Schumpeter explores the relationship between socialism and democracy. Some socialists claim that socialism is the only true form of democracy: by eliminating the bourgeoisie’s economic potency, everyone can participate equally in political power. In practice, the relation is more complex. Socialist revolution may require a “transitional period” in which democracy is suspended to implement goals, or for society to acclimate. Socialists may hold up socialist society above the value of democracy. Such valuations can lead to conflict. Indeed, the case of Russia shows that socialism is compatible with such conflict and a radically undemocratic state.

“Democratic” socialist parties in the UK and Scandinavia may be democratic because it was the best way for them to get power. For them, pursuing a non-democratic road had little chance of success.

Schumpeter seeks a robust definition of democracy. Democracy “is that institutional arrangement for arriving at political decisions which realizes the common good” (250). The common good can be understood as the general interest, welfare, or happiness of the public. This, and the means to achieve it, should be transparent to all rational members of the community. Due to the division of labour and skills, it is not possible for all citizens to participate in the process of implementing the common good directly.