Development and Underdevelopment in the History of Economic Thought

Schumpeterian and Millian Interpretation of the Role of Elites in the New State Capitalism

akdere cinla, Assistant professor
Bas Dinar Gulenay, Associate Professor

The theories of elite are proposed in the begining of 20th century to oppose the social classes approach of Marx. J. S. Mill, W. Pareto, G. Mosca, R. Dahl and J. Schumpeter are considered among the ones who have contributed to the development of elite theories. Mill, after loosing confidence on both Conservatives and Liberals on reform of parliament, discusses the form of representation of people in his book entitled Considerations On Representative Government (1861). Questioning the government’s democratic nature, he put the idea of elite government that has more power under review. Schumpeter’s theory of elite class feeded by his study of democracy in his Capitalism, Socialism and Democracy (1942) and paper entitled “Imperialism and Social Classes” (1919 and 1927).In the new state capitalism, on one side, political elites are involved in economic processes to achieve financial and political gain, on the other side, economic elites areas are strongly supported by the government through loans, contracts and a number of means. The instrument for widespread implementation of the new state capitalism is the expropriation of key sectors. Energy is the sector where this instrument is the most popular. With energy becoming increasingly important for the economy and rising energy prices, governments in developing countries made major investments in national energy companies. This way, governments of these countries were able to take control of almost all of the natural and most valuable resources of their countries. Political elites also control countries’ energy resources. These companies that are called "national champions" and they are subject to private ownership while receiving intense support from the government to compete with foreign commercial competitors. Thanks to this governmental support, these companies play a dominant role in the national economy and in export markets. For example, "national champions" in Russia are controlled by a group of oligarchs who hav


Keywords: J. S. Mill, J. A. Schumpeter, elites, new state capitalism

Paper file