Can capitalism survive? No, said one of the 20th century’s greatest economists, Joseph Schumpeter, in his magnum opus, “Capitalism, Socialism and Democracy,” in 1942. Schumpeter was no Marxist. Indeed, his critique of capitalism was born of respect for its revolutionary nature: capitalism had been so successful, he felt, that it had already spawned a large, bored intellectual class that would occupy itself by undermining the very system that supported it.

The election of 2004 can be read in part as a rejection of Schumpeterian pessimism. Voters brushed aside the hysteria of the intellectual classes, as well as much of Hollywood and the press, over George W. Bush’s supposed “cowboy capitalism.” They convincingly reelected a president who explicitly proposes to reinvigorate democratic capitalism through partial privatization of Social Security, continued tax-cutting, broadening of free trade, and the rollback of counterproductive regulation.

The chattering classes, it would appear, are no match for the bourgeoisie.

But it’s not over. Schumpeter identified the strength of capitalism as its entrepreneurial drive, a process he defined as “creative destruction.” New technologies would ceaselessly arrive to vanquish old technologies. New businesses would replace old businesses. And in the process, legions of worker-bees would be subjected to brutal, uncaring economic forces that might create ready support for the arguments of intellectuals that some new, more perfect system ought to be imposed.

For a picture of how these forces wax and wane you can’t do much better than keep an eye on Michigan. On November 2, Michigan cemented its reputation as a Blue State, voting, though by a narrower margin than in 2000, for the Democratic candidate. The vaunted “Reagan Democrats” who delivered Michigan to the GOP column in 1984 and 1988 seem to have stayed home despite Bush’s strong appeal to traditional values, and despite a 3-to-2 margin in favor of a constitutional amendment on the Michigan ballot to ban gay marriage.

There could be a number of reasons for that. Michigan’s Democratic governor, Jennifer Granholm, remains personally very popular and may have provided some coattails to John Kerry. But Michigan more than most states has borne the brunt of the global forces of creative destruction. Its unemployment rate has remained stubbornly higher than the national average. And its dominant industry, auto manufacturing, is still losing market share and suffering wave after wave of layoffs.

Nor are things likely to get easier. Over-capacity in the auto industry worldwide – an estimated 20 million vehicles, compared to America’s total production of about 17 million vehicles – is actually growing, meaning that the high-cost producers may never catch up. Auto union leaders understand that they are living in a state of economic bankruptcy, but they are very unlikely to agree to the kind of rapid change that is needed to keep up with, much less get ahead of, the moving target presented by their competitors.

There is a lot of ruin in an empire, of course. Kmart, another Michigan entity, recently clawed its way out of bankruptcy only a year ago to acquire Sears last week. On paper, anyway, the combined entity is now the third largest retailer in America.

But analysts already are questioning the viability of the Sears-Kmart empire. Wal-Mart, with its relentless focus on cost and quality, and its more modern locations, still holds the strategic high ground. And in any case Kmart officials have made clear that the combination with Sears could actually accelerate the downsizing process.

All of which means continued, relentless pain. And Michigan’s politicians, to the applause of much of the intellectual class, are reacting in precisely the manner Joseph Schumpeter feared: attacking the entrepreneurial classes by raising state taxes and weakening property rights under the guise of environmental and health necessity, making it all the harder to attract the new and better jobs of the future.

Should the overall American economy falter, and the Michigan disease spread to the rest of the country, Schumpeter’s gloomy assessment might yet turn out to be correct. Nobody should think the 2004 election is the final word.

Mr. Bray is a Detroit News columnist.