pockets within capitalist societies does not follow. For such a claim all available cases would have to be examined. Currently Schumpeter can at most claim that imperialism is not always a corollary of capitalism, which at that time was a controversial statement nevertheless.

Secondly, it seems like Schumpeter has defined imperialism too narrowly. It is doubtful that recourse to violence is inherently pre-capitalist. As Kissinger argues in World Order, wars can certainly also be waged out of a desire to actively shape the world after bourgeoisie values.7 ‘Bringing democracy’ to Iraq, or the USA backed coup against Allende in Chili are no cases of aristocratic bellicosity, yet they were undertaken to change the domestic structures of other sovereign nations. Were they, in a sense, not cases of imperialism?

Thirdly, Schumpeter is unclear about what culture exactly is, why it makes people violent, how economic or political structures interact with culture, and why certain pre-capitalist cultures retain their violent tendencies, while new capitalist cultures may renounce violence. What is it about culture that makes it absorb values necessary for survival in one era, and perpetuates those values in an era where they are no longer necessary? If you claim violent attitudes will disappear, because of capitalism, as Schumpeter does,8 you should also explain why they will disappear.

Fourthly, Schumpeter does not really define capitalism. He does not define it as an economic system, which influences cultural and political phenomena, rather, ‘rationalization, individualization and democratization’ are part of capitalism. I especially doubt whether democratization is inherent to capitalism. The correlation between the two is large, but not perfect.

Fifthly, the gigantic difference between military capabilities of Western countries and non-Western countries probably contributed to the imperialist tendencies of the former, an element Schumpeter fails to mention. Thus, it is doubtful that decisions to interfere in other countries (using a slightly wider definition of imperialism), can be fully explained by pre-capitalist culture and social structures, even if Schumpeter has developed a cogent argument about why capitalism is not inherently imperialistic.

Lastly, Schumpeter’s dependence on structural elements is a pity. His theory depends on processes and structures, rather than on individual decisions and individual’s expectations of other’s behaviour. As I discussed last week, the latter is a far more powerful way to analyze social phenomena than the former. Yet, I think much of what Schumpeter says can be translated to an individualist perspective, so it is not a major problem for the theory he lies down.

So all in all, I think it is an interesting book. It gives Marxism a good kick in the teeth where it hurts, so that is always welcome. It provides interesting insights in how economic competition can influence state behaviour, so even if Schumpeter was ‘wrong,’ his way of analyzing politics was interesting and insightful.

Bottom Line: Although not my typical type of scholarship, it is interesting to think about where violent attitudes come from. What it is it about people that makes them believe they have the right to violently interfere in other nations?

P.s. For those interested in the history of economics, this book is a rejection of (neo-)Marxist theory, for example Lenin’s Imperialism, the Highest Stage of Capitalism: “[…], the attempt may be made to reduce imperialist phenomena to economic class interests of the age in question. This is precisely what neo-Marxist theory does. […] But let us emphasize even here that it does not, of logical necessity, follow from the economic interpretation of history.”9 Meanwhile, the influence of Schumpeter’s Austrian economic mentors is clearly visible, as he uses the concept of marginal utility to explain how monopolists raise prices higher and push wages lower than producers on competitive markets. This concept was developed one generation before him, amongst others by his mentor Friedrich von Wieser, in a branch of the economic discipline which has brought forth scholars such as Menger, Von Mises, and Hayek.

1Schumpeter, J., The Sociology of Imperialisms, p. 64.

2Schumpeter, J., The Sociology of Imperialisms, p. 88-89.

3Schumpeter, J., The Sociology of Imperialisms, p. 97.

4Schumpeter, J., The Sociology of Imperialisms, p. 92.

5Schumpeter, J., The Sociology of Imperialisms, p. 98.

6Schumpeter, J., The Sociology of Imperialisms, p. 7.

7Kissinger, H., World Order, p. 242.

8Schumpeter, J., The Sociology of Imperialisms, p. 98.

9Schumpeter, J., The Sociology of Imperialisms, p. 7.


2 thoughts on “Book Review: Joseph Schumpeter — The Sociology of Imperialism

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  1. Big topic. Schumpter, I think, was probably more brilliant in conversation than writing, and I’d be intereested to hear a dialogue between you two on this. With respect to “capitalism”, I agree that the definition is pretty important. It’s pretty much guaranteed, IMO, that any group will try to extract rents from another, within or between societies. I see that as imperialism more than capitalism, which tends — I think — to imply NON-power relations. That said, I can see why “capitalist” plebs would like imperialism… as a source of prestige, escape from home, and some share of rents. (I’m a descendent of East India Company imperialists 🙂


  2. I guess it would be interesting to see under which circumstances capitalist countries can form a coalition which can agree on how potential spoils of Imperialism should be distributed. If there is no consensus on that, it should not occur with government support. Like you say, any group wants extraction from colonies to itself, but it can only happen if that group is sufficiently strong, or can ally with other groups, i.e. they need to agree on the distribution.


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