Don't Cry for Capitalism

Michael Dueker predicts that about another 5.4 million jobs (as per my eye-balled estimate of this chart) will be gone by the time the recession is over. (A figure pretty close to the one I got using historical averages.)

Most anyone thought that higher unemployment would mean more people entering the relative safety and human-capital-building environment of higher education. But so far, it seems that process is not taking place.

Which means Joseph Schumpeter's soul can rest a little easier. Most famous for his explication of creative destruction, he also thought that capitalism would ultimately succumb to the intellectual:

All those who are unemployed or unsatisfactorily employed or unemployable drift into the vocations in which standards are least definite....They swell the host of intellectuals...whose numbers hence increase disproportionately. They enter it in a thoroughly discontented frame of mind. Discontent breeds resentment....righteous indignation about the wrongs of capitalism.

But I wonder how Schumpeter would have classified the much out-of-favor quants? Their derivatives came out of academia, but many blame their complexity for causing the credit crunch. Would they be misunderstood capitalists, or intellectual terrorists?