Joseph Schumpeter

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems
by Linda Yueh
Published 4 Jun 2018

Ibid., pp. 164, 378. 29.  Ibid., pp. 383–4. 30.  Keynes, Essays in Persuasion, p. 366. 31.  Ibid., p. 369. 32.  Ibid., p. 366. 7 – Joseph Schumpeter: What Drives Innovation? 1.    Joseph Schumpeter, 1942, Capitalism, Socialism and Democracy, New York: Harper & Brothers, p. 84. 2.    Thomas K. McCraw, 2007, Prophet of Innovation: Joseph Schumpeter and Creative Destruction, Cambridge, MA: Harvard University Press, p. x. 3.    Schumpeter, Capitalism, p. 83. 4.    Joseph Schumpeter, 1939, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process, vol. II, New York: McGraw-Hill, p. 1033. 5.    

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Ibid., p. xiv. 30.  Joseph Schumpeter, 1955, ‘Social Classes in an Ethnically Homogeneous Environment’, trans. Heinz Norden, in Imperialism, Social Classes: Two Essays by Joseph Schumpeter, New York: Meridian Books, pp. 120–22. 31.  Joseph Schumpeter, 1928, ‘The Instability of Capitalism’, Economic Journal, 38, pp. 361–86. 32.  Schumpeter, Business Cycles, vol. I, pp. 103–4. 33.  World Bank, 1993, The East Asian Miracle: Economic Growth and Public Policy, Washington, DC: World Bank. 34.  Schumpeter, ‘The Instability of Capitalism’, pp. 364–6. 35.  Joseph Schumpeter, 1934, The Theory of Economic Development, Cambridge, MA: Harvard University Press, pp. 75–8. 36.  

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This means that the economic problem is not – if we look into the future – the permanent problem of the human race.’30 It means that we can look forward to a fifteen-hour working week, as ‘three hours a day is quite enough’.31 But, it would lead to an even greater challenge: [M]ankind will be deprived of its traditional purpose … Thus for the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.32 7 Joseph Schumpeter: What Drives Innovation? Innovation is the engine of economic growth, or, as Joseph Schumpeter put it, innovation in a capitalist economy is the ‘perennial gale of creative destruction’.1 Schumpeter’s view was that the economy undergoes long cycles as new technologies are adopted, while existing technologies become obsolescent. And those new technologies give a boost to economic growth. Joseph Schumpeter was perhaps the first economist to define the ‘capitalist engine’, in his 1942 Capitalism, Socialism and Democracy, his most important work.2 Contrary to popular belief, the term ‘capitalism’ was not devised by Adam Smith.

The Great Economists: How Their Ideas Can Help Us Today
by Linda Yueh
Published 15 Mar 2018

Ibid., pp. 164, 378. 29. Ibid., pp. 383–4. 30. Keynes, Essays in Persuasion, p. 366. 31. Ibid., p. 369. 32. Ibid., p. 366. Chapter 7 – Joseph Schumpeter: What Drives Innovation? 1. Joseph Schumpeter, 1942, Capitalism, Socialism and Democracy, New York: Harper & Brothers, p. 84. 2. Thomas K. McCraw, 2007, Prophet of Innovation: Joseph Schumpeter and Creative Destruction, Cambridge, MA: Harvard University Press, p. x. 3. Schumpeter, Capitalism, p. 83. 4. Joseph Schumpeter, 1939, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process, vol. II, New York: McGraw-Hill, p. 1033. 5.

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Schumpeter, Capitalism, pp. 167, 170, 190–91. 29. Ibid., p. xiv. 30. Joseph Schumpeter, 1955, ‘Social Classes in an Ethnically Homogeneous Environment’, trans. Heinz Norden, in Imperialism, Social Classes: Two Essays by Joseph Schumpeter, New York: Meridian Books, pp. 120–22. 31. Joseph Schumpeter, 1928, ‘The Instability of Capitalism’, Economic Journal, 38, pp. 361–86. 32. Schumpeter, Business Cycles, vol. I, pp. 103–4. 33. World Bank, 1993, The East Asian Miracle: Economic Growth and Public Policy, Washington, DC: World Bank. 34. Schumpeter, ‘The Instability of Capitalism’, pp. 364–6. 35. Joseph Schumpeter, 1934, The Theory of Economic Development, Cambridge, MA: Harvard University Press, pp. 75–8. 36.

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This means that the economic problem is not – if we look into the future – the permanent problem of the human race.’30 It means that we can look forward to a fifteen-hour working week, as ‘three hours a day is quite enough’.31 But, it would lead to an even greater challenge: [M]ankind will be deprived of its traditional purpose … Thus for the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.32 CHAPTER 7 Joseph Schumpeter: What Drives Innovation? Innovation is the engine of economic growth, or, as Joseph Schumpeter put it, innovation in a capitalist economy is the ‘perennial gale of creative destruction’.1 Schumpeter’s view was that the economy undergoes long cycles as new technologies are adopted, while existing technologies become obsolescent. And those new technologies give a boost to economic growth. Joseph Schumpeter was perhaps the first economist to define the ‘capitalist engine’, in his 1942 Capitalism, Socialism and Democracy, his most important work.2 Contrary to popular belief, the term ‘capitalism’ was not devised by Adam Smith.

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas
by Janek Wasserman
Published 23 Sep 2019

They served as Austrian government ministers, advisers to Habsburg royalty and heads of state, and policy experts, in addition to their roles as professors and journalists. They established themselves as the world’s most formidable opponents of Marxism and socialism and leading exponents of liberal ideology. In the interwar era, a new generation emerged to advance earlier intellectual and ideological efforts. First Mises, Joseph Schumpeter, and Hans Mayer, then Friedrich Hayek, Gottfried Haberler, and Oskar Morgenstern made their reputations by the end of the 1920s. They developed innovative understandings of business cycles and monetary theory, which gained a wide hearing in the post–World War I and Great Depression periods. They cultivated relationships with financial and political elites in chambers of commerce, national banks, and conservative political parties.

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The Austrian-German rivalry allowed Austrian scholars to gain recognition by challenging their German peers, however. The Methodenstreit was the most prominent example of these confrontations, and it created a counterpole to the hegemonic German approach in Vienna. The Methodenstreit: “A History of Wasted Energies” Joseph Schumpeter, a later member of the Austrian School, rendered a negative judgment of the “debate over methods” in his canonical history of economic thought. He explained, “Methodological clashes often are clashes of temperaments and of intellectual bents. This was so in our case. There are such things as historical and theoretical temperaments. . . .

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He offered a comprehensive explanation of the interest phenomenon while also leveling a blistering attack on labor theories of value. He became a major international figure, embodying the Austrian School even more than Menger. The book was translated into English, making it one of the few German works afforded such a treatment. It went through four editions and inspired several generations of scholars, including Joseph Schumpeter, Ludwig von Mises, and Friedrich Hayek. It also provoked ardent detractors. Henry Carey Baird, son of the American economist Henry Carey, called the book “the most complex, confusing, narrow, hair-splitting, and arrogant criticism.” It played a pivotal role in several controversies in the history of economic thought.

The Classical School
by Callum Williams
Published 19 May 2020

France at the time was a comparatively wealthy place, but was doing far worse than Britain. France’s smartest people applied themselves to try to understand what was going wrong. You may have noticed, however, that the book contains no contributions from Americans. That may seem surprising: today America dominates both the global economy and academic economics. However, Joseph Schumpeter says that “[a]s regards the United States, there is nothing to record in the way of systematic endeavor before the nineteenth century. This is as we should expect from environmental conditions that were unlikely to produce either a demand for or supply of general treatises.” Even in the 19th century America did not produce many economists, and those that it did, such as Henry George, tended to borrow ideas from the European classical economists.

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Imports can also improve productivity. A country can in theory run trade deficits indefinitely, with no ill effects. Trade deficits are usually associated with strong, not weak, economic growth. Nonetheless, in the 17th century the view was widely held that having a trade surplus was a good thing. Joseph Schumpeter says that it is “strikingly illustrative of the ways of the human mind that [John] Locke of all men should have committed himself to this [mercantilist] argument”. Michel de Montaigne was another supporter, noting that “no man profits but by the loss of others”. Daniel Defoe reckoned that wealth increased as the value of products that could be exported similarly increased.

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William Letwin, a historian, calls Jonathan Swift’s Modest Proposal (1729) “the last word on political arithmetic as an instrument of social policy”. The Anglo-Irish satirist Swift lambasted Petty’s theory by demonstrating the economic “advantages” of selling 100,000 children per annum to be eaten by the starving poor. Political economists also ignored Petty’s insights. Joseph Schumpeter argued that in the 18th century “the vast majority very quickly forgot” political arithmetic. Instead, they became increasingly interested in devising elaborate theories to describe the world. Empirical evidence was hard to get hold of, was unreliable, and, thanks to David Hume, there were lingering doubts as to whether it was possible to draw general statements from the analysis of data.

Austerity: The History of a Dangerous Idea
by Mark Blyth
Published 24 Apr 2013

Austerity was, then, in the eyes of liberals, after Keynes sacrificed on the altar of fiscal profligacy. Yet after two decades of failure, austerity’s arch defenders had little to say or show for all its virtue. Chief among those who were quieted was Joseph Schumpeter himself. Schumpeter’s Retreat Twelve years after criticizing the Roosevelt administration’s policies in The Economics of the Recovery Program, which gave Mellon’s liquidationism a theory of growth, stressed the importance of entrepreneurs, and argued for austerity, Joseph Schumpeter cut an intellectually lonely figure. By 1946, the world had gone Keynes’s way, not his. Schumpeter could, like many others, have jumped on the bandwagon, but for a true economic liberal, and a political conservative, that was never an option.

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These ideas were, I argue, the original neoliberal ideas in that they drew on the classical liberalism of Locke, Hume, and Smith, and applied themselves anew to the policy issues of the day. I then discuss the responses that these ideas engendered, the most relevant of which are John Maynard Keynes’s refutation of austerity policies and Joseph Schumpeter’s strange abrogation of them.11 By 1942, it seems that the die has been cast and austerity had been sent away to the retirement home for bad economic ideas. It turned out, however, to be a premature retirement. Austerity’s Contested Present In chapter 5, we take the story forward. We begin by detailing the two places austerity found a home after Keynes’s anti-austerity arguments seemed to have won the day: Germany—the home of ordoliberalism—and Austria, not the country, but Austria as a distinct school of economics.

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Where British New Liberals began to see recessions as ameliorable through more spending, the Austrians saw in recessions the necessary pain of austerity after the interventionist “party.” In sum, while the New Liberals and their mid-twentieth-century heirs embraced the state and intervention, the Austrians, in particular, Friedrich Hayek, Ludwig von Mises, and Joseph Schumpeter, rejected these notions entirely. John Maynard Keynes once noted that the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.68 Today’s ideas about austerity are no exception to this rule.

Slouching Towards Utopia: An Economic History of the Twentieth Century
by J. Bradford Delong
Published 6 Apr 2020

After the war, the former empire, which had been a single economic unit, was split among seven countries, each with its own currency and its own high tariffs. The regional division of labor unwound. Before the war ended, Joseph Schumpeter, just thirty-four years old at the time, had set out the resulting problem: “The material goods needed by the armies,” he said, had been provided and would continue to be provided. “After the war, we will be left… with a ‘monetary problem.’” He used an analogy, saying that countries paying for the war would be “in the position of an entrepreneur whose factory burnt down and now has to enter the losses in his books.”18 Joseph Schumpeter was finance minister of the new Austrian Republic by 1919. He favored an immediate and substantial wealth tax on all real, industrial, commercial, residential, and financial property to pay off the debt.

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The Role of Meiji Militarism in Japan’s Technological Progress,” Journal of Economic History 37, no. 1 (March 1977): 113–135. 21. Rudyard Kipling, “White Man’s Burden,” The Times, February 4, 1899, reprinted at Wikipedia, https://en.wikipedia.org/wiki/The_White_Man%27s_Burden. 22. Joseph Schumpeter, “The Sociology of Imperialisms,” 1918, in Imperialism and Social Classes: Two Essays by Joseph Schumpeter, Cleveland: Meridian Books, 2007. 23. John Hobson, Imperialism: A Study, London: James Nisbet, 1902. 24. Norman Angell, Europe’s Optical Illusion, Hamilton, Kent, UK: Simpkin, Marshall, 1908. 5. World War I 1. Norman Angell, Peace Theories and the Balkan War, London: Horace Marshall and Son, 1912, 124. 2.

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Clements, The Life of Herbert Hoover: Imperfect Visionary, 1918–1928, New York: Palgrave Macmillan, 2010. 16. Keynes, Economic Consequences, 268. 17. Keynes, Economic Consequences, 149. 18. Christian Seidl, “The Bauer-Schumpeter Controversy on Socialization,” History of Economic Ideas 2, no. 2 (1994): 53, quoting Joseph Schumpeter’s 1917 “Die Krise des Steuerstaates,” itself reprinted in Joseph Schumpeter, “Die Krise des Steuerstaates,” Aufsätze zur Soziologie, Tübingen: J. C. B. Mohr (Paul Siebeck), 1953. 19. Joe Weisenthal, Tracy Alloway, and Zach Carter, “The Real Story of Weimar Hyperinflation,” Bloomberg, Odd Lots Podcast, April 15, 2021, www.bloomberg.com/news/articles/2021-04-15/zach-carter-on-the-real-story-of-weimar-hyperinflation; Sally Marks, “The Myths of Reparations,” Central European History 11, no. 3 (2008): 231–255. 20.

The Price of Time: The Real Story of Interest
by Edward Chancellor
Published 15 Aug 2022

‘Interest is like a double-edged sword,’ concluded Proudhon, ‘it kills, whichever side it hits you with.’5 There was nothing original in Proudhon’s invective. His complaints had an ancient pedigree. He cited the Hebrew word for interest, neschek, which derives etymologically from the bite of a serpent.6 Proudhon’s rhetoric was high-flown and repetitive, and his economic analysis was not profound. In his History of Economic Analysis, Joseph Schumpeter lamented Proudhon’s complete inability to analyse. Even so, Proudhon had some original proposals. He wanted to nationalize the Banque de France, expand the money supply and reduce interest rates close to zero. His People’s Bank would charge half a per cent to cover its costs. Gold would be replaced by paper money.

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Earlier generations of economists, who considered the problem of interest more deeply than their twenty-first-century counterparts, had no doubt as to its importance. For Böhm-Bawerk, interest was ‘an organic necessity’.65 Irving Fisher called interest ‘too omnipresent a phenomenon to be eradicated’.66 In similar vein, Joseph Schumpeter stated that interest ‘permeates, as it were, the whole economic system’.67 The author of Das Kapital, an avowed enemy of interest, agreed with this arch-apologist for capitalism. In a phrase evocative of the ancient world in which a charge for lending was first recorded, Marx writes that ‘usury lives in the pores of production, as it were, just as the gods of Epicurus lived in the space between worlds.’68 2 Selling Time When money is lent on a contract to receive … [there is] an increase by way of compensation for the use; which is generally called interest by those who think it lawful, and usury by those who do not.

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Between 1927 and the end of 1929, Keynes’s personal fortune declined by more than three-quarters, from £44,000 to £7,815, as a result of heavy losses on commodity speculations, his use of portfolio leverage and his failure as an economist to anticipate Somary’s gathering storm clouds.54 Somary had studied economics at Vienna, where he’d attended the private seminars of Eugen von Böhm-Bawerk. Among the other seminar attendants were future luminaries of the Austrian school of economics, including Ludwig von Mises, Joseph Schumpeter and Friedrich Hayek. An axiom of the Austrian school was that interest is necessary so that investment and consumption decisions are co-ordinated over time.55 As we have seen, Böhm-Bawerk argued that the rate of interest reflects society’s time preference. He also claimed that the level of interest determines how much capital is tied up in production, and thus the return on capital.fn11 When interest is determined in a free market, he said, time preference and the return on capital should equalize.

Capitalism: Money, Morals and Markets
by John Plender
Published 27 Jul 2015

As Karl Marx rightly perceived, industrial capitalism has always been inherently unstable, which is the first and most palpable defect of the system. The cycle of profit, speculation, irrational exuberance, stock market panic and recession has been an endemic feature of capitalism since the industrial revolution began. Creative destruction, the process identified by the Austrian-American economist Joseph Schumpeter as the essential dynamic of capitalism, has long been troublesome for those thrown out of work as a result of increasing competition and technological innovation. It also subverts the sense of community. And today, not only is the business cycle made worse by ill-judged monetary policies and manic bankers – there have been more than 100 major banking crises worldwide in the past three decades – but globalisation and economic interdependence have caused basic manufacturing industries to evacuate wholesale from the developed to the developing world, at a high cost in lost jobs.

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That said, the book undoubtedly satisfies the market test, since it remains one of the publishing world’s outstanding bestsellers.25 If there is now a more widespread acceptance that the money motive is not invariably reprehensible, there are caveats. For some, like Keynes, the motive could still be highly distasteful. In forecasting how the world might look to his generation’s grandchildren, he wrote that the love of money would ultimately be recognised as ‘a somewhat disgusting morbidity’. For others, such as Joseph Schumpeter, the economist best known for identifying creative destruction as the motor of capitalism, there remained a question as to how far the profit-maximising business person could be regarded as an admirable role model. He argued that something was lost in the transition from a society governed by aristocrats, whose values were essentially military, to an industrial age; and, unlike Thomas Carlyle, he saw the businessman as woefully unheroic: With the utmost ease and grace the lords and knights metamorphosed themselves into courtiers, administrators, diplomats, politicians and into military officers of a type that had nothing whatever to do with that of the medieval knight.

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And that is why resilience in an entrepreneur is more important than brilliance – grit trumps almost every other trait.’29 Nowadays there is what I would call grudging assent to the proposition that entrepreneurship has a vital role in generating economic growth, an idea that was first given its proper due by the Austrian school of economists in the twentieth century. Joseph Schumpeter, in particular, lauded the role of entrepreneurs in the capitalist process of creative destruction, whereby inefficient businesses are wiped out in the downturn of the economic cycle, and new, more competitive businesses emerge. The Austrians were bested in argument by Keynes in the 1930s on the question of whether to rely on laissez-faire, or on the monetary and fiscal activism that Keynes preferred, as a remedy for unemployment in the Great Depression.

The Entrepreneurial State: Debunking Public vs. Private Sector Myths
by Mariana Mazzucato
Published 1 Jan 2011

As a matter of fact, capitalist economy is not and cannot be stationary. Nor is it merely expanding in a steady manner. It is incessantly being revolutionized from within by new enterprise, i.e., by the intrusion of new commodities or new methods of production or new commercial opportunities into the industrial structure as it exists at any moment. Joseph Schumpeter (1942 [2003], 13) The important thing for Government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all. John Maynard Keynes (1926, xxx) It is a popular error that bureaucracy is less flexible than private enterprise.

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A grant from the Ford Foundation’s Reforming Global Finance initiative, led by Leonardo Burlamaqui, was not only helpful but useful due to Leonardo’s own work on understanding ways in which ‘knowledge governance’ can ‘shape’ markets. It was indeed Leonardo’s work with Ford that inspired the first meetings and work that led to another research project, funded by the Institute for New Economic Thinking (INET), in which Randy Wray and I are today banging heads: a project on how to bring together the thinking of Joseph Schumpeter on innovation and Hyman Minsky on finance, to understand the degree to which finance can be turned into a vehicle for creative destruction rather than its current obsession with Ponzi-like destructive creation. Amongst other friends and colleagues who have provided inspiration through interaction and feedback, I want to mention Fred Block, Michael Jacobs, Paul Nightingale and Andy Stirling, the latter two from SPRU, my new academic home.

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This economic concept is named after University of Chicago economist Frank Knight (1885–1972), who theorized about risk and uncertainty and their differences in economic terms. 2 Evans and Rauch (1999) show, for instance, that a Weberian-type State bureaucracy that employs meritocratic recruitment and offers predictable, rewarding longterm careers enhances prospects for growth, even when controlling for initial levels of GDP per capita and human capital. 3 Contemporary political economists, such as Chang (2008) and Reinert (2007), who specialize in the history of economic policy do of course talk about the role of the State in promoting a ‘catching-up’ process, or in actively acting countercyclically. Yet these are more in line with a view of the State not as an entrepreneurial risk taker (of first resort) but a more passive entrepreneur of last resort. 4 Joseph Schumpeter (1942 [2003]) referred to ‘creative destruction’ as the process by which innovation changes the status quo, allowing the market shares of firms which introduce new products and processes to grow, and those of the firms that resist change to fall. Chapter 1 FROM CRISIS IDEOLOGY TO THE DIVISION OF INNOVATIVE LABOUR Governments have always been lousy at picking winners, and they are likely to become more so, as legions of entrepreneurs and tinkerers swap designs online, turn them into products at home and market them globally from a garage.

The Inner Lives of Markets: How People Shape Them—And They Shape Us
by Tim Sullivan
Published 6 Jun 2016

It was set in motion by Smith and carried on for one hundred years thereafter by the classical economists—David Ricardo, Thomas Malthus, Karl Marx, Vilfredo Pareto, among others. It was continued for nearly one hundred years more by neoclassical economists like Thorstein Veblen, John Maynard Keynes, and an enduring hero of free-market proponents, Joseph Schumpeter. Pareto, who lived from 1848 until 1923, is emblematic of both the worldliness and precision of these towering figures in the history of economic thought. He was well experienced in matters of business but also well schooled in the language of math that was already deployed to describe economics and commerce.

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This approach had many benefits: math created a common language that pushed for weaker assumptions, stronger conclusions, and greater generality. And it allowed economists, as a group, to start creating a concise, logical system that described the world, much the way physicists have done. (Critics of this approach had emerged already at the beginning of the twentieth century. The eminent Austrian American economist Joseph Schumpeter described Pareto’s theories as “arid generalizations” that did little to move the field forward.9) Mathematical models were easily assessed for logical errors. (At least superficially so: there was always the question of what assumptions one chose to make to shrink the market down to a few pages’ worth of algebra.)

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In contrast to the steady march that had taken place toward ever-greater generalizability of models, scholars were beginning to take specific phenomena they wished to explore and build up models that, while still abstract, aimed to capture the essence of a real-life market. Akerlof, with characteristic modesty, has observed that this was merely a return to the approach that iconic economists like Joseph Schumpeter and John Maynard Keynes had taken to describe the economy, where there was no pretension of modeling a complete system. Aspects of a market just drop from the sky. For instance, why do humans have the tendencies and instincts in market transactions that Keynes famously described as our “animal spirits”?

The New Depression: The Breakdown of the Paper Money Economy
by Richard Duncan
Published 2 Apr 2012

Otherwise, the enormous amount of dollars its exporters earn in the United States each year will push up the yuan when the exporters bring them back home to China and convert them into yuan. That is something the Chinese authorities cannot allow because a much higher yuan would be sure to throw China’s economy into crisis. Notes 1. Joseph Schumpeter, Ten Great Economists, from Marx to Keynes (New York: Oxford University Press, 1951). 2. These estimates were reached using information published by the IMF on disclosed and undisclosed reserves. 3. Fed’s Flow of Funds Account of the United States, second quarter 2011 (see Exhibit 2.7, Rest of the World).

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Moreover, the amount of credit has grown so large relative to the amount of what was previously understood to be money that it has made money irrelevant. The new reality is that credit has displaced money as the key economic variable. That change is the subject of Chapter 4. Note 1. Joseph Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), p. 1123. CHAPTER 4 The Quantity Theory of Credit A credit-expansion boom must unavoidably lead to a process which everyday speech calls the depression. —Ludwig von Mises1 So long as gold was money, credit creation was limited by the supply of gold.

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By the end of this chapter, the disturbing implications of this theory will have become clear. The Quantity Theory of Money The quantity theory of money asserts that changes in the quantity of money in an economy cause a proportional change in the price level. The theory is centuries old. In his magisterial work History of Economic Analysis, Joseph Schumpeter credits Jean Bodin, a French political philosopher, for being the first to propound the theory in 1568. David Hume, John Stuart Mill, Ludwig von Mises (with a few qualifications), and Milton Friedman—along with many others—all accepted and wrote about the quantity theory. In 1912, Irving Fisher published the definitive work on the subject, The Purchasing Power of Money: Its Determination and Relation to Credit, Interest and Crises.2 In that book, Fisher employed what he called the equation of exchange to demonstrate the relationship between the quantity of money and the price level.

Capitalism in America: A History
by Adrian Wooldridge and Alan Greenspan
Published 15 Oct 2018

In the 1830s, Americans began to use the phrase to refer to people who were engaged in mercantile transactions.3 Thereafter Americans reserved the same respect for businesspeople that the British reserved for gentlemen, the French for intellectuals, and the Germans for scholars. America’s willingness to “put something heroic into their way of trading,” as Alexis de Tocqueville put it, produced a cult of the entrepreneur. Americans were instinctive supporters of Joseph Schumpeter’s idea that the real motors of historical change were not workers, as Marx had argued, nor abstract economic forces, as his fellow economists tended to imply, but people who build something out of nothing, inventors like Thomas Edison, who had 1,093 patents, and company builders like Henry Ford, Thomas Watson, and Bill Gates.

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Creation and destruction are Siamese twins. The process involves displacing previously productive assets and their associated jobs with newer technologies and their jobs. Thus Henry Bessemer’s novel steel technology of 1855 displaced previous, more costly steelmaking. The world owes the idea of creative destruction to Joseph Schumpeter and his great work Capitalism, Socialism and Democracy (1942). “The process of creative destruction is the essential fact about capitalism,” Schumpeter argued. “It is what capitalism consists in and what every capitalist concern has got to live in.” Yet for all his genius, Schumpeter didn’t go beyond brilliant metaphors to produce a coherent theory of creative destruction: modern economists have therefore tried to flesh out his ideas and turn metaphors into concepts that acknowledge political realities, which is to say, the world as it really is.

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Sophisticated investors (including many foreigners) learned to hedge against risk by buying a “market basket” of railroad securities, just as today’s investors buy a basket of leading industrial stocks. Investors were keen on acquiring information and hedging against risk because the new business was so unstable. Joseph Schumpeter noted that the American railroad boom, far more than any of the European railroad booms, meant “building well ahead of demand” and therefore operating deficits for unspecifiable periods. The railroad barons had no choice but to engage in speculation on a massive scale: they needed to assemble unheard-of quantities of matériel in order to build businesses that initially had no customers.

As the Future Catches You: How Genomics & Other Forces Are Changing Your Work, Health & Wealth
by Juan Enriquez
Published 15 Feb 2001

Andrews, The Clone Age: Adventures in the New World of Reproductive Technology (New York: Henry Holt, 1999). 11. Juan Enriquez, “Green Biotech and European Competitiveness,” Trends in Biotechnology, April 2001. 12. This process of creative destruction was identified over half a century ago by an Austrian economist turned Harvard professor, Joseph Schumpeter. See Joseph Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (New York: McGraw-Hill, 1939). 13. Charles J. Whalen, “Today’s Hottest Economist Died Fifty Years Ago,” Business Week, December 11, 2000. Chapter XII: Sleepless … (and Angry) in Seattle 1.

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Western Europe is not immune to massive changes … And could easily lose its way if it keeps trying to stop … Key technologies … And keeps bleeding brains to areas like Silicon Valley. Technology is not kind … It does not wait … It does not say please … It slams into existing systems … And often destroys them … While creating a new system.12 (Today’s chi-chi economist, Joseph Schumpeter … died half a century ago … trained as a lawyer … coined the term “creative destruction”: new products and discoveries relentlessly destroy the old … By age 30, he had three clear goals in mind: to become “Europe’s greatest lover of beautiful women and Europe’s greatest horseman—and perhaps also the world’s greatest economist.”

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One
by Meghnad Desai
Published 15 Feb 2015

In February 2009, as the British Prime Minister Gordon Brown was proposing a massive internationally coordinated Keynesian reflation package at the G20 summit in London, I wrote an article for the online edition of a major UK newspaper about the perils of following a Keynesian policy solution.1 It was clear to me that the cure would not come from a repetition of the old policies of borrowing and reflation. Globalization had fundamentally changed the context. To find a solution to the crisis we needed to explore the “underworld,” as Keynes described it, the world where economists who had gone out of fashion lived. Karl Marx, Joseph Schumpeter, Nikolai Kondratieff, Friedrich Hayek (and even Knut Wicksell, who was still read but not understood) viewed capitalism as a system which was subject to the waves of up and down cycles – as a dynamic disequilibrium system. Modern economics views the market as a stationary equilibrium system – where decisions taken are compatible, so in essence supply equals demand.

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Who is right – the Prize givers and receivers, or the general public which is dubious of economics and economists? Beyond the mainstream there are many pockets of unfashionable economics or heterodoxies, as we may call them. The economic theories of Marx have a bearing on the cycles, as do those of Frederick Hayek. who has his devoted supporters.5 Economists such as Joseph Schumpeter or Nikolai Kondratieff were also much concerned with finding cyclical patterns in economic data over the two previous centuries. It is these economists who have more to say about how and why we are in the state we are in than mainstream or even Keynesian theories. The Role of Globalization As we are going through a crunch in the West, many economies in Asia, Latin America and Africa – the so-called “emerging economies” of China, India, Brazil, Indonesia and Nigeria – are debating “problems” of maintaining their growth at 5 percent or 8 percent or even 10 percent.

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The tradition of Ricardo and Walras takes the equilibrium route. The equilibrium tradition is the more dominant one, especially in recent years. The tradition of Marx and Wicksell takes the disequilibrium path. And there are insights in the disequilibrium tradition which can be illuminating. It was Joseph Schumpeter who gave economics not only a theory but a vision – weltanschauung – about how capitalism flourished through a series of cycles of booms and busts. Creative Destruction The second half of the nineteenth century witnessed one of the many episodes of globalization. This one was built on the industrial and financial revolutions.

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis
by Anatole Kaletsky
Published 22 Jun 2010

Newman et al, “When Will the Antarctic Ozone Hole Recover?” Geophysical Research Letters 33 (2006). 4 Andrew Mellon quotation from Herbert Hoover’s autobiography, The Memoirs of Herbert Hoover: Vol. 3, The Great Depression, 31-32. 5 In 1934, Joseph Schumpeter wrote, “depressions are not simply evils, which we might attempt to suppress, but . . . forms of something which has to be done.” Joseph Schumpeter, “Depressions,” in Douglass Brown et al., The Economics of the Recovery Program, 16. 6 This statement is itself an instance of the “paradox of the liar,” which is related to the impossibility of devising a logical system that is both internally consistent and complete, demonstrated by Russell and Goedel.

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This mutability is the key condition for capitalism’s prosperity and long-term survival. Yet politicians, businesspeople, and economists to the right of the ideological spectrum, the people supposedly most dedicated to capitalism’s historic triumph, are mostly blind to the most important reason for its success. They extol the virtues of Joseph Schumpeter’s process of “creative destruction,”3 whereby dying industries are replaced by previously unimagined new technologies and managerial systems, but they wilfully ignore the same process of creative self-destruction that renews the system as a whole. Why should the politico-economic structure of the capitalist system be considered immutable, while its microfoundations are in constant flux?

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See John Williamson, “What Washington Means by Policy Reform,” in John Williamson, ed., Latin American Readjustment: How Much Has Happened. 2 See Alain Gresh, “Understanding the Beijing Consensus,” trans. Stephanie Irvine, Le Monde Diplomatique English Edition (November 2008). The Beijing Consensus is described more extensively in Chapter 24. 3 Joseph Schumpeter, Capitalism, Socialism and Democracy. 4 “When they faced a graduated income tax in 1913, businessmen everywhere judged it the most destructive legislation in the nation’s history.” Robert Wiebe, Business Men and Reform: A Study of the Progressive Movement, 196. 5 David Lloyd George, chancellor of the exchequer, described his “People’s Budget” of 1909 as “a war budget.

Crisis Economics: A Crash Course in the Future of Finance
by Nouriel Roubini and Stephen Mihm
Published 10 May 2010

As credit dried up in the United States, it evaporated overseas too, and as economies contracted, manufacturing giants like China and commodity exporters like Russia caught the virus. Toward the end of 2008 the pandemic worsened, and the history of long-forgotten crises became increasingly relevant for explaining what was happening. So too did the writings of economists who had languished in obscurity for many years. John Maynard Keynes came back into vogue, as did Joseph Schumpeter, Hyman Minsky, Irving Fisher, and even Karl Marx. Their sudden reappearance was significant, if portentous: all had made their mark studying how capitalism could collapse in crisis. They may have drawn wildly different conclusions as to why and how, much less what to do about it, but the fact that their names were uttered with a quiet respect was a sign that a sea change was at hand.

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It is is an admittedly selective history of economic theory, but its ambition is straightforward: to highlight what’s useful. As always, pragmatism informs our choices. Keynes is here, as is his most radical interpreter, Hyman Minsky, but so are economists from other camps: Robert Shiller, one of the most visible proponents of behavioral economics; Joseph Schumpeter, the grand theorist of capitalist “creative destruction”; and economists of a historical bent, from Charles Kindleberger to Carmen Reinhart and Kenneth Rogoff. Their disparate strands of thought inform our idiosyncratic approach to understanding crises. When Markets Behave Badly Crisis economics is the study of how and why markets fail.

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There’s another way of looking at financial crises, one that points to an entirely different understanding of the Great Depression of the 1930s, the Japanese near depression and Lost Decade of the 1990s, and the Great Recession of our own time. To Austria and Back The Austrian School originated in the late nineteenth and early twentieth centuries with a loosely affiliated group of Austrian economists: Carl Menger, Ludwig von Mises, Eugen von Böhm-Bawerk, and Friedrich Hayek. These economists and their many students, including Joseph Schumpeter, were a fractious bunch and are next to impossible to categorize. The same can be said of those twenty-first-century economists who consider themselves heirs to the Austrians. Nonetheless, a few generalizations are possible. Being an Austrian economist today is tantamount to holding libertarian economic beliefs.

Capitalism, Alone: The Future of the System That Rules the World
by Branko Milanovic
Published 23 Sep 2019

—Plato, The Republic The definition of liberal meritocratic capitalism is quite straightforward. I define capitalism in the fashion of Karl Marx and Max Weber, as the system where most production is carried out with privately owned means of production, capital hires legally free labor, and coordination is decentralized. In addition, to add Joseph Schumpeter’s requirement, most investment decisions are made by private companies or individual entrepreneurs.1 Definition of liberal meritocratic capitalism The terms “meritocratic” and “liberal” come from the definitions of various forms of equality that John Rawls lays out in A Theory of Justice (1971).

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Liberal theory thus tends to ignore the entire short twentieth century and to go directly from 1914 to the fall of the Berlin Wall in 1989, almost as if nothing had happened in between—1989 brings the world back to the path it was on in 1914, before it slipped in error. This is why liberal explanations for the outbreak of the war are nonexistent, and the explanations proffered are based on politics (Fritz Fischer, Niall Ferguson), the remaining influence of aristocratic societies (Joseph Schumpeter), or, least convincing of all, the idiosyncrasies of individual actors, mistakes, and accidents (A. J. P. Taylor). Marxism is much better able to explain the war and the rise of fascism. Its adherents hold that the war was the outcome of “the highest stage of capitalism,” that is, the stage at which capitalism had created cartels and national monopolies that fought each other for control of the rest of the world.

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The very “deepening” of capitalism through its undiluted emphasis on money-making and its expansion into the personal sphere (topics discussed in Chapter 5) leaves less time for broader political deliberations and cannot produce that ideal of the informed and concerned citizen that many democratic theories postulate. It can even be argued that such a citizen cannot coexist with hypercommercialized capitalism. Definitions of democracy that insist on citizens’ participation are thus at odds with reality. Robert Dahl’s and Joseph Schumpeter’s much more technical definitions of polyarchy and democracy are more accurate. In the words of one of Dahl’s critics, “Democracy and polyarchy are … [for Dahl] both purely instrumental devices for maximizing the satisfaction of prior, private wants [of citizens]—nothing more” (Krouse 1982, 449).

The Evolution of Everything: How New Ideas Emerge
by Matt Ridley

The really big thing that both Smith and Ricardo – and Robert Malthus and John Stuart Mill and all the other British political economists of the time – missed, however, was that they were living through the Industrial Revolution. They had no conception that they stood ‘at the threshold of the most spectacular economic developments ever witnessed’, as Joseph Schumpeter put it a century later: ‘Vast possibilities matured into realities before their very eyes. Nevertheless, they saw nothing but cramped economies struggling with ever-decreasing success for their daily bread.’ This was because their world view was dominated by the idea of diminishing returns. Ricardo, for example, watching local farmers struggle with bad harvests in the 1810s, agreed with his friend Malthus that corn yields must stagnate, because the best land was already in cultivation and every marginal acre brought under the plough would be worse than the one before.

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The ‘marginalist’ revolution in economics, led by Carl Menger, Léon Walras and Stanley Jevons and culminating in the synthesis of Alfred Marshall, shifted the focus of price setting to the consumer rather than the producer, but left the question of increasing returns largely unanswered. In place of diminishing returns, they produced the idea of an equilibrium – a steady state of perfect competition towards which the economic system tended to move once information is easily available. Then came Joseph Schumpeter, with his relentless focus on innovation and his insistence that there was no equilibrium, but an unfolding of incessant, dynamic change. In his Theory of Economic Development, written while he was at the University of Czernowitz in 1909, Schumpeter was the first economist to insist that the role of the entrepreneur was crucial.

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In the 1920s the American sociologist Colum Gilfillan traced the pedigree of ships from dugout canoes to steamships, implying that there was a gradualism about the progress of technology that stories of sudden invention disguised, and an inevitability about each step once the previous one had been taken. In 1922 William Ogburn developed a fully-fledged theory of emergent invention, arguing that ‘the more there is to invent with, the greater will be the number of inventions’. The economists Joseph Schumpeter and Friedrich Hayek both saw the economy in explicitly Darwinian ways: as a system where ideas recombine and trends emerge rather than are imposed. In 1988 George Basalla wrote a book called The Evolution of Technology, which stressed the continuity of successive innovations. He pointed out that Eli Whitney’s cotton gin was not conjured out of thin air, but adapted from the Indian charka or roller gins already in use.

The Rational Optimist: How Prosperity Evolves
by Matt Ridley
Published 17 May 2010

Innovation, whether in the form of new technology or new ways of organising the world, can destroy as well as create. A Wal-Mart store drives small general retailers out of business as surely as the computer drove the typewriter out of business. But against this must be balanced the enormous benefits that (especially the poorest) customers reap in terms of cheaper, more varied and better goods. It was Joseph Schumpeter who pointed out that the competition which keeps a businessman awake at night is not that from his rivals cutting prices, but that of entrepreneurs making his product obsolete. As Kodak and Fuji slugged it out for dominance in the 35mm film industry in the 1990s, digital photography began to extinguish the entire market for analogue film – as analogue records and analogue video cassettes had gone before.

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Suddenly the rising income of the average British worker met the falling cost of cotton cloth and suddenly everybody could afford to wear (and wash) cotton underwear. The historian Edward Baines noted in 1835 that the ‘wonderful cheapness of cotton goods’ was now benefiting the ‘bulk of the people’: ‘a country-wake in the nineteenth century may display as much finery as a drawing room in the eighteenth.’ The capitalist achievement, reflected Joseph Schumpeter a century later, ‘does not typically consist of providing more silk stockings for queens but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort.’ But increasing supply was not easy, because even the remotest Pennine valleys and Welsh marches were now thickly settled with the cottages of weavers and spinsters, transport was dear and some of the workers were earning good enough wages to take weekend holidays, occasionally even drinking their pay away till Monday night, preferring consumption to extra income.

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It was Paul Romer’s great achievement in the 1990s to rescue the discipline of economics from the century-long cul-de-sac into which it had driven by failing to incorporate innovation. From time to time its practitioners had tried to escape into theorems of increasing returns – Mill in the 1840s, Allyn Young in the 1920s, Joseph Schumpeter in the 1940s, Robert Solow in the 1950s – but not until Romer’s ‘new growth theory’ in the 1990s was economics fully back in the real world: a world where perpetual innovation brings brief bursts of profit through temporary monopoly to whoever can commandeer demand for new products or services, and long bursts of growth to everybody else who eventually gets to share the spilled-over idea.

The State and the Stork: The Population Debate and Policy Making in US History
by Derek S. Hoff
Published 30 May 2012

Laurence Laughlin, the old-guard head professor of political economy at the University of Chicago, called the law of diminishing returns to land “simply a physical fact . . . which Nature has disclosed to us, just as we say it is a fact that water runs down hill.”40 Suggesting that population growth among the “undesirable classes” reinforced their poverty, Laughlin wrote that “those who advise moral restraint on the growth of this class of persons . . . can not be called ‘hard-hearted,’ or ‘un-Christian,’ or ‘dismal Malthusians.’ They are rather the true friends of the unfortunate people, who need real, not sentimental and misdirected, kindness and help.”41 Frank Taussig, who taught at Harvard for over fifty years (his preeminent colleague Joseph Schumpeter called him the “American [Alfred] Marshall”),42 wrote in his economics textbook that the “Malthusian position is impregnable” and welcomed the eventual stationary state envisioned by John Stuart Mill.43 “A limitation of numbers is not a cause of higher wages,” Taussig observed, “but it is a condition of the maintenance of high wages.”44 Yale’s future president Arthur Hadley 52 chapter 2 scoffed at the young maverick opponents of laissez-faire for trying to wish away the iron laws of economics—including the law that too many children led to starvation wages.45 Frank Fetter, a Cornell and Princeton professor closely associated with the Austrian School of political economy, had critiqued Malthusian theory in his 1894 doctoral dissertation from the University of Halle.46 But in his 1913 presidential address to the AEA, “Population or Prosperity,” Fetter declared, “It is high time to revise the optimistic American doctrine of population.”47 Due to population growth, “popular welfare in America is already threatened,” he asserted.

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Generally, historians examining the decline of stagnation theory simply suggest that postwar prosperity and the Baby Boom rendered theories of secular stagnation moot.97 Or they emphasize conservative opposition to it, which was certainly important.98 For instance, financier Alexander Sachs, one of FDR’s economic advisers, believed that the nation was suffering from excessive taxation and an “under-investment” depression rather than a permanent economic plateau.99 Yet leading conservatives, including Austrian-born Harvard economist Joseph Schumpeter and population depressed 93 former President Herbert Hoover, tended to reject the end-of-innovation pillar of stagnation more than the end-of-population-growth pillar.100 Population experts themselves offered an important and original revolt against 1930s stagnationist thought.101 And mainstream anti-stagnationists included SPK in their intellectual tool kit.

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Scale referred to not only the physical scale of the planet but also the time scale of economic growth; ecological economists were adamant that perpetual growth was a seductive illusion over the long run because natural systems are “closed loops” and all human activity increases entropy, the energy unavailable for productive use. A small coterie launched ecological economics. Romanian-born Nicholas Georgescu-Roegen, who studied under Joseph Schumpeter at Harvard, deserves credit for giving birth to the field—which he called bioeconomics—in the mid 1960s. Georgescu-Roegen argued, in simplest terms, “Matter matters, too.” Seeing the earth as a closed system—he used the analogy of an hourglass—Georgescu-Roegen urged the reorientation of economic activity toward sustainability.57 Better known today is Kenneth Boulding, president of the American Economic Association in 1968, who began the 1960s as an orthodox economist at the University of Michigan, though one who had identified planetary limits in an introduction to Malthus’s Essay on Population.58 Boulding’s classic 1966 essay, “The Economics of the Coming Spaceship Earth,” pleaded for a transition from a reckless “cowboy economy” to a “spaceman economy.”59 This new economy would recognize that “the earth has become a single space- 176 chapter 6 ship, without unlimited reservoirs of anything, either for extraction or pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy.”60 A spaceman economy would emphasize the total stock of resources, not current consumption (called “throughput” by environmental economists).

Machine, Platform, Crowd: Harnessing Our Digital Future
by Andrew McAfee and Erik Brynjolfsson
Published 26 Jun 2017

¶ A mechanical fillet is a smooth transition from one area of a part to another—for example, a rounded corner between two surfaces that meet at a right angle. # Or it might not be a good idea. Only time and research will tell. PART 2 PRODUCT AND PLATFORM CHAPTER 6 THE TOLL OF A NEW MACHINE Economic progress, in capitalist society, means turmoil. — Joseph Schumpeter, 1942 WITHIN ONE GENERATION, SEVERAL LONG-STANDING INDUSTRIES were transformed permanently and deeply by a single computer network. The business world has rarely, if ever, seen disruption at this speed and scale before. The first sentence in the previous paragraph exaggerates—the Internet had some help from other technologies as it remade sector after sector—but we don’t think the second sentence does.

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It’s like a totem; it’s a psychological anchor into something that you care about. Acquiring innovation. It was thought for a long time that large, established companies would be the biggest innovators. They’re the ones, after all, with the resources to afford large labs and R&D staff. The great Austrian economist Joseph Schumpeter challenged this view. He maintained that smaller, younger, more entrepreneurial firms—companies that had no interest in maintaining the status quo—were more likely to come up with truly novel goods and services. As he put it, “In general it is not the owner of stage coaches who builds railways.”

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I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.” “Indeed,” Keynes wrote, “the world is ruled by little else.” Keynes saw that the ideas of prominent “worldly philosophers”* like Adam Smith, Karl Marx, David Ricardo, Friedrich Hayek, and Joseph Schumpeter reach far outside the discipline of economics. They change how people think about fairness and justice, how companies organize themselves and innovate, how governments approach taxation and trade, and so on. Economists think about exchange, a fundamental and universal human activity, so their biggest ideas on the subject have had a huge impact.

Sabotage: The Financial System's Nasty Business
by Anastasia Nesvetailova and Ronen Palan
Published 28 Jan 2020

The instruments enabled many banks to shield themselves from losses, at the expense of investors. Ultimately, CDSs became a tool of the sabotage of government as well, entrapping a giant insurer on one side of the CDS business. THE BITTER AFTERTASTE OF FINANCIAL INNOVATION A classic scholar of business behaviour, Joseph Schumpeter, saw innovation as an important source of market power.28 Schumpeter analysed various innovations: the introduction of new products, new methods of production and new forms of business organization, as well as the penetration of new markets. Crucially, he argued, it is not a mere invention or a new product, or even several such products, that transforms an economy, but ‘the carrying out of new combinations’ that works as the key driver of economic change.29 Michael Milken, Lewie Ranieri and Blythe Masters became celebrities in the world of finance and beyond.

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Harrison, W., ‘In defence of big banks’, The New York Times, 22 August 2012, www.nytimes.com/2012/08/23/opinion/dont-break-up-the-big-banks.html. Hodgson, G. M., ‘John R. Commons and the Foundations of Institutional Economics’, Journal of Economic Issues, vol. 37, 2003, pp. 547–76, https://doi.org/10.1080/00213624.2003.11506603. Hodgson, G. M., The Evolution of Institutional Economics, Routledge, 2004. Hosters, J., ‘Joseph Schumpeter and His Legacy in Innovation Studies’, Knowledge, Technology, & Policy, vol. 18:3, 2005, pp. 20–37. Independent, ‘The banker the credit crisis couldn’t touch’, 27 July 2008, www.independent.co.uk/news/business/analysis-and-features/the-banker-the-credit-crisis-couldnt-touch-878002.html. Ingram, D. and P.

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Giannone, ‘AIG bailout good for banks while investors bleed’, Reuters, 11 March 2009, www.reuters.com/article/us-aig-bailout-sb-idUSTRE52A0TP20090311. 27. ‘Credit derivatives: the great untangling’, Economist, 6 November 2008, www.economist.com/briefing/2008/11/06/the-great-untangling. 28. H. Minsky, Stabilizing an Unstable Economy, Yale University Press, 1986, p. 346. 29. J. Hosters, ‘Joseph Schumpeter and His Legacy in Innovation Studies’, Knowledge, Technology, & Policy, vol. 18:3, 2005, pp. 20–37. J. A. Schumpeter, ‘The Influence of Protective Tariffs on the Industrial Development of the United States’, in Proceedings of the Academy of Political Science, May 1940, pp. 2–7. 30. M. Lavoie, Introduction to Post-Keynesian Economics, Palgrave Macmillan, 2009. 31.

Future Politics: Living Together in a World Transformed by Tech
by Jamie Susskind
Published 3 Sep 2018

Ryan, On Politics, 961. 33. See Sasha Issenberg, ‘How Obama’s Team Used Big Data to Rally Voters’, MIT Techology Review, 19 December 2012 <https://www. technologyreview.com/s/509026/how-obamas-team-usedbig-data-to-rally-voters/> (accessed 1 December 2017). 34. ‘Joseph Schumpeter’, Wikipedia, last edited 23 December 2017 <https://en.wikipedia.org/wiki/Joseph_Schumpeter> (accessed 21 January 2018). 35. Pedro Domingos, The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World (London: Allen Lane, 2015), 17. 36. Carole Cadwalladr, ‘Robert Mercer:The Big Data Billionaire Waging War on Mainstream Media’, The Guardian, 26 February 2017 <https:// www.theguardian.com/politics/2017/feb/26/robert-mercerbreitbart-war-on-media-steve-bannon-donald-trump-nigel-farage> (accessed 1 December 2017). 37.

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Future Perfect: The Case for Progress in a Networked Age. London: Penguin, 2013. Jones, Steve. ‘Why “Big Data” is the Fourth Factor of Production’. Financial Times, 27 Dec. 2012. <https://www.ft.com/content/5086d700-504a11e2-9b66-00144feab49a> (accessed 9 Dec. 2017). ‘Joseph Schumpeter’. Wikipedia, last modified 23 Dec. 2017 <https:// en.wikipedia.org/wiki/Joseph_Schumpeter> (accessed 21 Jan. 2018). Jouppi, Norm. ‘Google Supercharges Machine Learning Tasks With TPU Custom Chip’. Google Cloud Platform Blog, 18 May 2016 <https:// cloudplatform.googleblog.com/2016/05/Google-supercharges-machinelearning-tasks-with-custom-chip.html> (accessed 28 Nov. 2017).

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Fourth, dialogue between politicians and the public was seen as a useful generator of good ideas. Finally, representative systems were considered the best way to mediate and moderate the fickle passions of the masses, while still taking their sentiment into account. In the modern age, representative democracy has been our best answer to the question posed by Joseph Schumpeter: ‘How is it technically possible for “people” to rule?’30 Schumpeter, a giant of twentieth-century economics, was sceptical in principle of the value of direct participation, arguing that the ‘electoral mass . . . is incapable of action other than a stampede’.31 And he looked at the modern democracies around him and decided that in practice, too, they were nothing like the classical archetype.

Keynes Hayek: The Clash That Defined Modern Economics
by Nicholas Wapshott
Published 10 Oct 2011

Kahn was the Messenger Angel who brought messages and problems from Keynes to the ‘Circus’ and who went back to Heaven with the result of our deliberations.”10 Kahn was an indifferent physicist turned inspired economist thanks to his mastery of mathematics, winning a first-class degree before being elected as a fellow of King’s in 1930. Kahn’s switch of subject led the Austrian School economist Joseph Schumpeter,11 with a typical lack of sensitivity, to inform him that “many a failed race-horse makes quite a good hack.”12 Keynes thought Kahn had “as much natural aptitude for economics as anyone whom I have taught since the war.”13 Kahn was highly intelligent and meticulous in his logic, but he lacked the confidence to press his ideas on others.

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“The most we may hope for is that the growing information of the public may make it easier for central banks both to follow a cautious policy during the upward swing of the cycle, and so to mitigate the following depression, and to resist the well-meaning but dangerous proposals to fight depression by ‘a little inflation.’”52 So Hayek came to the end of his quartet of lectures. “In the event the lectures were a sensation,” recalled Robbins, “partly for their revelations of an aspect of classical monetary theory which for many years had been forgotten.”53 There was a sense, according to Joseph Schumpeter, that Hayek was saying something new and startling. Although Hayek’s lectures raised as many questions as they answered, Robbins was particularly pleased, for they had achieved exactly his intended purpose, to introduce British economists to “this great tradition [the Austrian School], [that] will do something to persuade English readers that here is a school of thought which can only be neglected at the cost of losing contact with what may prove to be one of the most fruitful scientific developments of our age.”54 The talks served as an extended job interview for Hayek, who dearly wished to join the LSE faculty.

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Galbraith jokingly observed, “Some will wonder if economists are capable of such refined emotion.”50 One young Harvard economics graduate student, Robert Bryce,51 a Canadian, enjoyed the added allure of having just arrived from Cambridge, England, where he had been taught by Keynes himself and had attended Hayek’s seminar at the LSE with the attitude of a Christian minister witnessing a cannibal ceremony. Bryce took full advantage of his links to the master, so much so that Joseph Schumpeter was prompted to remark, “Keynes is Allah and Bryce is his prophet.”52 Just as not all of those in Washington who fell under the spell of Keynes were young, some older economics professors at Harvard also underwent an unlikely epiphany. Alvin H. Hansen, who before long came to be known as the “American Keynes,” was a fifty-year-old classical economist when recruited by Harvard from the University of Minnesota in 1937.

The Master Switch: The Rise and Fall of Information Empires
by Tim Wu
Published 2 Nov 2010

Two of his works are particularly important for this work: The Theory of Economic Development; and Capitalism, Socialism, and Democracy (New York: Routledge, 2006) (1942). For more about his work see Robert Loring Allen, Opening Doors: The Life and Work of Joseph Schumpeter, Volume One—Europe (New Brunswick, NJ: Transaction Publishers, 1991); on his up-and-down life, see Richard Swedberg’s Schumpeter: A Biography (Princeton, NJ: Princeton University Press, 1991); Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction (Cambridge, MA: Belknap Press, 2007). 17. Albert Bigelow Paine, In One Man’s Life: Being Chapters from the Personal & Business Career of Theodore N.

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In fact, without White’s opposition, there is good reason to think that Gray would have both created a working telephone and patented it long before Bell.7 The initial inability of Hubbard, White, and everyone else to recognize the promise of the telephone represents a pattern that recurs with a frequency embarrassing to the human race. “All knowledge and habit once acquired,” wrote Joseph Schumpeter, the great innovation theorist, “becomes as firmly rooted in ourselves as a railway embankment in the earth.” Schumpeter believed that our minds were, essentially, too lazy to seek out new lines of thought when old ones could serve. “The very nature of fixed habits of thinking, their energy-saving function, is founded upon the fact that they have become subconscious, that they yield their results automatically and are proof against criticism and even against contradiction by individual facts.”8 The men dreaming of a better telegraph were, one might say, mentally warped by the tangible demand for a better telegraph.

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As if mourning his company, Alexander Bell became a bedridden invalid, in the grip of such a depression that he checked himself in to Massachusetts General Hospital.15 CYCLES OF BIRTH AND DEATH The struggle between Bell and Western Union over the fate of the telephone was, in retrospect, a match to the death. The victor would go on to prosper, while the loser would wilt away and die. This is how the Cycle turns. No thinker of the twentieth century better understood that such winner-take-all contests were the very soul of the capitalist system than did the economist Joseph Schumpeter, the “prophet of innovation.” Schumpeter’s presence in the history of economics seems designed to displease everyone. His prose, his personality, and his ideas were infuriatingly provocative and confounding, and quite deliberately so. He bragged of sexual exploits at faculty meetings, and while living in the United States during World War II, he voiced support for Germany, supposedly out of dislike for Russians.

Masters of Management: How the Business Gurus and Their Ideas Have Changed the World—for Better and for Worse
by Adrian Wooldridge
Published 29 Nov 2011

With a Scalpel, Not a Hatchet Some would argue that all these contradictions indicate that management theory is itself a contradiction in terms. I prefer to see it as an immature discipline, prevented from growing up, partly, by its enormous financial success. Management theory is in roughly the same state that economics was a century ago. Many of its fundamental tenets have yet to be established. The discipline still awaits its Joseph Schumpeter or John Maynard Keynes. It lacks rules of debate, so the discipline remains open to anybody with an axe to grind—much as economics was open to the likes of Karl Marx. However, just as anybody wanting to know about economics a hundred years ago could draw on writers such as Alfred Marshall, Adam Smith, and David Ricardo, management theory already has its founding fathers—among them, Alfred Sloan and Peter Drucker.

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It is an ad campaign and an insurance policy rolled into one. It is no accident that some of the leading proponents of CSR are companies that have been embroiled in scandals or companies that operate in scandal-plagued industries such as oil and gas. CSR is both a ready-made advertising campaign and an insurance policy. Joseph Schumpeter once complained that “the public mind has by now so thoroughly grown out of humor with business, as to make condemnation of capitalism and all its works almost a requirement of the etiquette of the discussion.”10 CSR gives companies a seat at the table. Globalization has given new urgency to the trend.

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The future lay with small firms that could exploit individual creativity and with bigger firms that could split themselves into small centers and encourage internal competition between these profit centers. “Jesus Christ tried 12,” Macrae argued in one of the telltale phrases that made his work so readable, “and that proved one too many.” This was heresy at the time. In 1942, Joseph Schumpeter had warned, in Capitalism, Socialism and Democracy, that the bureaucratization of capitalism was killing the spirit of entrepreneurship. Why should governments risk the turmoil of “creative destruction” when Keynesian economists, working hand in glove with big business and big government, could provide orderly prosperity?

The Long Twentieth Century: Money, Power, and the Origins of Our Times
by Giovanni Arrighi
Published 15 Mar 2010

A dominant state exercises a hegemonic function if it leads the system of states in a desired direction and, in so doing, is perceived as pursuing a general interest. It is this kind of leadership that makes the dominant state hegemonic. But a dominant state may lead also in the sense that it draws other states onto its own path of development. Borrowing an expression from Joseph Schumpeter (1963: 89), this second kind of leadership can be designated as “leadership against one’s own will” because, over time, it enhances competition for power rather than the power of the hegemon. These two kinds of leadership may coexist — at least for a time. But it is only leadership in the first sense that defines a situation as hegemonic.

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In other words, the decision not to do what the Europeans would do later is perfectly understandable in terms of a territorialist logic of power that weighed carefully the prospective benefits, costs, and risks of the additional commitment of resources to stateand war-making involved in the territorial and commercial expansion of empire. In this connection we should note that Joseph Schumpeter’s (1955: 64-5) thesis that precapitalist state formations have been characterized by strong “objectless” tendencies “toward forcible expansion, without definite, utilitarian limits — that is, non-rational and irrational, purely instinctual inclinations toward war and conquest” — holds no water in the case of THE THREE I-IEGEMONIES OF HISTORICAL CAPITALISM 37 Imperial China.

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(Braudel 1984: 125). From all these points of view, Venice’s state-centered regime of accumulation appears to have been far more successful than Genoa’s capital-centered regime. This was certainly true in the short run, bearing in mind that, in these things, a century is even more of a “short run” than Joseph Schumpeter thought. But in the longer run, it was not the Venetians but the Genoese that went on to promote, monitor, and benefit from the first world-embracing cycle of capital accumulation. This brings us to another major difference between the two regimes of accumulation. The very success of the Venetian regime of accumulation, combined with the fact that this success rested on the power of the state, enhanced the introversion of Venetian capitalism and its lack of innovative thrust.

Crisis and Leviathan: Critical Episodes in the Growth of American Government
by Robert Higgs and Arthur A. Ekirch, Jr.
Published 15 Jan 1987

A postelection survey, intended to demonstrate the victorious candidate's mandate, revealed, as McCloskey put it, "that 5% of the people voted for me because they agreed with my views; 11 % voted for me even though they disagreed with my views, and 84% didn't have any idea what the hell my views were."30 In sum, one has many good reasons to agree with Joseph Schumpeter's assessment: "The freely voting rational citizen, conscious of his (long-run) interests, and the representative who acts in obedience to them-is this not 15 The Sources of Big Government the perfect example of a nursery tale?"31 Political actions commonly take place in an environment of ignorance, misinformation, posturing, and heated emotions; there are long seasons of lassitude and maneuvering punctuated by brief episodes of frenzied action.

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Paul David, for example, has argued for it in his studies of technological change. David criticizes "a mechanistic world view that allots to the past at best a transient role in shaping the future." He stresses historical irreversibility, where "previous economic configurations become irrevocably lost." As early as 1942 Joseph Schumpeter warned against commission of a mechanistic, trend-imposing "statistical crime": "for any historical time series, the very concept of historical sequence implies the occurrence of irreversible changes in the economic structure which must be expected to affect the law of any given economic quantity."5 Only a few economists have adopted this perspective explicitly in studies of the growth of governmental power over the economy, but among political historians the idea is widely accepted. 6 A SCHEMATIC VIEW OF THE PROBLEM As we have seen, several commonly employed indexes of the size of government display a ratchet movement during the twentieth century: government grew suddenly much bigger with the onset of each great crisis; after the crisis it receded but usually not to the precrisis level or even to a level that would have been reached had the precrisis rate of growth persisted instead of being displaced by the events of the crisis.

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American governments in the twentieth century, impelled by a more "progressive" ideology, readily accepted-indeed eagerly sought-expanded powers. The crisis of the 1890s, the last major battle in which the forces of classical liberalism won a clear victory, serves as an illuminating backdrop against which the crises of the twentieth century stand out in bold relief. CREATIVE DESTRUCTION IDEOLOGICALLY SUSTAINED, 1865-1893 When Joseph Schumpeter coined the expression "creative destruction" to describe the dynamics of "relatively unfettered capitalism," he might have had in mind the United States in the late nineteenth century. Certainly the nation's economic development had never been so rapid, nor so erratic and disruptive. The American who studies the statistics of his country's social and economic change, wrote the industrialist Andrew Carnegie in the early 1890s, "becomes almost dizzy at discovering the velocity with which she is rushing on."

Does Capitalism Have a Future?
by Immanuel Wallerstein , Randall Collins , Michael Mann , Georgi Derluguian , Craig Calhoun , Stephen Hoye and Audible Studios
Published 15 Nov 2013

What will our grandchildren consume fifty years from now? We cannot begin to envisage their consumer fads, but we can be sure there will be some. Markets are not fixed by territory. Planet Earth can be filled and yet new markets can be created. That, of course, depends on what some have called the “technological fix” and it is more or less what Joseph Schumpeter called “creative destruction,” which he identified as being the core of capitalist dynamism—entrepreneurs pour money into technological innovation which results in the creation of new industries and the destruction of old ones. The Great Depression in the United States was partially caused by the stagnation of the major traditional industries, while the new emerging industries, though vibrant, were not yet big enough to absorb the surplus capital and labor of the period.

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The fundamentalist character of the neoliberal movement is revealed in its adamant refusal to recognize as capitalism anything except the purest unregulated markets—just as religious fundamentalists recognize only their own radical brand of faith as true religion. History, however, shows that the ideal type of free markets cannot be observed in any empirical situation; it is an ideological fantasy. Following in the footsteps of Fernand Braudel and Joseph Schumpeter, we argue that sustained profits always require a degree of state protection and market monopoly. Hegemonic monopoly is what in fact propelled the renewed surge of American power and finance at the turn of the twenty-first century. At the time Michael Mann and Immanuel Wallerstein publicly opposed the project for an American world empire, and both presented analytical arguments questioning its viability.1 There is now enough hard evidence to see how these predictions squared with reality.

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There will be whole new fronts of pathbreaking research, for instance, in the alternative organization of markets. The dismissal of market possibilities was a major theoretical and practical mistake of twentieth-century leftist movements. We treat with great respect the intellectual legacy of Joseph Schumpeter. But what will be the future uses of his theory of entrepreneurial dynamism? Who or what could play the role of entrepreneurs in the future, even beyond the crisis of capitalism? Is it possible to harness entrepreneurial energies toward more market creativity and less destruction? No less seriously we take Karl Polanyi’s idea of ‘fictitious commodities’, like land, money, and human life, that cannot be traded.

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes
by Mark Skousen
Published 22 Dec 2006

Economists over the years have had difficulty understanding Ricardo's "corn model" and his Principles textbook, especially the twisted assumptions he required to prove his theories. Ricardo once remarked that only twenty-five people in the entire country could understand it. A century later, Chicago economist Frank H. Knight remarked, "there is much [here] I cannot follow" (1959, 365). Joseph Schumpeter lambasted Ricardo for making most of the economic players "frozen and given," piling "one simplified assumption upon another," and developing a theory "that can never be refuted and lacks nothing save sense" (Schumpeter 1954, 472-73). Just the kind of theory Marx needed! Perhaps Keynes had Ricardo in mind when he wrote, "It is astonishing what foolish things one can temporarily believe if one thinks too long alone, particularly in economics" (Keynes 1973a [1936], xxiii).

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Brilliant, handsome, and witty, Sweezy left Harvard in 1932 as a classical economist, went to the London School of Economics for graduate work, became an ardent Hayekian, then briefly fell under the spell of Harold Laski and John Maynard Keynes, and finally converted to Marxism! From then on, the debonair Sweezy made every effort to make Marxism respectable on college campuses. Returning to Harvard as an instructor during the golden era of the Keynesian revolution, he befriended John Kenneth Galbraith, tutored Robert Heilbroner, and collaborated with Joseph Schumpeter on his forthcoming Capitalism, Socialism and Democracy. Sweezy wrote his most famous article on the "kinked" demand curve, helped organize the Harvard Teachers' Union, and published The Theory of Capitalist Development (1942), an extremely coherent and compelling exposition of Marxism (although the author overly committed himself to citing Stalin).

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In 1936, Sidney and Beatrice Webb came back with glowing reports of a "new civilization" and the "re-making of man," a vibrant nation with full employment, good working conditions, free education, free medical services, child care and maternity benefits, and the widespread availability of museums, theaters, and concert halls. Oskar Lange, a Polish socialist, and Fred M. Taylor, president of the AEA, contended that central planning boards could imitate the market's success. Austrian economist and Harvard professor Joseph Schumpeter chided Mises and Hayek by concluding, "Can socialism work? Of course it can," adding even more damagingly, "The capitalist order tends to destroy itself and centralist socialism is ... a likely heir apparent" (Schumpeter 1950 [1942], 167). Foreign Aid and Development Economics After World War II, European and Latin American countries began experimenting with socialism on a gigantic scale, nationalizing industry after industry, raising taxes, imposing wage-price controls, inflating the money supply, creating national welfare programs, and engaging in all kinds of collectivist mischief.

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank
by John Tamny
Published 30 Apr 2016

We know this because we’re aware of all the rich venture capitalists who grew that way by virtue of putting money behind eventual tech behemoths, along with employees who have attained wealth that can be measured in the tens of millions thanks to stock options. What this tells us is that to attain credit to grow, tech entrepreneurs must give up not insignificant ownership stakes in their companies for the privilege. Beyond that, the nature of entrepreneurialism must be taken into account. The great Austrian economist Joseph Schumpeter aptly described the entrepreneur as the individual whose work “consists precisely in breaking up old, and creating new, tradition.”3 In a world of consumers who are frequently resistant to change, the entrepreneur intends to offer the consumer or business a product or service they didn’t know they wanted.

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Unknown are all the economic advances that would have expanded the credit pie had the dollar been stable in the 2000s such that credit had migrated to real ideas instead of consumption. CHAPTER FIFTEEN Conclusion: Why Washington and Wall Street Are Better Off Living Apart The investment banker is ‘a producer’ of money and credit, “the capitalist par excellence.” —Joseph Schumpeter “Your No. 1 client is the government,” John J. Mack, Morgan Stanley’s chairman and chief executive from 2005 to 2009, told current CEO James Gorman in a recent phone call. Mr. Gorman, who was visiting Washington that day, agreed. —Wall Street Journal, September 10, 2013 ALTHOUGH SILICON VALLEY can still claim top-dog status as the center of technological innovation in the United States, Austin, Texas, is increasingly part of the discussion.

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Paul Scott, “From Washed-Up Drug Addict to $100M Man,” Daily Mail Online, May 23, 2013. 15. Ibid. CHAPTER FOUR 1. Claire Cain, “Wearing Your Failures on Your Sleeve,” New York Times, November 8, 2014. 2. Mike Isaac, “Upstarts Raiding Giants for Staff in Silicon Valley,” New York Times, August 19, 2015. 3. Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction (Cambridge, Mass.: Belknap Press, 2007), 70. 4. Ibid., 73. 5. Julianne Pepitone & Stacy Cawley, “Facebook’s first big investor, Peter Thiel, cashes out,” CNNMoney, August 20, 2012. 6. Peter Thiel, with Blake Masters, Zero to One (New York: Crown Business, 2014), 84. 7.

Where Does Money Come From?: A Guide to the UK Monetary & Banking System
by Josh Ryan-Collins , Tony Greenham , Richard Werner and Andrew Jackson
Published 14 Apr 2012

Our bankers are indeed nothing but Goldsmiths’ shops where, if you lay money on demand, they allow you nothing; if at time, three per cent.’ Daniel Defoe, Essay on Projects, 16901 It proved extraordinarily difficult for economists to recognise that bank loans and bank investments do create deposits. Joseph Schumpeter, 19542 2.1. The confusion around banking There is significant confusion about banks. Much of the public is unclear about what banks actually do with their money. Economics graduates are slightly better informed, yet many textbooks used in university economics courses teach a model of banking that has not applied in the UK for a few decades, and unfortunately many policymakers and economists still work on this outdated model.

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They are fairly homogenous, reasonably durable, portable and of a convenient size for the smallest or, in packets, for the largest transactions (divisible). The centrality of the commodity itself in determining the nature of money led to this theory being called the ‘commodity theory of money’ or the ‘metallist theory of money’. As the economist Joseph Schumpeter describes it, the logic of this argument leads to a conception of money as a neutral, imaginary ‘veil’ lying over the ‘real’ economy:13 ‘Real analysis’ proceeds from the principle that all essential phenomena of economic life are capable of being described in terms of goods and services, of decisions about them and of relations between them.

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These deposits are accepted by everyone, including the state, in payment for taxes. This is the process of credit creation, which enables banks to create money. It is the ability of banks to create new money, independently of the state, which gave rise to modern capitalism and makes it distinctive. As political economist Geoffrey Ingham describes it, following Joseph Schumpeter: The financing of production with money-capital in the form of newly created bank money uniquely specifies capitalism as a form of economic system. Enterprises, wage labour and market exchange existed to some small degree, at least, in many previous economic systems, but... their expansion into the dominant mode of production was made possible by the entirely novel institution of a money-producing banking system.1 7.1.

Who's Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life
by Richard Florida
Published 28 Jun 2009

Chapter 4 1 Robert Lucas, “On the Mechanics of Economic Development,” Journal of Monetary Economics 22, 1988, pp. 3-42. 2 Adam Smith, The Wealth of Nations, Bantam, 2003 (1st ed., 1776). 3 David Ricardo, Principles of Political Economy and Taxation, Cosimo Classics, 2006 (1st ed., 1817). 4 Joseph Schumpeter, Theory of Economic Development, Harvard University Press, 1934 (1st ed., 1911); Schumpeter, Capitalism, Socialism, and Democracy, Harper, 1975 (1st ed., 1942). Thomas McCraw has written an illuminating biography of Schumpeter, Prophet of Innovation: Joseph Schumpeter and Creative Destruction, Belknap, 2007. 5 Bill Steigerwald, “City Views: Urban Studies Legend Jane Jacobs on Gentrification, the New Urbanism, and Her Legacy,” Reason, June 2001. 6 See the discussion of Jacobs’s ideas in David Ellerman, “Jane Jacobs on Development,” Oxford Development Studies, December 4, 2004, pp. 507-521. 7 Geoffrey West et al., “Growth, Innovation, Scaling, and the Pace of Life in Cities,” Proceedings of the National Academy of Sciences, April 24, 2007, pp. 7301-7306. 8 Robert Axtell and Richard Florida, “Emergent Cities: Micro-foundations of Zipf’s Law,” March 2006.

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In 1776 Adam Smith published The Wealth of Nations, which argued that specialization, efficiency, and division of labor are the cornerstones of modern economic growth.2 Later, David Ricardo’s theory of comparative advantage argued that not just firms but countries gain advantage by specializing in certain kinds of economic activity.3 The far-seeing urbanist Jane Jacobs agrees that specialization has its uses, but she focuses on an even more fundamental source of economic growth—what she terms expansion. Like the great economist Joseph Schumpeter, she emphasizes the critical importance of innovation and entrepreneurship. In her eyes, the prospect of new types of work and new ways of doing things drives large-scale economic expansion. But where most economists locate momentum in great companies, entrepreneurs, and nation-states, Jacobs presciently identifies great cities as the prime motor force.

Reinventing Capitalism in the Age of Big Data
by Viktor Mayer-Schönberger and Thomas Ramge
Published 27 Feb 2018

Machine learning system experts around the world are actively pursuing strategies to teach their systems to be creative, albeit currently with only very limited success. It seems that so far, creativity is a difficult nut to crack for machines. Until this changes, managers will continue to be needed to steer the complex process of creative destruction, which famed Austrian American economist Joseph Schumpeter saw as the source of sweeping innovation. FUKOKU’S CHOICE—WHICH WE CALL OPTION ONE—FOCUSES on cost. This solution works only if firms successfully automate and optimize decision-making, cutting down on overhead and permanently reducing the size of the workforce. But at its heart, option one is a bet on the past, a bet on a strategy that will disrupt its workers rather than its structure.

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firms will increase in size and combine: The Marxist Monopoly Capital, written in the 1960s, is perhaps one of the most cited critiques from the left, although the authors’ argument against “monopoly capitalism” echoes Lenin’s earlier work; Paul A. Baran and Paul M. Sweezy, Monopoly Capital: An Essay on the American Economic and Social Order (New York: Monthly Review Press, 1966). The economist and admirer of innovation Joseph Schumpeter was more nuanced in his critique: on the one hand, he identified large firms as surprising places of innovation; on the other hand, he worried that capitalism may become undone as monopolies cripple the human urge to innovate; see generally Thomas K. McCraw, Prophet of Innovation (Cambridge: Harvard University Press, 2007).

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For example, a seller may offer an initial service at a loss to a buyer, imagining that the transaction will lead to repeat sales, not knowing that the buyer never intends to come back—or would only do so for the same low price. The seller’s “loss leader” leads to nothing but a loss. before copycats appear and free ride: In his famous book The Theory of Economic Development, Joseph Schumpeter argued that entrepreneurs, by definition, have discovered a category of exclusive information. They’re the first people to identify a new market, patent an invention, launch an efficient means of production, or introduce some other “new combination”—a way to coordinate human activity—before anyone else is aware of it.

What's Wrong With Economics: A Primer for the Perplexed
by Robert Skidelsky
Published 3 Mar 2020

No one has any incentive to change what they are doing. Economics shares the concept of equilibrium with physics. The idea is that there exist forces in nature which automatically balance each other. Any disturbance to the balance will set up an opposing force to restore it: you swing the pendulum one way, and gravity pushes it back. Joseph Schumpeter (1883–1950) described equilibrium as the ‘magna charta’ of exact economics.1 But it poses a severe problem. How do economists reconcile, even notionally, the idea of a state of rest with the undoubted dynamism and instability of economic life? The answer lies in the notion of ‘shocks’. The normal state of economic life is one of predictable activity, based on stable expectations.

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The stationary state is a kind of equilibrium in which the economy simply reproduces itself. This translates into the idea of balanced growth, with population and capital increasing at roughly the same rate and preferences staying constant.8 Partial equilibrium traces the adjustment of supply to demand in a particular market in isolation from the rest of the economy. Joseph Schumpeter contrasted static and dynamic models. Statics refers to an economy of given, known, and constant external conditions, such as tastes and technology. This has no resemblance to modern market economies. In dynamic analysis, external conditions not only change but such change is fundamental to a capitalist economy.

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Most economists cannot envisage a post-capitalist era, because they see scarcity as a permanent condition: the Robbins definition sets no limit to human wants. Scarcity continues to demand arithmetical – not moral – solutions. Further, capitalism has showed itself superior to communism as a growth engine, because central planning couldn’t do the necessary social arithmetic – an argument we owe to Hayek (1937). Then there was Joseph Schumpeter, whose views could be summarised as ‘never let a recession go to waste’. He was the apostle of wealth-creation through ‘creative destruction’. Progress was not a smooth evolutionary process but a chaotic one, in which moribund giants are constantly being replaced by agile upstarts through a succession of crises.

The Curse of Bigness: Antitrust in the New Gilded Age
by Tim Wu
Published 14 Jun 2018

See Etsuko Kameoka, Competition Law and Policy in Japan and The EU (2014), pp. 5–6 *In the early 1960s, historian Richard Hofstadter would famously remark that antitrust was no longer a popular movement but that it “now runs its quiet course without much public attention.” *One prominent exception was the iconoclastic economist Joseph Schumpeter, who had championed the entrepreneur in his earlier years, but in his later years grew to admire the large monopolistic corporation and begun to see the lure of monopoly as a principal driver of innovation and “creative destruction.” Schumpeter, however, did not take seriously the problem of investment in barriers to entry, and particularly the power of government to insulate monopolies from creative destruction.

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Rec. 16452 (1950). 82 efforts to transplant U.S. antitrust laws to Japan: Competition Law and Policy in Japan and the EU, Etsuko Kameoka, Edward Elgar Publishing, 2014. 83 “not a single American-trained economist of any prominence”: The Antitrust Experiment in America, Donald Dewey, Columbia University Press, 1990. 83 “now runs its quiet course”: The Paranoid Style in American Politics, Richard Hofstadter, Vintage Books, 2008. 84 “a private, competitive enterprise economy”: “The Case Against Big Business,” George J. Stigler, Fortune, May 1, 1952. 84 iconoclastic economist Joseph Schumpeter: Capitalism, Socialism and Democracy, Joseph A. Schumpeter, Routledge, 1976. 84 “did not take seriously the problems”: The Master Switch: The Rise and Fall of Information Empires, Tim Wu, Vintage Books, 2011. 85 “the existing structure is the efficient structure”: In Defense of Industrial Concentration, John S.

Green Tyranny: Exposing the Totalitarian Roots of the Climate Industrial Complex
by Rupert Darwall
Published 2 Oct 2017

It disappeared after Hitler’s defeat and only bubbled up again in the terrorism and antinuclear protests of the 1970s and the formation of the Green Party in 1980. German eco-ideas found their way across the Atlantic, where they fed progressives’ attack on capitalism, targeting its most concrete manifestation—the modern corporation. In the 1940s, the Austrian economist Joseph Schumpeter identified the corporation’s vulnerability in his prediction that capitalism would be the cause of its own downfall. Environmentalism—the belief that mankind’s activities threaten the survival of both humanity and the planet—found a receptive audience in boardrooms and among those to whom business leaders turn to tell them what is important.

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Nazi ecological politics were rehabilitated by the Greens and would come to form part of mainstream German and then European politics. What united them was a deep hostility to capitalism and the free market. Against them stands the Jeremiah of capitalism. Far from wishing to see capitalism fail, Joseph Schumpeter foresaw its death coming from its own hand; although writing in the 1940s, he could not have foreseen that the instrument of its self-destruction would be environmentalism. This, then, is the ideological landscape across which the action unfolds. At the end of the 1960s, while American environmentalists were focusing their efforts on banning DDT, Sweden was putting coal—the most ubiquitous source of electrical energy—in the crosshairs when it made acid rain the world’s top environmental problem.

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Promoting itself as a model for America, it is self-evidently impossible for all the other forty-seven contiguous states to import one-third of their electricity from each other. California also led the way in being the crucible of America’s Climate Industrial Complex. In the 1940s, the Austrian economist Joseph Schumpeter argued that cultural and sociological factors would lead to the demise of capitalism. The fruits of capitalism harvested by tech billionaires, hedge fund managers, and foundation executives were poured into the 2010 fight to defeat Proposition 23, which had attempted to limit the economic damage of California’s renewable targets.

The Internet Is Not the Answer
by Andrew Keen
Published 5 Jan 2015

“We are asked to perform for our friends, to create things they like, to work on a personal brand—and brands teach us that authenticity is the result of consistency. We must honor our true self and represent the same self to all of our friends or risk being discredited.”105 Berners-Lee’s definition of capitalism, however, is too pedestrian. Rather than just a static market economy that enables trading, capitalism is what the Austrian economist Joseph Schumpeter called an “evolutionary” process of economic change that “never can be stationary.” In his 1942 magnum opus Capitalism, Socialism and Democracy, Schumpeter used the term “Creative Destruction” to describe the constant cycles of disruptive invention and reinvention that drive capitalism. “This process of Creative Destruction is the essential fact about capitalism,” Schumpeter insisted.

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“Nearly everything you think you know about strategy and innovation is wrong,” Downes and Nunes warn about today’s radically disruptive economy.59 In their 2014 book, Big Bang Disruption,60 they describe an economy in which disruption is devastating rather than creative. It’s a world, they say, in which Joseph Schumpeter’s “perennial gales of creative destruction” have become Category 5 hurricanes. Upheavals from big-bang disruptors like Google, Uber, Facebook, and Instagram “don’t create dilemmas for innovators,” Downes and Nunes warn, “they trigger disasters.”61 And Kodak is the textbook example of this kind of disaster—a $31 billion company employing 145,000 people that, as they note, was bankrupted “gradually and then suddenly”62 by the hurricane from Silicon Valley.

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Real Books,” New York Times, July 9, 2014. 55 Andrew Wallenstein, “Cable Operator Pitching TV Industry on Plan to Convert Illegal Downloads to Legal Transaction Opportunities,” Variety, August 5, 2013, variety.com/2013/digital/news/comcast-developing-anti-piracy-alternative-to-six-strikes-exclusive-1200572790. 56 “Recording Industry Welcomes Support by Payment Providers to Tackle Illegal Online Sale of Unlicensed Music,” International Federation of the Phonographic Industry, March 2, 2011, ifpi.org/content/section_news/20110302.html. 57 Bill Rosenblatt, “Ad Networks Adopt Notice-and-Takedown for Ads on Pirate Sites,” Copyright and Technology Blog, July 21, 2013, copyrightandtechnology.com/category/economics. 58 Victoria Espinel, “Coming Together to Combat Online Piracy and Counterfeiting,” Whitehouse.gov, July 15, 2013. 59 Kyle Alspach, “Steve Case: Silicon Valley Has Wrong Mindset for Next Internet Revolution,” Techflash, October 10, 2013. 60 Mariana Mazzucato, The Entrepreneurial State: Debunking Public vs. Private Sector Myths (London: Anthem, 2013), p. 105. 61 Joseph Schumpeter, “The Entrepreneurial State,” Economist, August 31, 2013. 62 Michael Ignatieff, “We Need a New Bismarck to Tame the Machines,” Financial Times, February 11, 2014. 63 Catherine Bigelow, “An Honor for Danielle Steel and a Downton for All,” SFGate, January 9, 2014. 64 Chrystia Freeland, Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else (New York: Penguin, 2012). 65 Chrystia Freeland, “Sympathy for the Toffs,” New York Times, January 24, 2014. 66 Ibid. 67 William Powers, Hamlet’s BlackBerry: A Practical Philosophy for Building a Good Life in the Digital Age (HarperCollins, 2010). 68 Jeff Jarvis, “What Society Are We Building Here?

23 Things They Don't Tell You About Capitalism
by Ha-Joon Chang
Published 1 Jan 2010

When they should be maximizing profits, it was argued, these managers were maximizing sales (to maximize the size of the company and thus their own prestige) and their own perks, or, worse, engaged directly in prestige projects that add hugely to their egos but little to company profits and thus its value (measured essentially by its stock market capitalization). Some accepted the rise of the professional managers as an inevitable, if not totally welcome, phenomenon. Joseph Schumpeter, the Austrian-born American economist who is famous for his theory of entrepreneurship (see Thing 15), argued in the 1940s that, with the growing scale of companies and the introduction of scientific principles in corporate research and development, the heroic entrepreneurs of early capitalism would be replaced by bureaucratic professional managers.

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No more heroes any more Our discussion so far shows that what makes the poor countries poor is not the lack of raw individual entrepreneurial energy, which they in fact have in abundance. The point is that what really makes the rich countries rich is their ability to channel the individual entrepreneurial energy into collective entrepreneurship. Very much influenced by capitalist folklore, with characters such as Thomas Edison and Bill Gates, and by the pioneering work of Joseph Schumpeter, the Austrian-born Harvard economics professor, our view of entrepreneurship is too much tinged by the individualistic perspective – entrepreneurship is what those heroic individuals with exceptional vision and determination do. By extension, we believe that any individual, if they try hard enough, can become successful in business.

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Even though they were not trained as economists, the economic officials of East Asia knew some economics. However, especially until the 1970s, the economics they knew was mostly not of the free-market variety. The economics they happened to know was the economics of Karl Marx, Friedrich List, Joseph Schumpeter, Nicholas Kaldor and Albert Hirschman. Of course, these economists lived in different times, contended with different problems and had radically differing political views (ranging from the very right-wing List to very left-wing Marx). However, there was a commonality between their economics.

The Digital Party: Political Organisation and Online Democracy
by Paolo Gerbaudo
Published 19 Jul 2018

What is characteristic to the political party, vis-à-vis other forms of association, is the way in which it is devised as a means to assert power within a larger corporate body, namely a state, for whose control it competes. The zero degree of the party in the context of democratic countries is an organisation that competes for government power through elections. This is reflected in minimalist definitions of political parties, such as Joseph Schumpeter’s ‘a group whose members propose to act in concert in the competitive struggle for political power’46 and Giovanni Sartori’s ‘any political group identified by an official label that presents at elections, and is capable of placing through (free and unfree) elections candidates for public office’.47 The second key element of political parties is the voluntary character of adherence: parties are ‘membership organisations’ which need not only to obtain votes but also to attract members.

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This is in line with what Weber called the ‘principle of small numbers’ (Prinzip der kleinen Zahl) that is, ‘the superior political manoeuvrability of small leading groups’.76 This view of the passivity of the mass, shared by Gramsci, Weber and Michels does not necessarily imply a wholesale indictment of democracy. Rather, what it entails is a model of ‘competitive democracy’ – in which, not too differently from Joseph Schumpeter’s procedural theory of democracy,77 the membership’s power largely revolves around its ability to choose over competing leaders and the ongoing threat of revoking support. This may seem like a diminutive power, when compared with more idealistic theories of democracy as direct intervention of individuals in deliberative processes, which, as we shall see, strongly inform the vision of online democracy.

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In fact, economic crises have also often been moments of rapid technological innovation. Richard Florida, for example, highlights that during the Long Depression that started in 1873 there was a peak in patents, and the same may be said about the stagflation of the 1970s that led to the development of industrial robots.98 Furthermore, we know from Joseph Schumpeter that capitalism is characterised by a tendency towards creative destruction,99 in which incumbents in various industries are constantly threatened by the rise of new products and services, and we most clearly see this phenomenon in the so-called ‘disruption’100 posed by new companies, such as Airbnb, Amazon, Uber and Deliveroo, to existing companies.

Innovation and Its Enemies
by Calestous Juma
Published 20 Mar 2017

INNOVATION AND ITS ENEMIES Introduction New ideas are not only the enemy of old ones; they also appear often in an extremely unacceptable form. CARL GUSTAV JUNG The quickest way to find out who your enemies are is to try doing something new. This book explores the dynamics of social opposition to innovation.1 In his pioneering work, the Austrian economist Joseph Schumpeter identified innovation as the central force in economic transformation. Much of the scholarly elaboration of his work has focused on how innovation drives economic evolution and the critical role that entrepreneurs play in the process. Innovation, according to Schumpeter, is the creation of new combinations that represent a departure from established practices.

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As Lynn White observed in Medieval Technology and Social Change, “The acceptance or rejection of an invention, or the extent to which its implications are realized if it is accepted, depends quite as much upon the conditions of society, and upon the imagination of its leaders, as upon the nature of the technological item itself.”15 Schumpeter, Innovation, and Social Transformation The preceding discussion illustrates “creative destruction,” a term coined by Austrian economist Joseph Schumpeter in his 1942 book Capitalism, Socialism and Democracy. Schumpeter believed that capitalism is a system that must always evolve, and with the evolution comes change. The change requires the destruction of something old, replaced by something new, such as the gun replacing archery and the mobile phone replacing the landline.

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Behind this seemingly innocent beverage lies one of the world’s most colorful technological controversies that spanned centuries and continents. Grounds for Concern The story of coffee shows how new innovations coevolve with social institutions that they disrupt and recreate. It also plays to Joseph Schumpeter’s rejection of the equilibrium outlook of economic life. He took the rather controversial view that “all change in consumers’ tastes is incidental to, and brought about by, producers’ actions.”3 Coffee (Coffea arabica), native to the highlands of Ethiopia, is such an example. Coffee was used by Ethiopian people for centuries.4 Most likely this was in the form of whole berries or leaves rather than beans.

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

Likewise, Robert Gordon’s stellar work on productivity and American prosperity – in some ways the antithesis to Brynjolfsson and McAfee’s work – has given us an extraordinary number of insights. Throughout the work on this book we have been reminded of the significance of many classical or political economists in the nineteenth and twentieth centuries. There are few roads to understanding business and the economy that do not stop by Karl Marx, Joseph Schumpeter, and Friedrich Hayek. One can dispute their politics, but their insights into the economy are instructive for a contemporary student in that field. Similarly, when we have reread works by scholars like John Kenneth Galbraith, Alexander Gerschenkron, and Susan Strange, to name just three, we have been struck by their insights.

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Of all the internet start-ups, for example, three-quarters fail because of “premature scaling” alone, according to the Startup Genome Report.32 Yet here we are, with rising venture capital investment in internet start-ups – many of them rushing to scale up their businesses faster than the others. Joseph Schumpeter, the Austrian-born economist, argued along the same lines and, partly inspired by German scholar Werner Sombart, portrayed the capitalist innovation process as “a perennial gale of creative destruction.” For Schumpeter, creation and destruction were part of the same process of economic renewal.

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Companies, he argued, are not black boxes that cannot be understood by economists. Nor are the successes and failures of firms mysteriously shielded from generalized observations about how economies work. Coase, who came from an institutionalist school of thought, was not all that impressed by Joseph Schumpeter’s almost Nietzsche-like admiration of the strong and individualistic entrepreneur: entrepreneurs, Schumpeter later wrote, act “with confidence beyond the range of familiar beacons,” a trait “present in only a small fraction of the population.”14 Nor was Coase satisfied with the residual treatment of firms in much of the economic thinking at the time – a perception of firms memorably described by Cambridge economist Dennis Robertson as “lumps of butter coagulating in a pail of buttermilk.”15 Like other economists with similar interests, Schumpeter could not give a reasonable explanation for why companies exist, and failure to understand such a basic component of economics clouded their views about the role of firms in the economy.

The end of history and the last man
by Francis Fukuyama
Published 28 Feb 2006

Historically, some of the most impressive economic growth records have been compiled by this type of state, including Imperial Germany, Meiji Japan, the Russia of Witte and Stolypin, and, more recently, Brazil after the military takeover in 1964, Chile under Pinochet, and, of course, the NIEs of Asia.31 Between 1961 and 1968, for example, the average annual growth rate of the developing world’s democracies, including India, Ceylon, the Philippines, Chile, and Costa Rica, was only 2.1 percent, whereas the group of conservative authoritarian regimes (Spain, Portugal, Iran, Taiwan, South Korea, Thailand, and Pakistan) had an average growth rate of 5.2 percent.32 The reasons why a market-oriented authoritarian state should do better economically than a democratic one are reasonably straightforward, and were described by the economist Joseph Schumpeter in his book Capitalism, Socialism, and Democracy. While voters in democratic countries may affirm free-market principles in the abstract, they are all too ready to abandon them when their own short-term, economic self-interest is at stake. There is no presumption, in other words, that democratic publics will make economically rational choices, or that economic losers will not use their political power to protect their positions.

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Imperialism and war were historically the product of aristocratic societies. If liberal democracy abolished the class distinction between masters and slaves by making the slaves their own masters, then it too should eventually abolish imperialism. This thesis was stated in a slightly different form by the economist Joseph Schumpeter, who argued that democratic capitalist societies were markedly un-warlike and anti-imperialistic because they provided other outlets for the energies that formerly fanned wars: The competitive system absorbs the full energies of most of the people at all economic levels. Constant application, attention, and concentration of energy are the conditions of survival within it, primarily in the specifically economic professions, but also in other activities organized on their model.

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They do not risk their lives, but they stake their fortunes, status, and reputations for the sake of a certain kind of glory; they work extremely hard and put aside small pleasures for the sake of larger and intangible ones; their labor frequently results in products and machines that demonstrate a breathtaking domination of the hardest of masters, nature; and if they are not classically public-spirited, they necessarily participate in the social world constituted by civil society. The classical capitalist entrepreneur described by Joseph Schumpeter is therefore not Nietzsche’s last man. It is in the very design of democratic capitalist countries like the United States that the most talented and ambitious natures should tend to go into business, rather than into politics, the military, universities, or the church. And it would seem not entirely a bad thing for the long-run stability of democratic politics that economic activity can preoccupy such ambitious natures for an entire lifetime.

The Limits of the Market: The Pendulum Between Government and Market
by Paul de Grauwe and Anna Asbury
Published 12 Mar 2017

Philosophers, economists, social scientists, and historians have developed countless theories describing how capitalism emerged and why ultimately it would be doomed. The key characteristics of these analyses are that they predict the final collapse of capitalism and its transformation into something very different in which governments (the state) will take over the command of the economy. Karl Marx, Friedrich Engels, Joseph Schumpeter, Rosa Luxemburg, Vladimir Lenin, Karl Polanyi, all have developed what I would call ‘linear theories’ of the rise and fall of capitalism, i.e. theories predicting that capitalism would disappear and be replaced permanently by some form of state control over the economy. This linear theory contrasts with the cyclical theory that has been developed in this book, i.e. a theory predicting that capitalism is subject to a rise and fall followed by a resurrection, which in turn leads to a new rise and fall, ad infinitum.

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One must admit that the World War I came close to making the Leninist prediction come true. In addition, Lenin’s contribution to destroying capitalism in Russia was formidable. But again his triumph in the end would only be temporary as Russia returned to capitalism during the s. This has led some to quip that communism is the longest road to capitalism. Joseph Schumpeter, the brilliant Austrian economist, who like so many intellectuals and scientists emigrated to the US during the s to escape Nazi totalitarianism, was not a communist. Yet he had an interesting theory about why capitalism was in trouble and would be overtaken by a new system of organizing the economy.

Automation and the Future of Work
by Aaron Benanav
Published 3 Nov 2020

Meanwhile, in Italy, the economy has completely stagnated. 3 See William Baumol, “Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis,” in American Economic Review, vol. 57, no. 3, June 1967, pp. 415–26; Robert Rowthorn and Ramana Ramaswamy, “Deindustrialization: Causes and Implications,” IMF Working Paper 97/42, 1997, pp. 9–11; Dani Rodrik, “Premature Deindustrialization,” Journal of Economic Growth, vol. 21, no. 1, 2016, p. 16. 4 Data on capital stock derives from the Penn World Table 9.1, last updated September 2019, retrieved from FRED, Federal Reserve Bank of St. Louis on May 9, 2020. 5 See Joseph Schumpeter, Business Cycles, vol. 1, McGraw-Hill, 1939, pp. 93–4. 6 Some economists have attempted to theorize tendential economic stagnation and its relationship to rising inequality. See, for example, Thomas Piketty, Capital in the Twenty-First Century, Harvard University Press, 2014; Robert J. Gordon, Rise and Fall of American Growth, Princeton University Press, 2016; and the essays collected around Lawrence Summers’s hypothesis in Coen Teulings and Richard Baldwin, eds., Secular Stagnation: Facts, Causes, and Cures, Vox, 2014. 7 For the original account of this phenomenon, see Nicholas Kaldor, Causes of the Slow Rate of Economic Growth in the United Kingdom, Cambridge University Press, 1966.

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See also Jeffrey Williamson, Trade and Poverty: When the Third World Fell Behind, MIT Press, 2011. 29 See, for example, Alexander Keyssar, Out of Work: The First Century of Unemployment in Massachussetts, Cambridge University Press, 1986; Christian Topalov, Naissance du chômeur, 1880–1919, Albin Michel, 1994. 30 Kristin Ross draws an evocative parallel between the experiences of the workers who entered Occupy Oakland, on the one hand, and the Paris Commune, on the other, in Communal Luxury: The Political Imaginary of the Paris Commune, Verso, 2015, p. 3. 31 Óscar Jordá, Sanjay R. Singh, and Alan M. Taylor, “Longer-run Economic Consequences of Pandemics,” NBER Working Paper 26934, 2020. 32 See Joseph Schumpeter, Capitalism, Socialism, and Democracy, Routledge, 2003, pp. 81–6. 33 Andy Stern, Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream, PublicAffairs, 2016, pp. 7–8. See also Andrew Yang, The War on Normal People: The Truth about America’s Disappearing Jobs and Why Universal Basic Income Is Our Future, Hachette, 2018, p. 94. 34 See, for example, Ray Kurzweil, The Singularity Is Near, Viking, 2005, p. 67.

How Markets Fail: The Logic of Economic Calamities
by John Cassidy
Published 10 Nov 2009

The idea of the free market as a spontaneously generated system for “the utilization of knowledge,” he said to an interviewer later in his life, was “the basis not only of my economic but also much of my political views . . . the amount of information the authorities can use is always very limited, and the market uses an infinitely greater amount of information than the authorities can ever do.” Back in the 1940s, when Hayek formulated his ideas about information, there was no sign of communism collapsing: to most observers, it looked like laissez-faire was the ideology whose time had passed. In 1942, Joseph Schumpeter, another Austrian admirer of free markets, who taught at Harvard, published Capitalism, Socialism, and Democracy, in which he argued that capitalism itself was doomed and bureaucracy was its replacement. Hayek was equally fearful about the future, and he set out to write a popular text defending the values of free market liberalism.

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After trying his hand at fiction, journalism, and mine engineering, he followed the advice of his father, an economist, and devoted himself to economics. During the 1860s, Walras published articles on various topics, but it was his 1874 treatise, Elements of Pure Economics, that established him as a major figure. (Joseph Schumpeter, in his History of Economic Analysis, described Walras as “the greatest of all economists.”) After reviewing previous economic doctrines, Walras began his formal analysis by considering how prices are determined in a barter economy where two people trade two items, such as bread and wine, for each other.

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In what was perhaps a poke at the efficient market hypothesis, Minsky described his thesis that capitalist economies inevitably progress from conservative finance to reckless speculation as the “financial instability hypothesis.” Minsky described it as an interpretation of Keynes’s General Theory, and he also credited the Austrian economist Joseph Schumpeter for influencing his views. “The first theorem of the financial instability hypothesis is that the economy has financing regimes under which it is stable, and financing regimes in which it is unstable,” he explained in 1992. “The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.”

How to Fix Copyright
by William Patry
Published 3 Jan 2012

Indeed, it is a dangerous objective since invocation of the balance metaphor is often done in order to maintain the status quo, as in “why upset the balance?” or as in descriptions of the status quo as containing a “delicate balance.” Balance conflicts with the dynamic disruption that creatively pushes us forward no matter how reluctantly: that’s what is behind Austrian economist Joseph Schumpeter’s theory of creative disruption, which was not named, it should be noted, “creative balance.” The balance metaphor should be abandoned in favor of simply asking, “what is the result we want?” What we want, however, cannot be separated from the political arena in which rights and privileges are granted or changed.

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Francis Gurry, the Director General of the World Intellectual Property Organization cautioned, “Copyright should be about promoting cultural dynamism, not preserving or promoting vested business interests.”26 Innovation Requires a Dynamic Legal System Innovation is by its nature dynamic. Innovation’s power lies in what economist Joseph Schumpeter termed “creative destruction”: the introduction of innovative products and business models that displace old ones.27 If an innovative product or service does not provide competition to existing products or services, it is not innovative. Competition is inextricably linked to innovation. Laws are not.

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Jack Goldsmith and Tim Wu, Who Controls the Internet?: Illusions of a Borderless World (2008, Oxford University Press. See also Johnny Ryan, A History of the Interent and the Digital Future (2010, Reaktion Books). 26. Francis Gurry,The Future of Copyright, address delivered in Sydney, Australia, February 25, 2011. 27. Joseph Schumpeter, Capitalism, Socialism and Democracy 83 (Harper & Brothers 3d ed. 1950, 2006 paperback) (1942). 28. Sam Ricketson, WIPO Study on Limitations and Exceptions of Copyright Related Rights in the Digital Environment at page 4, Standing Committee on Copyright and Related Rights, 9th Session, Geneva, June 23 to 27, 2003, SCCR/9/7 (April 5, 2003).

Made to Break: Technology and Obsolescence in America
by Giles Slade
Published 14 Apr 2006

If Armstrong had conceived of his situation in these terms, he might have acted differently. Advanced capitalism had regularly stifle or swallowed up the individual entrepreneur during these years when the political will to enforce legislation against monopolistic practices was the exception rather than the rule. In 1942 the Harvard economist Joseph Schumpeter would devote a portion of his influ ntial book Capitalism, Socialism and Democracy to documenting the causes for what he called “the obsolescence of the entrepreneurial function” in advanced capitalism.16 But whatever Armstrong’s motives were, his decision to exclude RCA proved to be a critical miscalculation, since it left Sarnoff with a strong disincentive to end his campaign against FM.

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Perhaps because of this cooptation, the counterculture lasted well beyond the sixties and permitted Madison Avenue to engage in cycle after cycle of rebellion and transgression, marketing new goods, new fads, new symbolic gestures of defian e.The twist that DDB put on psychological obsolescence through their VW ads at the very beginning of the 1960s has been with us ever since. THEODORE LEVITT AND MARSHALL MCLUHAN Bernbach was not the only 1960s marketing genius who was obsessed with obsolescence. Fascinated by the economic theories of Joseph Schumpeter and Peter F. Drucker, Theodore Levitt, an oil industry executive born in Germany decided on a career change in the 1940s. After leaving his position at Standard Oil, Levitt completed a Ph.D. in economics at Ohio State University in 1951. By 1959 he had come under the influ nce of John Kenneth Galbraith and had joined the faculty of Harvard’s Graduate School of Business Administration.

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Advertising and Selling, 11, no. 10 (September 5, 1928): 19,20,44, 46. 3. Ibid., p. 44. 4. Ibid., p. 49. 5. Joseph A. Schumpeter, The Theory of Economic Development: An Enquiry into Profits Capital, Credits, Interest and the Business Cycle,trans. R. Opie (Cambridge: Harvard University Press, 1934). 6. Eduard März, Joseph Schumpeter: Scholar, Teacher, Politician (New Haven: Yale University Press, 1991), p. 5. 7. Schumpeter, Capitalism, Socialism and Democracy, pp. 82–83. 8. Paul M. Mazur, American Prosperity: Its Causes and Consequences (London: Jonathan Cape, 1928), p. 98. 9. Ibid., p. 99. 10. Frederick, “Is Progressive Obsolescence the Path toward Increased Consumption?”

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies
by Erik Brynjolfsson and Andrew McAfee
Published 20 Jan 2014

.* So the only viable way for societies to become wealthier—to improve the standard of living available to its people—is for their companies and workers to keep getting more output from the same number of inputs, in other words more goods and services from the same number of people. Innovation is how this productivity growth happens. Economists love to argue with one another, but there’s great consensus among them about the fundamental importance of innovation for growth and prosperity. Most in the profession would agree with Joseph Schumpeter, the topic’s great scholar, who wrote that, “Innovation is the outstanding fact in the economic history of capitalist society . . . and also it is largely responsible for most of what we would at first sight attribute to other factors.”3 It is here that the consensus ends. How much of this “outstanding fact” is taking place right now, and whether it’s on an upward or downward trend, is a matter of great dispute.

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As we discussed at the beginning of the chapter, the earnings of bricklayers will vary a lot less than the winner-take-all earnings of app developers, but that’s not the only difference. Instead of stable market shares, where revenues and income correspond proportionally to differences in talent and effort, competition in winner-take-all markets will be much more unstable and asymmetrical. The great economist Joseph Schumpeter wrote of “creative destruction,” where each innovation not only created value for consumers but also wiped out the previous incumbent. The winners scaled up and dominated their markets, but were in turn vulnerable to the next generation of innovators. Schumpeter’s observation describes markets in software, media, and the Internet much better than traditional markets in manufacturing and services.

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Thomas Edison, Henry Ford, Bill Gates, and many others created new industries that more than replaced the work that was eliminated as farming jobs vanished over the decades. The current transformation of the economy creates an equally large opportunity. Entrepreneurship has been an important part of the Econ 101 playbook at least since economist Joseph Schumpeter’s landmark work, written in the middle of the twentieth century, on the nature of capitalism and innovation. Schumpeter put forward our favorite definition of innovation—“the market introduction of a technical or organisational novelty, not just its invention”—and, like us, believed that it was an essentially recombinant process, “the carrying out of new combinations.”11 He also argued that innovation was less likely to take place in incumbent companies than in the upstarts that were trying to displace them.

Going Solo: The Extraordinary Rise and Surprising Appeal of Living Alone
by Eric Klinenberg
Published 1 Jan 2012

Durkheim argued that the modern division of labor would bind citizens organically. After all, individuals could achieve “independence” and “liberty” only if they were supported by the key modern social institutions—the family, the economy, and the state—which meant they had a clear self-interest in joining together to promote the common good. The Austrian economist Joseph Schumpeter didn’t think individuals would see things this way. In his 1942 book Capitalism, Socialism, and Democracy, Schumpeter observed that modern capitalism promoted “the rationalization of everything in life,” and predicted that a cold, calculating culture would ultimately lead to the “decomposition” of the collective.

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They tend to overlook the fact that neither individuals nor societies see living alone as a goal or an end point—which is why social movements to promote the interests of singletons are so difficult to organize. And they don’t admit that living alone has not led to the “decomposition” of collective life and the end of meaningful social commitments, as the economist Joseph Schumpeter and many others feared. More pragmatically, those who caution against the shift toward living alone need to grapple with the fact that the social changes driving it—the emergence of the individual, the rising status of women, the growth of cities, the development of communications technologies, and the expansion of the life course—are unlikely to be reversed.

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This is consistent with the observations of Yale law professor Robert Ellickson, who writes, “As a nation becomes more prosperous, its households generally shrink in size.” See Ellickson, The Household, p. 35. For Kosovo and Albania, see Sasha Tsenkova, Housing Policy Reforms in Post-Socialist Europe: Lost in Transition (Heidelberg: Physica-Verlag, 2009), p. 115. 18. See Euromonitor International, “Single Living.” 19. See Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper Perennial, 1962 [1942]). p. 157. 20. The survey figures are reported in Frank Furstenberg Jr., Sheela Kennedy, Vonnie McLoyd, Rubén Rumbaut, and Richard Settersten Jr., “Growing Up Is Harder to Do,” Contexts 3, no. 3 (2004): 36. 21.

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth
by Michael Jacobs and Mariana Mazzucato
Published 31 Jul 2016

Fortunately, there are plenty of resources within economics with which to do this. For these characteristics of capitalist economies are hardly revelatory. They have been analysed in theory and documented in practice for more than a hundred years of economic scholarship. They underlie the work of some of the greatest economists of the past century—such as Karl Polanyi, Joseph Schumpeter and John Maynard Keynes—and of the more recent schools of evolutionary, institutional and post-Keynesian economics. As the separate chapters in this book show, analysis based on these foundations can generate searching critiques of current policy, and powerful alternative perspectives. Three key insights underpin a rethinking of capitalism in these ways.

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It is organisations—including household families, business enterprises and government agencies—and not markets that invest in the productive capabilities embodied in physical and human capital that generate productivity. Markets can give organisations access to labour, land, finance and intermediate products, but, as recognised explicitly in the views of both Karl Marx and Joseph Schumpeter, market exchange per se does not enhance the productivity of these inputs.3 Organisations enhance productivity by first developing and then utilising the productive resources that they have under their control. In any economy characterised by significant productivity growth, the investment strategies and organisational structures of business enterprises drive productivity growth.

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Beyond that logical statement, however, the elaboration of the theory of innovative enterprise requires systematic comparative–historical research on the organisational and institutional determinants of the processes that transform technological and market conditions to generate goods and services that are higher quality and lower cost than those that previously existed. Writing at the end of his career, Joseph Schumpeter advised: ‘Nobody can hope to understand the economic phenomena of any, including the present, epoch who has not an adequate command of the historical facts and an adequate amount of historical sense or of what may be described as historical experience.’38 By ‘historical experience’ Schumpeter, who more than any other economist argued for the centrality of innovation for understanding a capitalist economy, meant the ability of the economist to integrate theory and history.

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right
by Philippe Legrain
Published 22 Apr 2014

Throw in insights from political economy, namely how policymakers get caught up with the crowd or captured by it, and the dangers of micromanagement become clear. The task for policymakers is particularly tricky because while the inherent instability of capitalism is a source of progress – the “gales of creative destruction” produced by innovators and entrepreneurs, as Joseph Schumpeter put it – it can also be extremely damaging: when the financial system runs away with itself and then crashes. Economies need to try to capture the benefits of entrepreneurs’ efforts – or the animal spirits of investors, as Keynes put it – while limiting the financial sector’s excesses. Governments need to encourage the dynamism of technological and business progress, while stepping in to rekindle its spirits in a slump.

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Steel illustrate the same process of industrial mutation… that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in. Joseph Schumpeter, Capitalism, Socialism and Democracy, 1942588 To get a glimpse of Europe’s future, you need to get down and party. Hackers, coders, gamers, developers, designers, DJs, technologists, entrepreneurs – they come together from all over Europe each year at Campus Party for a week of inspiring talks, eye-opening demos, informal networking and creative sparking.

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Thus economic growth is an ongoing voyage of discovery into an unknowable future, fuelled by ingenuity and energy, trialled by enterprising businesses and stimulated by competition within a framework of supportive institutions. In effect, it is a bit like evolution, which proceeds by mutation, selection and replication. While I do not agree with much of what Joseph Schumpeter wrote, his insight in 1942 that capitalism is an evolutionary process of continuous innovation and creative destruction seems fundamentally correct. Developing economies can grow simply by imitating what works well in more advanced ones – as can the less developed parts of every advanced economy.

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis
by James Rickards
Published 15 Nov 2016

Revelation 6:5–6 Introduction Felix Somary was perhaps the greatest economist of the twentieth century. He is certainly among the least known. Somary was born in 1881 in a German-speaking part of what was then the Austro-Hungarian Empire. He studied law and economics at the University of Vienna. There he was a classmate of Joseph Schumpeter’s and took his Ph.D. with Carl Menger, the father of Austrian economics. During the First World War Somary served as a central banker in occupied Belgium, but for most of his career he was a private banker to wealthy individuals and institutions. He moved to Zurich in the 1930s where he lived and worked until his death in 1956.

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The sanjak railway episode echoes rivalries in our own day about natural gas pipelines from the Caspian Sea to Europe, some of which may traverse old Ottoman sanjaks. The players—Turkey, Russia, and Germany—are the same. Where is our new Somary? Who is the new raven? Somary also used the historical-cultural method favored by Joseph Schumpeter. In 1913, Somary was asked by the seven great powers of the day to reorganize the Chinese monetary system. He declined the role because he felt a more pressing monetary crisis was coming in Europe. A decade ahead of a powerful deflation that held the world in its grip from 1924 to 1939, he wrote: Europeans found the Chinese amusing for their rejection of paper money and their practice of weighing metallic currency on scales.

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That would be a strange answer to Marx’s prayer. But history sometimes indulges in jokes of questionable taste. Joseph A. Schumpeter Capitalism, Socialism and Democracy (1942) Show me the man and I’ll find you the crime. Lavrentiy Beria, chief of the Secret Police (NKVD) under Stalin Schumpeter Reconsidered Joseph Schumpeter’s name conjures the phrase “creative destruction,” his best-known intellectual contribution, one of the most powerful economic insights of the twentieth century, with important implications today. Schumpeter’s concept was that capitalism is a dynamic force more potent than the enterprises that rise and fall within it.

The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order
by Benn Steil
Published 14 May 2013

Maynard would later reflect proudly on his chosen profession that the economist “must be mathematician, historian, statesman, philosopher.”5 He would never display a rare gift as any one of these alone, but he amalgamated them with a genius that no economist has ever matched. It is a long-standing matter of contention among Keynes’s chroniclers the degree to which his personal life should be held to inform his development as a public intellectual, scholar, and statesman. Famed economist Joseph Schumpeter, for example, cuttingly pronounced Keynes’s famous aphorism “in the long run we are all dead” to be a natural perspective for a childless thinker. Keynes and his future wife, it should be noted, had tried to have a child in the late 1920s; but more to the point, to dismiss important elements of Keynes’s thinking on the grounds that they were artifacts of alleged hidden impulses is to fail to give his reasoning its due.

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“Had Keynes begun … with the simple statement that he found it realistic to assume that modern capitalistic societies had money wage rates that were sticky and resistant to downward movements,” the great economist Paul Samuelson argued in 1964, “most of his insights would have remained just as valid.”96 This is the logical basis on which much Keynesian analysis today is undertaken—not on Keynes’s theorizing about the unique menace of money (to which Keynes clung tenaciously). “Most people who admire Keynes,” Joseph Schumpeter wryly observed, “take from him what is congenial to them and leave the rest.”97 For his part, Rueff argued that Keynes’s monetary and fiscal policy prescriptions had no sound basis. On the contrary, their inevitable result down the road would be inflation and a private productive apparatus less able to supply the goods and services people actually want.98 Hubert Henderson and others had shared this view, but it did not become widespread until the stagflation of the 1970s and the consequent anti-Keynesian blowback.

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If money wages in this country always go up when the cost of imported food stuffs rises, the power of exchange depreciation to help us begins to evaporate.”40 Keynes was more an internationalist Englishman than an English internationalist. Therefore it was not surprising that “Keynes’s advice,” in the words of his great contemporary Joseph Schumpeter, “was in the first instance always English advice, born of English problems.”41 These problems were mutating rapidly with global economic and political forces during the 1920s and ’30s. In the ’20s, memories were still fresh of Great Britain, the nineteenth century’s imperial creditor nation, in Keynes’s words “conduct[ing] the international orchestra,” whereas by the ’30s a grim acceptance had set in that Britain had a chronic payments deficit problem that could not be cured within the strictures of any idealist, “automatic” global system—particularly one whose terms would now be set by the United States.

Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
by Kevin Phillips
Published 31 Mar 2008

Every boom, they say, comes from extraordinary credit expansion out of proportion to real economic growth. One Austrian School acolyte, Kurt Richebächer, had predicted just that unhappy fate for the U.S. housing bubble several years before his death during the summer of 2007. Hyman Minsky (1919-96), part Keynesian, part disciple of Joseph Schumpeter, became so well known for preaching the financial system’s vulnerability to speculation and risk that admirers labeled the August panic a “Minsky Moment.” Certainly the Austrian-Minsky fusion, so specific in its finger pointing, will rise or fall on the economic outcome of the next several years.

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FIGURE 2.3 The Evolution of Critical Derivatives, 1972-2005 Source: Chase Manhattan; 1993-2005 discussions from various sources. Back in 1977, Time had titled a lengthy essay on credit card issuers “Merchants of Debt” but had examined none of the bolder new financial products. Perhaps unknowingly, the magazine had adopted a phrase used in the 1930s by Joseph Schumpeter, an economist of the Austrian School, and then in the 1970s by Hyman Minsky. Both men argued that downturns evolved from financial and credit excesses. “Merchants of debt” was their epithet for banks and other financial entities that strove to market debt in as many (innovative) forms and to as many buyers as possible.

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Clearly, elements of marketplace globalization are in some retreat, not least in the United States. Over the last fifteen years, I have used the term “financial mercantilism” to describe a collaboration in which Washington and the U.S. financial sector seek to minimize certain unwanted marketplace forces. The purpose is to suppress what economist Joseph Schumpeter called “creative destruction”—for the United States, circa 2008, that would include the failure of a major financial institution or the deflation-cum-downward-revaluation of financial assets. My book Arrogant Capital (1994), following several notable bailouts, used this phraseology: “Financial mercantilism—government-business collaboration calculated to suspend or stymie market forces—has at least partly replaced yesteryear’s vibrant capitalism.”

Double Entry: How the Merchants of Venice Shaped the Modern World - and How Their Invention Could Make or Break the Planet
by Jane Gleeson-White
Published 14 May 2011

Like Sombart, Weber argues that double entry is significant because it makes possible an abstract measure of income and expenses—and therefore enables the calculation of profit, the key component of capitalistic business practice. Weber also believed that the formal rationality of double entry made the world a cold and disenchanted place—and, ominously, predicted that double entry would continue its rule ‘perhaps until the last ton of fossilized coal is burnt’. The economist Joseph Schumpeter (1883–1950) also traces the development of capitalism back to double-entry bookkeeping. In Capitalism, Socialism and Democracy, published in 1942, Schumpeter says that capitalism adds a new edge to rationality by ‘exalting the monetary unit—not itself a creation of capitalism—into a unit of account.

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p. 169 ‘The most general presupposition . . .’ Weber in Carruthers and Espeland, op. cit., p. 32. p. 169 ‘a rational capitalistic establishment . . .’ Weber in Michael J. Fischer, ‘Luca Pacioli on business profits’, Journal of Business Ethics, vol. 25, no. 4, June 2000, pp. 299–312. p. 169 ‘exalting the monetary unit . . .’ Joseph Schumpeter, Capitalism, Socialism and Democracy, Taylor & Francis e-Library, 1942, p. 123. p. 170 ‘generates a formal spirit of critique . . .’ D. Stephen Long, Divine Economy, Routledge, London, 2000, p. 18. p. 171 ‘Perhaps it is sufficient to . . .’ Yamey, Art and Accounting, op. cit., p. 82.

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality
by Branko Milanovic
Published 15 Dec 2010

After stating boldly, “I am simply investigating the uniformity of the phenomena” and “not seeking to convince anyone,” he, perhaps uniquely in the history of social sciences, warded off potential readers by warning them that “those who have another objective will have no trouble finding an infinity of works which will give them complete satisfaction; they need not read this one.”6 The malaise, Aron explained, stems from Pareto’s attitude, which in essence says that everything professors teach is false. But the professors, Pareto argued, must persevere in this falsehood because that’s the only thing the populace would ever understand, since to teach the truth would be fatal to any social order. In Pareto’s jargon: social equilibrium requires belief in nonlogical sentiments.7 This is how Joseph Schumpeter in his monumental History of Economic Analysis described Pareto:He was a man of strong passions, passions of the kind that effectively preclude a man from seeing more than one side of a political issue, or for that matter, of a civilization. This disposition was reinforced rather than mitigated by his classic education that made the ancient world as familiar to him as were his own Italy and France—the rest of the world just [barely] existed for him.8 Pareto wrote two influential (text)books of economics and is today, in the economics profession, remembered essentially for two contributions: Pareto improvement (or Pareto optimum) and Pareto’s “law” of income distribution.

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I am grateful to Andrea Brandolini for the information on Pareto. 5 Raymond Aron, Main Currents in Sociological Thought (New York: Pelican, 1967), 2:176. 6 Vilfredo Pareto, Manual of Political Economy, translated by Ann S. Schwirr (New York: Augustus M. Kelley, 1971), 2. 7 “This is why Pareto will always remain apart among professors and sociologists. It is almost intolerable to the mind, at least to a teacher, to admit that truth in itself can be harmful” (Aron, Main Currents, 2:177). 8 Joseph Schumpeter, A History of Economic Analysis (1952; reprint, New York: Oxford University Press, 1980), 860. 9 The formula is a bit more complicated. Say that the “guillotine” is 1.45. If n people have incomes higher than y, then increasing the threshold to 1.1y would reduce the number of people with such high incomes to n/(1.1)1.45 = n/1.148. 10 Pareto, Manual of Political Economy, 312. 11 Pareto died in 1923, a year after Mussolini came to power in Italy.

The Ascent of Money: A Financial History of the World
by Niall Ferguson
Published 13 Nov 2007

Evolutionary economics is in fact a well-established sub-discipline, which has had its own dedicated journal for the past sixteen years.21 Thorstein Veblen first posed the question ‘Why is Economics Not an Evolutionary Science?’ (implying that it really should be) as long ago as 1898.22 In a famous passage in his Capitalism, Socialism and Democracy, which could equally well apply to finance, Joseph Schumpeter characterized industrial capitalism as ‘an evolutionary process’: This evolutionary character . . . is not merely due to the fact that economic life goes on in a social and natural environment which changes and by its change alters the data of economic action; this fact is important and these changes (wars, revolutions and so on) often condition industrial change, but they are not its prime movers.

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Left to itself, natural selection should work fast to eliminate the weakest institutions in the market, which typically are gobbled up by the successful. But most crises also usher in new rules and regulations, as legislators and regulators rush to stabilize the financial system and to protect the consumer/voter. The critical point is that the possibility of extinction cannot and should not be removed by excessively precautionary rules. As Joseph Schumpeter wrote more than seventy years ago, ‘This economic system cannot do without the ultima ratio of the complete destruction of those existences which are irretrievably associated with the hopelessly unadapted.’ This meant, in his view, nothing less than the disappearance of ‘those firms which are unfit to live’.30 In writing this book, I have frequently been asked if I gave it the wrong title.

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Temin (eds.), Learning by Doing in Markets, Firms and Countries (Cambridge, MA, 1999), pp. 253-94. 27 The allusion is of course to Richard Dawkins, The Selfish Gene (2nd edn., Oxford, 1989). 28 Rudolf Hilferding, Finance Capital: A Study of the Latest Phase of Capitalist Development (London, 2006 [1919]). 29 ‘Fear and Loathing, and a Hint of Hope’, The Economist, 16 February 2008. 30 Joseph Schumpeter, The Theory of Economic Development (Cambridge, MA, 1934), p. 253. 31 Bertrand Benoit and James Wilson, ‘German President Complains of Financial Markets “Monster” ’, Financial Times, 15 May 2008. List of Illustrations Photographic acknowledgements are given in parentheses. Every effort has been made to contact all copyright holders.

Capital Ideas: The Improbable Origins of Modern Wall Street
by Peter L. Bernstein
Published 19 Jun 2005

That journal is now nearly sixty years old and commands wide respect among economists, statisticians, and mathematicians. The first issue of Econometrica, which appeared in January 1933, contained an introductory article by the famous Harvard economist and the first president of the Econometric Society, Joseph Schumpeter, as well as a timely paper by Irving Fisher titled “The Debt-Deflation Theory of Great Depressions.” The first fruit of Cowles’s own research into market forecasting, an article titled “Can Stock Market Forecasters Forecast?,” appeared in the July 1933 issue. A three-word abstract of the article concluded: “It is doubtful.”

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He set out to find an economist who could explain to his satisfaction what had caused the recent debacle in the nation’s economy, as Diogenes had set out with his lamp in search of one honest man. Williams got to know the greats of the Harvard economics faculty at the time—the quintessential Viennese Joseph Schumpeter, the plain midwestern American Alvin Hansen, and the irrepressible Wassily Leontief, newly arrived from the University of Kiel in Germany, to which he had fled after the Russian revolution. Much as Williams admired these figures, he confesses in his memoir that, like Diogenes, he never found the man he was seeking.

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Modigliani describes Burbank as “a famous anti-foreigner and anti-semite.”4 Samuelson is even harsher: “Burbank stood for everything in scholarly life for which I had utter contempt and abhorrence.”5 The interview did not go well. Burbank reviewed the list of all the famous people on the Harvard faculty, expressed his doubts that Modigliani could match their skills, and suggested that the young man go home.a Though he had decided that Harvard was clearly not for him, Modigliani did have lunch with Joseph Schumpeter and Gottfried Haberler while he was in Cambridge. Haberler was another senior and foreign-born member of the Harvard department. “They gave me hell,” Modigliani recalls, when he told them he had decided to return to the New School.6 They insisted that Burbank had overstepped his authority and had no business rejecting the choice of the economics faculty.

Samuelson Friedman: The Battle Over the Free Market
by Nicholas Wapshott
Published 2 Aug 2021

“Without exception, my mentors in Chicago said to go to Columbia,” he recalled. “I was never one particularly to accept advice of my elders and betters. And kind of by miscalculation I picked Harvard.”27 At Harvard, Samuelson was taught by a group of exceptional German and Austrian intellectuals escaping the tyranny of Nazism, among them Wassily Leontief,28 Joseph Schumpeter,29 Gottfried Haberler,30 and Alvin Hansen,31 known as “the American Keynes” for his adept, early, and highly influential exposition of Keynes’s 1936 masterwork, The General Theory, to American economists. The terms of Samuelson’s fellowship meant he could not study for a PhD, so he holed up in the Harvard library writing a succession of groundbreaking papers on mathematical economics.

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The more distinguished Samuelson’s career became, the more valuable his cache of papers was to a research university. In November 2006, Samuelson asked the Harvard Archive about lodging his voluminous files of personal and academic papers with the university. He reminded Harvard that they held Joseph Schumpeter’s papers, but that the archives of Nobelists Franco Modigliani and Robert Solow were to be found at the impressive library facilities at Duke University, in Durham, North Carolina. “When one stays preoccupied with doing new research,” he wrote, “little time is left to plan optimally autobiographical and archival matters.

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Samuelson Facts. https://www.nobelprize.org/prizes/economic-sciences/1970/samuelson/facts/. 15.Quoted in Friedman and Friedman, Two Lucky People, pp. 444–45. 16.Letter from Samuelson to Friedman, November 5, 1970. Hoover Institution Friedman archive. 17.Letter from Friedman to Arthur R. Nayer, October 13, 1970. Hoover Institution Friedman archive. 18.Samuelson named Jacob Viner, Frank Knight, Paul Douglas, Joseph Schumpeter, Wassily Leontief, Gottfried Haberler, Alvin Hansen, Lloyd Metzler, Robert Solow, James Tobin, Lawrence Klein, Robert Mundell, Joseph Stiglitz, Bertil Ohlin, Gunnar Myrdal, Erik Lundberg, Ingvar Svennilson, Gustav Cassel, Erik Lindahl, and Knut Wicksell. 19.https://www.nobelprize.org/uploads/2018/06/samuelson-lecture.pdf. 20.Ibid. 21.Thorstein Bunde Veblen, born Torsten Bunde Veblen in Norway (July 30, 1857–August 3, 1929), economist and sociologist best known for his idea of “conspicuous consumption”: people engage in conspicuous consumption, along with “conspicuous leisure,” to demonstrate their wealth or to mark social status. 22.Samuelson, “A few remembrances of Friedrich von Hayek (1899–1992),” Journal of Economic Behavior & Organization, vol. 69, no. 1, January 2009, pp. 1–4. 23.Friedman and Friedman, Two Lucky People, p. 445. 24.Larry Martz, “A Nobel for Friedman,” Newsweek, October 25, 1974. 25.Friedman and Friedman, Two Lucky People, p. 442. 26.Ibid. 27.Newsweek, October 25, 1976. 28.Friedman letter to Samuelson, October 20, 1976.

Money and Government: The Past and Future of Economics
by Robert Skidelsky
Published 13 Nov 2018

Pure research has long been recognized as an independent intellectual pursuit; its hallmark, disinterestedness; its purpose, the search for truth. The pecuniary interest of scholars is not directly involved in either the direction of their enquiry or its results. At the same time, there is what Joseph Schumpeter called the ‘sociology of success’. Put crudely, why are some ideas acceptable, and others rejected or marginalized? In the natural sciences this question is relatively easy to answer: newer ideas bring us closer to reality than 11 I n t roduc t ion the older ones. For this reason, quantum physics replaced classical physics.

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But as long as the central bank had the means of regulating the rate of money creation by the commercial banks, the existence of credit money seemed to pose no danger to its ability to control prices. The heroic faith in the QTM as a short-run stabilization policy instrument, even though the QTM was palpably untrue in the shortrun, is explained by the urgency of its therapeutic ambitions. Even economists such as England’s Dennis Robertson and the Austrian Joseph Schumpeter, for whom the business cycle was caused by ‘real’ shocks like technical innovations, thought that intelligent monetary policy could prevent the rocking tendency from becoming too violent. But as Eprime Eshag wrote, the QTM was ‘somewhat wanting and to a large extent irrelevant as an instrument of analysis of shortrun unemployment and production problems which became the primary concern of the economists during and after the [Great Depression]’.26 A pp e n di x 3.1: F ish e r’s E quat ion Fisher built up his equation as follows:27 MV = ∑pQ On the left, we have M for the money supply and V for the velocity of circulation.

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Keynes’s alternative view was that it was the Fed’s misguided raising of its discount rate, from 3.5 per cent to 5 per cent in January 1928, which led to the collapse of a healthy investment boom. It turned him permanently against the use of ‘dear money’ as a boom-control mechanism.15 ‘Never waste a recession,’ Joseph Schumpeter is said to have said. On the Austrian analysis, recessions give a chance to re-allocate ‘malinvested’ productive factors to efficient uses. They should therefore be allowed to run unhindered until they have done their work. Economists whose common sense had not been completely destroyed by their theories rejected the drastic cure of destroying the existing economy in order to rebuild it in the correct proportions.

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work
by Richard Florida
Published 22 Apr 2010

Despite the massive deprivation and human suffering they caused, these crises played a fundamental role in propelling the economy forward. They were critical moments when existing economic and social arrangements were remade, enabling new periods of economic growth. Born in the same year that Marx died, the great theorist of innovation and entrepreneurship, Joseph Schumpeter, used the phrase “creative destruction” to describe how economic crises sweep away old firms and outmoded economic systems and practices, clearing the way for entrepreneurs to introduce new technologies and even entirely new industries and setting into motion a new era of growth. John Maynard Keynes saw in these crises the need for government spending to essentially protect capitalism from itself.

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It would never grow rapidly again, he believed, because all the ingredients for growth, including technological innovation and population growth, had been exhausted, and deficit spending by the government was the only way out. The Great Depression set the stage for the Second Great Reset. Just as Hansen and others were advancing this theory and capturing the attention of policy makers and the public, his Harvard colleague Joseph Schumpeter was developing his own, more accurate assessment of the role of innovation in overcoming economic crises. Schumpeter, notes Field, had a much “better fix on what was going on. He developed his homage to the power of creative destruction against the backdrop of what has turned out to be the most technologically dynamic epoch of the twentieth century.”4 Field’s contention about the innovativeness of the Second Reset is based on detailed and meticulous research.

Broken Markets: A User's Guide to the Post-Finance Economy
by Kevin Mellyn
Published 18 Jun 2012

The markets and the largest investment-banking operations increasingly came to believe that the authorities would step in to prevent any reckoning for financial bets gone wrong. In this sense, the Great Moderation was at least as much a product of governments as it was of markets, something that pains the heart of free-market fundamentalists. The problem is that in a free market, everyone is free to fail. Indeed, something that Joseph Schumpeter called “creative destruction” is essential to economic progress.The Great Moderation was largely a one-way bet for market participants. Financial crises of one sort or another, which affected companies ranging from Japanese and Swedish banks to Long Term Capital, an American hedge fund, continued to occur.

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Price signals, while imperfect, communicate information relevant to investors and entrepreneurs, who essentially make bets on the future. Profits arise when change occurs in the market and someone seizes the opportunity before others. It is all a big experiment, but millions of autonomous decisions by buyers, sellers, and entrepreneurs sort out what works and what doesn’t, and the economy advances. Another great Austrian, Joseph Schumpeter, called this process “creative destruction,” in which enterprises are constantly dying and being born. The tidy minds of educated elites have always rebelled at this wasteful process. Surely science and analysis, supported by ever-better models and data, can do better than the random judgment of the financial markets.

The Global Auction: The Broken Promises of Education, Jobs, and Incomes
by Phillip Brown , Hugh Lauder and David Ashton
Published 3 Nov 2010

Trump cards held by workers in the competition for high-value work have been reshuffled as they have been throughout the history of capitalism. Governments have a political duty to privilege their citizens, but capitalism has no such loyalty. Where it is given room to breathe, it tirelessly accumulates capital in whatever ways it can with scant regard for existing arrangements. Joseph Schumpeter highlighted a relentless capitalism, which “is by nature a form or method of economic change.”1 If alive today, even Schumpeter may have been surprised by the scale of “perpetual commotion” in the economy in recent decades. He would also have been reminded of Karl Marx and Friedrich Engels’s words that under capitalism “all that is solid melts into air, all that is holy is profane, and man is at last compelled to face with sober senses, his real conditions of life, and his relations with his kind.”2 The real condition confronting many well-qualified Americans is an economy of knowledge caught in two minds.

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So we will continue in the hope that Americans, along with other developed and emerging nations, will ultimately rise to the national as well as global challenges that will shape the quality of life for the next generation. 164 The Global Auction Notes Chapter One 1. Alexis de Tocqueville, Democracy in America, vol. 2 (New York: Harper and Row, 1966 [1835]). 2. See Richard Rosecrance, The Rise of the Virtual State: Wealth and Power in the Coming Century (New York; Basic Books, 1999), xi. 3. Joseph Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1947), chap. 7. 4. Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, The War for Talent (Boston, Mass.: Harvard Business School Press, 2001). 5. Here “low wages” is a relative concept relating to the expectations of the rewards and career prospects associated with professional and managerial occupations.

Good Profit: How Creating Value for Others Built One of the World's Most Successful Companies
by Charles de Ganahl Koch
Published 14 Sep 2015

To make matters even worse, Hinkel’s had to pay transaction fees to banks on those card purchases (often as high as 5 percent), so its net gain from charge cards turned into a net loss. That pretty much finished off Hinkel’s and countless family-owned department stores like it, long before the Internet threatened brick-and-mortar retailers with creative destruction. Successful businesspeople stand on ground that is “crumbling beneath their feet,”2 said Joseph Schumpeter, who taught at Harvard in the 1930s and ’40s and is one of the most important economists of the twentieth century. His observation about the tenuousness of success is a tough fact every established business faces. At Koch, we’ve known for a long time that there is no getting around this reality.

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Chapter 2: KOCH AFTER FRED 1. F. A. Harper, Why Wages Rise (New York: The Foundation for Economic Education, 1957), p. 36. Chapter 3: QUEENS, FACTORY GIRLS, AND SCHUMPETER 1. Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper Perennial, 2008), p. 67. 2. Cited in “Joseph Schumpeter: In Praise of Entrepreneurs,” Books and Arts section, The Economist, April 28, 2007, p. 94. 3. Schumpeter, Capitalism, Socialism, and Democracy, p. 84. 4. Ibid., p. 83. 5. Letter from Fred Koch to Dr. Walter F. Rittman. 6. http://www.freetheworld.com​/2014/EFW2014-POST.pdf. 7. Based on data available through the year 2012.

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
by Justin Fox
Published 29 May 2009

In 1930 he had published The Theory of Interest, a polishing and rethinking of his earlier writings on financial economics that today is seen as his most important contribution to the field.23 And the mathematical approach he favored had finally begun to gain traction, especially in Europe. The wealth of 1920s America lured European scholars across the Atlantic. One of them, Norwegian future Nobelist Ragnar Frisch, persuaded Fisher to join him in launching an association of mathematically minded economists. Harvard’s Joseph Schumpeter, an Austrian-educated scholar who didn’t do much math himself but admired those who did, signed on as a cofounder. They dubbed their new group the Econometric Society, and began to hold occasional small meetings where papers were presented. They didn’t have the money to do much more. A letter arrived in Fisher’s mailbox from Cowles.

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Williams’s Theory was more congenial in its approach. Williams had been a junior investment banker in Boston when the great crash came. He stayed on at his firm until 1932, and then enrolled in Harvard’s economics Ph.D. program in hopes that he would learn to “understand the workings of the economy as a whole.” His faculty adviser Joseph Schumpeter was worried that Williams’s conservative political beliefs might rub others on the dissertation committee the wrong way and urged him to focus on a subject that no one would dare challenge him on.14 The result was The Theory of Investment Value. “Rational men, when they buy stocks and bonds, would never pay more than the present worth of the expected future dividends,” Williams wrote, “…nor could they pay less, assuming perfect competition, with all traders equally well informed.”15 The book was thus a guide to valuing stocks on the basis of projected future dividends, much as Irving Fisher had outlined back in 1906.

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The full text of Theory of Interest is available online at the Library of Economics and Liberty, www.econlib.org. 24. According to various Cowles Commission reports, attendees at the summer conferences, which ran from 1935 through 1940, included economists Ragnar Frisch, Trygve Haavelmo, Nicholas Kaldor, Oskar Lange, Wassily Leontief, Abba Lerner, Paul Samuelson, and Joseph Schumpeter; statistician-geneticist R. A. Fischer; statistical quality control pioneer Walter Shewhart; statisticians Corrado Gini (of “Gini coefficient” fame), Harold Hotelling, and Jacob Wolfowitz (who fathered a famous son named Paul); and mathematicians Karl Menger and Abraham Wald. 25. Alfred Cowles III, “Can Stock Market Forecasters Forecast?”

Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy
by Erik Brynjolfsson
Published 23 Jan 2012

Making progress in these two areas will be the best way to allow human workers and institutions to race with machines, not against them. Fostering Organizational Innovation How can we implement a “race with machines” strategy? The solution is organizational innovation: co-inventing new organizational structures, processes, and business models that leverage ever-advancing technology and human skills. Joseph Schumpeter, the economist, described this as a process of “creative destruction” and gave entrepreneurs the central role in the development and propagation of the necessary innovations. Entrepreneurs reap rich rewards because what they do, when they do it well, is both incredibly valuable and far too rare.

How Much Is Enough?: Money and the Good Life
by Robert Skidelsky and Edward Skidelsky
Published 18 Jun 2012

Aristotle is the classic source of pre-modern economic thought, for two reasons. First, unlike his more radical predecessor Plato, he did not try to conjure a social ideal out of pure reason. His goal was simply to organize the opinions of his educated contemporaries, to forge them into a system. Joseph Schumpeter’s description of his economic writings as “decorous, pedestrian, slightly mediocre, and more than slightly pompous common sense” is a caricature, but not a complete distortion.1 Second, and related to this, Aristotle was the dominant influence on all economic theorizing from the twelfth to the seventeenth century.

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Herbert Marcuse, One-Dimensional Man: Studies in the Ideology of Advanced Industrial Society, ed. Douglas Kellner (Boston: Beacon Press, 1991), pp. xlii, xxx. 52. Ibid., p. 246. 53. Herbert Marcuse, Eros and Civilization (New York: Random House, 1961), p. 48. 54. Ibid., p. 260. CHAPTER 3. THE USES OF WEALTH 1. Joseph Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), p. 57. 2. Aristotle, Nicomachean Ethics, tr. Christopher Rowe and Sarah Broadie (Oxford: Oxford University Press, 2002), p. 251. In Aristotle’s other major ethical work, the Eudemian Ethics, he is more even-handed between the active and the philosophical life. 3.

How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present
by Thomas J. Dilorenzo
Published 9 Aug 2004

The result is that the average American working person today lives better in many ways than kings did several hundred years ago, with his automobiles, central heating and air conditioning, swimming pools and hot tubs, inexpensive food, and all the other “necessities” of modern life that those kings would have considered miracles. All of this is the product of capitalism. The economist Joseph Schumpeter summed up how capitalism benefits the masses: The capitalist engine is first and last an engine of mass production which unavoidably also means production for the masses. . . . It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to the rich man.

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Neela Banerjee and David Firestone, “New Kind of Electricity Market Strains Old Wires Beyond Limits,” New York Times, August 24, 2003, 1. CHAPTER ONE: WHAT IS CAPITALISM? 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Random House, 1937), 422. 2. Ludwig von Mises, Liberalism: In the Classical Tradition (San Francisco: Cobden Press, 1985), 32. 3. Joseph Schumpeter, Capitalism, Socialism, and Democracy, 3rd ed. (New York: Harper and Row, 1962), 62. 4. Ludwig von Mises, Human Action: A Treatise on Economics (Auburn, AL: Ludwig von Mises Institute, 1998), 270. 5. Ibid., 272. 6. For the classic refutation of socialism as an economic system see Ludwig von Mises, Socialism (Indianapolis: LibertyClassics, 1981), first published in 1922.

Stuffocation
by James Wallman
Published 6 Dec 2013

Once you had noticed this happening with the process of producing yarn, you would also see that it was a natural part of the progress of other industries. Once someone discovered that making railroads with steel was better than iron, for instance, the iron tracks were obsolete. Actually, while you were about it, this theory did not just sound like a number of industries, it sounded a lot like capitalism. The Austrian American economist Joseph Schumpeter noticed this. “The same process of industrial mutation – if I may use that biological term,” Schumpeter wrote, “incessantly revolutionises the economic structure from within, incessantly destroys the old, incessantly creating a new one. This process of Creative Destruction is the essential fact about Capitalism.”

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“The same process of industrial mutation – if I may use that biological term,” Schumpeter wrote, “incessantly revolutionises the economic structure from within, incessantly destroys the old, incessantly creating a new one. This process of Creative Destruction is the essential fact about Capitalism.” From Joseph Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1942). Christine Frederick For more on Christine Frederick, read Christine McGaffey Frederick, Selling Mrs. Consumer (New York: Business Borse, 1929); also Janice Rutherford, Selling Mrs. Consumer: Christine Frederick and the Rise of Household Efficiency (Athens, Georgia: University of Georgia Press, 2003).

The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy
by Katherine M. Gehl and Michael E. Porter
Published 14 Sep 2020

: A Second Look (Chicago: University of Chicago Press, 2011); Frances McCall Rosenbluth and Ian Shapiro, Responsible Parties: Saving Democracy from Itself (New Haven: Yale University Press, 2018). 4. The early twentieth-century economist Joseph Schumpeter is often credited with first recognizing this analogy, relating parties to firms, voters to customers, votes to currency, and policies to products. See Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York, Harper and Brothers, 1942). For good recent summaries, see Ian Shapiro, The State of Democratic Theory (Princeton, Princeton University Press, 2003), 50–77; Jeffrey Edward Green, The Eyes of the People: Democracy in an Age of Spectatorship (New York; Oxford: Oxford University Press, 2010), 171–177. 5.

A Little History of Economics
by Niall Kishtainy
Published 15 Jan 2017

The gist of it was that because the economy couldn’t right itself, the government had to. It had to take on a larger role in the economy than ever before, in the hope that a disaster like the Great Depression would never happen again. Capitalism survived the storm, but it was changed forever. CHAPTER 19 Creative Destruction The Austrian economist Joseph Schumpeter (1883–1950) loved to show off his brilliant intellect and keen wit. He once said that he had three ambitions: to be the greatest economist in the world, the finest horseman in Austria and the best lover in Vienna. He regretted, he said, that he’d only succeeded in two of them, adding that, unfortunately, things hadn’t been going so well with the horses lately.

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The French economist Thomas Piketty (b. 1971) published a book in 2014, Capital in the Twenty-First Century, which examined the rise of the rich and confirmed fears about how fast they were pulling ahead of everybody else. How did the giants get so huge? Karl Marx said that they’re the capitalists who exploit the workers to make money; Joseph Schumpeter, that they’re bold people who take risks and get rich when they get lucky. Conventional economics has a less colourful story. The question is what determines wages, most people’s source of income. Economics says that workers are paid what they contribute to production. Educated people have skills that make them more productive, so they earn more.

Multitude: War and Democracy in the Age of Empire
by Michael Hardt and Antonio Negri
Published 1 Jan 2004

In effect, when scholars use the term anarchy to characterize such periods they usually refer not to an absence of power but merely to institutional chaos, excesses or defects of the production of norms, or conflicts among powers—and all of this was certainly present in England’s seventeenth-century interregnum as it is in today’s era of globalization. As Joseph Schumpeter says, just when it seems that the field is clear and empty, there are really already the seeds of “a tropical growth of new legal structures.”76 Our contemporary interregnum, in which the modern national paradigm of political bodies is passing toward a new global form, is also populated by an abundance of new structures of power.

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For the “republican” line, see the various publications that refer to “global civil society,” such as Mary Kaldor, Global Civil Society: An Answer to War (Cambridge: Polity, 2003); and the annual journal Global Civil Society, which began publication in 2001. 75 On the limitations of the “domestic analogy,” which attempts to link political forms on the global scene with those in the national framework, see Empire, 3-21. 76 Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper and Brothers, 1942), 141. 77 See Saskia Sassen, “The State and Globalization,” in Rodney Hall and Thomas Biersteker, eds., The Emergence of Private Authority in Global Governance (Cambridge: Cambridge University Press, 2002), 91-112. See also our Empire. 78 For a good summary of the theories of uneven development and unequal exchange, see B.

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To the extent that Leo Strauss is an intellectual point of reference for these neoconservatives, one might have suspected such a development after having read Strauss’s book on Spinoza, in which he gives a nihilistic interpretation of the ontology, a skeptical reading of ethics, and a cold reception of prophetic Judaism. It is an interpretation remarkably close to Schmitt’s reading of Hobbes. 118 See Joseph Schumpeter, Business Cycles (New York: McGraw-Hill, 1939). For Schumpeter’s theory of crisis, see also “The Analysis of Economic Change,” Review of Economic Statistics 17, (May 1935): 2-10; and “Theoretical Problems of Economic Growth,” Journal of Economic History 7 (November 1947): 1-9. 119 See Antonio Damasio, Looking for Spinoza: Joy, Sorrow, and the Feeling Brain (New York: Harcourt, 2003). 120 Eric Raymond, The Cathedral and the Bazaar (Sebastopol, CA: O’Reilly, 1999).

Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole
by Benjamin R. Barber
Published 1 Jan 2007

As Neal Gabler argues in his ongoing examination of Walt Disney’s world, when Steve Jobs (the key figure at Apple Computer and then Pixar Animation Studios) came to Disney in the Disney/Pixar merger, he brought along a democratic “bravado and disdain for traditional business practices.”27 This bravado is typical of many who work the web, whether as bloggers, program developers or, like Joe Trippi, Howard Dean’s campaign manager and web enthusiast, as new digital politicos. After all, the architecture of the web is horizontal, and many of its other features lend themselves both to leveling and resistance against authority. Can it be then that the new technologies are proof of the force Joseph Schumpeter called creative destruction: the capacity of capitalism to cure is own maladies through tumultuous developments it has itself produced? Perhaps. Yet it is important to recognize that democratic and felicitously anarchic as their architecture may be, new electronic technologies (like all technologies) ultimately tend to reflect the cultures that generate them.

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Also see Ulf Hannerz, Cultural Complexity: Studies in the Social Organization of Meaning (New York: Columbia University Press, 1992). 10. Tyler Cowen, Creative Destruction: How Globalization Is Changing the World’s Cultures (Princeton, N.J.: Princeton University Press, 2002), p. 22. Cowen’s title is drawn from classical economist Joseph Schumpeter’s description of the dialectic in which capitalism “creatively” destroys the stages it traverses as it evolves. For a detailed critique of Cowen, see my review “Brave New McWorld,” Los Angeles Times Book Review, February 2, 2003. 11. Cowen, Creative Destruction, p. 44. 12. Constance Classen, “Sugar Cane, Coca-Cola and Hypermarkets: Consumption and Surrealism in the Argentine Northwest,” in Howes, ed., Cross-Cultural Consumption, p. 39.

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Gabler’s Walt Disney: The Triumph of the American Imagination (New York: Knopf, 2006) makes a case along the lines of Thomas Frank’s argument introduced above treating certain archetypical business figures in the 1960s advertising industry as innovators and rebels against traditional business culture. Capitalism here seems to work at curing itself of its maladies through that creative destruction about which Joseph Schumpeter writes. 28. In the case of Howard Dean’s campaign, however, it did attempt to explore and exploit citizen-to-citizen communication in which elites and leaders were less central than civic community-building. This turned out, in political terms, to be something other than a virtue, as Dean found out in the Iowa caucuses.

Animal Spirits: The American Pursuit of Vitality From Camp Meeting to Wall Street
by Jackson Lears

We can but praise the high courage of the road breakers, admitting as we infallibly must in Gertrude Stein’s own words, and with true Bergsonian faith—‘Something is certainly coming out of them.’” The “Bergsonian faith” reflected the characteristic progressive belief that breakage and difficulty are mere products of the transition to Something Better. Technophiles and plutocrats would one day appropriate this strategy for their own purposes, and the economist Joseph Schumpeter would summarize it in his own influential phrase, “creative destruction.” Meanwhile Luhan summed up the Armory Show with characteristic self-dramatization, striking a revolutionary pose that was sharply at odds with her motto “Let it happen”: I felt as though the exhibition were mine. I really did.

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Not to mention a tolerance for radical uncertainty, from the outset. It all sounds a little like an expedition to the South Pole. Such were the possibilities of enterprise animated by animal spirits. Keynes’s discussion of animal spirits and long-term investment reveals him to be far more philosophically and psychologically interesting than Joseph Schumpeter, the economist who in recent years has been credited with displacing him as the presiding spirit of our entrepreneurial age. Schumpeter’s ideal entrepreneur turns out to be little more than a capitalist embodiment of conventional male will, spearheading the relentless forward march of technological innovation, leaving a trail of “creative destruction” in his wake.

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“Many roads are being broken”: Dodge to Stein, quoting Art and Decoration, March 1913, in ibid., 273. “the sound of breaking”: Virginia Woolf, “Mrs. Bennett and Mrs. Brown” [1926], in her The Captain’s Deathbed and Other Essays (1956), 115–17. “And out of the shattering”: Dodge to Stein, in A History, 273. “creative destruction”: Joseph Schumpeter, Capitalism, Socialism, and Democracy [1942] (third ed., 1950), 81. “I felt as though”: Luhan, Intimate Memories, 112. “Imagine suddenly”: Ibid., 134. “He is the most natural”: John Reed, “With Villa in Mexico,” Metropolitan 39 (Feb. 1914) 72. “Darktown Follies drew space”: James Weldon Johnson, Black Manhattan (1930), 192.

Stealth of Nations
by Robert Neuwirth
Published 18 Oct 2011

If society is devoted to the principle of profit as the root of life, he wrote, “the idea of freedom thus degenerates into a mere advocacy of free enterprise—which is today reduced to a fiction by the hard reality of giant trusts and princely monopolies.” (Polanyi’s contemporary, the economist Joseph Schumpeter, compressed this thought into a more striking image: “The stock exchange is a poor substitute for the Holy Grail.”) Polanyi saw the free market as a political construct and argued that the pursuit of profit alone would not liberate people from slavery or guarantee that we could not poison the planet.

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As Mother Courage tells her entourage in Bertolt Brecht’s play about a street peddler in medieval Europe’s Hundred Years’ War, “I won’t let you spoil my war for me. Destroys the weak, does it? Well, what does peace do for ’em, huh? War feeds its people better.” While Brecht’s words may sound shocking today, they’re not much different from what some respected economists have said. As Joseph Schumpeter, one of the great economic phrasemakers, put it, “No bourgeoisie ever disliked war profits.” Indeed, wartime profiteering extends to the modern era and to some conflicts that are considered far too noble and high-minded to have involved smuggling and profiteering. For instance, in order to channel the nation’s resources for World War II, the United States instituted stringent price controls.

Milton Friedman: A Biography
by Lanny Ebenstein
Published 23 Jan 2007

This is an epochmaking contribution to the tools of economic analysis, analogous to, but even more important than, Marshall’s discovery of the demand function.”6 Developed economies are, Hansen and other Keynesians believe, subject to long-term stagnation as a result of attempted excess savings. According to Joseph Schumpeter, who was often considered with Keynes to have been one of the two leading contemporary economists in the first half of the twentieth century, Keynes’s was a “doctrine that... can easily be made to say both that ‘who tries to save destroys real capital’ and that, via saving, ‘the unequal distribution of income is the ultimate cause of unemployment.’

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According to Henry Spiegel, a wellread and judicious historian of economic thought: “At the time when Viner taught at Chicago, the designation ‘Chicago School’ was not yet a commonly used term.”12 No reference to the “Chicago school” has been found in histories of economic thought written before the mid-1950s, including Joseph Schumpeter’s massive History of Economic Analysis, Joseph Dorfman’s multivolume The Economic Mind in American Civilization, and Paul Homan’s Contemporary Economic Thought. Similarly, there is apparently no reference to a “Chicago school” in the American Economic Review or Journal of Political Economy before the 1950s.

Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe
by Greg Ip
Published 12 Oct 2015

Several Austrian-born economists led by Friedrich Hayek argued that economic booms bred overinvestment in dubious or unprofitable projects, and reasoned that the economy required a slump to clear away this overhang of unneeded assets. “Depressions are not simply evils, which we might attempt to suppress,” wrote another of the Austrians, Joseph Schumpeter, “but forms of something which has to be done, namely, adjustment to change.” Anything that remedied the Depression would interfere with this necessary adjustment. This ecological view was shared by Andrew Mellon, Herbert Hoover’s Treasury secretary. He welcomed the cleansing effect of the Great Depression.

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Louis). 11 Wilson was quite taken: Woodrow Wilson, Papers of Woodrow Wilson, February 24, 1898, 440. 12 “What we are proceeding”: Ibid., December 23, 1913, 65. 13 “The whole country”: Quoted in “About… Robert Latham Owen,” accessed at http://www.kansascityfed.org/publicat/TEN/pdf/Fall2007/Fall07About.RobertOwen.pdf. 14 “forms of something which has to be done”: Joseph Schumpeter, “Depressions,” in Economics of the Recovery Program (New York: McGraw-Hill, 1934). 15 “liquidate labor, liquidate stocks”: Whether Mellon actually said this is unknown. It was attributed to him by Herbert Hoover in The Memoirs of Herbert Hoover, The Great Depression 1929–1941 (New York: Macmillan, 1952), 30. 16 had to restore prices and end deflation: Fisher’s views are well captured in Robert Loring’s Irving Fisher: A Biography (Hoboken, N.J.: Wiley, 1993), 240. 17 It was the engineer’s duty: Hoover wrote this in 1954 in Engineer’s Week.

Leading From the Emerging Future: From Ego-System to Eco-System Economies
by Otto Scharmer and Katrin Kaufer
Published 14 Apr 2013

Capital is an entrepreneurial capacity that propels the economy and drives the transformative process of value creation. Financial capital allows entrepreneurs to take an idea and move it toward action: to hire people, build a product that they envision, and create the infrastructure required to sustain a business. As described by the economist Joseph Schumpeter, this process is “creative destruction.”38 What drives it? In Schumpeter’s view, it is the entrepreneur. Schumpeter thought that capitalism would eventually destroy itself by crowding out entrepreneurs from increasingly bigger and more bureaucratic companies.39 While his view on entrepreneurs rings true to many, there is an even deeper force at work that drives entrepreneurial activity and value creation across all sectors of society.

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See Chinese government Benyus, Janine, 81 Berlin Wall, 27, 28, 36, 227 Beuys, Joseph, 192 Biodiversity, 81 Biodynamic farming, 82 Biomimicry, 81 Blind spot(s), 15, 80, 127, 138, 143–144 of cognition science, 145–146 consciousness, 67–69 in global discourse, 3 how to lead from the emerging future, 3–5 of leadership, 18, 19f source, 141–142 taking mainstream economic thought for granted, 15 of the 20th century, 143–144 See also Structural disconnects and system limits Bojonegoro, East Java, Indonesia shifting the field of democracy to 4.0, 198–201 Bosch, 136 Botsman, Rachel, 134, 135 Bouazizi, Mohamed, 28 Boycotts, 118 BRAC Bank, 98, 101, 232 Braungart, Michael, 81–82 Brazil, 62–63, 251 transforming the secretariat of the National Heritage (SPU), 201–203 See also Natura Brezhnev, Leonid, 63 Brill, Steven, 271n1 Britain, 135 Bronx Cooperative Development Initiative (BCDI), 248–249, 251 Bubbles compensation, 94 financial, 6, 7, 7f, 8, 47, 48, 54, 58, 93, 95–99 outmoded mental models giving rise to systemic, 3–4, 11 profit, 93–94 speculation, 99, 234–235, 234f technology, 7 Buber, Martin, 163 Buddhism, 141, 165, 166 Burnout, 39 Bush, George W., 20 Business Alliance for Local Living Economies (BALLE), 89–90, 218–219 Capital, 75, 77, 241 collectively creating, 100–102 myths about, 102 natural, human, industrial, and financial, 91–92 origin, history, and meanings of the term, 91 reclaiming our ownership of, 102–103 relinking financial with real, 90–103 Capitalism, 90 current crisis of, 137 evolution of, as evolution of consciousness, 51, 52f, 53–57 Joseph Schumpeter on, 96 Max Weber on, 79 shared ownership and, 135 stakeholder, 54 (see also Society 3.0) Capitalism 2.0, 92, 187 Capitalism 3.0, 92, 187 Cardoso, Fernando Henrique, 63 Cardoso, Marcelo, 222–223 Catholic Church, 32 Challenge-response model of economic evolution, 51, 52f, 55–56 Cheney, Dick, 20 Chernobyl disaster, 34–36 China, 60–61, 141 Chinese government, leading learning communities in the, 215–217 Cicero, 130 Citigroup, 10 Civil society movements, problems with the first wave of, 41 Civil society organizations (CSOs), 227 Climate and Development Knowledge Network (CDKN), 181 Action Lab Event, 181–182 Climate change, 37, 174 shifting the conversation on, 180–182 Clinton, Bill, 58 Closed heart, 32, 33 Closed-loop designs, 81–82 Closed mind, 32, 33 Closed will, 32, 33 “Closing-in” points, 240.

The End of Accounting and the Path Forward for Investors and Managers (Wiley Finance)
by Feng Gu
Published 26 Jun 2016

See Feng Gu and Baruch Lev, “Overpriced Shares, Ill-Advised Acquisitions, and Goodwill Impairment,” The Accounting Review 86 (2011): 1995–2022. 3. This brings to mind the great economist (“creative destruction”) Joseph Schumpeter: “Success in conducting a business enterprise depends under present conditions much more on the ability to deal with labor leaders, politicians and public officials than it does on business ability . . . Hence, except in the biggest concerns [companies] that can afford to employ specialists of all kinds, leading positions tend to be filled by “fixers” and “trouble shooters” rather than by “production men.” In Joseph Schumpeter, Capitalism, Socialism, and Democracy, 3rd ed. (New York: HarperPerennial, 1950), 386. 4.

No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy
by Linsey McGoey
Published 14 Apr 2015

They are a government-sanctioned monopoly permitting exclusive sales of a product for a limited period of time, protected by courts of law. In The Wealth of Nations, Smith suggested that, in instances where individuals take huge financial risks to come up with a new invention, it was not unreasonable for a government to grant a ‘monopoly of the trade for a certain number of years’. Over a century later, Joseph Schumpeter reiterated Smith’s sentiment. ‘Long-range investing under rapidly changing conditions, especially under conditions that change or may change any moment under the impact of new commodities and technologies, is like shooting at a target that is not only indistinct but moving – and moving jerkily at that’, he wrote.

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See Daniel Carrington and Karl Mathiesen, ‘Revealed: Gates Foundation’s $1.4 bn in Fossil Fuel Investments’ Guardian, 19 March 2015. 41Robert Black et al., ‘Accelerating the Health Impact of the Gates Foundation’, Lancet, vol. 373 (2009), 1584–5; see also Grieve Chelwa, ‘Economics Has an Africa Problem’, on Africa Is a Country (10 Febuary 2015), africasacountry.com, in which Chelwa criticizes the ‘expulsion of Africa from the debates that concern it’. 42The interview took place in April 2012. I have used a pseudonym at the researcher’s request. 43Personal communication. 44Smith, Wealth of Nations, 490. Joseph Schumpeter, Capitalism, Socialism and Democracy (New York: Harper & Row, 1975 [1942]), 88. CHAPTER SIX 1Gary Rivlin, The Plot to Get Bill Gates (New York: Three Rivers Press, 1999), 27. 2My discussion of Gates’s early years at Microsoft draws on a number of sources, in particular Rivlin, The Plot to Get Bill Gates; Ken Auletta, World War 3.0: Microsoft and its Enemies (New York: Random House, 2001); James Wallace and Jim Erickson, Hard Drive; Bill Gates, The Road Ahead (New York: Viking, 1995).

The Warhol Economy
by Elizabeth Currid-Halkett
Published 15 Jan 2020

Throw in the exponential rise in real estate costs in New York City, and the closing of CBGB became inevitable. Then artists and musicians will do what they always do: move to another blighted neighborhood, make it attractive, and move on. Conventional economic theory even describes this process—named “creative destruction” by the great economist Joseph Schumpeter over sixty years ago—positing that products, places, and ideas must be destroyed to generate a better version. Clubs may close, neighborhoods get gentrified, but creativity will find a new venue. And if you ask most economists, they would argue that the market fixes everything: good art rises to the top, and Manhattan is teeming with art galleries and music venues and remains one of the most culturally relevant hubs in the world.

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Part of the emergence of these sorts of horizontal relationships has to do with the amorphous nature of creativity and also the ability of different creative people to share resources, ideas and knowledge to create what Jane Jacobs called “new combinations.”18 Often these new permutations translate into collaborations across industries and new cultural consumer goods—what the economist Joseph Schumpeter termed “creative destruction”19 (although, writing in 1942, he wasn’t talking about rap music). As Shepard Fairey recounted, “Chuck D came in last week and signed a print. I like Public Enemy and Public Enemy likes me and so there’s a collaboration.” But what this example also speaks to is the symbiotic, interdependent relationships across creative industries, or rather, artistic and cultural production and commodificiation is not limited to one type of creativity.

The Relentless Revolution: A History of Capitalism
by Joyce Appleby
Published 22 Dec 2009

By the last three decades of the nineteenth century the United States and Germany had nurtured the innovations that picked up the beat of economic development. Constant innovations didn’t come without cost, because every improved device rendered obsolete its predecessor. Prodded by the lure of stronger sales and higher profits, backers of incessant inventiveness hurt established industries and firms. The early-twentieth-century Austrian economist Joseph Schumpeter captured the essence of capitalism, with his “creative destruction” of the old by the new.28 Rarely has anyone so precisely hit the nail on the head, implying the consequences associated with both “creative” and “destruction.” Less catchy is the economists’ take on this, “early obsolescence,” a phrase meant to indicate that commercial objects don’t grow old; they just become obsolete when they are replaced by something better.

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And therein lies a capitalist morality play. When in 1909 a federal court ordered the dissolution of Standard Oil, managers who had chafed under the centralization of authority in the company’s New York City headquarters had the chance to try new techniques. There’s almost a law hidden here, a corollary to Joseph Schumpeter’s famous remark that capitalism involved creative destruction. Capitalism benefits from periodic liberation from established authorities, freeing those who yearn to experiment, innovate, and learn from fresh ideas.50 Corporate power in the United States waxed strong as the nineteenth century came to an end.

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So along with all the newly minted scientists who found good jobs in higher education there were thousands in literature, philosophy, history, political science, and sociology who did so as well. With tenured positions within the academy, much of the country’s intelligentsia lost the acerbic tone of skeptical outsiders, common in Europe. The economist Joseph Schumpeter feared that capitalism would fail because of its cultural opponents. The American public has resoundingly supported capitalism and its demands on society in part because they have not been exposed to the withering commentary of critics. State legislatures and private philanthropists got behind the monumental effort to build university systems by opening up their purses.

The Technology Trap: Capital, Labor, and Power in the Age of Automation
by Carl Benedikt Frey
Published 17 Jun 2019

In 1900, the average housewife could still only dream of living like the upper classes, who had servants to do the most tedious household tasks for them. In the following decades every home suddenly got equal access to the electric servant. Washing machines, electric irons, and a host of other electric appliances took over hours of drudgery in the home. In short, the capitalist achievement, as the great economist Joseph Schumpeter observed, did not consist of providing “more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.”6 It is easy to oversimplify history. However, if there is one predominant factor underlying economic and social change over the past two centuries, it is surely the advancement of technology.

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Yet other technologies of the Industrial Revolution could have been invented and put into widespread use without advances in science. So why were they not? Broadly speaking, there are two strands of explanations. While some scholars have emphasized constraints on the supply of technology, others have pointed at limited demand. Joseph Schumpeter believed that for a given technology to be adopted, some kind of need must exist.2 This was also the view of Thomas Malthus, who reckoned that “necessity has been with great truth called the mother of invention. Some of the noblest exertions of the human mind have been set in motion by the necessity of satisfying the wants of the body.”3 A number of examples of technological developments since the Industrial Revolution that conform to this view spring to mind, including the Manhattan Project, set up by the U.S. government to develop an atomic bomb before Nazi Germany could do so; the steam engine developed by Thomas Savery to pump water out of British coal mines; and the interchangeable parts pioneered by Eli Whitney to “substitute correct and effective operations of machinery for the skill of the artist which is acquired only by long practice and experience; a species of skill which is not possessed in this country to any considerable extent.”4 To return to the preindustrial world, most demand-driven explanations of the lack of preindustrial growth tend to emphasize the fact that labor-saving technologies, which allow us to produce more with less, make economic sense only if capital is relatively cheap compared to labor.

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Yet in the eighteenth century they kept trickling down to working-class people, if not, perhaps, to the unskilled poor, cottagers and paupers, who constituted the bottom 20 percent of the income distribution.79 The fact that low-income households today have access to many things that weren’t available to Renaissance monarchs is indeed evidence of enormous material progress over the centuries. The capitalist achievement, as Joseph Schumpeter noted, was not to provide more silk stockings for monarchs but “bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.”80 But that does not make concerns over the well-being of the shrinking middle class moot. Nor does it make moot concerns over the fact that there are many necessities that are not getting any cheaper.

Everything Is Obvious: *Once You Know the Answer
by Duncan J. Watts
Published 28 Mar 2011

It assumes, in effect, that as long as economists have a good model of how individuals behave, they effectively have a good model for how the economy behaves as well. In eliminating the complexity, however, the representative-agent approach effectively ignores the crux of the micro-macro problem—the very core of what makes macroeconomic phenomena “macro” in the first place. It was for precisely this reason, in fact, that the economist Joseph Schumpeter, who is often regarded as the founding father of methodological individualism, attacked the representative-agent approach as flawed and misleading.10 In practice, however, methodological individualists have lost the battle, and not just in economics. Pick up any work of history, sociology, or political science that deals with “macro” phenomena, like class, race, business, war, wealth, innovation, politics, law, or government, and you will find a world populated with representative agents.

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This argument was made long ago by the physicist Philip Anderson in a famous paper titled “More Is Different” (Anderson 1972). 7. For Thatcher’s original quote, see Keay (1987). 8. The definition of “methodological individualism” is typically traced to the early twentieth century in the writings of the Austrian economist Joseph Schumpeter (1909, p. 231); however, the idea goes back much earlier, at least to the writings of Hobbes, and was popular among the thinkers of the Enlightenment, for whom an individualistic view of action fit perfectly with their emerging theories of rational action. See Lukes (1968) and Hodgson (2007) for a discussion of the intellectual origins of methodological individualism, as well as a scathing critique of its logical foundations. 9.

Capital Without Borders
by Brooke Harrington
Published 11 Sep 2016

Timothy Colclough, “To PTC or Not to PTC,” STEP Journal, November/December 2009, 51–53. 60. Friedman, Dead Hands. 61. Jason Sharman, Havens in a Storm: The Struggle for Global Tax Regulation (Ithaca, NY: Cornell University Press, 2006). 62. Daniel Bell, The Cultural Contradictions of Capitalism, 2nd ed. (London: Heinemann Educational Books, 1976). See also Joseph Schumpeter, “The Crisis of the Tax State,” in Wolfgang Stolper and Richard Musgrave, eds., International Economic Papers, no. 4, 5–38 (New York: Macmillan, 1954 [1918]). 63. Bruce Carruthers and Terence Halliday, Rescuing Business: The Making of Bankruptcy Law in Britain and the United States (Oxford: Oxford University Press, 1998), 60. 64.

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George Connor and Christopher Hammons, The Constitutionalism of American States (Columbia: University of Missouri Press, 2008). 13. Constitution of the Commonwealth of Massachusetts, Part I, Article VII, www.malegislature.gov/Laws/Constitution. 14. Jack Goldstone, Revolution and Rebellion in the Early Modern World (Berkeley: University of California Press, 1991). See also Joseph Schumpeter, Die Krise des Steuerstaats (Graz, Austria: Leuschner & Lubensky, 1918). 15. Edmund Burke, Reflections on the Revolution in France (Oxford, UK: Oxford University Press, 1999 [1790]). 16. Philipp Genschel, “Globalization and the Transformation of the Tax State,” European Review 13 (2005): 60. 17.

Can Democracy Work?: A Short History of a Radical Idea, From Ancient Athens to Our World
by James Miller
Published 17 Sep 2018

The land of Whitman’s democratic vistas was also a commercial republic of free individuals, who defined themselves by the things they possessed, the clothes they bought, the cultural goods they consumed—and these material preferences, as survey research revealed, could be roughly correlated with political preferences. Politics and capitalism could converge in ways unforeseen by Karl Marx. In 1942, Joseph Schumpeter, an economist who had been born in Moravia and raised in Vienna before moving to the United States in 1932 to teach at Harvard University, accurately depicted the strange results of merging a democratic faith with marketing methods refined by behavioral scientists. “What we are confronted with in the analysis of political processes,” he wrote, “is largely not a genuine but a manufactured will.

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Cole: a vision of democratic socialism for an industrial society ||| Walter Lippmann on the psychological limits to an informed public ||| John Dewey and the persistence of the democratic faith ||| Edward Bernays and the value of propaganda ||| George Gallup and the rise of survey research and public opinion polling ||| Joseph Schumpeter on democracy as “rule of the politician” ||| the cruel game of modern politics: sham democracies vs. democracy as a universal ideal, solemnized in the Universal Declaration of Human Rights of 1948 CODA: WHO ARE WE? Manhattan, January 2017, protesting the election of Donald Trump: “This is what democracy looks like”; but a democratic process also elected President Trump ||| when President Barack Obama said, “That’s not who we are,” who are “we”?

Ghost Road: Beyond the Driverless Car
by Anthony M. Townsend
Published 15 Jun 2020

This “city” of mechanical minions is, for now, walled in. But can this ruthless geometry be contained? Or is Amazon’s inevitable next move to carry this new town plan out into the larger world? Rarely has capitalism produced such a pure mechanism for “creative destruction,” that “process of industrial mutation” described by Joseph Schumpeter “that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Will these parcel-purveying machines prove as ruthlessly efficient at restructuring our communities, too? And if they succeed, will there will be room for us in this new city of boxes?

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Streets,” New York Times, October 28, 2019, https://www.nytimes.com/2019/10/27/nyregion/nyc-amazon-delivery.html. 136Amazon cornered the market: Scott Kirsner, “Acquisition Puts Amazon Rivals in Awkward Spot,” Boston Globe, December 1, 2013, https://www.bostonglobe.com/business/2013/12/01/will-amazon-owned-robot-maker-sell-tailer-rivals/FON7bVNKvfzS2sHnBHzfLM/story.html. 136100,000 of these diligent devices were reporting: Nick Wingfield, “As Amazon Pushes Forward with Robots, Workers Find New Roles,” New York Times, September 10, 2017, https://www.nytimes.com/2017/09/10/technology/amazon-robots-workers.html. 137cramming 50 percent more inventory: Ananya Bhattacharya, “Amazon Is Just Beginning to Use Robots in Its Warehouses and They’re Already Making a Huge Difference,” Quartz, June 17, 2016, https://qz.com/709541/amazon-is-just-beginning-to-use-robots-in-its-warehouses-and-theyre-already-making-a-huge-difference/. 137bots that slide along tracks suspended: Fiona Hartley, “Over 1,000 Robots Pack Groceries in Ocado’s Online Shopping Warehouse,” Dezeen, June 6, 2018, https://www.dezeen.com/2018/06/06/video-ocado-warehouse-shopping-robots-movie/. 137China’s JD.com employs a freakish spiderlike robot: JD.com, “Tour of the Warehouse of the Future,” YouTube video, May 11, 2017, https://www.youtube.com/watch?v=24T14VP5vVs. 137will face excruciating pressure to control carbon emissions: OECD/ITF, ITF Transport Outlook 2017 (Paris: OECD Publishing, 2017), https://www.ttm.nl/wp-content/uploads/2017/01/itf_study.pdf. 137“that incessantly revolutionizes the economic structure”: Joseph Schumpeter, Capitalism, Socialism, and Democracy (London, UK: Routledge, 1942), 82–83. 138Domino’s Pizza outlet averages a mere 1,500 square feet: United States Securities and Exchange Commission, Annual Report Pursuant to Section 13 or 15(d): Domino’s Pizza, December 29, 2013, p. 4, https://www.sec.gov/Archives/edgar/data/1286681/000119312514066092/d661353d10k.htm. 138cardboard pizza, scant sauce, and synthetic-tasting: Allison P.

Social Capital and Civil Society
by Francis Fukuyama
Published 1 Mar 2000

There is a significant and interesting literature on the “cultural contradictions of capitalism,” which argues that capitalist development ultimately undermines itself by producing insufficient norms, or else by producing norms at odds with those necessary for the operation of markets and innovation. Perhaps the most famous exponent of this view was Joseph Schumpeter, who argued in Capitalism, Socialism, and Democracy that capitalism tended to produce a class of elites over time that was hostile to the very forces that had made their lives possible and that they would eventually seek to replace market economies with socialist ones.1 Daniel Bell and others have written about the problems of affluence in undermining the work ethic and other kinds of norms necessary to the capitalist order.2 It is a staple of the contemporary literature about corporate layoffs and downsizing that the global economy has become an enemy of community by disrupting families, localities, and the loyalties that at one time pervaded the workplace.3 1 Joseph A.

Free Speech And Why It Matters
by Andrew Doyle
Published 24 Feb 2021

p.97the ‘gramophone mind’: George Orwell, ‘The freedom of the press’, in Davison, op. cit., pp. 888 –897. Quotation taken from p. 896. The essay was originally written as a preface to Orwell’s novel Animal Farm (London: Secker & Warburg, 1945), but was not published until the typescript was posthumously discovered in 1972. p.97we only enfeeble ourselves if we neglect to use them: Quoted by Joseph Schumpeter, Capitalism, Socialism and Democracy, fourth edition (London: George Allen & Unwin Ltd, 1954), p. 12. First edition published in 1943. Index A abuses of state power 67 academic freedom 60–3 Academic Freedom in an Age of Conformity (Williams) 63 Alibhai-Brown, Yasmin 21, 22 Almansor (Heine) 94 American Civil Liberties Union (ACLU) 19, 93 Ancient Greeks 58 ‘anecdotal evidence’ 32 anti-censorship campaigners 17 anti-Semitism 18–19, 66, 80 Arendt, Hannah 72 Areopagitica (Milton) 3–4 ‘art’ 56 artists 55–8 Associated Press 50 Atwood, Margaret 26 Auschwitz 80 authoritarianism 89 avoidance of conflict 35–6 B Barrett, Lisa Feldman 70 ‘Battle of Cable Street’ 20 Benn, Tony 69 Berkeley, University of California 33 Bernstein, Eduard 97 big tech corporations 11–13, 45 ‘blackshirts’ 20 blasphemy 51 Boghossian, Peter 74 ‘bonfire of the vanities’ 55 books censors 4 destruction 94 humanistic culture 9–10 moral or immoral 83 Botticelli, Sandro 55 Boyle, Danny 84 Bradbury, Ray 11 Brexit 67 British Library 95 C cancel culture 25–30, 42–3, 63, 96 Cardozo, Benjamin 33 Catholic Church 9 Cato Institute 28 Cave, Nick 27 Censored (Coleman) 87 censorship and the censors 85 and criticism 16, 24 and the Internet 13 metaphor of sunlight 44 of printed texts 4 right-leaning tabloids 7 right-wing talking point 6 and social media 11, 45 tech giants 13 Charbonnier, Stéphane (‘Charb’) 50, 51, 53 Charlie Hebdo 50, 51–3 ‘Charter 77’ committee 3 Chomsky, Noam 26 Christakis, Erika 61 Christakis, Nicholas 61–2 ‘Clean Up TV’ campaign 83 Clinton, Chelsea 79 Coleman, Paul 87 College of Policing 88 comedians and comedy 49–50, 56 see also satire Communications Act 2003 (UK) 66, 89 Communications Decency Act 1996 (US) 12 concept creep 46–7, 68 consent 75 Cope, Edward Drinker 74 Cox, Jo 82 Crash (Cronenberg) 84 criticism 16, 24, 32, 57 Cronenberg, David 84 ‘crowded theatre’ argument 22–4 Crown Prosecution Service 88 ‘culture wars’ 2, 63–4 D Danning, Gordon 81 Darwin, Charles 74 Davis, Daryl 17–18, 69 ‘Day of Absence’ protests 62 debating defeated ideas 68 Declaration of the Rights of Man and of the Citizen 10 decolonising authors 96 ‘Decolonising Working Group,’ British Library 95 Defending My Enemy (Neier) 19 democratic accountability 11 ‘despotism of custom’ (Mill) 57 dictatorships 90 ‘direct-effects model’ 84 Disclosure and Barring Service (DBS) 88 disinformation 85 Dissertation on First-Principles of Government (Paine) 18 diversity 33 ‘dog whistle’ 16 Dorsey, Jack 12 dystopian fiction 11 E Eddo-Lodge, Reni 27–8 emotional and intellectual comfort 37 emotional pain 75 ‘The English People’ (Orwell) 59 Enlightenment 10 European Court of Human Rights 87 European Union referendum (2016) 59 Evergreen State College 62 F Facebook 12, 13 ‘fact-checking’ 13 Fahrenheit 451 (Bradbury) 11 ‘fake news’ 12, 85 fascism 32–3, 67–8 feminism 71 First Amendment of the United States Constitution 10, 11 First Principles (Spencer) 43 forced conversions 43 Foucault, Michel 73 Foundation for Individual Rights in Education (FIRE) 61 Founding Fathers 10, 11 France 50 Frankfurt School 83 ‘free speech crisis’ 89 ‘Free Speech Is Killing Us’ (Marantz) 81–2 French Revolution 10 Fritsch, Theodor 66 G Galileo 4 ‘gaslighting’ 25–6 gender identity 30 gender-neutral pronouns 89 gender self-identification 26, 71 Goebbels, Joseph 66, 80, 94 Gopnik, Adam 72 ‘gramophone mind’ (Orwell) 97 ‘grossly offensive’ online speech 89 H Haidt, Jonathan 70, 71 Hall, Radclyffe 84 Hardy, Thomas 75 Harper’s Magazine 26–7 Hate Crime Operational Guidance (College of Policing) 88 ‘hate crimes’ 88 ‘hate incidents’ 88 ‘hate speech’ 12, 19, 87–91, 96–7 ‘hate speech’ laws 22, 52–3, 66–7, 87 Havel, Václav 3 Hazlitt, William 43, 60 Heine, Heinrich 94 higher education 60–1 see also universities historical discrimination 33 Hitchens, Christopher 3 Hitler 10, 66 Hobbes, Thomas 6 Holland, Tom 73–4 Holmes, Oliver Wendell 22–3 Holocaust denial 68 House of Commons 82 humanistic culture 9–10 Humberside Police 1 Hutus 77 I identity issues 33–4 identity-obsessed activism 83 ‘identity quakes’ 74 inciting violence 77–85 Internet 13, 45, 96 see also social media Is Free Speech Racist?

Cheap: The High Cost of Discount Culture
by Ellen Ruppel Shell
Published 2 Jul 2009

IKEA touts its “green side” by lighting its stores with low-wattage bulbs and charging extra for plastic bags while its clientele burns through gallon after gallon of fuel to buy disposable tables and lamps. Asked his assessment of company practices, MIT-trained urban development expert Wig Zamore said: “IKEA is the least sustainable retailer on the planet.” IN 1939, Harvard economist Joseph Schumpeter singled out key retail organizations as causing the “big disturbance.” He wrote that they “disrupt the existing system and enforce a distinct process of adaptation.” Typically, these outfits were founded by what he called “new men,” with “new capital.” Discounters from Woolworth to Walton to Kamprad are typical of these new men.

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,” Washington Post, July 9, 2008, A15. 137 Vietnam and other low-wage nations: See Anna Eriksson and Margareta Przedpel ska, “The Impact of Swedish Investment and Trade in Labour Conditions in Vietnam,” a master’s thesis online at www.ep.liu.se/exjobb/eki/2001.nek/018. 138 seven times the area of a football field: A football field is a bit less than 58,000 square feet in area. 138 500-kilometer radius: Karin Lundstrom, “Will IKEA Make the Arctic Bloom?” This Europe, November 29, 2007; see http://www.thiseurope.com/node/191. 138 charging extra for plastic bags: Avis Thomas-Lester, “IKEA Puts a Price on Throw-away Plastic,” Washington Post, March 16, 2007, B01. 139 “enforce a distinct process of adaptation”: Joseph Schumpeter, Business Cycles (New York: McGraw-Hill, 1939), 101. 140 “that could be moved around at will”: Richard Sennett, The Craftsman (New Haven, Conn.: Yale University Press, 2008). 143 consumer electronics shop members: Carol Stocker, “The Fix Is in Decline,” Boston Globe, February 10, 2005, H1. 143 young viewers were unlikely to encounter one: The Fix-It Shop was converted to a Mail-It Shop with a fax machine and shipping service.

Irrational Exuberance: With a New Preface by the Author
by Robert J. Shiller
Published 15 Feb 2000

The New York Stock Exchange was the only major stock market still open at the end of July 1914, the only place where stocks could still be converted into cash, and that was thought to be an untenable situation. There might well have been a world stock market crash of record proportions at that time, but we will never know, since it was forestalled by the market closings. 22. See James Tobin, “The New Economics One Decade Older,” in The Eliot Janeway Lectures on Historical Economics in Honor of Joseph Schumpeter (Princeton, N.J.: Princeton University Press, 1974); James Tobin, “A Proposal for International Monetary Reform,” Eastern Economic Journal, 4 (1978): 153–59; and Barry Eichengreen, James Tobin, and Charles Wyplosz, “Two Cases for Sand in the Wheels of International Finance,” Economic Journal, 105 (1995): 162–72.

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Legalized Gambling: A Reference Handbook. Santa Barbara, Calif.: ABC-CLIO, 1994. Tobias, Andrew. “The Billion-Dollar Harvard-Yale Game.” Esquire, December 19, 1978, pp. 77–85. Tobin, James. “The New Economics One Decade Older,” in The Eliot Janeway Lectures on Historical Economics in Honor of Joseph Schumpeter. Princeton, N.J.: Princeton University Press, 1974. ———. “A Proposal for International Monetary Reform.” Eastern Economic Journal, 4 (1978): 153–59. Tversky, Amos, and Daniel Kahneman. “Judgment under Uncertainty: Heuristics and Biases.” Science, 185 (1974): 1124–31. Ul Haq, Mahbub, Inge Kaul, and Isabelle Grunberg (eds.).

The Paypal Wars: Battles With Ebay, the Media, the Mafia, and the Rest of Planet Earth
by Eric M. Jackson
Published 15 Jan 2004

While this is an impressive track record by most standards, it’s far short of what our group initially hoped to accomplish. I may not have fully appreciated it when I accepted the CEO’s invitation to join what was then a tiny startup, but it stands to reason that the creation of most technology ventures is by necessity a tumultuous process. Joseph Schumpeter, a Harvard economist, dubbed the process of entrepreneurs unleashing new innovations into the marketplace as “creative destruction” because it invariably shakes up the existing economic order.1 Looking back, this term is certainly appropriate to describe what PayPal set out to do, and it also hints at the turbulence that accompanied our efforts.

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Management teams also need to motivate their employees by making them feel that their company is somehow special. Both cases certainly applied to Confinity. But those observations alone don’t diminish the magnitude of Peter’s vision. Even though he never used the exact words, he was pledging to turn Confinity into nothing less than an initiator of the “creative destruction” that Joseph Schumpeter described sixty years earlier. He genuinely seemed to believe that this little startup had the ability to upend the world’s financial systems by giving consumers unparalleled power over their own finances. Say what you will about this vision’s credibility, but in the days that followed his speech I became convinced that Peter wasn’t the only person in the office who believed it.

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire
by Bruce Nussbaum
Published 5 Mar 2013

Funding Circle, for example, has lent $37 million to six hundred local businesses and Crowdcube has raised about $4 million in equity capital for more than a dozen companies. If Americans shifted just half of their combined $30 trillion of investments in multinational conglomerates to local businesses, argues Cortese, “we’d be living in a far different world.” CREATIVE DESTRUCTION AND CREATIVE EDUCATION In Capitalism, Socialism and Democracy, Joseph Schumpeter wrote, “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.” Schumpeter, the father of “creative destruction,” saw a version of capitalism in which entrepreneurs were the central, disruptive energy sustaining economic growth.

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Volume 11, “Laissez-faire: Pro and Con” (Chicago: University of Chicago Press, 1999). 244 Fortunately, there are “incubators”: Nicole Davis, “Putting Your Money Where Your Mom and Pops Live,” Brooklyn Based, March 3, 2012, accessed September 15, 2012, http://brooklynbased.net/email/2012/ 03/putting-your-money-where-your-mom-and-pops-live/. 244 As Amy Cortese, a crowdfunding: http://www.amycortese.com/Amy_Cortese_homepage.html, accessed September 15, 2012; Davis, “Putting Your Money Where Your Mom and Pops Live.” 244 ”people need to be able: Amy Cortese, correspondence with author, August 7, 2012. 244 Cortese believes that: Ibid. 244 Smallknot, for example: Davis, “Putting Your Money Where Your Mom and Pops Live.” 244 Egg restaurant in Brooklyn: Ibid. 244 The forty-five investors: Smallknot profile of Egg restaurant campaign, http://smallknot.com/egg, accessed September 15, 2012. 244 Smallknot was founded by two: Andrew Cominelli, “Smallknot Redefines Small Business Finance,” Greenpoint Gazette, March 14, 2012, accessed September 15, 2012, http://www.greenpointnews.com/news/4316/ smallknot-redefines-small-business-finance. 245 “We were working all hours”: Ibid. 245 “Local crowdfunding can mitigate”: Amy Cortese, correspondence with author, August 7, 2012. 245 In Britain, crowdfunding: http://locavesting.blogspot.com, accessed October 18, 2012. 245 Funding Circle, for example: http://www.fundingcircle.com/, accessed September 15, 2012. 245 If Americans shifted just half: Danielle Sacks, interview with Amy Cortese, “ ’Locavesting’: Investing in Main Street Instead of Wall Street,” Fast Company, accessed October 18, 2012, http://www.fastcoexist.com/1678356/ locavesting-investing-in-main-street-instead-of-wall-street. 245 In Capitalism, Socialism and Democracy: Joseph Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1975; orig. pub. 1942), 82–85. CHAPTER 9 251 Sixteen of us had spent: Future of Design Summit, Stanford, March 19 to 20, 2010. Among the others at the summit were Nick Leon, now director of Design London; Bill Burnett, Executive Director of the Stanford Design Program; Ronald Jones, who leads the Experience Design Group at Konstfack University College of Arts, Crafts and Design in Stockholm; Nathan Shedroff, who was then launching a design strategy MBA at California College of the Arts in San Francisco; and Jacob Mathew, cofounder of IDIOM, a top innovation consultancy in India. 253 Roger Martin at the Rotman: I talk with Roger Martin often and have done many interviews and panels with him over the last fifteen years, but he shared this important bit of advice about assessing creativity during an online discussion.

A Pelican Introduction Economics: A User's Guide
by Ha-Joon Chang
Published 26 May 2014

South Korea may rely more on market solutions than Britain does in the provision of health care, but the case is the reverse in water or railways. If the ‘slippery slope’ existed, we wouldn’t have these kinds of diversity. The (Neo-)Schumpeterian School One-sentence summary: Capitalism is a powerful vehicle of economic progress, but it will atrophy, as firms become larger and more bureaucratic. Joseph Schumpeter (1883–1950) is not one of the biggest names in the history of economics. But his thoughts were original enough to have a whole school named after him – the Schumpeterian, or neo-Schumpeterian, school.* (Not even Adam Smith has a school named after him.) Like the Austrians, Schumpeter worked under the shadow of the Marxist school – so much so that the first four chapters of his magnum opus, Capitalism, Socialism, and Democracy (henceforth CSD), published in 1942, are devoted to Marx.17 Joan Robinson, the famous Keynesian economist, once famously quipped that Schumpeter was just ‘Marx with the adjectives changed’.

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He is often thought of as an Austrian economist (no, not by his nationality – he was an American), but he had a lot of Institutionalist influences, and some of his ideas overlap with the Keynesian and the Behaviouralist ones. 2. Physicists have tried, and failed, to construct what they call the ‘theory of everything’. 3. ‘… and in their darkness bind them all’, goes the rest of the sentence. 4. Joseph Schumpeter emphasized that all analysis in economics is preceded by a pre-analytical cognitive act, called vision, in which the analyst ‘visualise[s] a distinct set of coherent phenomena as a worth-while object of [his] analytic efforts’. He pointed out that ‘this vision is ideological almost by definition’, as ‘the way in which we see things can hardly be distinguished from the way in which we wish to see them’.

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab
Published 7 Jan 2021

Perhaps as consequence of the much more positive role technology and companies played in this Western golden age, people's ideological views on capital versus labor and man versus machine softened significantly. Importantly, economists too touted more the positive effects of enterprises and their innovations in societal and economic development. Austrian economist Joseph Schumpeter already in the 1940s saw a world emerge in which “creative destruction”42 led to the breakdown of old companies and their products, by new companies and their breakthrough technologies. The car replaced the horse, the plane replaced the ship, and electric household devices replaced domestic workers.

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Yuval Noah Harari, for example, is much less upbeat about the impact of the agricultural revolution on the quality and quantity of food supply on people. 37 A Tale of Two Cities, Charles Dickens, Chapman & Hall, 1859. 38 “The Emma Goldman Papers,” Henry Clay Frick et al., University of California Press, 2003, https://www.lib.berkeley.edu/goldman/PublicationsoftheEmmaGoldmanPapers/samplebiographiesfromthedirectoryofindividuals.html. 39 “Historical Background and Development Of Social Security,” Social Security Administration, https://www.ssa.gov/history/briefhistory3.html. 40 “Standard Ogre,” The Economist, December 1999, https://www.economist.com/business/1999/12/23/standard-ogre. 41 “The Presidents of the United States of America”: Lyndon B. Johnson, Frank Freidel and Hugh Sidey, White House Historical Association, 2006, https://www.whitehouse.gov/about-the-white-house/presidents/lyndon-b-johnson/ 42 Term coined in “Capitalism, Socialism and Democracy”, Joseph Schumpeter, Harper Brothers, 1950 (first published 1942) 43 “A Friedman Doctrine—The Social Responsibility Of Business Is to Increase Its Profits,” Milton Friedman, The New York Times, September 1970, https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html. 44 Global Income Distribution From the Fall of the Berlin Wall to the Great Recession, Christoph Lakner and Branko Milanovic, World Bank, December 2013, http://documents.worldbank.org/curated/en/914431468162277879/pdf/WPS6719.pdf 45 “Deconstructing Branko Milanovic's ‘Elephant Chart’: Does It Show What Everyone Thinks?”

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab and Peter Vanham
Published 27 Jan 2021

Perhaps as consequence of the much more positive role technology and companies played in this Western golden age, people's ideological views on capital versus labor and man versus machine softened significantly. Importantly, economists too touted more the positive effects of enterprises and their innovations in societal and economic development. Austrian economist Joseph Schumpeter already in the 1940s saw a world emerge in which “creative destruction”42 led to the breakdown of old companies and their products, by new companies and their breakthrough technologies. The car replaced the horse, the plane replaced the ship, and electric household devices replaced domestic workers.

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Yuval Noah Harari, for example, is much less upbeat about the impact of the agricultural revolution on the quality and quantity of food supply on people. 37 A Tale of Two Cities, Charles Dickens, Chapman & Hall, 1859. 38 “The Emma Goldman Papers,” Henry Clay Frick et al., University of California Press, 2003, https://www.lib.berkeley.edu/goldman/PublicationsoftheEmmaGoldmanPapers/samplebiographiesfromthedirectoryofindividuals.html. 39 “Historical Background and Development Of Social Security,” Social Security Administration, https://www.ssa.gov/history/briefhistory3.html. 40 “Standard Ogre,” The Economist, December 1999, https://www.economist.com/business/1999/12/23/standard-ogre. 41 “The Presidents of the United States of America”: Lyndon B. Johnson, Frank Freidel and Hugh Sidey, White House Historical Association, 2006, https://www.whitehouse.gov/about-the-white-house/presidents/lyndon-b-johnson/ 42 Term coined in “Capitalism, Socialism and Democracy”, Joseph Schumpeter, Harper Brothers, 1950 (first published 1942) 43 “A Friedman Doctrine—The Social Responsibility Of Business Is to Increase Its Profits,” Milton Friedman, The New York Times, September 1970, https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html. 44 Global Income Distribution From the Fall of the Berlin Wall to the Great Recession, Christoph Lakner and Branko Milanovic, World Bank, December 2013, http://documents.worldbank.org/curated/en/914431468162277879/pdf/WPS6719.pdf 45 “Deconstructing Branko Milanovic's ‘Elephant Chart’: Does It Show What Everyone Thinks?”

Antifragile: Things That Gain From Disorder
by Nassim Nicholas Taleb
Published 27 Nov 2012

Thanks to optionality, it becomes tamed and harvested randomness. Creative and Uncreative Destructions Someone who got a (minor) version of the point that generalized trial and error has, well, errors, but without much grasp of asymmetry (or what, since Chapter 12, we have been calling optionality), is the economist Joseph Schumpeter. He realized that some things need to break for the system to improve—what is labeled creative destruction—a notion developed, among so many other ones, by the philosopher Karl Marx and a concept discovered, we will show in Chapter 17, by Nietzsche. But a reading of Schumpeter shows that he did not think in terms of uncertainty and opacity; he was completely smoked by interventionism, under the illusion that governments could innovate by fiat, something that we will contradict in a few pages.

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It is equivalent to disrupting the natural chemistry of your body by the injection of hormones. The Apollonian without the Dionysian is, as the Chinese would say, yang without yin. Nietzsche’s potency as a thinker continues to surprise me: he figured out antifragility. While many attribute (mistakenly) the notion of “creative destruction” to the economist Joseph Schumpeter (not wondering how something insightful and deep can come out of an economist),2 while, as we saw, the more erudite source it to Karl Marx, it is indeed Nietzsche who was first to coin the term with reference to Dionysus, whom he called “creatively destructive” and “destructively creative.” Nietzsche indeed figured out—in his own way—antifragility.

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Ziliak, 1996, “The Standard Error of Regressions.” Journal of Economic Literature 34(1): 97–114. McConaugby, D., C. Matthews, and A. Fialko, 2001, “Founding Family Controlled Firms: Performance, Risk and Value.” Journal of Small Business Management 39: 31–49. McCraw, Thomas 2007, Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: The Belknap Press of Harvard University. McGill, S., 2007, Low Back Disorders: Evidence-Based Prevention and Rehabilitation. Human Kinetics Publishers. McGrath, R. G., 1999, “Falling Forward: Real Options Reasoning and Entrepreneurial Failure.” Academy of Management Review: 13–30.

Tesla: Inventor of the Electrical Age
by W. Bernard Carlson
Published 11 May 2013

As Chapter 1 will reveal, Tesla’s father and uncles were all priests in the Serbian Orthodox Church and Tesla absorbed something of that faith’s beliefs that through the Son of God, the Word or Logos, everything in Creation is endowed with an underlying principle.18 In this sense, Tesla was much like the great British scientist Michael Faraday, whose research in electricity and chemistry was strongly influenced by his religious beliefs; Faraday was a member of the Sandemanian Church, a Christian sect founded in 1730 that gave Faraday a strong sense of the unity of God and nature.19 In taking an idealist approach to invention, Tesla was exhibiting what the economist Joseph Schumpeter called subjective, as opposed to objective, rationality (see Chapter 2). For Schumpeter, engineers and managers come up with incremental innovations by going out and assessing existing needs whereas entrepreneurs and inventors introduce radical and disruptive innovations by responding to ideas that come from within.20 With objective rationality, the individual shapes ideas in response to the outside world (the market) whereas with subjective rationality, the individual reshapes the outside world to conform to his or her internal ideas.

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The inventor, I thought, gives to the world creations which are palpable, which live and work.”49 CREATIVE DESTRUCTION AND SUBJECTIVE RATIONALITY Before we leave Tesla and Szigeti in the park, we should take a moment to reflect on the nature of Tesla’s insight that afternoon, not just from a technical viewpoint but from a cognitive perspective as well. To do so we need to connect Tesla with the economist Joseph Schumpeter’s ideas about innovation and the creative destruction of capitalism. Schumpeter was fascinated by the role that innovation played in the modern economy, and he emphasized in his writings that there were two kinds of innovative activity. On the one hand, there are the creative responses of entrepreneurs and inventors who introduce radically new products, processes, and services and in so doing wreak the creative destruction that Schumpeter regarded as a central characteristic of capitalism.

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Bertram Hopkinson (Cambridge: Cambridge University Press, 1901), 1:57–83, on 67–69. 49. 1915 Autobiographical Sketch, A198. 50. Clayton M. Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School Press, 1997). 51. Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction (Cambridge, MA: Belknap Press of Harvard University Press, 2007). 52. Schumpeter, “Rationality in the Social Sciences,” 329–30. CHAPTER THREE LEARNING BY DOING 1. NT, My Inventions, 65. 2. See Osana Mario, “Historische Betrachtungen uber Teslas Erfindungen des Mehrphasenmotors und der Radiotechnick um die Jahrhundertwende,” in Nikola Tesla-Kongress für Wechsel- und Drehstromtechnik, proceedings of a conference held at the Technical Museum in Vienna, 6–13 September 1953 (Vienna: Springer-Verlag, 1953), 6–9, on 7.

A Culture of Growth: The Origins of the Modern Economy
by Joel Mokyr
Published 8 Jan 2016

—David Hume, 1742 Contents Acknowledgments ix Preface xiii Part I: Evolution, Culture, and Economic History Chapter 1: Culture and Economics 3 Chapter 2: Nature and Technology 16 Chapter 3: Cultural Evolution and Economics 22 Chapter 4: Choice-based Cultural Evolution 34 Chapter 5: Biases in Cultural Evolution 43 Part II: Cultural Entrepreneurs and Economic Change, 1500–1700 Chapter 6: Cultural Entrepreneurs and Choice-based Cultural Evolution 59 Chapter 7: Francis Bacon, Cultural Entrepreneur 70 Chapter 8: Isaac Newton, Cultural Entrepreneur 99 Part III: Innovation, Competition, and Pluralism in Europe, 1500–1700 Chapter 9: Cultural Choice in Action: Human Capital and Religion 119 Chapter 10: Cultural Change and the Growth of Useful Knowledge, 1500–1700 142 Chapter 11: Fragmentation, Competition, and Cultural Change 165 Chapter 12: Competition and the Republic of Letters 179 Part IV: Prelude to the Enlightenment Chapter 13: Puritanism and British Exceptionalism 227 Chapter 14: A Culture of Progress 247 Chapter 15: The Enlightenment and Economic Change 267 Part V: Cultural Change in the East and West Chapter 16: China and Europe 287 Chapter 17: China and the Enlightenment 321 Epilogue: Useful Knowledge and Economic Growth 339 References 343 Index 381 Acknowledgments This book had its origins in the Joseph Schumpeter lectures I delivered in Graz in November 2010 and I am deeply grateful to my hosts at the Schumpeter Society for their hospitality and penetrating comments at an early stage. Books based on endowed lectures tend to be relatively short. This book, however, took on a life of its own, and chapters kept being added.

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Thus there were many forms of socialist thought before Marx, and his great achievement was to unify and coordinate these belief into a cohesive doctrine. Psychiatry was a messy body of knowledge until Freud came along. Scholarship on the great cultural entrepreneurs in history is vast. Multitudinous bookshelves are devoted to the works of Adam Smith and Sigmund Freud, and even more minor cultural entrepreneurs such as Ayn Rand, Joseph Schumpeter, Michel Foucault, and Herbert Marcuse. Some may find a great deal of interest in parsing and exegesizing the exact words of cultural entrepreneurs to find out what the Master “really meant.” However, because my purpose is to uncover how cultural change affected actual events and outcomes, what is of concern to us is what people actually extracted and learned from the cultural entrepreneurs and how they changed their economic behavior as a result.

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Belfanti, Carlo Marco. 2004. “Guilds, Patents, and the Circulation of Technical Knowledge.” Technology and Culture Vol. 45, No. 3, pp. 569–89. Bell, A.E. 1947. Christian Huygens and the Development of Science in the Seventeenth Century. London: Edward Arnold. Benabou, Roland. 2008. “Ideology (Joseph Schumpeter Lecture).” Journal of the European Economic Association Vol. 6, Nos. 2-3, pp. 321–52. Benabou, Roland, Davide Ticchi, and Andrea Vindign,. 2014. “Forbidden Fruits: The Political Economy of Science, Religion and Growth.” Unpublished working paper, Princeton University. Benhabib, Jess and Spiegel, Mark M. 2005.

With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough
by Peter Barnes
Published 31 Jul 2014

California Public Utilities Commission, “Decision Adopting Cap-and-Trade Greenhouse Gas Allowance Revenue Allocation Methodology for the Investor-Owned Electric Utilities, San Francisco,” 2012, 58, http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M031/K744/31744787.pdf. Chapter 9: From Here to the Adjacent Possible 1. Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper & Row, 1942). 2. Niles Eldredge and Stephen Jay Gould, “Punctuated equilibria: An alternative to phyletic gradualism,” in T. J. M. Schopf, ed., Models in Paleobiology (San Francisco: Freeman Cooper, 1972, 82—115, http://www.blackwellpublishing.com/ridley/clas-sictexts/eldredge.pdf. 3.

Why Wall Street Matters
by William D. Cohan
Published 27 Feb 2017

It’s impossible, of course, to try to surmise what would have happened if the Federal Reserve and the Treasury had not bailed out Wall Street in 2008, because the Fed and the Treasury did bail out Wall Street in 2008. And by the way, though people may forget, that is exactly why the Federal Reserve was set up in the first place a century earlier: to bail out Wall Street if needed and to save capitalism from itself, the seeds of its own destruction having been sown from the start, as the economist Joseph Schumpeter famously argued. Still, we fume. At the infamous April 2009 meeting in the Roosevelt Room at the White House between President Obama, then three months into the job, and the CEOs of the nation’s biggest and most powerful banks, the mood was tense, to say the least. The stock market had hit its relative lows during the previous month.

Exceptional People: How Migration Shaped Our World and Will Define Our Future
by Ian Goldin , Geoffrey Cameron and Meera Balarajan
Published 20 Dec 2010

The creation of new industries and markets displaces people from their old jobs and generates opportunities elsewhere. As has been mentioned already, in low-and middle-income countries, economic development typically promotes migration.76 The process of economic transformation into an industrial economy displaces traditional livelihoods in favor of large-scale production through the process Joseph Schumpeter called “creative destruction”: The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.77 The incorporation of developing countries into the global economy, rather than halting migration, can stimulate movement through the disruptive process of social and economic reorganization.

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Edward Taylor (eds.), International Migration: Prospects and Policies in a Global Market. Oxford, UK: Oxford University Press, pp. 15–34, p. 33. 71. Quoted in Castles and Miller, 2009: 224. 72. Pritchett, 2006: 30. 73. Massey et al., 2002: 13. 74. Ibid., 2002: 15. 75. Pritchett, 2006: 43–62. 76. de Haas, 2008. 77. Joseph Schumpeter. 1942 [1975]. Capitalism, Socialism and Democracy. New York: Harper, pp. 82–85. 78. Saskia Sassen. 1988. The Mobility of Labour and Capital: A Study of International Investment and Labor Flow. Cambridge, UK: Cambridge University Press, p. 18. 79. Ibid.: 19. 80. Massey and Taylor, 2004: 385. 81.

Seventeen Contradictions and the End of Capitalism
by David Harvey
Published 3 Apr 2014

It sets up a train of technological accommodations and of new problems, and in so doing it creates new opportunity niches that call forth fresh combinations which in turn introduce further technologies – and further problems … The economy therefore exists always in a perpetual openness of change – in perpetual novelty. It exists perpetually in a process of self-creation. It is always unsatisfied … The economy is perpetually constructing itself.6 New technological configurations displace the old and in so doing initiate phases of what the economist Joseph Schumpeter famously dubbed ‘gales of creative destruction’.7 Whole ways of life and modes of being and thinking have to drastically alter to embrace the new at the expense of the old. The recent history of deindustrialisation and its association with dramatic technological reconfigurations is an obvious case in point.

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Jane Jacobs, The Economy of Cities, New York, Vintage, 1969. 3. Arthur, The Nature of Technology, p. 211. 4. Alfred NorthWhitehead, Process and Reality, New York, Free Press, 1969, p. 33. 5. Arthur, The Nature of Technology, p. 213; Karl Marx, Grundrisse, Harmondsworth, Penguin, 1973. 6. Arthur, The Nature of Technology, p 191. 7. Joseph Schumpeter, Capitalism, Socialism and Democracy, London, Routledge, 1942, pp. 82–3. 8. Arthur, The Nature of Technology, p. 186. 9. André Gorz, Critique of Economic Reason, London, Verso, 1989, p. 200. 10. Martin Ford, The Lights in the Tunnel: Automation, Acclerating Technology and the Economy of the Future, USA, AcculantTM Publishing, 2009, p. 62. 11.

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
by Kate Raworth
Published 22 Mar 2017

‘I don’t care who writes a nation’s laws – or crafts its advanced treatises – so long as I can write its economics textbooks,’ he declared in later years, ‘The first lick is the privileged one, impinging on the beginner’s tabula rasa at its most impressionable state.’34 Samuelson’s 1948 Circular Flow diagram, which depicted income flowing round the economy as if it were water flowing round plumbed pipes. A long struggle of escape Paul Samuelson was not alone in appreciating the extraordinary influence wielded by those who determine how we begin. His teacher and mentor, Joseph Schumpeter, also realised that the ideas handed down to us can be very hard to shake off, but he was determined to do so, to make way for his own insights. As Schumpeter wrote in his 1954 History of Economic Analysis, In practice we all start our own research from the work of our predecessors, that is, we hardly ever start from scratch.

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In the 1920s John Maynard Keynes critiqued the use of comparative statics, pointing out that it is precisely what happens in between those snapshots of economic events that is of greatest interest. ‘Economists set themselves too easy, too useless a task,’ he wrote, ‘if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.’17 In the 1940s, Joseph Schumpeter drew on Marx’s insights into dynamism to describe how capitalism’s inherent process of ‘creative destruction’, through continual waves of innovation and decline, gave rise to business cycles.18 In the 1950s, Bill Phillips created his MONIAC precisely with the aim of replacing comparative statics with system dynamics, complete with the time lags and fluctuations that can be observed as water flows into and out of tanks.

The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives
by Peter H. Diamandis and Steven Kotler
Published 28 Jan 2020

A 2012 study by the Partnership for a New American Economy, for example, found that three out of four patents issued to America’s top ten patent-producing universities have at least one foreign-born inventor. A different look at this same trend comes via “product reallocation,” which describes the rate at which new goods and services enter the market and force old ones to exit, or what economist Joseph Schumpeter called “creative destruction.” Far more than patents, researchers consider product reallocation the gold standard for innovative impact. A few years ago, researchers from the University of California, San Diego, found a direct link between migration and this gold standard. By tracking the product reallocation rate for every American company that hired a highly skilled foreign-born worker between 2001 and 2014, they found a very clear signal.

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See: https://www.newamericaneconomy.org/sites/all/themes/pnae/patent-pending.pdf. “product reallocation”: Gaurav Khanna and Munseob Lee, “Hiring Highly Educated Immigrants Leads to More Innovation and Better Product,” Conversation, September 26, 2018. See: https://theconversation.com/hiring-highly-educated-immigrants-leads-to-more-innovation-and-better-products-100087. Joseph Schumpeter called “creative destruction”: Ibid. By tracking the product reallocation rate: Ibid. In America, immigrants are twice as likely to start a new business: Grace Nasri, “The Shocking Stats About Who’s Really Starting Companies in America,” Fast Company, August 14, 2013. See: https://www.fastcompany.com/3015616/the-shocking-stats-about-whos-really-starting-companies-in-america. 33 percent of venture-backed companies: Mark Boslet, “NVCA Study Finds ⅓ Of Recently Public Venture Companies Have Immigrant Founders,” PE Hub Network, June 20, 2013, See: http://nvcaccess.nvca.org/index.php/topics/public-policy/372-nvca-releases-results-from-american-made-20.html.

Value of Everything: An Antidote to Chaos The
by Mariana Mazzucato
Published 25 Apr 2018

Investment banks' importance in channelling professional investors' funds into productive industry rose up the political agenda because early savings banks, which took deposits from households, often lost them to fraudulent or excessively risky money-making schemes and so were steered by regulation into buying mainly government bonds.5 By licensing only a few investment banks, governments granted them the monopoly power needed to co-ordinate expansion of related industries, and to achieve the profit required to absorb high risks.6 The banks' unique role in development was recognized by some mid-twentieth-century economists, notably Joseph Schumpeter (1934) and Alexander Gerschenkron (1962).7 The ‘banking problem' arose because, as the twentieth century progressed, banks' role in fuelling economic development steadily diminished in theory and practice - while their success in generating revenue and profit, through operations paid for by households, firms and governments, steadily increased.

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(i) Cumulative Innovation If there is one thing that economists agree on (and there are not many), it is that technological and organizational changes are the principal source of long-term economic growth and wealth creation. Investments in science, technology, skills and new organizational forms of production (such as Adam Smith's emphasis on the division of labour) drive productivity and long-term increases in GDP. Building on the work of Marx, who highlighted the role of technological change in capitalism, Joseph Schumpeter (1883-1950) is probably the economist who has most emphasized the importance of innovation in capitalism. He coined the term ‘creative destruction' to describe the way that product innovations (new products replacing old) and process innovations (new ways to organize production and distribution of goods and services) caused a dynamic process of renewal but also a process of destruction, with old ways falling aside and in the process causing many companies to go bankrupt.

The Social Life of Money
by Nigel Dodd
Published 14 May 2014

Whereas the traditional image of a bank is as a crucial intermediary between lenders and borrowers, banks today operate not simply as issuers of debt but also as repositories of risk. To grasp the significance of this difference for money, I want to turn to the arguments of Hyman Minsky and Susan Strange. MINSKY’S HALF-CENTURY Hyman Minsky was a doctoral student of Joseph Schumpeter and Wassily Leontief at Harvard during the 1940s. Whereas Schumpeter had drawn attention to banks’ importance in the business cycle, Minsky’s main focus was on the effect of financial markets on the wider economy (Minsky 1993a, 1993b). During the 1970s, Minsky developed the financial instability hypothesis, in which he argued that speculative bubbles and spells of financial market instability are part of the normal life cycle of the economy (Minsky 1992).

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For this meaning the other (“cultural significance”) is relevant only insofar as it influences the actual behaviour of people with respect to money; and here it is again a question of performance (to be answered in the individual case) whether one succeeds in grasping these elements of a given cultural environment which are essential for the explanation of monetary history. JOSEPH SCHUMPETER, “MONEY AND CURRENCY”1 Schumpeter’s insistence that culture is “not what concerns monetary science” typifies a way of approaching money in classical social and economic thought that has never really gone away—even though it has been persuasively challenged by scholars in sociology and anthropology.

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Année sociologique 2: 1–28. Durkheim, E. (1997). The Division of Labor in Society, New York, Free Press. Durkheim, E. (2001). The Elementary Forms of Religious Life, Oxford, U.K., Oxford University Press. Eagleton, T. (2012). Why Marx Was Right, New Haven, CT/London, Yale University Press. Earley, J. S. (1994). “Joseph Schumpeter: A Frustrated ‘Creditist.’ ” New Perspectives in Monetary Macroeconomics, G. Dymski and R. Pollin Eds. Ann Arbor, University of Michigan Press: 337–51. Economou, M., M. Madianos, et al. (2011). “Increased Suicidality amid Economic Crisis in Greece.” Lancet 378: 1459. Eggertsson, G. B. and P.

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right
by George R. Tyler
Published 15 Jul 2013

That era provided the evidence that Smith utilized in arguing that the business community readily colludes against consumers, employees, and the public interest, resulting in higher prices, less innovation, and a reduced variety of goods. That sentiment also informed the works of political scientist Joseph Schumpeter. He fathered the concept of “creative destruction,” which describes the capitalist process: new, innovative competitors—Apple or Google, for example—arise to challenge established giants such as Microsoft or IBM. The level of such enterprise destruction runs about 10 percent annually in the United States; between 1989 and 1997 an average of 611,000 US firms disappeared each year, out of about 5.7 million.62 Antitrust policy is designed explicitly to promote and nurture this creative destruction process by limiting the ability of aging dinosaur firms to metamorphose into conglomerates that restrict competition; without it, capitalism stagnates as dinosaurs stagger on, dominating weaker innovators.

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In fact, academic researchers have determined that the American business community in toto has been debt free since 2004, when the corporate debt ratio fell below zero.13 Some undercapitalized banks, small businesses, and struggling manufacturing enterprises are hard pressed and indebted, but they’re the exception in an American business community flush with profits and cash three decades into the Reagan era. Economists talk about two types of extraordinary profits, named to honor economists David Ricardo and Joseph Schumpeter. Ricardian rents accrue to owners of fixed (nonreproduceable) resources, such as quite fertile land, oil, or gold deposits, while Schumpeterian rents flow to individuals or firms because of entrepreneurial insights in a risky or complicated environment—think of the early days of Bill Gates or Steve Jobs.

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Attaining that goal hinges on two elements from Henry Ford adopted by these countries: prioritizing productivity growth in order to maximize economic growth, and linking wages to labor productivity growth. Prioritizing productivity reaches back to the British economist Alfred Marshall and the Austrian Joseph Schumpeter who first preached the seminal importance of raising productivity as the precursor to prosperity.8 This lesson was emphasized anew in the postwar era by a number of nations, including the family capitalism countries and Japan. Indeed, the first great challenge to America’s postwar economic preeminence was Japanese firms such as Toyota in the 1970s and 1980s.

Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy
by Robert W. McChesney
Published 5 Mar 2013

There is no valid reason why American scholars should bow down to capitalism in general and corporate power specifically. In the end, this is not a left-right issue. Some of the finest public intellectuals of the past century who ruthlessly criticized capitalism and its relationship to democracy were also advocates of capitalism as well as political conservatives. The most famous was Joseph Schumpeter, but the tradition lives on. Kevin Phillips wrote a series of thoughtful books in this vein over the past two-plus decades. In 2009 and 2010, renowned conservative Richard Posner wrote two stellar books precisely on the crisis of capitalism and the problem of self-government. Honest inquiry is not monopolized by any political ideology.63 Indeed, only a handful of liberals, like John Kenneth Galbraith, have been up to the task of providing an unvarnished view of capitalism’s deep flaws, without necessarily rejecting it.64 If capitalism is as great as its defenders claim, it can survive and even prosper by being subjected to criticism, examination, and open debate.

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On the date I checked, banks occupied numbers 31 and 32, so it is possible the big banks would occupy as many as four of the top thirty slots on a random day. 9. John A. Byrne, “The 12 Greatest Entrepreneurs of Our Time,” Fortune, Apr. 2012, 68–86. 10. Chris Anderson, “The Web Is Dead; Long Live the Internet: Who’s to Blame: Us,” Wired 18 (Sept. 2010): 164. This requires the full panoply of what Joseph Schumpeter called “monopolistic practices” (or “the editing of competition”) to bring it about. See Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York: Harper & Row, 1950), 90, and Essays (Cambridge, MA: Addison-Wesley Press, 1951), 56. 11. Carl Shapiro and Hal R. Varian, Information Rules (Boston: Harvard Business School Press, 1999), 173. 12.

The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention
by William Rosen
Published 31 May 2010

Their optimism is by any measure far greater than that found in the general population, with the result that their decision making is, to be charitable, flawed, whether as a result of the classic confirmation bias—the tendency to overvalue data that confirm one’s original ideas—or the “sunk-cost” bias, which is another name for throwing good money after bad. Even after reliable colleagues urge them to quit, a third of inventors will continue to invest money, and more than half will continue to invest their time.8 A favorite explanation for the seeming contradiction is the work of the Czech émigré economist Joseph Schumpeter,* who drew a famous, though not perfectly clear, boundary between invention and innovation, with the former an economically irrelevant version of the latter. The heroes of Schumpeter’s economic analysis were, in consequence, entrepreneurs, who “may9 be inventors just as they may be capitalists … they are inventors not by nature of their function, but by coincidence….”

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.: Inventors Publishing, 1931). 7 “lack of capital” Ibid. 8 more than half will continue to invest their time Thomas Astebro, “Inventor Perseverance After Being Told to Quit: The Role of Cognitive Biases,” Journal of Behavioral Decision Making 20, January 2007. 9 “may be inventors” Scherer, “Invention and Innovation in the Watt-Boulton Steam Engine Venture,” citing Joseph Schumpeter’s Theory of Economic Development. 10 Another study, this one conducted in 1962 Donald W. MacKinnon, “Intellect and Motive in Scientific Inventors: Implications for Supply,” in Simon Kuznets, ed., The Rate and Direction of Inventive Activity: Economic and Social Factors (Princeton: Princeton University Press, 1962). 11 the eighteenth-century Swiss mathematician Daniel Bernoulli Peter L.

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else
by Chrystia Freeland
Published 11 Oct 2012

No one has come up with a definitive explanation of the unhappy growth paradox, but the economists who study it speculate that the uncertainty and inequality of these periods of rapid economic change may be to blame. Even if our country’s economy overall is growing strongly and we are doing well ourselves, we know that we are living through a period of what Joseph Schumpeter called “creative destruction.” That volatility, and the painful consequences it has for the losers, makes even the winners anxious. The tension in emerging markets isn’t only psychological. As in the West, a big part of the story of the developing world’s first gilded age is the “friction . . . between capital and labor, between rich and poor” that Carnegie identified more than a century earlier.

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That means you can probably blame Drucker for far too many soul-destroying PowerPoint presentations, peppy but hollow business books, and inspirational corporate “coaches” with lots of energy but no message. But Drucker also, more than half a century ago, predicted the shift to what he dubbed a “knowledge economy” and, with it, the rise of the “knowledge worker.” Drucker made his name in America, but he was a product of the Viennese intellectual tradition—Joseph Schumpeter was a family friend and frequent guest during his boyhood—of looking for the big, underlying social and economic forces and trying to spot the moments when they changed. Accordingly, he saw the emerging knowledge worker as both the product and beneficiary of a profound shift in how capitalism operated.

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated)
by Charles Wheelan
Published 18 Apr 2010

First, a market economy inspires hard work and progress not just because it rewards winners, but because it crushes losers. The 1990s were a great time to be involved in the Internet. They were bad years to be in the electric typewriter business. Implicit in Adam Smith’s invisible hand is the idea of “creative destruction,” a term coined by the Austrian economist Joseph Schumpeter. Markets do not suffer fools gladly. Take Wal-Mart, a remarkably efficient retailer that often leaves carnage in its wake. Americans flock to Wal-Mart because the store offers an amazing range of products cheaper than they can be purchased anywhere else. This is a good thing. Being able to buy goods cheaper is essentially the same thing as having more income.

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The broader the scope of government, the more room there is for special interests to carve out deals for themselves that have nothing to do with the legitimate functions of government described in Chapter 3. Tyranny of the status quo. If small groups can get what they want out of the legislative process, they can also stop what they don’t want, or at least try. Joseph Schumpeter, who coined the term “creative destruction,” described capitalism as a process of incessantly destroying the old structure and creating a new one. That may be good for the world; it is bad for the firms and industries that make up the “old structure.” The individuals standing in capitalism’s path of progress—or destruction, from their standpoint—will use every tool they have to avoid it, including politics.

Bourgeois Dignity: Why Economics Can't Explain the Modern World
by Deirdre N. McCloskey
Published 15 Nov 2011

Samuelsonian thought describes modern economists of the so-called mainstream—modeling exclusively with “constrained maximization,” in which the only virtue acknowledged is prudence.9 Not every worthy economist is Samuelsonian. An embattled countersquad of economic thinkers, with quite varied politics, has in the twentieth century included Joseph Schumpeter, Ludwig von Mises, Friedrich Hayek, Thorstein Veblen, John R. Commons, John Maynard Keynes, John H. Clapham, Frank Knight, Eli Heckscher, Gunnar Myrdal, Antonio Gramsci, Luigi Einaudi, Joan Robinson, Kenneth Boulding, Ronald Coase, Paul Sweezy, Alexander Gerschenkron, John Kenneth Galbraith, George Shackle, Robert Heilbroner, Theodore Schultz, Albert Hirschman, Bert Hoselitz, Bruno Leoni, Noel Butlin, James Buchanan, Thomas Schelling, Robert Fogel, Amartya Sen, Elinor Ostrom, Israel Kirzner, and Vernon Smith.

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Betterment never lost its virtuous and financial connotations, though later applied narrowly to betterment of agricultural land. By contrast, “innovation,” a derivation from Medieval Latin, was disreputable into the nineteenth century. The Oxford English Dictionary attributes its first use in sense 5, “introducing a new product into the market,” to Joseph Schumpeter in 1939, which seems implausibly late (the OED is conservative in such dating). And one can quarrel, too, with the lexicographer’s understanding of what Schumpeter was up to in the book quoted, Business Cycles. In the word “innovation” Schumpeter included, as all economists do when they use it, betterments in making products too, and in financing them and in trading them and in inventing them de novo, not merely the introducing of a new product.

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The polity, too, paid them back, with democratic liberalism, a free press, the Iowa caucuses, the South African constitution, and all our joy. We need to guard the resulting success against both cynicism and utopianism. One might well worry about the “cultural contradictions of capitalism” articulated with horror or glee by Daniel Bell, Karl Polanyi, Joseph Schumpeter, and Max Weber, and by Lenin and Marx before them, and by many of Lenin’s and Marx’s liberal enemies, too. The trouble with a liberal society is that it has few defenses against the worst of left or right dogma, because its leading principle is pluralistic nondogmatism. It gives an opening for monist critics, who would be instantly martyred or jailed in an illiberal polity, such as Russia or Singapore.

Television Is the New Television: The Unexpected Triumph of Old Media in the Digital Age
by Michael Wolff
Published 22 Jun 2015

There was, even, a kind of slack-jawed response—perhaps not least of all because Hollywood power is not used to being challenged—to the certainty, impatience, and what rather seemed like the advanced intelligence of the tech side. Very quickly it all seemed something like a math class mixing slow students with advanced ones. Morris began the day gamely recalling his college economics and Joseph Schumpeter and creative destruction and the need to come to terms with how great transformations happen—how to manage destruction. He drew a triangle on a whiteboard, with one point for tech, one point for talent, one point for media companies. We are all in this together, he said confidently. When that did not get an obvious assent, he changed it into a kind of exhortation: “Are we all in this together?”

Imperial Ambitions: Conversations on the Post-9/11 World
by Noam Chomsky and David Barsamian
Published 4 Oct 2005

Part of the reason that conservative international relations specialists like Samuel Huntington and Robert Jervis were highly critical of U.S. policy was the observation that U.S. policies were creating a situation in which much of the world regarded the United States as a “rogue state,” a threat to their existence, and would form coalitions against U.S. hegemony. And this was in the Clinton years, before the Bush administration’s National Security Strategy. In a 1919 essay called “The Sociology of Imperialisms,” the Austrian economist Joseph Schumpeter wrote: There was no corner of the world where some interest was not alleged to be in danger or under actual attack. If the interests were not Roman, they were of Rome’s allies; and if Rome had no allies, then allies would be invented. When it was utterly impossible to contrive such an interest—why, then it was the national honor that had been insulted.

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor
by William Easterly
Published 4 Mar 2014

Watt’s spending twelve years improving an invention and a factory owner’s financing him only happened because Watt had gotten a patent on his steam engine. Conventional wisdom is that patents are the main or only way the West solved the inadequate incentives for invention problem. But there is also an even more bottom-up solution that was first sketched out by Joseph Schumpeter early in the twentieth century in his famous theory of “creative destruction.” Schumpeter postulated that an innovator has a jump on everyone else on commercializing his or her own idea. The innovator can develop new products that use his ideas, keeping the idea itself secret from other would-be users.

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Withers, Placing the Enlightenment: Thinking Geographically About the Age of Reason (Chicago, IL: University of Chicago Press, 2007), Kindle edition, locations 92–93; and Mokyr, Enlightened Economy, 34 (on “bumper sticker”). 19. Mokyr, Enlightened Economy, 30. 20. Ibid., 33. 21. Ibid., 42. 22. Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper and Brothers, 1942). 23. Paul M. Romer, “Endogenous Technological Change.” Journal of Political Economy 98, no. 5, pt. 21 (October 1990): S71–S102. 24. Paul M. Romer, “New Goods, Old Theory, and the Welfare Costs of Trade Restrictions,” Journal of Development Economics 43 (1994): 5–38. 25.

Against Intellectual Monopoly
by Michele Boldrin and David K. Levine
Published 6 Jul 2008

P1: KNP head margin: 1/2 gutter margin: 7/8 CUUS245-07 cuus245 978 0 521 87928 6 May 21, 2008 16:55 158 Against Intellectual Monopoly Economic Arguments for Intellectual Monopoly Economists – ourselves included – think that it is important that the creators of ideas be compensated for their effort in adding to our stock of knowledge.8 Although the economics literature generally acknowledges that intellectual property leads to undesirable intellectual monopoly, it also argues that this might be a good thing – because creators of new ideas may not be adequately compensated otherwise, and this is one way to provide additional compensation. As Joseph Schumpeter, in the words of Jean Tirole, puts it, “If one wants to induce firms to undertake R&D one must accept the creation of monopolies as a necessary evil.”9 This view is as commonly held among economists today as it was in the past. In their recent textbook, Robert Barro and Xavier Sala-i-Martin argue: In order to motivate research, successful innovators have to be compensated in some manner.

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The idea that monopoly is necessary for innovation forms the foundation for a wide variety of economic models, ranging from general equilibrium models of monopolistic competition to micromodels of patents and patent races. The original theoretical argument was sketched by Allyn Young before the Second World War and developed in greater detail by Joseph Schumpeter during the war. The first formal treatment of the idea that competitive markets are intrinsically incapable of handling innovations can be found in writings by Kenneth Arrow and subsequently Karl Shell, published in the early and middle 1960s. In the second half of the 1980s, Robert Lucas, Paul Romer, and many followers used new analytical instruments to apply this P1: KNP head margin: 1/2 gutter margin: 7/8 CUUS245-07 cuus245 978 0 521 87928 6 May 21, 2008 16:55 Defenses of Intellectual Monopoly 159 point of view to the problem of economic development, creating a theory now known as the new growth theory.

Adam Smith: Father of Economics
by Jesse Norman
Published 30 Jun 2018

Moreover, though Smith often has moments of startling originality in his moral, historical and jurisprudential writings—the impartial spectator, his stadial theory of development, much of his detailed analysis of commercial society—he was not especially original in his political economy. The great economist Joseph Schumpeter wrote in his History of Economic Analysis that ‘The fact is that The Wealth of Nations does not contain a single analytic idea, principle, or method that was entirely new in 1776.’ The accuracy of this bald and bold assertion is open to debate, and Schumpeter remained an admirer of Smith, if a rather qualified one.

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Smith considers inflation, the contrast between money and real prices and what would later become known as purchasing power parity at some length at the end of Book II of WN in his ‘Digression Concerning the Variations in the Value of Silver During the Course of the Four Last Centuries’ Smith’s supposed lack of originality: Joseph Schumpeter, History of Economic Analysis, Routledge [1954] 1987. A far more dismissive, and indeed manifestly unfair and inaccurate, critique is offered by Murray Rothbard, for whom ‘The mystery is the enormous and unprecedented gap between Smith’s exalted reputation and the reality of his dubious contribution to economic thought… The problem is that he originated nothing that was true, and that whatever he originated was wrong’.

The Billionaire Raj: A Journey Through India's New Gilded Age
by James Crabtree
Published 2 Jul 2018

The careers of the Vanderbilts, Rockefellers, and Carnegies had invited similar questions more than a century earlier, as they built the canals and railroads and steamships through which America grew. In their own eras all were pilloried as corrupt and avaricious. Over time, all have gradually been rehabilitated as masters of new technology and pioneers of industrial change rather than robber barons—the embodiment of what economist Joseph Schumpeter would later call “the perennial gale of creative destruction.”45 In time Ambani and his fellow Bollygarchs may come to be viewed in this way too, as the murkier details of their methods fade but the scale of their achievements remains. Yet behind this boldness there was also an unmistakable sense of fear.

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Anand Giridharadas, “Indian to the Core, and an Oligarch,” New York Times, June 15, 2008. 42. “Anil Ambani Sues Mukesh for Rs10,000 Crore,” Livemint, September 25, 2008. 43. Swaminathan Aiyar, “India No More Dominated By a Handful of Business Oligarchs,” Economic Times, June 5, 2011. 44. “An Unloved Billionaire,” The Economist, August 2, 2014. 45. Joseph Schumpeter, Capitalism, Socialism and Democracy, p. 82. 46. “India May Be Challenging Today, but the India of Tomorrow Will Be Fulfilling: Mukesh Ambani,” Financial Express, March 18, 2017. Chapter 2: The Good Times Begin 1. Danny Fortson and Oliver Shah, “Qatari Royals Splash £120m on London Terrace,” Sunday Times, April 28, 2013. 2.

Visions of Inequality: From the French Revolution to the End of the Cold War
by Branko Milanovic
Published 9 Oct 2023

When once fixed in an hypothesis which cannot be assailed, from its being founded upon observations not called in question, he pushes his reasoning to their remotest consequences, without comparing their results with those of actual experience. 2 The same tendency would later be criticized by Joseph Schumpeter, who termed it the “Ricardian vice.” He … piled one simplifying assumption upon another until, having really settled everything by these assumptions, he was left with only a few aggregate variables between which, given these assumptions, he set up simpler one-way relations so that, in the end, the desired results emerged almost as tautologies.” 3 Ricardo remains a presence in today’s economics both methodologically and through his insights in many areas, but principally so in international trade, fiscal policy, and the role of technological progress.

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. … Our formula for the rate of interest shows that unless there be constant progress in the arts, the rate must sink toward zero, supposing accumulation of capital to go on. 92 The view that a capitalist economy may eventually become stationary has been, in one way or another, held by many other economists, including Joseph Schumpeter, Alvin Hansen, and more recently, Larry Summers. The law of the tendential fall of the rate of profit, in Marx’s formulation, made so much ink flow not because it was so different from what other classical or neoclassical economists wrote (neither in its underlying logic nor in the statement that zero-profit capitalism is an impossibility) but because of its implications: that it sounds the death knell of capitalism.

Seven Crashes: The Economic Crises That Shaped Globalization
by Harold James
Published 15 Jan 2023

Just a few examples: the Hungarian countess Catherine Károlyi (the “Red Countess”) recalled her visit to Cambridge University, where a young communist student explained to her that it was extremely regrettable but “imperative” that the old universities of Oxford and Cambridge should be completely leveled when the revolution came, and British undergraduates with clipped upper-class accents spoke of the Soviet Union as the “promised land.”99 Barbara Pym, the impeccable novelist of middle-class Britain, as a student went around Oxford with a Nazi swastika pin, and traveled to see Hitler give a speech in Hamburg: “I thought he looked smooth and clean and was very impressed.”100 Keynes’s fundamental optimism stood in stark contrast to the gloom of the great Austrian economist Joseph Schumpeter. Schumpeter—perhaps also driven by a concatenation of personal tragedies—had developed a deeply pessimistic view of the interplay of political and economic developments. Capitalism had been the great motor of innovation, celebrated in his early work as “creative destruction.” But now it was destroying itself.

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Susan Howson and Donald Moggridge (Basingstoke: Macmillan, 1990), 106. 97. Ibid., 158 –159. 98. Skidelsky, Keynes, 3: 31. 99. Catherine Károlyi, On m’appelait la Comtesse Rouge (Budapest: Corvina, 1980), 329–330. 100. Quoted in Paula Byrne, The Adventures of Miss Barbara Pym (London: William Collins, 2021). 101. Joseph Schumpeter, Capitalism, Socialism and Democracy (London: George Allen & Unwin, 1976 [1942]), 61. 102. Ibid., 146. 103. Ibid., 161. 104. Ibid., 156. 105. Ibid., 162. 106. Ibid., 430. 107. Joseph A. Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954). 108. “Wenn fundamental Neues in der Welt geschieht, dann stehen wir vor einem Rätsel,” from a 1932 talk, quoted in Wolfgang F.

Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom
by Grace Blakeley
Published 11 Mar 2024

The economics profession accepted Coase’s theory, but to avoid sounding like Marxists, they needed to show that, even though bosses seemed to have a lot of power over their workers, this power is limited by the operation of the market. They needed to show that bosses couldn’t abuse the power they had over workers because they were constrained by the market mechanism. This is where Joseph Schumpeter came in. Born in 1883, Schumpeter was an Austrian economist who is now remembered as one of the giants of classical political economy. He was also an ardent anti-communist and anti-Keynesian, who believed that social democracy had encouraged a lazy corporatism that would ultimately undermine the entrepreneurial spirit that allows capitalism to survive.

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Sweezy was born the year after Baran to a well-off family in New York and, unlike Baran, didn’t become acquainted with Marxist ideas until his early twenties.108, 109 The easygoing upper-class Sweezy took to the halls of Harvard far quicker than the grumpy, intellectual Baran, penning dozens of articles in which he sought to apply Marxist ideas to mainstream economic problems—work that is still used in mainstream economic theory today. He even took up a post at Harvard once occupied by one Joseph Schumpeter. But despite—or perhaps because of—their different upbringings and temperaments, the two had a fruitful intellectual collaboration during their lifetimes. They worked to adapt Marx’s theory of capital, which had been written in the age of “the railroad and the steamship,” to the age of computers and airplanes.110 Modern capitalism was, the pair wrote, a highly concentrated economic system dominated by powerful monopolies and oligopolies.

The Age of Turbulence: Adventures in a New World (Hardback) - Common
by Alan Greenspan
Published 14 Jun 2007

I would define what was going on in general terms and then translate that into the implications for individual businesses. That was my value-added, and we prospered. Working with heavy industry gave me a profound appreciation of the central dynamic of capitalism. "Creative destruction" is an idea that was articulated by the Harvard economist Joseph Schumpeter in 1942. Like many powerful ideas, his is simple: A market economy will incessantly revitalize itself from within by scrapping old and failing businesses and then reallocating resources to newer, more productive ones. I read Schumpeter in my twenties and always thought he was right, and I've watched the process at work through my entire career.

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A d a m Smith's Enlightenment ideas of individual initiative and the power of markets came back from near eclipse in the 1930s to their current dominance of the global economy. Smith (above left) remains among my deepest intellectual influences. I was also influenced by the thinking of John Locke (above right), the great British moral philosopher who articulated fundamental notions of life, liberty, and property, and Joseph Schumpeter, the twentieth-century economist whose concept of creative destruction gets to the heart of the role of technological change in a modern capitalist society. TOP LEFT: Hulton Archive/Getty Images; TOP RIGHT: Bettman/Corbis; BOTTOM RIGHT: Getty Images More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps the copyright. 

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GDP continued to grow at a solid pace, unemployment shrank, and inflation stayed in check, for another four years. By not being too quick to raise rates, we helped clear the way for the postwar period's longest economic boom. This was a classic example of why you can't just decide monetary policy based on an econometric model. As Joseph Schumpeter might have pointed out, models are subject to creative destruction too. E ven rising productivity could not explain the looniness of stock prices. On October 14, 1996, the Dow Jones Industrial Average vaulted past 6,000—a milestone achieved, declared a front-page story in USA Today, "on the opening day of the seventh year of the most consistent bull market in history."

The Scandal of Money
by George Gilder
Published 23 Feb 2016

Ametrano quotes Hayek: “Changes in the importance of the commodities, the volume in which they were traded, and the relative stability or sensitivity of their prices (especially the degree to which they were determined competitively or not) might suggest alterations to make the currency more popular.”10 An extreme example, says Ametrano, “would be a major breakthrough in green energy that would make petroleum useless.” So much for Brent crude. What Ametrano sees as an exotic possible breakthrough in energy technology, however, is in fact the condition of the entire entrepreneurial economy. All existing goods and services are vulnerable to innovation, which is, as Joseph Schumpeter insisted, the very law of capitalism. To treat it as some kind of exceptional or anomalous event is a fundamental error. The information theory of capitalism defines growth as learning. Its microeconomic manifestation is the learning or experience curve in individual businesses and industries.

The Production of Money: How to Break the Power of Banks
by Ann Pettifor
Published 27 Mar 2017

He was followed by Henry Thornton (1760–1815) and Henry Dunning MacLeod (1821–1902). John Maynard Keynes (1883–1946) built on these theories and developed practical policies for officials and politicians to implement. However, even then mainstream orthodox economists found his monetary theories and policies challenging, as Joseph Schumpeter explained in his History of Economic Analysis over sixty years ago: it proved extraordinarily difficult for economists to recognise that bank loans and bank investments do create deposits … And even in 1930, when the large majority had been converted and accepted the doctrine as a matter of course, Keynes rightly felt it necessary to re-expound and to defend the doctrine at some length … and some of the most important aspects cannot be said to be fully understood even now.2 A small group of distinguished economists all understood that money as part of a developed monetary system is not, and never has taken the form of a commodity.

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
by Morgan Housel
Published 7 Sep 2020

This was true whether you were a lawyer or a farmer or a car mechanic. Historian Eric Rauchway writes: This fall in value immediately afflicted only a few Americans. But so closely had the others watched the market and regarded it as an index of their fates that they suddenly stopped much of their economic activity. As the economist Joseph Schumpeter later wrote, “people felt that the ground under their feet was giving way.”⁵⁸ There are two topics that will affect your life whether you are interested in them or not: money and health. While health issues tend to be individual, money issues are more systemic. In a connected system where one person’s decisions can affect everyone else, it’s understandable why financial risks gain a spotlight and capture attention in a way few other topics can.

Cryptoeconomics: Fundamental Principles of Bitcoin
by Eric Voskuil , James Chiang and Amir Taaki
Published 28 Feb 2020

There is no distinction between these supposedly-competing views on money creation , invaliding the theory. This resolves the centuries-old debate [870] , apparently begun between Plato [871] and Aristotle [872] , regarding whether money is based on mining or credit. The theories are identical, as money and credit are a duality [873] . According to Joseph Schumpeter, the first known advocate of a credit theory of money was Plato. Schumpeter describes metallism as the other of “two fundamental theories of money”, saying the first known advocate of metallism was Aristotle. Adherents of the two theories are merely talking past each other [874] . Bitcoin, as fiat (i.e. non-use-value [875] money) without state support [876] , has finally made observable both the logical errors of metallism [877] , which attempted to show [878] the necessity of use value to money, and chartalism [879] , which attempted to show [880] the necessity of state support to fiat.

The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future
by Jeff Booth
Published 14 Jan 2020

Out with the old, in with the new One of the pillars of capitalism is a free-market system—it’s the centrepiece of how all modern economies evolve—a near-constant flow of innovative entrepreneurs breaking monopolies and then themselves creating new ones. The paradoxical term “creative destruction” was coined for this by Austrian American economist Joseph Schumpeter (1883–1950). In Schumpeter’s vision of capitalism, innovation by entrepreneurs was the disruptive force that sustained economic growth, even though it destroyed the value of established companies. Furthermore, the value that was destroyed in established companies was that which they enjoyed from some level of monopoly power derived from a previous technological, regulatory, organizational, or economic paradigm.

Wall Street: How It Works And for Whom
by Doug Henwood
Published 30 Aug 1998

Adjustable rate notes protect bondholders against imprudent or capital-risking actions by management, like taking on gobs of new debt. Looser regulations on issuance like shelf registration, which allows corporations to file general prospectuses to be kept on file, rather than prepare custom prospectuses for a specific stock or bond issue, allow firms to hawk their paper when the market looks friendly. Joseph Schumpeter (1939, vol. 2, p. 613), writing during a decade when financial innovation was deeply out of fashion, observed that "it is one of the most characteristic features of the financial side of capitalist evolution so to 'mobilize' all, even the longest, maturities as to make any commitment to a promise of future balances amenable to being in turn financed by any sort of funds and especially by funds available for short time, even overnight, only.

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While this may provoke a "reaction" sometime in the future — higher investment demand will drive up the price of investment goods, thereby offsetting the possibility of higher profits — the short-term effect is undeniably stimulative iCWV, p. 189-190). Changes in the natural rate may also come from the "real" side of an economy. Keynes followed Joseph Schumpeter in arguing that technical and organizational innovations adopted by a handful of especially spirited entrepreneurs, which competition forces the less pioneering to adopt, are at the heart of capitalist progress. But these innovators would be nothing more than frustrated dreamers if the banking system — or, more broadly, financiers — didn't accommodate them by allowing them to rent RENEGADES Other people's money (CWYl, pp. 85-86).

The Right to Earn a Living: Economic Freedom and the Law
by Timothy Sandefur
Published 16 Aug 2010

They can choose to go into another business instead or to find a niche market wherein they can specialize. This is admittedly disruptive to the entrepreneurs and workers who work for the less efficient firms and who, when those firms fail, find themselves temporarily unemployed and must obtain new jobs or new skills. This is the process that economist Joseph Schumpeter famously called “creative destruction.” Although these economic readjustments may be difficult for workers, the result will be greater economic efficiency and more wealth for everyone, including those who were formerly unemployed.10 In the 1930s, the creative nature of this dynamism was not widely respected, and intellectuals professing a doctrine of “rational” economic planning by government assailed the basic concepts of supply and demand, claiming that government control over the economy would eliminate the alleged inefficiencies of capitalism, equalize income among citizens, and organize economic activity with precision.11 This planning was generally characterized as “reform” and as a way to protect small-scale producers and family farmers from unfair competition by powerful industries, but the reality was quite different: the new economic planning systems stifled entrepreneurship and innovation and worsened the Great Depression.

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Corrigan, 257 U.S. 312, 376 (1921) (Brandeis, J., dissenting) (emphasis added). 6. Dorsey Richardson, Constitutional Doctrines of Justice Oliver Wendell Holmes (Baltimore: Johns Hopkins Press, 1924), p. 41. 7. Nebbia v. New York, 291 U.S. 502 (1934). 321 Notes for Pages 125–128 8. Ibid. at 537. 9. United States v. Carolene Products, 304 U.S. 144, 152 n. 3 (1938). 10. Joseph Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1975), pp. 82–85. 11. Amity Schlaes, The Forgotten Man: A New History of the Great Depression (New York: HarperCollins, 2007); and Arthur A. Ekirch Jr., Ideologies and Utopias: The Impact of the New Deal on American Thought (Chicago: Quadrangle Books, 1969). 12.

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt
by Kwasi Kwarteng
Published 12 May 2014

It was in this respect that the conquistadors’ efforts were both significant for the history of money and paradoxical, since the Spanish monarchy, despite the wealth it had acquired in the New World, was almost always indebted and often was compelled to declare bankruptcy. It is a premise of this book that government finance, the need to accumulate treasure, whether by conquest, by borrowing or by taxation, provides a powerful impetus behind developments in society. This idea was expressed by the great Austrian economist Joseph Schumpeter in his article ‘The Crisis of the Tax State’, published in 1919.2 More specifically, this book argues that the needs of government spending, in particular relating to war finance, are responsible for the development of what is often thought of as a narrow and specialist field, that of monetary history.

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The problem of the resumption was that ‘the value of sterling money abroad has been raised by 10 per cent, whilst its purchasing power over British labour is unchanged’. As a consequence, Britain had ‘to reduce our sterling prices . . . by 10 per cent in order to be on a competitive level, unless prices rise elsewhere’.21 Keynes’s later rival Joseph Schumpeter could also see in 1928 that Britain’s return to the gold standard, ‘“stabilizing” the pound at what was, viewed from the standpoint of existing conditions, an artificial value, naturally meant dislocating business, putting a premium on imports and a tax on exports, intensifying losses and unemployment’.

How Asia Works
by Joe Studwell
Published 1 Jul 2013

The most famous exposition of this view is perhaps Schumpeter’s. The banker, he wrote, ‘is essentially a phenomenon of development … He makes possible the carrying out of new combinations, authorizes people, in the name of society as it were, to form them. He is the ephor [the senior magistrate in ancient Greece] of the exchange economy.’ Joseph Schumpeter, A Theory of Economic Development, translated by Redvers Opie (Cambridge, MA: Harvard University Press, 1934), p. 74. Part 4 – Where China Fits In 1. Li Xiangqian and Han Gang, ‘Xin faxian Deng Xiaoping yu Hu Yaobang deng sanci tanhua jilu’ (‘Newly Discovered Record of Three of Deng Xiaoping’s Talks with Hu Yaobang and Others’), Bainianchao, n0. 3 (1999): 4–11, reprinted in Xie Chuntao, ed., Deng Xiaoping xiezhen (A Portrait of Deng Xiaoping) (Shanghai: Shanghai cishu chubanshe, 2005), p. 192. 2.

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Samuels, Machiavelli’s Children: Leaders and Their Legacies in Italy and Japan (Ithaca, NY: Cornell University Press, 2003). Henry Sanderson and Michael Forsythe, China’s Superbank: Debt, Oil and Influence – How China Development Bank is Rewriting the Rules of Finance (Singapore: John Wiley, 2012). Joseph Schumpeter, Redvers Opie (trans.), A Theory of Economic Development (Cambridge, MA: Harvard University Press, 1934). Adam Schwarz, A Nation in Waiting: Indonesia’s Search for Stability (St Leonards: Allen & Unwin, 1999). Tibor Scitovsky, ‘Economic Development in Taiwan and South Korea’ in L. Lau (ed.), Models of Development: A Comparative Study of Economic Growth in South Korea and Taiwan (San Francisco: Institute for Contemporary Affairs, 1986).

Wealth and Poverty: A New Edition for the Twenty-First Century
by George Gilder
Published 30 Apr 1981

Toward the end of this fascinating work, Jacobs writes: “The primary economic conflict, I think, is between people whose interests are with already well-established economic activities, and those whose interests are with the emergence of new economic activities” (p. 249). 2 Quoted in Arnold Heertje, Economics and Technical Change (New York: John Wiley & Sons, 1977), p. 75. 3 Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper & Row, 1962). 4 William Tucker, “Of Mites and Men,” Harper’s, vol. 257, no. 1539 (August 1978) pp. 43–58. 5 Martin J. Bailey, “Inflationary Distortions and Taxes,” in Henry J. Aaron, ed., Inflation and the Income Tax (Washington, DC: the Brookings Institution, 1976), p. 302.

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budget balancing Buffett, Warren Bulgaria Bundy, McGeorge bureaucracy Burns, Scott Burry, Mike business, big government policy small strategy busing California, welfare in California Business Round Table California PropositionSee Proposition cannibalism Cannibals and Kings (Marvin Harris) Canute capital flight capital gains taxes government revenues from inflation and need for cut in capitalism, chance in critiques of democracy and dynamics of golden rule of moral neutrality of origins of rules of vs. socialism work under Capitalism, Socialism, and Democracy (Joseph Schumpeter) Capitalism and Freedom (Milton Friedman) capitalist freedom cardiological units Carlson, Chester Carnegie, Andrew Carnegie Council on Children Carson, Rachel Carter, Jimmy Carter administration Catholics CAT scanners CBO. See Congressional Budget Office Census Bureau Central Park CETA.

Profiting Without Producing: How Finance Exploits Us All
by Costas Lapavitsas
Published 14 Aug 2013

It was eventually published in Vienna in 1904 as Böhm-Bawerk’s Marx Kritik and its impact was immediate.3 By then, Böhm-Bawerk was professor at Vienna and in 1905 initiated a celebrated seminar which soon became a forum of debate between the rising stars of Austrian neoclassicism and Austro-Marxism. The most prominent participant was Joseph Schumpeter but the group also included Ludwig von Mises. Among the Marxists, Otto Bauer had a strong presence, and he probably invited Hilferding to take part in the debates, thus developing a lasting relationship with Schumpeter.4 The broader impact and significance of Hilferding’s reply to Böhm-Bawerk becomes clear only in the context of the ‘revisionism’ debate within the German Social Democratic Party.

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The putative historical connection between money and the credit practices of ancient Middle Eastern societies has offered further possibilities to develop alternative theories of the origin of money. In this connection mainstream economic theory has been useful to alternative theorists, even if mainstream analysis has not always been acknowledged by critics who are not economists. Thus, both Joseph Schumpeter and John Hicks have put forth credit-theories of money.26 Despite differences, both postulate that the fundamental interaction among economic agents is characterized by credit relations based on promises to pay, rather than by the give-and-take of exchanging equivalents. From this perspective, money is fundamentally a promise to pay that might be based on relations of trust, power, social custom, and so on.

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis
by Martin Wolf
Published 24 Nov 2015

I participated, therefore, in the move towards more market-oriented economic perspectives that took place at that time. I was particularly impressed with the Austrian view of the market economy as a system for encouraging the search for profitable opportunities, in contrast to the neoclassical fixation with equilibrium: the writings of Joseph Schumpeter and Hayek were (and remain) powerful influences. The present crisis has underlined my scepticism about equilibrium, but has also restored a strong and admiring interest in the work of Keynes, which had begun when I was at Oxford. After a passage of eighty years, Keynes’s concerns of the 1930s have again become ours.

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Many investors – particularly those concerned with providing incomes in retirement, such as pension funds – needed higher returns than government bonds provided, while stocks looked less attractive after the collapse of the market in 2000. The market’s response was to mass-produce higher-yielding, pseudo-high-grade assets. In an inversion of Joseph Schumpeter’s idea of ‘creative destruction’, Jagdish Bhagwati of Columbia University called this ‘destructive creation’.41 It was the new structured finance that provided investors with what they thought they wanted. As Lloyd Blankfein, chairman of Goldman Sachs, pointed out in 2009: ‘In January 2008, there were 12 triple A-rated companies in the world.

Good Economics for Hard Times: Better Answers to Our Biggest Problems
by Abhijit V. Banerjee and Esther Duflo
Published 12 Nov 2019

His mother, who was from a French-speaking Jewish family, founded the well-known designer brand Chloé when she moved to France, after being forced to leave her home in Egypt in the early 1950s. The years when Chloé went from being a dressmaker to a global brand were exactly the years of Philippe’s growing up. Nevertheless, inspired by Joseph Schumpeter (the Harvard economist of the mid–twentieth century and braggart extraordinaire50), Aghion sees innovation as a process of creative destruction, in which each innovation involves both creation of the new and destruction of the old.51 In his world, sometimes the creative dominates, but at other times the destructive holds sway; novelties get created not because they are useful but because they defeat someone’s existing patent.

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Romer, “Endogenous Technological Change,” Journal of Political Economy 98, no. 5, part 2 (1990): S71–S102, https://doi.org/10.1086/261725. 49 Philippe Aghion and Peter Howitt, “A Model of Growth Through Creative Destruction,” Econometrica 60, no. 2 (1992): 323–51. 50 The Wikipedia entry for Schumpeter reads thus: “Schumpeter claimed that he had set himself three goals in life: to be the greatest economist in the world, to be the best horseman in all of Austria and the greatest lover in all of Vienna. He said he had reached two of his goals, but he never said which two, although he is reported to have said that there were too many fine horsemen in Austria for him to succeed in all his aspirations.” See https://en.wikipedia.org/wiki/Joseph_Schumpeter. 51 Philippe Aghion and Peter Howitt, “A Model of Growth Through Creative Destruction,” Econometrica 60, no. 2 (1992): 323–51. 52 ‘Real GDP Growth,” US Budget and Economy, http://usbudget.blog spot.fr/2009/02/real-gdp-growth.html. 53 David Leonardt, “Do Tax Cuts Lead to Economic Growth?,” New York Times, September 15, 2012, https://nyti.ms/2mBjewo. 54 Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva, “Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities,” American Economic Journal: Economic Policy 6, no. 1 (2014): 230–71, https://doi.org/10.1257/pol.6.1.230. 55 William Gale, “The Kansas Tax Cut Experiment,” Brookings Institution, 2017, https://www.brookings.edu/blog/unpacked/2017/07/11/the-kansas-tax-cut-experiment/. 56 Owen Zidar, “Tax Cuts for Whom?

Company: A Short History of a Revolutionary Idea
by John Micklethwait and Adrian Wooldridge
Published 4 Mar 2003

Many on the Left would argue that companies tried to set up governments of their own—and succeeded equally spectacularly. Meanwhile, the ways that companies have subtly influenced our lives have multiplied. It was a company—Lever Brothers—that introduced us to the concept of “BO.” (“It was not enough to produce satisfactory soap,” Joseph Schumpeter once observed. “It was also necessary to induce people to wash.”)5 It is a company—McDonald’s—that is credited with teaching the Chinese how to queue.6 Three themes stand out in our story. First, the company’s past is often more dramatic than its present. Modern business books may have macho titles such as Barbarians at the Gate and Only the Paranoid Survive, but early businessmen took risks with their lives as well as their fortunes.

Economics Rules: The Rights and Wrongs of the Dismal Science
by Dani Rodrik
Published 12 Oct 2015

First, math ensures that the elements of a model—the assumptions, behavioral mechanisms, and main results—are stated clearly and are transparent. Once a model is stated in mathematical form, what it says or does is obvious to all who can read it. This clarity is of great value and is not adequately appreciated. We still have endless debates today about what Karl Marx, John Maynard Keynes, or Joseph Schumpeter really meant. Even though all three are giants of the economics profession, they formulated their models largely (but not exclusively) in verbal form. By contrast, no ink has ever been spilled over what Paul Samuelson, Joe Stiglitz, or Ken Arrow had in mind when they developed the theories that won them their Nobel.

The Misfit Economy: Lessons in Creativity From Pirates, Hackers, Gangsters and Other Informal Entrepreneurs
by Alexa Clay and Kyra Maya Phillips
Published 23 Jun 2015

The average life span of leading American companies has declined by over fifty years in the last hundred years: from sixty-seven years in the 1920s to only fifteen in 2012.10 Apart from the auto sector, many other blue-chip industries are in decline. The pharmaceutical industry had its heyday in the eighties and nineties, with blockbuster drugs like Lipitor, Plavix, and Zoloft. Some in the industry have faced competition from generics and been forced to slash internal R&D. If we listened to Joseph Schumpeter, the economist and political scientist, we’d allow the forces of “creative destruction”—the process of destroying an old economic order and the emergence of a new one—to have their way. DAVID BERDISH IS A DEVOUT Catholic and a third-generation autoworker at Ford Motor Company. He worked at the company for thirty-one years before recently retiring.

The Penguin and the Leviathan: How Cooperation Triumphs Over Self-Interest
by Yochai Benkler
Published 8 Aug 2011

In Europe, the progression went in the other direction; the rise of command-control systems began with state bureaucracy (pioneered by Bismarck in Prussia) and later diffused to businesses. But whatever the order of events, by the mid-1960s one thing was clear: In the United States and elsewhere, organization of hierarchies had come to dominate modern economic and social life. The father of sociology, Max Weber, saw this earlier in the century; economists like Joseph Schumpeter saw this in the mid-century: The future was to be inherited by ever larger, controlled bureaucracies; by various versions of Leviathan. Paralleling the arc taking place in politics, the intellectual debate (and to some extent the practice) of the next forty years saw a pronounced shift away from centralized systems and toward markets and market-mimicking approaches.

Making the Future: The Unipolar Imperial Moment
by Noam Chomsky
Published 15 Mar 2010

In short, President Obama’s programs were “a giveaway to Wall Street executives” and a blow in the solar plexus to their defenseless victims. The outcome should surprise only those who insist on hopeless naïveté about the design and implementation of policy, particularly when economic power is highly concentrated and state capitalism has entered into a new stage of “creative destruction,” to borrow Joseph Schumpeter’s famous phrase, but with a twist: creative in ways to enrich and empower the rich and powerful, while the rest are free to survive as they may, while celebrating Loyalty and Law Day. The Revenge Killing of Osama Bin Laden June 1, 2011 The May 1 [2011] U.S. attack on Osama bin Laden’s compound violated multiple elementary norms of international law, beginning with the invasion of Pakistani territory.

The Participation Revolution: How to Ride the Waves of Change in a Terrifyingly Turbulent World
by Neil Gibb
Published 15 Feb 2018

It is also a framework for the transformation of existing businesses and enterprises to thrive in the new economic order; how to pivot, realign and genuinely innovate. And, lastly, for anyone who might be interested, it shows how to be a billionaire…in three easy moves. Creative destruction “Every act of creation is first an act of destruction” Pablo Picasso In 1942 the Austrian-American economist Joseph Schumpeter popularised the concept of “creative destruction”, describing it as the “process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Schumpeter’s point is that every act of creation, and every act of groundbreaking innovation, however good and useful they are, is also an act of destruction, in that it supplants something.

This Could Be Our Future: A Manifesto for a More Generous World
by Yancey Strickler
Published 29 Oct 2019

Gore Supreme Court decision broke the matrix and caused the havoc that has been the world ever since. Had Gore won in 2000, the Iraq War would not have happened, which means the mass displacement of people in the Middle East would not have happened, and Trump and Brexit probably wouldn’t have happened. But I digress. There are longer cyclical theories as well. The economist Joseph Schumpeter was fascinated with what he called “long-wave theory”—a pattern of economic growth and contraction with an interval of sixty years. They are called Kondratiev waves, named after the Soviet economist who first observed them. Schumpeter and other economists found evidence of Kondratiev waves coinciding with major innovations, from industrialization to the automobile to the internet.

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism
by Leigh Phillips and Michal Rozworski
Published 5 Mar 2019

At the same time, the scope of economic planning carried out inside corporations increased. The combination of bigger government and bigger corporations that emerged from World War II led even those on the right to question whether capitalism would give way to some form of economy-wide planning. Hayek’s fellow traveler Joseph Schumpeter famously thought that the replacement of capitalism by some form of collectivist planning was unavoidable. A fervent anti-socialist, Schumpeter nevertheless saw how the capitalism of his time was aggregating production and creating ever-larger institutions—not just firms but also government agencies—that planned internally on ever-larger scales.

Survival of the Richest: Escape Fantasies of the Tech Billionaires
by Douglas Rushkoff
Published 7 Sep 2022

They seek monopolies because that’s the default structure for controlling a new market. They may use innovative technology to accomplish this, but they never challenge the underlying operating system or its demand for extraction and growth. They justify all the resulting social and economic devastation as what economist Joseph Schumpeter called “creative destruction.” While Schumpeter was quite specifically building on a Marxist idea that changes in industry can create a churn between old wealth and new wealth, the startup economy doesn’t really follow this path. A handful of entrepreneurs and developers may get very rich off their ideas, but for the most part it’s the same institutional investors and family funds profiting now off Google or Facebook who once profited off Intel and IBM or, before that, GE and AT&T.

Why Nations Fail: The Origins of Power, Prosperity, and Poverty
by Daron Acemoglu and James Robinson
Published 20 Mar 2012

Strotz Professor of Arts and Sciences and Professor of Economics and History, Northwestern University “In this delightfully readable romp through four hundred years of history, two of the giants of contemporary social science bring us an inspiring and important message: it is freedom that makes the world rich. Let tyrants everywhere tremble!” —Ian Morris, Stanford University, author of Why the West Rules—for Now “Imagine sitting around a table listening to Jared Diamond, Joseph Schumpeter, and James Madison reflect on more than two thousand years of political and economic history. Imagine that they weave their ideas into a coherent theoretical framework based on limiting extraction, promoting creative destruction, and creating strong political institutions that share power, and you begin to see the contribution of this brilliant and engagingly written book.”

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Even though mechanization led to enormous increases in total incomes and ultimately became the foundation of modern industrial society, it was bitterly opposed by many. Not because of ignorance or shortsightedness; quite the opposite. Rather, such opposition to economic growth has its own, unfortunately coherent, logic. Economic growth and technological change are accompanied by what the great economist Joseph Schumpeter called creative destruction. They replace the old with the new. New sectors attract resources away from old ones. New firms take business away from established ones. New technologies make existing skills and machines obsolete. The process of economic growth and the inclusive institutions upon which it is based create losers as well as winners in the political arena and in the economic marketplace.

Who Stole the American Dream?
by Hedrick Smith
Published 10 Sep 2012

The United States built a system of deterrence through alliances with NATO in Europe, SEATO in Southeast Asia, CENTO in the Middle East, and special defense links to Japan and South Korea in the Far East. Every region, every country, every civil war, every coup d’état, every nascent threat, became a potential trip wire for U.S. involvement. From Harry Truman to George W. Bush, America’s leaders gauged U.S. national interests as broadly as the rulers of ancient Rome. Economist Joseph Schumpeter’s description of the Roman Empire resonates vividly today: “There was no corner of the known world where some interest was not alleged to be in danger or under actual attack. If the interests were not Roman, they were those of Rome’s allies; and if Rome had no allies, then allies would be invented.

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Troop Deployment, 1950–2005,” 10, Heritage Foundation, May 24, 2006, http://​www.​heritage.​org. 58 Simply maintaining those bases Deputy Undersecretary of Defense Dorothy Robyn, cited in Christine Anh and Sukjong Hong, “Bring War Dollars Home by Shutting Down Bases,” Institute for Policy Studies, March 31, 2011, http://​www.​ips-​dc.​org. 59 “There was no corner of the known world” Joseph Schumpeter, Imperialism and Social Classes: Two Essays (Cleveland: Meridian Books, 1951), 51. 60 Rumsfeld made plans to bring seventy thousand troops home Donald H. Rumsfeld, testimony, Senate Armed Services Committee, September 23, 2004, http://​www.​defense.​gov. 61 “America stands alone” President William Clinton, Second Inaugural Address, January 20, 1997, http://​www.​gpo.​gov. 62 “The survival of liberty” President George W.

Culture and Imperialism
by Edward W. Said
Published 29 May 1994

This came about for many reasons, which a whole library of systematic studies (beginning with those by critics of imperialism during its most aggressive phase such as Hobson, Rosa Luxemburg, and Lenin) has ascribed to largely economic and somewhat ambiguously characterized political processes (in the case of Joseph Schumpeter, psychologically aggressive ones as well). The theory I advance in this book is that culture played a very important, indeed indispensable role. At the heart of European culture during the many decades of imperial expansion lay an undeterred and unrelenting Eurocentrism. This accumulated experiences, territories, peoples, histories; it studied them, it classified them, it verified them, and as Calder says, it allowed “European men of business” the power “to scheme grandly”;73 but above all, it subordinated them by banishing their identities, except as a lower order of being, from the culture and indeed the very idea of white Christian Europe.

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Although Hobson implicates other European powers in the perversions of imperialism, England stands out. 15. Raymond Williams, The Country and the City (New York: Oxford University Press, 1973), pp. 165–82 and passim. 16. D.C.M. Platt, Finance, Trade and Politics in British Foreign Policy, 1815–1914 (Oxford: Clarendon Press, 1968), p. 536. 17. Ibid., p. 357. 18. Joseph Schumpeter, Imperialism and Social Classes, trans. Heinz Norden (New York: Augustus M. Kelley, 1951), p. 12. 19. Platt, Finance, Trade and Politics, p. 359. 20. Ronald Robinson and John Gallagher, with Alice Denny, Africa and the Victorians: The Official Mind of Imperialism (1961; new ed. London: Macmillan, 1981), p. 10.

The Origins of the Urban Crisis
by Sugrue, Thomas J.

Newly resurgent racial liberals and radicals battled with deeply entrenched racial conservatives over fundamental questions of rights and equality. At the same time, the national economy underwent a period of extraordinary dynamism and growth, fueling unprecedented prosperity, but also unleashing what economist Joseph Schumpeter called the forces of “creative destruction.” Northern industrial cities like Detroit were overwhelmed by the combination of racial strife and economic restructuring. Their impact played out in urban streets and workplaces. The labor and housing markets of the postwar city became arenas where inequality was shaped and contested.8 In the following pages, I hope to complicate the conventional narratives of post-World War II American history.

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Kusmer, “African Americans in the City Since World War II: From the Industrial to the Post-Industrial Era,” Journal of Urban History 21 (1995): 458–504. Also extremely important is Loïc J. D. Wacquant, “Urban Outcasts: Stigma and Division in the Black American Ghetto and the French Urban Periphery,” International Journal of Urban and Regional Research 17 (1993): 366–83. 8. Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper, 1942). 9. Every major Northern and Midwestern city lost jobs in the 1950s. For a concise summary, see Kasarda, “Urban Change and Minority Opportunities,” 43–47, esp. Tables 1 and 2. On industrial decline, see Sugrue, “Structures of Urban Poverty,” 100–117; John Cumbler, A Social History of Economic Decline (New Brunswick, N.J.: Rutgers University Press, 1989); Gary Gerstle, Working-Class Americanism: A History of Labor in a Textile City, 1920–1960 (Cambridge: Cambridge University Press, 1989), 318–30; on the electrical industry, see Ronald W.

The Third Pillar: How Markets and the State Leave the Community Behind
by Raghuram Rajan
Published 26 Feb 2019

The relatively stagnant median wage problem actually seems to be a stagnant median firm problem. While some of this is because of economies of scale and network effects, indubitably some of this is also because large firms have altered the rules of the competitive game. SCARING COMPETITION AWAY AND ALTERING THE RULES OF THE GAME Economists since Joseph Schumpeter have argued that just because competition is weak today does not mean it will be weak in the future. In an economy where technological progress is rapid, competition does not just come from existing firms, it also comes from the possible firms of the future, who use entirely new technologies to upend incumbents.

…

ENHANCING COMPETITION TO BUILD TRUST IN MARKETS A second aspect of markets that needs attention is the degree of competition in them, and the increasing dominance of large firms in each sector. Let us start first with competition. INDUSTRY DOMINANCE AND MARKET POWER The benign view of an industry dominated by a few large firms has much to do with the Austrian economist Joseph Schumpeter. He believed that competitive discipline did not come from existing competitors in the market at a point in time, but from the disruptive innovator who would strike “not at the margins of the profits and their outputs of the existing firms but at their foundations and their very lives.”3 Schumpeter’s view was that a monopoly firm’s paranoia about possible future threats to its monopoly profits would be the spur to innovation, and the reason it would give its customers a good deal.

Rentier Capitalism: Who Owns the Economy, and Who Pays for It?
by Brett Christophers
Published 17 Nov 2020

Lenin, following Marx, noted that the dulling impact of the rentier’s monopoly power ‘inevitably engenders a tendency to stagnation and decay. Since monopoly prices are established, even temporarily, the motive cause of technical and, consequently, of all other progress, disappears to a certain extent.’47 To be sure, Joseph Schumpeter famously contested this thesis, maintaining in his Capitalism, Socialism and Democracy that monopoly power does not in fact typically have such a ‘soporific effect’ – a monopoly position, ‘especially in manufacturing industry’, being ‘in general no cushion to sleep on. As it can be gained’, Schumpeter protested, ‘so it can be retained only by alertness and energy.’48 But Schumpeter was wrong.

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In his view, the utilitarian justification invariably given for robust IP protection is nothing more than a sham: ‘The IP standards advanced countries favour typically are designed not to maximise innovation and scientific progress, but to maximise the profits of big pharmaceutical companies and others.’85 Whether or not this conspiratorial reading is correct, what is clear is that, with the monopoly powers conferred by IP rights now being so robust, rent-seeking is incentivized and widely pursued. Recalling Joseph Schumpeter’s words cited in the Introduction, then, the IP rentier’s monopoly position has indeed become a ‘cushion to sleep on’. Or, to use an alternative metaphor – this time from law professor Robert Merges – capital has for some time now been ‘ “pigging out” at the IP trough’.86 The trough offers ample sustenance.

End This Depression Now!
by Paul Krugman
Published 30 Apr 2012

The idea that interest rates low enough to promote full employment would somehow be an obstacle to economic adjustment seems odd, but it also sounded familiar to those of us who had looked at the flailing of economists trying to come to grips with the Great Depression. In particular, Rajan’s discussion closely echoed an infamous passage from Joseph Schumpeter, in which he warned against any remedial policies that might prevent the “work of depressions” from being achieved: In all cases, not only in the two which we have analyzed, recovery came of itself. There is certainly this much of truth in the talk about the recuperative powers of our industrial system.

House of Debt: How They (And You) Caused the Great Recession, and How We Can Prevent It From Happening Again
by Atif Mian and Amir Sufi
Published 11 May 2014

When a city or country has a collapse in spending, a flexible economy should be able to adjust by lowering wages and making exporting industries more competitive. Another adjustment mechanism should have been migration. Perhaps it was time for workers to pack up and move to other parts of the country with a stronger job market. Economists going back to Joseph Schumpeter have argued that this “creative destruction” process is natural and even healthy. When the economy needs to reallocate its production to new activities, workers move in order to take advantage of new opportunities. But unfortunately, the U.S. economy during the Great Recession didn’t work that way, and unemployment persisted.

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs
by Andy Kessler
Published 1 Feb 2011

The stock market allocates precious capital to companies it thinks can maximize profits and starves those that can’t. In other words, the stock market is democracy’s half-evil henchman, whose tool is the size of the carrot, not the use of the stick. The tenets of capitalism’s great economists, from Adam Smith’s Invisible Hand to Joseph Schumpeter’s Creative Destruction and Gordon Gekko’s Greed Is Good, are all powerful concepts, but it’s profits and the stock market that carry out the dirty work. No Five-Year Plans. All men are created equal, but a few of you need to be canned and retrained so progress can happen again. New industries get funded and start hiring again.

The Rise of the Quants: Marschak, Sharpe, Black, Scholes and Merton
by Colin Read
Published 16 Jul 2012

Both these kindred spirits were political and intellectual activists in Germany. Neisser had been instrumental in the formation of the influential Vienna Colloquium, which helped motivate, hone, and publicize some of John von Neumann’s most significant work in the early to mid-1930s. Neisser, who the renowned economist Joseph Schumpeter once described as “one of the most brilliant economic minds (of his generation),” remained at the New School until he died in 1975.1 The Early Years 13 Lederer and Neisser were most influential in Marschak’s early work. These former participants of what was known as the “Kiel School” had exposed Marshak to an approach to economics that was developed by some reform-oriented economists in the Kiel Institute of World Economics from 1914 until the rise of fascism forced them to seek refuge elsewhere.

Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy
by Jonathan Taplin
Published 17 Apr 2017

Under this so-called “Rank & Yank” policy, people proved perfectly willing to slit one another’s throats, resulting in a corporate atmosphere marked by appalling dishonesty within and ruthless exploitation outside the company. Since at least 1995, professors at business schools have dismissed this kind of behavior as a natural outgrowth of the Austrian economist Joseph Schumpeter’s notion of “creative destruction.” The growth of the tech economy with its constant change would create a new kind of employee: oriented to the short term and focused on potential ability rather than acquired knowledge. But most of us are like Epicurus or even the monks of Camaldoli. We need a life narrative in which we take pride in being good at a specific task, and we value the experiences we have lived through.

The End of the Free Market: Who Wins the War Between States and Corporations?
by Ian Bremmer
Published 12 May 2010

Western governments sometimes allow security concerns to trump growth potential. But governments that practice state capitalism have many more levers to pull and buttons to push when it comes to shutting down the free exchange of just about anything. Second, there is the concept of “creative destruction.” Economist Joseph Schumpeter coined this phrase in his 1942 book, Capitalism, Socialism, and Democracy, to describe a process by which dying ideas and materials fertilize new ones, endowing capitalism with a self-regenerating dynamism. As industries become obsolete and die, the workers, assets, and ideas that once sustained them are freed to recombine in new forms to produce goods, services, and ideas that meet the evolving wants and needs of consumers.

Work in the Future The Automation Revolution-Palgrave MacMillan (2019)
by Robert Skidelsky Nan Craig
Published 15 Mar 2020

Two conclusions from his chapter 31 have been debated ever since: first, Ricardo’s statement that the opinion prevailing in ‘the labouring class, that the employment of machinery is frequently detrimental to their interests, is not founded on prejudice and error, but is conformable to the correct principles of 5 6 The Nature and Significance of Economic Science, 1945 ed., 16. Joseph Schumpeter, History of Economic Analysis, 1954, 681–682. 2 The Future of Work 15 political economy’.7 Second, that to the extent this opinion is true, ‘there will necessarily be a diminution in the demand for labour, the population will become redundant, and the situation of the labouring classes will be that of distress and poverty’.8 It was the notion of the population becoming ‘redundant’ which still strikes fear into those who dread the coming of the robots.

Silicon City: San Francisco in the Long Shadow of the Valley
by Cary McClelland
Published 8 Oct 2018

† The Defense Advanced Research Projects Agency (DARPA) invests on behalf of the US government in groundbreaking technology for national security. It hosted a series of competitions, challenging students from the nation’s top universities to demonstrate breakthroughs in robotics and autonomous vehicles. ‡ Economist Joseph Schumpeter described “creative destruction” as a kind of mutagenic or Darwinian force at the heart of capitalism—one that “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” § The Stanford University Founding Grant provides that the gifted land “shall constitute the foundation and endowment for the University herein provided, and upon the trust that the principal thereof shall forever remain intact, and that the rents, issues, and profits thereof shall be devoted to the foundation and maintenance of the University hereby founded and endowed, and to the uses and purposes herein mentioned

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
by Brink Lindsey
Published 12 Oct 2017

Another trend that suggests a rise in rent-seeking is the apparent decline of business dynamism over the past few decades. A buildup of entry barriers is likely to suppress entrepreneurship, while the prospect of political favors can divert entrepreneurship from innovation to rent extraction. Indeed, a host of economic indicators suggest that what Joseph Schumpeter called “creative destruction,” the ongoing displacement of old firms and existing ways of doing things by new firms and new ideas, is in a long-term slump. The rate of new business formation (calculated as the number of new businesses less than one year old divided by the total number of firms) has fallen from 12 percent in the late 1980s to 8 percent as of 2010.

China's Disruptors: How Alibaba, Xiaomi, Tencent, and Other Companies Are Changing the Rules of Business
by Edward Tse
Published 13 Jul 2015

Banks will have to compete; the health-care system will become more market-oriented, with the needs of users, be they patients or health-care providers, increasingly met by private companies; and private companies will be the primary content deliverers supplying video entertainment to most of the country’s population. While state companies can perform well at such fundamental tasks as building basic infrastructure, they are far weaker when it comes to undertaking the “creative destruction” (as Joseph Schumpeter called it) that an innovative economy requires. This involves the ceaseless testing of new products and processes conducted via a relentless churn of businesses, most of which fail. It also involves the relentless competition for consumer attention, which will inevitably be drawn by those businesses that offer access to information or services that state-owned companies do not provide.

Kings of Crypto: One Startup's Quest to Take Cryptocurrency Out of Silicon Valley and Onto Wall Street
by Jeff John Roberts
Published 15 Dec 2020

“Typically, the leaders of old paradigms don’t embrace new ones. That’s the reason Marriott didn’t embrace Airbnb and why the White Pages got replaced by Google,” Tapscott says. His observation is a perfect example of “the gale of creative destruction,” a phrase coined by legendary economist Joseph Schumpeter, who nearly eighty years ago defined it as “a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” But in the case of banks, Tapscott notes, some are more poised to adapt to the impending gale than typical incumbents.

Extreme Money: Masters of the Universe and the Cult of Risk
by Satyajit Das
Published 14 Oct 2011

Electronic displays flashing red or green price signals are the distilled essence of the financial world. Traders do not experience the underlying reality directly but only in terms of gains or losses—money made or lost that can be lost or made back in the next few seconds. The author Tom Wolfe once summed up the world of money by citing the Austrian economist Joseph Schumpeter: “Stocks and bonds are what he called evaporated property. People completely lose touch of the underlying assets. It’s all paper—these esoteric devices. So it has become evaporated property squared. I call it evaporated property cubed.”11 Extreme money is eviscerated reality—the monetary shadow of real things.

…

Keynes was equally critical of Hayek’s work, commenting that one article started “with a mistake” and then moved on to “bedlam.” Another article constituted “a farrago of nonsense.” Although he got on well with the Austrian personally, and thought Hayek’s 1944 The Road to Serfdom was “a grand book,” Keynes was unpersuaded, concluding: “what rubbish his theory is.”5 Joseph Schumpeter’s worldview was shaped by his role as Austria’s minister of finance, paying off debts incurred in the collapse of central European financial institutions. Intending to be the world’s greatest economist, lover, and horseman, the colorful, thrice-married Austrian acknowledged only having to work at his horsemanship.

Owning the Earth: The Transforming History of Land Ownership
by Andro Linklater
Published 12 Nov 2013

Huntington eloquently pleaded the necessity for strong rule during this period of “authoritarian transition” until legal and parliamentary institutions were sufficiently well-established to channel the new social forces into democratic forms. Underlying his hugely influential argument was Rostow’s five-stage model that saw industrial development leading inevitably to a democratic form of government. In the words of Joseph Schumpeter, a seminal influence on Rostow’s thinking, “modern democracy is a product of the capitalist process.” Thus in the belief that authority would lead to industry and so to liberty, the United States fostered an unholy spectrum of freedom-hating autocrats during the last three decades of the Cold War, from Diem to President Marcos in the Philippines and the Shah of Iran, by way of President Mobutu in Zaire, the Trujillo family in the Dominican Republic, a string of murderous generals in Guatemala, the Somoza dynasty in Nicaragua, and General Pinochet in Chile.

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The entrails of the 1930s depression were picked over endlessly by economists of all kinds, but few did so more obsessively than those belonging to what became known as the Austrian School. Its general stance was articulated early by the most eclectic of its leaders, the abrasively inventive Joseph Schumpeter. Among the host of fertile ideas that Schumpeter planted in the economic garden, two stood out: the belief that a capitalist economy was subject to uncontrollable cycles of expansion and contraction, and that these upheavals allowed innovative entrepreneurs to overthrow outmoded methods and technologies in a process Schumpeter termed “creative destruction.”

Capitalism and Freedom
by Milton Friedman
Published 1 Jan 1962

We do not wish to conserve the state interventions that have interfered so greatly with our freedom, though, of course, we do wish to conserve those that have promoted it, Moreover, in practice, the term conservatism has come to cover so wide a range of views, and views so incompatible with one another, that we shall no doubt see the growth of hyphenated designations, such as libertarian-conservative and aristocratic-conservative. Partly because of my reluctance to surrender the term to proponents of measures that would destroy liberty, partly because I cannot find a better alternative, I shall resolve these difficulties by using the word liberalism in its original sense—as the doctrines pertaining to a free man. 1 Joseph Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954) p. 394. Chapter I The Relation between Economic Freedom and Political Freedom IT IS WIDELY BELIEVED that politics and economics are separate and largely unconnected; that individual freedom is a political problem and material welfare an economic problem; and that any kind of political arrangements can be combined with any kind of economic arrangements.

Financial Fiasco: How America's Infatuation With Homeownership and Easy Money Created the Economic Crisis
by Johan Norberg
Published 14 Sep 2009

It will still not survive unless it creates something that is valued more highly than the raw materials, components, ideas, capital, and labor from which it is made. And it will die even if nobody understands what happened. Politicians who distribute pork they cannot afford are reelected; butcher shops that sell pork they cannot afford go bankrupt. That is why the Austrian economist Joseph Schumpeter identified creative destruction as the core of capitalism. Competition from other companies and free choice for customers entail that less good operations are constantly being eliminated so that resources go instead to more promising business concepts and operations. Many people today see the recession as a crisis for capitalism.

Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
by Carlota Pérez
Published 1 Jan 2002

In this book, she makes an even more original and seminal contribution. She examines the interaction between that part of the economy commonly known as financial capital and the upsurge of new technologies from their first beginnings to the time when they predominate in the structure and behavior of the economy. In his major work, Business Cycles (1939), Joseph Schumpeter, whilst interpreting the major waves of economic growth and technological transformation as ‘successive industrial revolutions’, insisted that these clusters of radical innovations also depended on financial capital. In fact, more space is devoted to finance in his book than to technology but, rather strangely, his followers – often known as ‘neo-Schumpeterians’ – neglected this aspect of his work.

The Nature of Technology
by W. Brian Arthur
Published 6 Aug 2009

But built up properly it will be central to my argument. Novel technologies must somehow arise by combination of existing technologies. Actually, this idea, like evolution itself, is by no means new. It has been mooted about by various people for well over 100 years, among them the Austrian economist Joseph Schumpeter. In 1910 Schumpeter was twenty-seven, and he was concerned not directly with combination and technology but with combination in the economy. “To produce,” he said, “means to combine materials and forces within our reach…. To produce other things, or the same things by a different method, means to combine these materials and forces differently.”

Makers
by Chris Anderson
Published 1 Oct 2012

Today, odds are, almost none of them are. Rao writes: The primary effect of steam was not that it helped colonize a new land, but that it started the colonization of time. Many people misunderstood the fundamental nature of Schumpeterian growth [a reference to the innovation and entrepreneurship growth theories of the economist Joseph Schumpeter] as being fueled by ideas rather than time. Ideas fueled by energy can free up time which can then partly be used to create more ideas to free up more time. It is a positive feedback cycle.17 The Third Industrial Revolution? There are those who argue that the Information Age is the Third Industrial Revolution.

The Fair Trade Scandal: Marketing Poverty to Benefit the Rich
by Ndongo Sylla
Published 21 Jan 2014

For him to be seen as a wholehearted partisan of free trade however, not to mention the founding father of this tradition, a good deal of nit-picking and rhetorical contortions must have been undertaken by eminent historians of political economy. In The Tradition of Free Trade (2004), Lars Magnusson dismantles this theory in a very convincing manner. To begin with, he points out that the arguments in favour of free trade existed before Smith. This was actually vigorously claimed by Joseph Schumpeter, an author who saw Smith as an economist lacking in originality, although he managed to faithfully reflect the spirit of his times.3 Magnusson’s analysis is generally similar to that of Schumpeter while completing it on some points. According to Magnusson, there were not one but several faces of Adam Smith.

Empire of Illusion: The End of Literacy and the Triumph of Spectacle
by Chris Hedges
Published 12 Jul 2009

The government—the only institution citizens have that is big enough and powerful enough to protect their rights—is becoming weaker, more anemic, and increasingly unable to help the mass of Americans who are embarking on a period of deprivation and suffering unseen in this country since the 1930s. Creative destruction, Joseph Schumpeter understood, is the essential fact about unfettered capitalism. “You are going to see the biggest waste, fraud, and abuse in American history,” Ralph Nader told me when I asked about the bailouts. “Not only is it wrongly directed, not only does it deal with the perpetrators instead of the people who were victimized, but they don’t have a delivery system of any honesty and efficiency.

Plenitude: The New Economics of True Wealth
by Juliet B. Schor
Published 12 May 2010

Even when growth picks up again, there will be large sectors in permanent decline—automobiles, industrial farming, and perhaps even fossil fuels will be smaller and less profitable industries, if they’re profitable at all. With a downturn this severe, there will be a protracted and difficult process of weeding out low-performing industries, companies, and products, or what the Austrian economist Joseph Schumpeter called creative destruction. It will take time to re-create the classic conditions for prosperity, such as confidence, financial regulation, monetary stability, consumer demand, and a steady policy hand. Due to the complexity of the global economy, the challenges are far greater than we’ve ever faced.

In Defense of Global Capitalism
by Johan Norberg
Published 1 Jan 2001

If you and I and everyone else can think of things that we would like two people to do, we have a permanent manpower deficit, with 6 billion people wanting at least 12 billion employees. This is why we will never have too much manpower, no matter how prosperous we become or how efficient our production gets. Efficiency does, of course, have a flip side. Economist Joseph Schumpeter famously described a dynamic market as a process of ‘‘creative destruction,’’ because it is concerned with ‘‘destroying’’ old solutions and industries, but with a creative end in view, namely the transfer of manpower and capital to more productive occupations. This gives us a higher standard of living, but as the word ‘‘destruction’’ suggests, not everyone benefits from every market transformation in the short term.

The Unbanking of America: How the New Middle Class Survives
by Lisa Servon
Published 10 Jan 2017

Enormous advances in technology, significant changes in consumer behavior, and a radically revised regulatory environment are coming together in ways that offer hope for more efficient, effective, and equitable provision of consumer financial services. This moment is notable for its rarity—this business sector “hasn’t changed materially in hundreds of years,” according to Brett King, an expert in retail banking. Creative destruction, a term coined by the Austrian economist Joseph Schumpeter, denotes the process by which capitalism destroys old economic orders and reinvents them through innovation. Here’s an example of this process at work: innovations in refrigeration and transportation technologies enabled the creation of supermarkets, which ultimately put many smaller food shops out of business.

Dead Companies Walking
by Scott Fearon
Published 10 Nov 2014

The bad ones don’t. Sure, they might get some buzz and even some big initial funding. But if they don’t have what it takes, they die a quick death. Even when the region is doing well, dozens of unheralded companies come on the scene every year, only to fade away. The Austrian economist Joseph Schumpeter called this process “creative destruction.” It’s a harsh but vital process. It weeds out subpar ideas and gives good ones like Google the nourishment they need to grow. Short-sellers help make this happen. We identify the duds, which is good not only for the larger economy but also for the people involved in those ventures.

The Long Good Buy: Analysing Cycles in Markets
by Peter Oppenheimer
Published 3 May 2020

Looking at history, one of the most important components and characteristics of bubbles, aside from their price ascent and subsequent decline, is the belief that something has changed, usually a new technology, innovation or growth opportunity. This component of a strong narrative that drives the interest in investment was observed by renowned Austrian economist Joseph Schumpeter, who argued that speculation often occurs at the start of a new industry. More recently, in a testimony before the US Congress on 26 February 1997, then-chairman of the Federal Reserve Alan Greenspan noted that ‘regrettably, history is strewn with visions of such “new eras” that, in the end, have proven to be a mirage’.

Cogs and Monsters: What Economics Is, and What It Should Be
by Diane Coyle
Published 11 Oct 2021

Even with today’s far more powerful computers, ‘big’ data and AI, there are good reasons to believe planning would fail, as Chapter Six will discuss. Competitive markets also provide an unrivalled way of changing the allocation of resources over time. John Kay has described this function as a ‘discovery process’. Joseph Schumpeter (1994 [1942]) famously referred to it as ‘creative destruction’. The competitive process is the source of dynamism in the economy—innovation, the invention and production of new goods and services, growth. Other types of economic organisation, including central planners, can sustain growth for a period, perhaps quite a long period (see Acemoglu and Robinson 2012).

Dual Transformation: How to Reposition Today's Business While Creating the Future
by Scott D. Anthony and Mark W. Johnson
Published 27 Mar 2017

Any leader who has gone through a reorganization or reinvention will tell you that, as hard as it is to decide to change, it is easier than actually making the change. The term often used to describe what happened to Kodak, newspaper companies, and Nokia is creative destruction. The phrase is generally credited to economist Joseph Schumpeter from his landmark book Capitalism, Socialism and Demography. In that work he vividly described the “gale of creative destruction” that tears down established institutions. Schumpeter described the destructive power of this gale, coupled with the innovative creation spurred by entrepreneurs, noting, “[T]he problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them.”

Prediction Machines: The Simple Economics of Artificial Intelligence
by Ajay Agrawal , Joshua Gans and Avi Goldfarb
Published 16 Apr 2018

These companies grew so large because their core technologies allowed them to realize lower costs and higher quality as they scaled. At the same time, competitors emerged, even in the face of these scale economies; just ask Microsoft (Apple and Google), Intel (AMD and ARM), and AT&T (almost everybody). Technology-based monopolies are temporary due to a process that economist Joseph Schumpeter called “the gale of creative destruction.” With AI, there is a benefit to being big because of scale economies. However, that doesn’t mean that just one firm will dominate or that even if one dominates, it will last long. On a global scale, that is even truer. If AI has scale economies, that will not affect all industries equally.

Fully Automated Luxury Communism
by Aaron Bastani
Published 10 Jun 2019

Once more we see production relocating to wherever labour is cheap and profits easier to realise. The ‘technological fix’ is different, with Marx consistently clear that technological innovation is an inherent feature of capitalism. His explanation, just as it would be for later voices such as Milton Friedman and Joseph Schumpeter, was that it was propelled by competition between capitalists. The imperative to compete means capitalists must always find cheaper, more efficient ways of producing commodities – often substituting machines for human labour – while also offering improvements on goods and services available to consumers.

How Democracy Ends
by David Runciman
Published 9 May 2018

We mean little to them as individuals because they don’t really see us as individuals – we are simply the unit that happens to be in front of the screen. People watch people. Machines process them. The threat to democracy is not manipulation. It is mindlessness. Still, does it really matter if representative democracy gets reduced to a form of advertising? Many writers have long suspected that’s all it has ever been. The economist Joseph Schumpeter, writing in 1942, defined democracy as a competition between teams of salesmen to get the voters to buy their product.60 It’s like buying soap powder. When we tire of one brand we can replace it with another. In 1969 Joe McGinnis published The Selling of the President 1968, in which he described how Richard Nixon had been repackaged by Madison Avenue to make him more palatable to the American electorate.61 Some readers at the time professed to be shocked at this manipulation of the democratic process; few would be shocked today.

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant
by W. Chan Kim and Renée A. Mauborgne
Published 20 Jan 2014

Schumpeter (1975). 5 Ibid. 6 For more discussions on the new growth theory and endogenous growth, see Paul Romer (1990, 1994) and G. M. Grossman and E. Helpman (1995). 7 For detailed discussions on competitive strategy, see Porter (1980, 1985, 1996). 8 See Kim and Mauborgne (1997a, 1999a, 1999b, 2009). 9 See Joseph Schumpeter (1934) and Andrew Hargadon (2003). 10 For a fuller discussion on this, see the red ocean trap ten in chapter 11. 11 While these two concepts are distinct, the methods associated with them can be used in a complementary manner. For example, once a problem is redefined by reconstruction of blue ocean strategy, problem-solving methods such as Theory of Inventive Problem Solving, which has the Russian acronym TRIZ, can be used to identify innovative solutions for the redefined problem by exploring many possible resource recombinations.

Genentech: The Beginnings of Biotech
by Sally Smith Hughes

Bud 1993, 193. 121 Yoxen 1983, 49. 122 Shapin defines the scientific entrepreneur “as one who is both a qualified scientist and, like all commercial entrepreneurs, a risk taker.” Shapin, 2008, 210. 123 For the notion applied to biotechnology of “creative destruction” fueling innovation and progress as popularized by economist Joseph Schumpeter, see McKelvey 1996, 4–6; and Orsenigo 1989, 4–5. EPILOGUE 1Rathmann oral history, 2003, 16, 36. 2Penhoet oral history, 1998, 110. 3Quoted in U.S. Congress 1988, 128. 4Quoted in Susan Brenner, “Genentech: Life under a Microscope,” Inc., May 1981, 62–68. 5Kenney 1986, 4. 6Gurin and Pfund 1980, 542.

The Great Wave: The Era of Radical Disruption and the Rise of the Outsider
by Michiko Kakutani
Published 20 Feb 2024

Yet finding the will and the resources to make great advances is harder in peacetime; it is all too easy to put off doing something about poverty, the opioid crisis or climate change until another day. War concentrates our attention and, like it or not, has done so throughout human history.” It’s an argument that echoes ideas articulated by the Austrian-born economist Joseph Schumpeter in 1942, in the wake of the Great Depression. Crises, he asserted, could become cradles for innovation by catalyzing the process he called “creative destruction”: In freeing up capital, the destruction of old companies could lead to the development of transformative new industries and breakthrough products, while the pressures of an economic downturn could incentivize inventors and outsiders to find creative solutions to old and new problems.

The botany of desire: a plant's-eye view of the world
by Michael Pollan
Published 27 May 2002

.* Even so, there was more to the windhandel than mere wind. For the tulip craze marked the birth of a real business—the Dutch bulb trade—that would long outlast the mania. (The same could be said of our own Internet bubble: beneath the froth of speculation is a new and important industry.) According to Joseph Schumpeter, it is not at all unusual for the birth of a new business to be attended by a speculative bubble as capital rushes in, dazzled by the young industry’s wildly exaggerated promise. Every bubble sooner or later must burst—the carnival that was permanent would spell the end of the social order.

The New Geography of Jobs
by Enrico Moretti
Published 21 May 2012

Industries that are on the technological frontier will become mainstream and, later, relics of the past. What is a good job today will inevitably become a bad job in the future. This dynamic was first recognized by Karl Marx, who thought that it was evidence of the inherent instability of the capitalist system. Eighty years later, however, the Austrian economist Joseph Schumpeter pointed out that instead of being a flaw, this process of “creative destruction” is capitalism’s greatest strength and its engine of growth. By its very nature, the innovation sector is the part of a market economy where creative destruction matters the most. The Princeton economist Alan Blinder recently noted that in the 1950s, companies making television sets were at the heart of America’s high-tech sector and generating tens of thousands of high-paying jobs.

The Global Minotaur
by Yanis Varoufakis and Paul Mason
Published 4 Jul 2015

Thus asabiyyah fades and, at some point, the rulers discover that their authority and power have weakened. Strife and anarchy follow, hope diminishes and optimism fades. Then some other group that has developed asabiyyah elsewhere takes over and the cycle continues. Commercial society is anything but immune to the prey–predator dynamic. Joseph Schumpeter (1883–1950), the doyen of liberal economists (though, paradoxically, he was much influenced by Marx’s economics), warned that it is in capitalism’s nature periodically to generate violent crises. The reason? Capital’s tendency to coalesce into large corporations with significant monopoly power.

The Cost of Inequality: Why Economic Equality Is Essential for Recovery
by Stewart Lansley
Published 19 Jan 2012

Economies have to evolve and adjust as some companies fail, new ones emerge and the success stories of the past are overtaken by new technological developments and the industries of the future. Innovation is the lifeblood of economic dynamism and inevitably involves some pain or ‘creative destruction’ as the Austrian economist, Joseph Schumpeter, described it in Capitalism, Socialism and Democracy published in 1942. It is a process of change that inevitably brings winners and losers. If the industrial restructuring of the last thirty years had been driven by business innovation aimed at improving productivity and long-run performance, creating new jobs and wealth along the way, the dislocation involved would have been defensible.

Buying Time: The Delayed Crisis of Democratic Capitalism
by Wolfgang Streeck
Published 1 Jan 2013

Even progressive income taxes would simply mean that the state developed hidden interests in the maintenance of inequality and the concentration of profits. Goldscheid was not alone in his pessimistic view of fiscal policy. The possibility of a ‘crisis of the tax state’ was widely discussed in the period immediately after the First World War, an especially influential contribution being the young Joseph Schumpeter’s lecture of 1918 to the Austrian Gesellschaft der Soziologie.46 His conclusion was that the historical institution of the tax state had not yet reached its limits, and that the war debts of Germany and Austria in particular could be settled without general socialization. Looking further ahead, however, he did not rule out the possibility – indeed, he expected it – that the tax state and the capitalist mode of production as a whole would one day cease to be viable.47 This idea would subsequently be banished to the catacombs in the history of economic thought, especially after 1945, when a welfare-state capitalism domesticated along Keynesian lines appeared to usher in a new era.

SuperFreakonomics
by Steven D. Levitt and Stephen J. Dubner
Published 19 Oct 2009

When the solution to a given problem doesn’t lay right before our eyes, it is easy to assume that no solution exists. But history has shown again and again that such assumptions are wrong. This is not to say the world is perfect. Nor that all progress is always good. Even widespread societal gains inevitably produce losses for some people. That’s why the economist Joseph Schumpeter referred to capitalism as “creative destruction.” But humankind has a great capacity for finding technological solutions to seemingly intractable problems, and this will likely be the case for global warming. It isn’t that the problem isn’t potentially large. It’s just that human ingenuity—when given proper incentives—is bound to be larger.

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines
by William Davidow and Michael Malone
Published 18 Feb 2020

The workers in all these new jobs—the rising middle class—purchased homes, appliances, and clothes, creating still more jobs and more consumers. The virtuous circle this created was classic capitalism in action, and arguably the greatest achievement of the Industrial Revolution. Of course, the internal combustion engine also unleashed the forces of Joseph Schumpeter’s creative destruction. Most notably, the engine replaced the horse. In 1870 there was one horse for every five citizens and 27 percent of farmland was used to grow feed for horses used for transportation.6 According to historian Joel Tarr, “in 1880 New York and Brooklyn were served by 427 blacksmith shops, 249 carriage and wagon enterprises, 262 wheelwright shops, and 290 establishments dealing in saddles and harnesses.”

The New Class Conflict
by Joel Kotkin
Published 31 Aug 2014

It is possible that as these firms move further from their entrepreneurial roots, many take on what anthropologist David Graeber describes as “a timid, bureaucratic spirit” that responds to the needs of investors and focuses on preserving already established business lines. Many observers, from Adam Smith and Karl Marx to Joseph Schumpeter, agree that monopoly creation, rent seeking, and price fixing are the natural instincts of the monied classes rather than risk taking, hard work, and free enterprise.82 Over time, this yearning for oligarchy could also threaten a host of other large firms, in media and finance in particular, which have been subject to what one analyst calls the “super-sizing” of big business.

Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us
by Dan Lyons
Published 22 Oct 2018

“If today is considered a retail apocalypse, then what’s coming next could truly be scary,” Bloomberg reported in November 2017, predicting that by the time the storm ends as many as eight million people, most of them low-income workers, could be put out of work. Where are those eight million laid-off retail workers going to go? People in Silicon Valley like to talk about “creative destruction,” a term popularized by economist Joseph Schumpeter. In the happy-face version of how this works, technology kills old jobs, but it also creates new and better ones. Factory workers lose their jobs to robots, but then go to work at the company that makes the robots. But eight million displaced retail workers are not going to get absorbed into Amazon.

The Future of Capitalism: Facing the New Anxieties
by Paul Collier
Published 4 Dec 2018

* Correspondingly, the anomalous individuals who were both very good and very rich, such as my old friend George Soros, became super-villains, distrusted by both sides. * ‘Creative destruction’ is the process by which efficient firms drive out less efficient through competition in the market. It accounts for much of the gradual increase in average incomes. The term was coined by Joseph Schumpeter (1942), who described it as ‘the essential fact about capitalism’. It is why all the other ‘isms’, however romantically appealing, are at best irrelevant. The future of our societies will depend upon reforming capitalism, not overthrowing it. * The building blocks – pragmatism, prosperity, community, ethics and social psychology – all cohere.

The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth
by Jeremy Rifkin
Published 9 Sep 2019

Stranded assets are part of the normal day-to-day operations of the market. But occasionally, an entire class of assets can suddenly and unexpectedly become stranded. This generally happens when a revolutionary new class of technologies and accompanying infrastructure platforms suddenly enter the marketplace, producing what Joseph Schumpeter termed “creative destruction,” quickly depreciating the value of existing assets, killing them off and moving them from the asset column to the liability column on the balance sheet. These types of disruptions most often characterize the great paradigm shifts in communication technology, sources of energy, modes of transport, and changes in habitats—for example, the shift from postal communication to the telephone, or from the horse and buggy to the automobile.

Restarting the Future: How to Fix the Intangible Economy
by Jonathan Haskel and Stian Westlake
Published 4 Apr 2022

Also, as we saw in figure 1.4, influential research by a team at the Organisation for Economic Co-operation and Development (OECD), led by Chiara Criscuolo, has found a steady rise since 2001 between the leading firms in the industry and the laggards.4 To many economists, enduring leader/laggard gaps looks like another symbol of competition gone wrong. After all, the genius of competition is that only firms with the best product will do well in the marketplace. But the best product is subject to continual change, what the economist Joseph Schumpeter called creative destruction: “This process of creative destruction is the essential fact about capitalism.”5 In a well-functioning market we would expect to see laggard firms either exiting the market or replacing the leading firms as their products get better. For some, another troubling aspect of competition in the modern economy is the overwhelmingly conglomerate nature of some of our new firms.

The Capitalist Manifesto
by Johan Norberg
Published 14 Jun 2023

This is not even what the advocates of this position claim; instead they mean that people who have a certain type of work at a certain age today do not have a much better salary than a person in a similar situation and in a similar position in 1980. Whoever has an American minimum wage today is no better than the person who had the minimum wage in 1980. Yet it’s not the same person on that wage, then and now. The Austrian economist Joseph Schumpeter pointed out that we often look at distribution issues as if we were looking at a hotel where the rooms are nicer the higher up you get. When we just take a snapshot of national income distribution today and compare it to what it looked like a few decades ago, we will not see much change except that the large suites at the top have become even more luxurious with espresso machines and silk sheets.

The Half Has Never Been Told: Slavery and the Making of American Capitalism
by Edward E. Baptist
Published 24 Oct 2016

The new elements they introduce as levers of dominance might be technological innovations, but entrepreneurs rarely create these innovations themselves. Instead, they figure out how to reap their benefits in order to rip market share and profits away from other capitalists who are invested in status-quo technologies and staler business models. They are architects of the dynamic of “creative destruction” that iconoclastic economist Joseph Schumpeter identified as the core engine of capitalism’s growth. Creative destruction produces wrenching shocks, devastating depressions following dramatic expansions, wars and conquests and enslavements. Here, in New Orleans, cotton—and slaves—enabled creative destruction to produce the modern economy.20 Nolte said he did what he did because of something he wanted to feel—what he called “the charm,” the spell he wove upon himself by knitting a “vast web of extended commerce” with himself at the center.

…

Nolte, Memoirs; Robert Roeder, “New Orleans Merchants, 1790–1837” (PhD diss., Harvard University, 1959). 19. The classic statement of the capitalist-as-Puritan is Max Weber, The Protestant Ethic and the Spirit of Capitalism trans. Talcott Parsons (New York, 1930). 20. John Cassidy, How Markets Fail: The Logic of Economic Calamities (New York, 2009); Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York, 1947). 21. Nolte, Memoirs, 69, 274–275, 311–313; Stephen Palmié, “A Taste for Human Commodities,” in Palmié, ed., Slave Cultures and the Culture of Slavery (Knoxville, TN, 1995), 40–54; Roeder, “New Orleans Merchants.” 22. George Green to J.

Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity
by Douglas Rushkoff
Published 1 Mar 2016

Most of the people enabling this have no reason to believe it is harmful to the business landscape, much less to human beings. At worst, argue today’s generation of technopreneurs, we are undergoing a whole lot of “creative destruction.” That’s the process, first coined by Marx but popularized by Austrian-American economic philosopher Joseph Schumpeter,20 through which the economy achieves a natural churn. Simply put, it’s a description of how young companies with superior technologies or processes invariably unseat established ones. Old ways of doing things are replaced by better ones. There’s pain, as companies go out of business and people lose jobs, but ultimately there’s gain, as the new market establishes itself.

The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction
by Richard Bookstaber
Published 1 May 2017

Irving Fisher (1892, 109) wrote, “Before Jevons, all the attempts at mathematical treatment fell flat.… [T]he mathematical method really began with Jevons in 1871.” Alfred Marshall’s writings also had the indelible mark of Jevons’ theories, though Marshall was never as willing as Fisher to recognize Jevons’ contribution. Still, Joseph Schumpeter (1954, 837) wrote, “No unbiased reader can fail to perceive … that Marshall’s theoretical structure, barring its technical superiority and various developments of detail, is fundamentally the same as that of Jevons, Menger, and especially Walras.” 4. See Schivelbusch (2014). 5. Hobsbawm (1999), 87–93. 6.

The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It
by Timothy Noah
Published 23 Apr 2012

Alan V. Deardorff and Robert M. Stern (Ann Arbor: University of Michigan Press, 1994), 343; and Jagdish Bhagwati, “The Stolper-Samuelson Theorem: Then And Now,” in Stolper-Samuelson Golden Jubilee, 219. 5. Taussig, who for many years had chaired Harvard’s Economics Department (he was succeeded by Joseph Schumpeter), was a highly influential figure in modern trade theory. He died the year before Stolper and Samuelson published their paper. In the passage they quoted, Taussig went on at cringe-inducing length: “It is a belief held especially in countries of high wages like the United States, and it goes with—indeed, is a part of—the most persuasive argument in favor of a policy of tariff protection.

The Impulse Society: America in the Age of Instant Gratification
by Paul Roberts
Published 1 Sep 2014

These new sectors offered not only higher wages, but also entirely new kinds of employment. Making a car, for example, required steel workers and tire makers—plus a lot of engineers and designers and marketing experts and Freudian analysts—and the wages from these new jobs led to even more economic activity. This “gale of creative destruction,” as economist Joseph Schumpeter called it, was the defining force of industrial capitalism, “incessantly destroying the old [economic order], incessantly creating a new one.” And generally speaking, the new order was a definite improvement. In most industrial societies, this surge in new prosperity was broadly enjoyed. We got higher wages, lower prices, and a steady stream of innovations, such as jet engines and X-ray photography and color TV, which lifted everyone’s living standards while creating still more avenues for growth and employment.

The Enigma of Capital: And the Crises of Capitalism
by David Harvey
Published 1 Jan 2010

Devalued capital can exist in many forms: deserted and abandoned factories; empty office and retail spaces; surplus commodities that cannot be sold; money that sits idle earning no rate of return; declining asset values in stocks and shares, land, properties, art objects, etc. Both Karl Marx and Joseph Schumpeter wrote at length on the ‘creative-destructive’ tendencies inherent in capitalism. While Marx clearly admired capitalism’s creativity he (followed by Lenin and the whole Marxist tradition) strongly emphasised its self-destructiveness. The Schumpeterians have all along gloried in capitalism’s endless creativity while treating the destructiveness as mostly a matter of the normal costs of doing business (although they admit that occasionally the destructiveness regrettably gets out of hand).

Fully Grown: Why a Stagnant Economy Is a Sign of Success
by Dietrich Vollrath
Published 6 Jan 2020

In particular, they looked into how innovation is used to grab customers and market share away from existing competitors. In their work, they take seriously the turnover among firms and workers as firms compete. Aghion and Howitt refer to their theory as “Schumpeterian,” as it involves the idea of creative destruction—the replacement of old firms with new ones—originally described by Joseph Schumpeter. To see their logic, it is easiest to think of the extreme cases first. If there is intense competition within an industry, perhaps because it is hard to exclude others from copying one firm’s ideas, or because a firm’s product (e.g., gasoline) is something people don’t have strong preferences about, there is little incentive to innovate.

War for Eternity: Inside Bannon's Far-Right Circle of Global Power Brokers
by Benjamin R. Teitelbaum
Published 14 May 2020

Domestically, though, within the United States, it wouldn’t have to be that way. Our internal conflict wouldn’t need to be dealt with militarily or through violence, but it would require destruction, particularly destruction of our public institutions, many of which, Steve believes, are in need of revitalization or, he suggests, being “blown up.” He mentions Joseph Schumpeter’s notion of “creative destruction” and Henri Bergson’s idea of élan vital, in addition to the Traditionalists. “It’s this thing that you have to go through, that you do have to destroy to rebuild.” It sounds like an agenda of chaos. Steve wants to see mass disassembly of our largest governmental agencies, and all this alongside his other agendas of breaking up the European Union and stopping the free international flow of people, goods, and money.

The Weightless World: Strategies for Managing the Digital Economy
by Diane Coyle
Published 29 Oct 1998

Lester Salamon, Helmut Anheier, Wojciech Sokolowski & associates (1996) The Emerging Sector: a statistical supplement, Johns Hopkins Institute for Policy Studies, Johns Hopkins University, Baltimore, MD. Lester Salamon & Helmut Anheier (1996) The Emerging Non-profit Sector, Manchester University Press, Manchester. Juliet Schor (1992) The Overworked American, Basic Books, New York. Joseph Schumpeter (first published 1942) Capitalism, Socialism and Democracy. Gill Seyfang and Colin Williams (February 1997) ‘LETS make money work for people rather than profits’, Kindred Spirit. Neal Stephenson (first published 1992) Snow Crash, Bantam, London. Bruce Sterling (1988) Islands in the Net, Arbor House.

The Great Depression: A Diary
by Benjamin Roth , James Ledbetter and Daniel B. Roth
Published 21 Jul 2009

While the gut-wrenching drama that played out in the stock market those October days made an indelible mark on Roth and many Americans, only about 2.5 percent of Americans actually owned stocks in 1929. Many subsequent historians see the crash as more of a catalyst for the Depression than its cause. Still, as economist Joseph Schumpeter put it, Americans of all walks of life “felt that the ground under their feet was giving way.” And the crash closed a frenetic era in American economic history, a period in which the stock market became the get-rich equivalent of the previous century’s gold rush. The notion that anyone with just fifteen dollars a week could become a millionaire by “playing the market on margin” pervaded American culture during the boom of the 1920s.

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy
by Nathan Schneider
Published 10 Sep 2018

It’s how smartphones have replaced everything from alarm clocks and record collections to asking driving directions from a gas-station attendant. The disrupters can win big. Christensen’s peers credited him with discovering a motive force in contemporary capitalism, a sunny successor to the “creative destruction” that Karl Marx, and then Joseph Schumpeter, observed in the industrial age. Thus we deify serial disrupters like Steve Jobs and Elon Musk. But what about the disrupted—those who endure the effects? In centuries past, among St. Clare’s nuns and the Diggers, among the Rochdale Pioneers and the Knights of Labor, cooperative economies have tended to take hold on the receiving end of economic upheavals.

Driverless: Intelligent Cars and the Road Ahead
by Hod Lipson and Melba Kurman
Published 22 Sep 2016

The 739,900 employees in the United States who currently work as automotive service technicians might argue about who’s going to take the 3 am shift, but no one will be there to overhear them.8 As jobs disappear, whether or not new jobs will appear in their place remains an open question. In the 1940s economist Joseph Schumpeter coined the term creative destruction to describe the restructuring process that follows the introduction of a disruptive technology. While this restructuring process touches several major parts of the economy, including equipment used and regulatory structures, its most visible and controversial manifestation is in the destruction of jobs.

More From Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources – and What Happens Next
by Andrew McAfee
Published 30 Sep 2019

Any central planner will miss many of the actual innovators or actively try to squelch them to protect the status quo of which the planners themselves are a part. This cycle of capitalist, technology-rich “creative destruction” was beautifully described in the middle of the twentieth century by the Austrian economist Joseph Schumpeter. But since the late nineteenth century and the work of Alfred Marshall and William Jevons, we’ve believed that this cycle would cause us to use up more and more of our planet’s resources. This was true throughout the Industrial Era, and especially in the years around Earth Day and the birth of the modern environmental movement.

The Pirate's Dilemma: How Youth Culture Is Reinventing Capitalism
by Matt Mason

Punk is the place where our story begins, because all the ideas in this book are underpinned by the punk perspective and the D.I.Y. philosophy it championed. The do-it-yourself movement of more than thirty years ago offered some suggestions as to how mass culture could be brought down. Today the ideas and technologies empowering us are underpinned by D.I.Y., and mass culture is beginning to falter. Hurricane Punk Economist Joseph Schumpeter once said economic development requires “gales of creative destruction.” Punk was a category five hurricane. This hurricane had been brewing since the nineteenth century at least, through a number of countercultural movements that sought to subvert the status quo. Realism, Impressionism, Dadaism, and surrealism all helped forge the spirit of punk, encouraging artists to break the rules and ignore traditions.

A World Without Email: Reimagining Work in an Age of Communication Overload
by Cal Newport
Published 2 Mar 2021

Put another way, although the now common tableau of the frantic business executives furiously typing on their phones might seem like the personification of our modern moment, it’s perhaps downright Paleolithic in its origins. Peter Drucker and the Tragedy of the Attention Commons As a child in Austria during the first decades of the twentieth century, Peter Drucker was exposed to some of the foremost economic thinkers of the age, including notables like Joseph Schumpeter of “creative destruction” fame, who attended evening salons held by Drucker’s parents, Adolph and Caroline.29 The intellectual energy of these salons laid the foundation for Drucker’s eventual emergence as one of the most important business thinkers of the modern period; he is widely acknowledged as the “founder of modern management.”30 His career produced thirty-nine books and countless articles before his death in 2005 at the age of ninety-five.

Future Tense: Jews, Judaism, and Israel in the Twenty-First Century
by Jonathan Sacks
Published 19 Apr 2010

That is when people, fearing chaos, begin to divide the world into the children of light and the children of darkness and prepare themselves to fight holy wars in the name of this god or that, ‘Jihad versus McWorld’ as Benjamin Barber characterises one of the central conflicts of our time.3 At such historic junctures, in Yeats’ famous words, ‘the best lack all conviction, while the worst are full of passionate intensity’. I came to know the late Sir Isaiah Berlin towards the end of his long and distinguished life. He was one of the twentieth century’s greatest defenders of freedom, but there was one thing on which we disagreed. At the end of his most famous essay, ‘Two Concepts of Liberty’, he quoted Joseph Schumpeter: ‘To realise the relative validity of one’s convictions and yet stand for them unflinchingly, is what distinguishes a civilised man from a barbarian.’4 Together with others I asked: if one’s convictions are only relative, why stand for them unflinchingly? If no truths are absolute, why choose to be civilised at all, rather than a barbarian?

Green Swans: The Coming Boom in Regenerative Capitalism
by John Elkington
Published 6 Apr 2020

Another of my favorite economists, Nikolai Kondratiev, was shot in 1938 because he told Stalin that capitalism, at the time flat on its face during the Great Depression, would recover and come back even stronger than before the crash. Brave, right, but suicidal. Stalin preferred to think that capitalism was down and would stay down. Not true then and, I suspect, very unlikely to be true now. Kondratiev’s work was picked up by Austrian economist Joseph Schumpeter, another huge influence on my thinking, and more recently by Carlota Perez, ditto.24 As Perez herself would argue, stories like that of Thomas Midgley Jr., told on pages 171–173, are powerful reminders that new technologies periodically disrupt our economies—and are likely to do so in the coming decades, in the process creating whole new generations of challenges alongside the undoubted benefits.

The Internet Trap: How the Digital Economy Builds Monopolies and Undermines Democracy
by Matthew Hindman
Published 24 Sep 2018

Governments could not hope to govern cyberspace, because the internet was not just a technology but “an act of nature.” Barlow was hardly the first to invoke “natural” laws or biological metaphors in talking about the internet. Southern California’s tech culture had been shaped by both Whole Earth Catalog-tinged counterculture2 and Joseph Schumpeter-inspired “evolutionary” capitalism. But Barlow’s treatise gave such views a wider audience. The essay was quickly mirrored on forty thousand other sites, making it arguably the most impressive example of viral content up to that point. Today the Declaration is often cited as the zenith of 1990s techno-utopian silliness.

A History of the World in Seven Cheap Things: A Guide to Capitalism, Nature, and the Future of the Planet
by Raj Patel and Jason W. Moore
Published 16 Oct 2017

The demand for credit rose faster than the states’ capacity to intimidate and confiscate funds. The inverse of this problem was that while capitalists had power over states, they were powerless to perform one of the key tasks of states in the modern world: identify, map, and secure cheap nature. Joseph Schumpeter famously observed that “without protection from some non-bourgeois group,” capitalists are “politically helpless.”86 When property conditions are established, populations subdued, flora and fauna mapped, and infrastructures built, capitalists do pretty well. But this all relies on credit and the militaries it can buy, and it’s worth pressing the difference between banking and other kinds of capitalist activity.

Escape From Rome: The Failure of Empire and the Road to Prosperity
by Walter Scheidel
Published 14 Oct 2019

Yet while this may have made warfare even costlier than it needed to be, in the end Rome’s massed infantry could always be counted on to hold the line: for centuries Rome lost many battles but never a war.62 Schumpeter in Rome? The War Machine Grinds On Back in 1919, in an indictment of the bloody follies of the Great Powers, Joseph Schumpeter sought to identify traits that turned a society into a “war machine,” an arrangement in which war was the only means for the prevailing form of political and social organization to “find an outlet and maintain its domestic position.” In this case, even when rational reasons for war-making were lacking, “War became the normal condition.… To take the field was a matter of course, the reasons for doing so were of subordinate importance.

…

PROXIMATE CAUSATION: CONQUEST REGIMES AND FISCAL SYSTEMS For Cicero, it already counted as a truism that (tax) revenue had “always been considered the sinews of the state,” just as 2,000 years later, Charles Tilly deemed “extraction” to be essential for supporting the three key state functions of state-making, war-making, and protection. As the Austrian economist Joseph Schumpeter reminded us with reference to his fellow Austrian sociologist Rudolf Goldscheid, “The budget is the skeleton of the state stripped of all misleading ideologies.” Whether as sinews or as bones, revenue sustained the state and its activities: “Follow the money, always follow the money”—Deep Throat’s (apocryphal) Watergate movie quote—is as good a precept for analyzing power relations as we can hope for.

The Googlization of Everything:
by Siva Vaidhyanathan
Published 1 Jan 2010

Stross, Planet Google: One Company’s Audacious Plan to Organize Everything We Know, vol. 1 (New York: Free Press, 2008); Alexander Halavais, Search Engine Society (Cambridge, MA: Polity, 2009). 10. Todd Gitlin, Media Unlimited: How the Torrent of Images and Sounds Overwhelms Our Lives (New York: Metropolitan Books, 2001). 11. The phrase is Joseph Schumpeter’s. See Schumpeter, Capitalism, Socialism, and Democracy (London: Allen and Unwin, 1952), 81. 12. Lucas D. Introna and Helen Nissenbaum, “Shaping the Web: Why the Politics of Search Engines Matters,” Information Society 16, no. 3 (2000): 169. 13. In another context I have used the term technocultural imagination to describe the conditions and habits that contemporary artists have enjoyed since the dissemination of digital technologies and networks.

The Great Disruption: Why the Climate Crisis Will Bring on the End of Shopping and the Birth of a New World
by Paul Gilding
Published 28 Mar 2011

I also do so because I have believed for many years that we are going to need business and markets fully mobilized if we are to achieve the historic task ahead of us. This is where my favorite economist comes in. Both as an activist and as an entrepreneur, I have always been particularly fond of the Austrian economist Joseph Schumpeter and his theories of creative destruction. He pointed out that markets are basically “a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” When I first read these words, I realized they could be describing an ecosystem like a rain forest.

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
by Ha-Joon Chang
Published 26 Dec 2007

The monopoly is due to the natural advantages accorded to the innovator, such as imitation lag (due to the time it takes for others to absorb new knowledge); reputational advantage (of being the first and so best-known producer); and the head start in ‘racing down learning curves’ (i.e., the natural increase in productivity through experience).8 The resulting temporary monopoly profit is reward enough for the innovative activity in most industries. This was indeed a popular argument against patents in the 19th century.9 This is also why patents do not feature at all in the Austrian-born American economist Joseph Schumpeter’s famous theory of innovation – Schumpeter believed that the monopoly rent (or what he calls the entrepreneurial profit) that a technological innovator will enjoy through the above mechanisms is a big enough incentive for investing in generating new knowledge.10 Most industries actually do not need patents and other IPRs to generate new knowledge – although they will be more than happy to take advantage of them, if they are offered to them.

Rogue State: A Guide to the World's Only Superpower
by William Blum
Published 31 Mar 2002

Rome was always being attacked by evil-minded neighbors...The whole world was pervaded by a host of enemies, it was manifestly Rome's duty to guard against their indubitably aggressive designs...Even less than in the cases that have already been discussed, can an attempt be made here to comprehend these wars of conquest from the point of view of concrete objectives. Here there was neither a warrior nation in our sense, nor, in the beginning, a military despotism or an aristocracy of specifically military orientation. Thus there is but one way to an understanding: scrutiny of domestic class interests, the question of who stood to gain. Joseph Schumpeter, 1919 1 America is today the leader of a world-wide anti-revolutionary movement in the defense of vested interests. She now stands for what Rome stood for. Rome consistently supported the rich against the poor in all foreign communities that fell under her sway; and, since the poor, so far, have always and everywhere been far more numerous than the rich, Rome's policy made for inequality, for injustice, and for the least happiness of the greatest number.

The Revenge of Analog: Real Things and Why They Matter
by David Sax
Published 8 Nov 2016

It ranks up there with the invention of steam power, electricity, and telecommunications. But it also contains an inherent assumption: that analog economic activity, and its associated work, will gradually be replaced or simply disappear. The commonly stated goal behind the digital economy is the maxim of creative destruction, coined by economist Joseph Schumpeter in the 1950s to describe revolutionary industrial change that consumes old processes and ways of doing business. As the hundreds of thousands of people who once worked for Kodak can tell you, this destruction is real. Wherever the digital economy has staked a claim, analog incumbents have struggled to adapt.

The New Harvest: Agricultural Innovation in Africa
by Calestous Juma
Published 27 May 2017

These are all too rare integrated approaches to studying an issue, developing a solution, and implementing it with full force, despite a hostile international environment, which demonstrate the difference that political will can make. Innovation and Economic Development Innovation is at the heart of economic transformation. Joseph Schumpeter’s seminal 1911 work, The Theory of Economic Development, outlines a general framework for understanding the role of innovation and entrepreneurship in economic development. For Schumpeter, economic development is nonlinear; it arises from endogenous systemic change—not external stimuli—and must take into account more than just economic conditions.

Originals: How Non-Conformists Move the World
by Adam Grant
Published 2 Feb 2016

Although we may not all aspire to start our own companies, create a masterpiece, transform Western thought, or lead a civil rights movement, we do have ideas for improving our workplaces, schools, and communities. Sadly, many of us hesitate to take action to promote those ideas. As economist Joseph Schumpeter famously observed, originality is an act of creative destruction. Advocating for new systems often requires demolishing the old way of doing things, and we hold back for fear of rocking the boat. Among nearly a thousand scientists at the Food and Drug Administration, more than 40 percent were afraid that they would face retaliation if they spoke up publicly about safety concerns.

The Upside of Inequality
by Edward Conard
Published 1 Sep 2016

Historically, innovators have found it difficult to prevent competitors from copying their ideas, even with patent protection. Instead, knowledge has spread rapidly and competitors have quickly found ways to catch up. The window for what economists call “Schumpeterian profits” (named for economist Joseph Schumpeter)—for innovators to earn above-average returns before competitors find a way to copy their ideas—has been brief. Just look at how quickly the leading mobile phone producers, once on the cutting edge of innovation, have lost their leadership. Motorola, Palm, Nokia, and BlackBerry are all shadows of their former selves.

Economists and the Powerful
by Norbert Haring , Norbert H. Ring and Niall Douglas
Published 30 Sep 2012

Cold War economics If we are to succeed in the war of ideologies and to win over the decent element in the enemy countries we must first of all regain the belief in the traditional values [of individual freedom, truth, and democracy]… —Friedrich August von Hayek, 1944 While in the early 1930s there was a great worry that capitalism might collapse due to lack of demand, as the Second World War approached the worry became that capitalism might simply be replaced outright. There was a pervasive sense of dismay and defeat among the intellectuals THE ECONOMICS OF THE POWERFUL 19 of the West. Support for communism grew and it was considered a very acute challenge for the Western economic model even among leading economists (Amadae 2003). Joseph Schumpeter (1943/2003), famous for describing entrepreneurship as a process of creative destruction, expressed his conviction that “a socialist form of government will inevitably emerge from an equally inevitable decomposition of capitalist society.” Frank Knight of the Chicago School, which later became famous for its uncompromising support of free markets, also expressed serious doubts.

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity
by Ha-Joon Chang
Published 4 Jul 2007

The monopoly is due to the natural advantages accorded to the innovator, such as imitation lag (due to the time it takes for others to absorb new knowledge); reputational advantage (of being the first and so best-known producer); and the head start in ‘racing down learning curves’ (i.e., the natural increase in productivity through experience).8 The resulting temporary monopoly profit is reward enough for the innovative activity in most industries. This was indeed a popular argument against patents in the 19th century.9 This is also why patents do not feature at all in the Austrian-born American economist Joseph Schumpeter’s famous theory of innovation – Schumpeter believed that the monopoly rent (or what he calls the entrepreneurial profit) that a technological innovator will enjoy through the above mechanisms is a big enough incentive for investing in generating new knowledge.10 Most industries actually do not need patents and other IPRs to generate new knowledge – although they will be more than happy to take advantage of them, if they are offered to them.

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
by Steven D. Levitt and Stephen J. Dubner
Published 11 Apr 2005

Wall Street Journal, March 16, 2004, which cites an Institute of Medicine report concluding that “there is no scientific basis for the recommendation [of eight glasses of water a day] and that most people get enough water through normal consumption of foods and beverages.” ADAM SMITH is still well worth reading, of course (especially if you have infinite patience); so too is Robert Heilbroner’s The Worldly Philosophers (New York: Simon & Schuster, 1953), which contains memorable profiles of Smith, Karl Marx, Thorstein Veblen, John Maynard Keynes, Joseph Schumpeter, and other giants of economics. 1. WHAT DO SCHOOLTEACHERS AND SUMO WRESTLERS HAVE IN COMMON? THE ISRAELI DAY-CARE STUDY: See Uri Gneezy and Aldo Rustichini, “A Fine Is a Price,” Journal of Legal Studies 29, no. 1 (January 2000), pp. 1–17; and Uri Gneezy, “The ‘W’ Effect of Incentives,” University of Chicago working paper.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
by George A. Akerlof and Robert J. Shiller
Published 1 Jan 2009

Douglas Steeples and David Whitten report extensive disagreement among economic observers about the best way to think about this depression.8 The depression of the 1890s has been variously considered an agricultural depression (Harold Underwood Faulkner), a consequence of the exhaustion of the safety valve of unexploited lands to the west (Frederic Jackson Turner), and the result of the essential completion of the nation’s network of railroads, depriving the economy of an investment opportunity (Joseph Schumpeter).9 Steeples and Whitten do not offer any way to resolve the confusing list of contributory factors; instead they stress the ongoing class war between populist and business interests. This war culminated in the presidential election of 1896, in the very middle of the depression, which became an intense battle over the desirability of inflation.

The Myth of Capitalism: Monopolies and the Death of Competition
by Jonathan Tepper
Published 20 Nov 2018

He wrote an entire book, titled Zero to One, praising creating businesses that are monopolies and defiantly declared that competition “is a relic of history.”9 Competition is a dirty word, whether you're in Omaha or Silicon Valley. Praising monopolies has a long tradition in the United States. Joseph Schumpeter, an Austrian-born economics professor at Harvard, is generally remembered for coining the phrase “gale of creative destruction,” in praise of competition. It is ironic that economists and consultants see him today as the champion of disruptive startups, when in Schumpeter's view, if you wanted to search for progress, it would lead you to the doors of monopolies.

Nervous States: Democracy and the Decline of Reason
by William Davies
Published 26 Feb 2019

What allows entrepreneurs to do this is not facts or professional qualifications, so much as impressions and information that others haven’t (yet) received. As in war, speed, secrecy, and courage are of the essence. The analogy between great business innovators and military leaders was made explicit by another Viennese economist, with a similar enthusiasm for raw capitalism, Joseph Schumpeter. As he wrote in the early 1930s: As military action must be taken in a given strategic position even if all the data potentially procurable are not available, so also in economic life action must be taken without working out all the details of what is to be done. Here the success of everything depends upon intuition.9 Anticipating contemporary fascination with the personalities of Steve Jobs or Mark Zuckerberg, Schumpeter was intrigued by the exceptional psychological attributes of these characters.

Bezonomics: How Amazon Is Changing Our Lives and What the World's Best Companies Are Learning From It
by Brian Dumaine
Published 11 May 2020

If Amazon’s enemies want a system where everyone plays nice, where less efficient companies get government protection, and the U.S. Justice Department is the referee, that’s their prerogative. That anti-Amazon vision, however, carries a steep price. It will stifle innovation. In the 1930s, Austrian economist Joseph Schumpeter argued that capitalism at its heart was about creative destruction—the old had to make way for the new if there was to be progress. History has borne him out. The automobile wiped out the buggy makers, cell phones have wiped out landlines, cloud computing is taking the place of corporate data centers, organic food is hurting the business of packaged goods giants like General Mills and Kraft Heinz.

How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely
by Andrew Craig
Published 6 Sep 2015

Marcus Aurelius. Meditations. London: Penguin, 2006. Markusen, James R., James R. Melvin, Keith E. Maskus and William H. Kaempfer. International Trade: Theory and Evidence. Boston: McGraw-Hill, 1995. Marx, Karl, and Friedrich Engels. The Communist Manifesto. London: Penguin, 2002. Marz, Eduard. Joseph Schumpeter: Scholar, Teacher, and Politician. New Haven: Yale University Press, 1991. Print. Mauldin, John. Bull’s Eye Investing: Targeting Real Returns in a Smoke and Mirrors Market. Hoboken: John Wiley & Sons, 2004. ———, and Jonathan Tepper. Endgame: The End of the Debt Supercycle and How It Changes Everything.

Radical Markets: Uprooting Capitalism and Democracy for a Just Society
by Eric Posner and E. Weyl
Published 14 May 2018

Soon, two major economic systems subsequently vied for dominance—capitalism in the West, now moderated by regulation, redistribution, and antimonopoly laws, and Communist state planning in the Soviet Union and its allies. Although the eventual victory of capitalism makes it hard for us to imagine the allure of central planning, during the Great Depression and even well after World War II, capitalism was on the defensive. In 1942, the prominent conservative economist Joseph Schumpeter predicted that socialism would ultimately replace capitalism.21 His view was that most economic activity in capitalist economies took place in corporations and that a corporation is just a bureaucracy in which “management” at the center issues orders to various workers. From this vantage point, it was a small step to an economy in which each industry was dominated by one or two gigantic corporations, with government regulation to ensure that they do not abuse their monopoly power, an outcome not much different from the central planning of socialism.

Red Flags: Why Xi's China Is in Jeopardy
by George Magnus
Published 10 Sep 2018

It is, as the Chinese translation of Renminbi says literally, the ‘people’s money’, and it is as significant to China as the US dollar is to America, or Sterling is to the British, or the Deutschmark once was to Germans before the advent of the Euro, to which most EU citizens now also feel tied. The case was put best by the Austrian-born US economist Joseph Schumpeter, who wrote a tract in 1930 in which he reflected on the passionate interest people have in monetary systems and the value of money. In his view, the reason was that ‘the monetary system of a people reflects all that the people wants, does, endures, is, and that simultaneously the monetary system of a people exercises a significant influence upon its economic activity and its destiny in general’.1 For many years, China has been driven to maintain the stability of its currency, partly for economic purposes, but also to anchor expectations at home about the management of money and finance, and to build trust abroad in the Renminbi itself, and in the Chinese foreign exchange rate regime.

Origin Story: A Big History of Everything
by David Christian
Published 21 May 2018

But so did the many differences in population densities, technologies, patterns of social and military organization, and even resistance to diseases that had accumulated over many millennia. There were winners and losers, and for the losers, the outcomes could be catastrophic. Like the appearance of the first oxygen atmosphere or the sudden death of the dinosaurs, this was an example of what the Austrian economist Joseph Schumpeter termed creative destruction—the constant, often violent replacement of the old by the new, which Schumpeter saw as the very heart of modern capitalism. Many societies were ruined, and many lives destroyed. But there was creation, too, because the sheer scale of the first global-exchange networks synergized collective learning on a planetary scale, releasing huge flows of information, energy, wealth, and power that would eventually transform human societies throughout the world.

The Cultural Logic of Computation
by David Golumbia
Published 31 Mar 2009

part three CULTURAL COMPUTATIONALISM chapter six Computation, Globalization, and Cultural Striation n the late 1960s and early 1970s, Marxist economists outlined a theory that was received with a certain amount of surprise, one that has been largely pushed aside today. The thesis was that despite the appearance of competition, most contemporary global economic power was held by a few, massive, concentrated centers—in short, monopolies. In critiques of Joseph Schumpeter (1942), orthodox pure “free market” capitalist economy, and also of more moderate, statist Keynesian economics, the writers Harry Braverman (1974) and Paul Baran and Paul Sweezy (Baran and Sweezy 1966; Sweezy 1972) suggested that capitalism exerts a continuous pressure, even in apparently democratic societies, toward monopolistic and oligarchical organization, and that the concentration of profit among a small group of institutions makes the systems that operate under the name capitalism nevertheless obey both macro-level laws of competition and at the same time laws of power politics, again demonstrating the resemblance of the modern corporation to the apparently pre-modern institution of the principality.

The Coming of Neo-Feudalism: A Warning to the Global Middle Class
by Joel Kotkin
Published 11 May 2020

Yet today we see diminishing social mobility and little real material progress for most people, as economic power is increasingly dominated by fewer companies, particularly in the finance and technology sectors.2 Our future is coming to look like the “high-tech middle age” that the Japanese futurist Taichi Sakaiya predicted more than three decades ago.3 The pioneers of the modern tech industry were once celebrated as exemplars of capitalist competition, illustrating what Joseph Schumpeter called the “creative destruction” that breaks up monopolies and allows others to rise from below. But today’s tech leaders increasingly resemble an exclusive ruling class, controlling a few exceptionally powerful companies, and like aristocracies everywhere they are often resistant to any dispersion of their power.

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite
by Duff McDonald
Published 24 Apr 2017

But the journal was shuttered in 1932 due to a lack of funding and clarity as to its ultimate mission.1 A successor, Business History Review, wasn’t founded until 1954. Another pre-Chandler effort at business history at Harvard was its Research Center in Entrepreneurial History, a joint effort between Arthur Cole, the School’s librarian, the economist Joseph Schumpeter (the man who coined the term creative destruction), Edwin Gay, and others. Active for just a single decade, from 1948 to 1958, the center helped solidify one of Western capitalism’s main tenets—that the ongoing destruction of individual businesses and fortunes was the price of a better life for all.

…

One could read into the articles that I was being critical of finance. I was being critical of control measurement systems, and of strategy. And a lot of my good friends on the faculty were teaching those things.” For the next fifteen years, the article was the most requested reprint from HBR. Fans of cutthroat capitalism love to quote Joseph Schumpeter on creative destruction. Less known are concerns he voiced in his 1942 work, Capitalism, Socialism, and Democracy, in which he worried that by giving control of the modern corporation to salaried managers, the people who would then be at the economy’s steering wheel would no longer have any incentive to innovate and generate new wealth (that is, creative destruction) but instead be focused on minimizing risk to maximize personal job security.16 And when they weren’t overly focused on their own money, they were overly focused on the corporation’s money, at the expense of paying attention to product management.

Fault Lines: How Hidden Fractures Still Threaten the World Economy
by Raghuram Rajan
Published 24 May 2010

Equally important, they need finance, infrastructure—for example, electric power, and transport and communication networks—and governance institutions to provide security to property and life as well as to facilitate business transactions. How the Early Developers Built Organizational Capital The great Austrian economist Joseph Schumpeter argued that capitalism grew through innovation, with newcomers bringing in creative new processes and techniques that destroyed the businesses of old incumbents. Much of capitalism’s dynamism in industrial countries does reflect this process: in the past few years, for example, the whole business of film photography has been almost completely eclipsed by the digital photography revolution.

The Wisdom of Crowds
by James Surowiecki
Published 1 Jan 2004

When it comes to democracy, such a standard seems much harder to come by, not so much because people are selfish and may act in ways that are contrary to the public interest (that’s true in a corporation as well, and it’s even true in a market, where many company executives would prefer it if stocks never approached their true value), but because, as economic theorist Joseph Schumpeter put it, “to different individuals and groups the common good is bound to mean different things.” So two politicians may both say, and mean, that they are acting in the public interest and then advocate radically different policies. We may agree with one and disagree with the other. But it’s not obvious that we can say that one of them has acted against the common good.

Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market
by Scott Patterson
Published 11 Jun 2012

Maschler, Citron, and Levine had gone head-to-head with a corrupt, self-dealing network of Nasdaq market makers and helped destroy it. Island was a classic example of the massively disruptive computer technology that started sweeping across the world in the last fifty years, the epitome of Joseph Schumpeter’s “perennial gale of creative destruction” behind capitalism. Fueled by Island, a new breed of dealers, quick-draw computer outfits like ATD, Tradebot, Getco, and Timber Hill were the new market makers. And Island’s progeny fanned out across Wall Street, a technocratic vanguard of elite players.

The Great Race: The Global Quest for the Car of the Future
by Levi Tillemann
Published 20 Jan 2015

Market Failure and the Man on a Horse In addition to promoting growth and providing an infrastructure for innovation, government plays another important role in the modern economy: stopping practices that might benefit an individual or firm but harm society as a whole. Balancing this intersection of growth and other social goods is a difficult task. In a Harvard lecture room, the Austrian economist Joseph Schumpeter once brashly stated that as a youth he “set out to become the greatest lover in Vienna, the greatest horseman in Austria, and the greatest economist in the world.” During a subsequent moment of humility, he conceded that he never quite made it: “Alas,” he lamented, “as a horseman, I was never really first-rate.”

Postcapitalism: A Guide to Our Future
by Paul Mason
Published 29 Jul 2015

The events that seem to cause the big turning points – wars, revolutions, discovery of new gold deposits and new colonies – were, he said, mere effects generated by the demands of the economy itself. Humanity, even as it tries to shape economic history, is relatively powerless over the long term. For a time in the 1930s, long-wave theory became influential in the West. The Austrian economist Joseph Schumpeter produced his own theory of business cycles, popularizing the term ‘Kondratieff Wave’. But once capitalism stabilized after 1945, long-wave theory seemed redundant. Economists believed state intervention could flatten out even the minor ups and downs of capitalism. As for a fifty-year cycle, the guru of Keynesian economics, Paul Samuelson, dismissed it as ‘science fiction’.3 And when the New Left tried to revive Marxism as a critical social science in the 1960s, they had little time for Kondratieff and his waves; they were looking for a theory of capitalist breakdown, not survival.

The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics
by William R. Easterly
Published 1 Aug 2002

In our lighting example, high-cost light producers kept getting pushed asideby lower-cost lightproducers.Candleslost out to whale oil lamps, which in turn lost out to kerosene lamps, which inturn lost out to electric lighting.Candlemakers,whalers, and kerosene refiners have successively been driven out of business by new technologies. This is not a new insight. The economist Joseph Schumpeter noted as long ago as 1942 that the process of economic growth ”incessantly revolutionizesthe economic structure from 178 Chapter 9 within, incessantly destroying the oldone, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.”12 The economists Philippe Aghion and Peter Howitt have stressed this kind of approach to growth in recent research.13 They note that the process of creative destruction complicates incentives for innovation.

Money: The Unauthorized Biography
by Felix Martin
Published 5 Jun 2013

Several of these works investigate not only the nature of money today, but the history of money and of monetary thought. There is a vast literature in this area, of course, and many essential and standard works are cited in the notes. Here too, however, I owe special acknowledgement to a number of books: Joseph Schumpeter’s great, unfinished History of Economic Analysis (Schumpeter, 1954); Charles Kindleberger’s Manias, Panics, and Crashes (Kindleberger, 1978) and his Financial History of Western Europe (Kindleberger, 1993); Thomas Sargent and François Velde’s The Big Problem of Small Change (Sargent and Velde, 2002); James Macdonald’s A Free Nation Deep in Debt: The Financial Roots of Democracy (Macdonald, 2006); and Antoin Murphy’s books John Law: Economic Theorist and Policy-Maker (Murphy, 1997) and The Genesis of Macroeconomics: New Ideas from Sir William Petty to Henry Thornton (Murphy, 2009).

Smart Mobs: The Next Social Revolution
by Howard Rheingold
Published 24 Dec 2011

Reed, who played an important part in facilitating innovation through the end-to-end architectural principle underlying the Internet, told Werbach, “We could have the greatest wave of innovation since the Internet (and probably bigger in impact, because more pervasive) if we could unlock the spectrum to explore the new possibilities.”89 New technologies have a history of destroying the dominance of prior technologies or making them obsolete. Joseph Schumpeter claimed that “this process of Creative Destruction is the essential fact about capitalism.”90 Lessig reminded me of Machiavelli’s counterpoint to Schumpeter: “Innovation makes enemies of all those who prospered under the old regime, and only lukewarm support is forthcoming from those who would prosper under the new.”91 Those who created an infrastructure in which the devices (telephones, televisions, and radios) are inexpensive and dumb, the network that connects the devices is highly specialized and expensive to install, and the service is sold on a metered basis (telephony, cable TV, and wired Internet access) are challenged by new enterprises in which cheap devices are the network, and no private enterprise owns the medium that carries their messages.

Deaths of Despair and the Future of Capitalism
by Anne Case and Angus Deaton
Published 17 Mar 2020

All of which tells in favor of the superstar story of rising profits, and against an account that depends exclusively on American institutions like lobbying, its political system, or a peculiarly American unwillingness to apply antitrust law.21 European countries have also seen some recent increases in income inequality, though less than in the United States, which is consistent with trade and IT pushing up inequality, but with additional, specifically American forces ramping it up. Innovation often happens through a process of creative destruction, or Schumpeterian competition, named after the Austrian economist Joseph Schumpeter. (He is famous for having declared his wish to be the greatest economist in the world, the greatest horseman in Austria, and the best lover in Vienna. He later claimed that only the decline in the cavalry had thwarted his triple ambition, though not all economists would agree. There is no surviving evidence on his third ambition.)

Capital Ideas Evolving
by Peter L. Bernstein
Published 3 May 2007

 bern_c16.qxd 3/23/07 246 9:12 AM Page 246 CA P I TA L I D E A S T O M O R ROW The miraculous vitality of markets is impossible to suppress, as even communist countries have learned. But the great theories of Capital Ideas have nurtured and guided the development of today’s markets to a much greater extent than most of the participants in these markets stop to realize. In the most vivid manner, Adam Smith’s Invisible Hand is always in play, while Joseph Schumpeter’s “perennial gale of creative destruction” blows compellingly, to a point where, as Schumpeter also reminds us, “Profit . . . is temporary by nature: it will vanish in the subsequent process of competition and adaptation.”7 Here is what the evolution of Capital Ideas is all about. bern_z01bnotes.qxd 3/23/07 9:12 AM Page 247 Notes P R E FAC E 1. 2. 3. 4. 5. 6. 7. 8. 9.

The Bitcoin Standard: The Decentralized Alternative to Central Banking
by Saifedean Ammous
Published 23 Mar 2018

The business is productive because it transforms inputs of a certain market price into outputs with a higher market price. Any firm that produces outputs valued at less than its inputs would go out of business, its resources freed up to be used by other, more productive firms, in what economist Joseph Schumpeter termed creative destruction. There can be no profit in a free market without the real risk of loss, and everyone is forced to have skin in the game: failure is always a real possibility, and can be costly. Government‐issued unsound money, however, can stall this process, keeping unproductive firms undead but not truly alive, the economic equivalent of zombies or vampires drawing on the resources of the alive and productive firms to produce things of less value than the resources needed to make them.

Bean Counters: The Triumph of the Accountants and How They Broke Capitalism
by Richard Brooks
Published 23 Apr 2018

When he coined the term ‘Protestant work ethic’ in 1904, the German philosopher Max Weber also wrote: ‘The most generous presupposition for the existence of this present-day capitalism is that of rational capital accounting as the norm for all large industrial undertakings which are concerned with the provision of everyday wants.’3 The ‘capital accounting’ to which he referred was in fact the double-entry bookkeeping system, which introduced the concept of ‘capital’ as the measure of an owner’s interest in an enterprise (centuries before Karl Marx expounded his theory in Das Kapital in 1867). Weber’s near-contemporary, Austrian-American economist Joseph Schumpeter, saw the accounting method as ‘the towering monument’ of what he called the ‘cost–profit calculus’, which itself ‘powerfully propels the logic of enterprise’. Another German economist, Werner Sombart, was more categorical still. ‘It is impossible to imagine capitalism without double-entry bookkeeping,’ he claimed.

Superminds: The Surprising Power of People and Computers Thinking Together
by Thomas W. Malone
Published 14 May 2018

For instance, when Ford introduced the Model T, in 1908, it sold for $850, but by 1925, Ford reduced its costs enough to sell a Model T for less than $300.6 Some of the learning occurred when different companies tried lots of different things and then other companies adopted the ideas that worked well (like assembly lines). Some learning was a simple result of the forces of supply and demand in markets: when customers didn’t want to buy gas-guzzling cars, companies produced fewer of them. And some of the learning was a result of how markets encourage what economist Joseph Schumpeter called creative destruction: the companies that figured out how to profitably sell cars grew larger, and those that didn’t went out of business. All this learning was collective learning by superminds. Some occurred in hierarchies, some in markets, and some in scientific and other communities outside the auto industry itself.

A World Without Work: Technology, Automation, and How We Should Respond
by Daniel Susskind
Published 14 Jan 2020

“From this angle,” writes Peter Thiel, “Google looks like a small player in a competitive world.”21 In short, finding answers to even the most basic questions of competition policy is not straightforward. And perhaps the biggest complication of all is that monopolies can be a very good thing. This may sound like economic sacrilege, but the early-twentieth-century economist Joseph Schumpeter famously made just this case. For Schumpeter, economics was all about innovation. He called it the “outstanding fact in the economic history of capitalist society.” His argument for monopolies is that, were it not for the prospect of handsome profits in the future, no entrepreneur would bother to innovate in the first place.

The AI Economy: Work, Wealth and Welfare in the Robot Age
by Roger Bootle
Published 4 Sep 2019

Furthermore, the technological “progress” that underpinned the Industrial Revolution undermined the livelihoods of many individuals and groups. This was not an unfortunate, incidental extra; it was intrinsic to the very process of economic growth, which relied upon old skills and occupations becoming redundant and new ones taking their place. The great Austrian American economist Joseph Schumpeter called this process “creative destruction.” Admittedly, even before the Industrial Revolution, there were also some cases of technological redundancy. For instance, the Venetian shipwrights, who for centuries had made their living out of constructing galleys and ships with fixed sails to ply their trade across the Mediterranean, eventually faced redundancy when oceangoing ships with adjustable sails came to dominate international trade.

The Reckoning: Financial Accountability and the Rise and Fall of Nations
by Jacob Soll
Published 28 Apr 2014

Weber saw accounting as one of many cultural elements necessary to the growth of complex capitalism, placing it squarely among the fundamental traits of the Protestant work ethic that he believed allowed early Americans to master capitalist culture.5 Even blunter was the influential German economist Werner Sombart: “One cannot imagine what capitalism would be without double-entry bookkeeping: the two phenomena are connected as intimately as form and contents.” The Austrian American economist, political scientist, and coiner of the term “creative destruction,” Joseph Schumpeter, not only saw accounting as central to capitalism but also lamented that economists had not devoted more attention to it; it was only through a historical understanding of accounting practices, he wrote, that effective economic theory could be formulated.6 These thinkers saw accounting as an ingredient to economic success and a key to understanding economic history.

Boom and Bust: A Global History of Financial Bubbles
by William Quinn and John D. Turner
Published 5 Aug 2020

Describing Law as a ‘Scottish financial theorist’ invokes exactly the wrong image; his life was sufficiently fascinating to have inspired not only an extensive historical literature of its own, but at least one lowbrow romantic novel.7 In 1694, at the age of 22, a Scottish court sentenced him to death for killing a man in a duel, but he escaped prison and fled to the Continent, growing rich through a combination of professional gambling, financial services and networking. At the same time, he wrote several treatises on economics, most notably Money and Trade Considered, which was published in 1705. Virtually every serious work about Law has emphasised both his reckless character and his genius: the famous Harvard economist Joseph Schumpeter placed him ‘in the front rank of monetary theorists of all times’.8 Law arrived in Paris in 1715, and immediately met with the Regent to propose the establishment of a ‘General Bank’ as a branch of government. The General Bank foreshadowed the emergence of the modern central bank, and was more ambitious than the Bank of England, which had been around since 1694.

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century
by Rodrigo Aguilera
Published 10 Mar 2020

At the top of many economists’ concerns today is the threat of automation, which over the next few decades could lead to the mass replacement of a significant section of the workforce by robots or AI. Historically, technological change has been an opportunity rather than a threat. “Creative destruction”, to use the term coined by economist Joseph Schumpeter, has meant that job losses from technological change have been offset by job creation in new industries that this change has brought about. But considerable evidence suggests that this time it will be different, particularly since large swathes of both working- and middle-class jobs appear under threat and the level of specialization needed in most emerging industries appears too high to be feasible for those whose jobs are on the line.

The Age of Surveillance Capitalism
by Shoshana Zuboff
Published 15 Jan 2019

These developments reflect the simple truth that genuine economic reformation takes time and that the internet world, its investors and shareholders, were and are in a hurry. The credo of digital innovation quickly turned to the language of disruption and an obsession with speed, its campaigns conducted under the flag of “creative destruction.” That famous, fateful phrase coined by evolutionary economist Joseph Schumpeter was seized upon as a way to legitimate what Silicon Valley euphemistically calls “permissionless innovation.”77 Destruction rhetoric promoted what I think of as a “boys and their toys” theory of history, as if the winning hand in capitalism is about blowing things up with new technologies. Schumpeter’s analysis was, in fact, far more nuanced and complex than modern destruction rhetoric suggests.

…

Other research findings point to the consequences of the impatient money that flooded the valley as inflationary hype drew speculators and ratcheted up the volatility of venture funding.28 Studies of pre-bubble investment patterns showed a “big-score” mentality in which bad results tended to stimulate increased investing as funders chased the belief that some young company would suddenly discover the elusive business model destined to turn all their bets into rivers of gold.29 Startup mortality rates in Silicon Valley outstripped those for other venture capital centers such as Boston and Washington, DC, with impatient money producing a few big wins and many losses.30 Impatient money is also reflected in the size of Silicon Valley startups, which during this period were significantly smaller than in other regions, employing an average of 68 employees as compared to an average of 112 in the rest of the country.31 This reflects an interest in quick returns without spending much time on growing a business or deepening its talent base, let alone developing the institutional capabilities that Joseph Schumpeter would have advised. These propensities were exacerbated by the larger Silicon Valley culture, where net worth was celebrated as the sole measure of success for valley parents and their children.32 For all their genius and principled insights, Brin and Page could not ignore the mounting sense of emergency.

Radicals Chasing Utopia: Inside the Rogue Movements Trying to Change the World
by Jamie Bartlett
Published 12 Jun 2017

Bodenhausen, ‘Cuing Consumerism: Situational Materialism Undermines Personal and Social Well-Being’, Psychological Science, March 2012, http://www.archpsychological.com/blog/wp-content/uploads/2012/05/luxury-items-depress-n-isolate.pdf; Kanter, op. cit.; Kramer and Alstad, op. cit. 37. See William Powers, Hamlet’s BlackBerry (HarperCollins, 2010); Joseph Schumpeter, ‘Too much information: How to cope with data overload’, Economist, 30 June 2011; ‘Self harm, suicide and risk: helping people who self-harm’, Royal College of Psychiatrists College Report CR158, June 2010, http://www.rcpsych.ac.uk/files/pdfversion/cr158.pdf. 38. Monika Alleweldt, ‘The healing biotopes plan: A plan for the healing of humankind and the earth’, https://www.tamera.org/basic-thoughts/the-healing-biotopes-plan/.

The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World
by Pedro Domingos
Published 21 Sep 2015

The Tipping Point could equally well (if less appealingly) be entitled The S Curve. An earthquake is a phase transition in the relative position of two adjacent tectonic plates. A bump in the night is just the sound of the microscopic tectonic plates in your house’s walls shifting, so don’t be scared. Joseph Schumpeter said that the economy evolves by cracks and leaps: S curves are the shape of creative destruction. The effect of financial gains and losses on your happiness follows an S curve, so don’t sweat the big stuff. The probability that a random logical formula is satisfiable—the quintessential NP-complete problem—undergoes a phase transition from almost 1 to almost 0 as the formula’s length increases.

The Great Surge: The Ascent of the Developing World
by Steven Radelet
Published 10 Nov 2015

Under the current heavily state-controlled economy, property rights and contract law remain limited and weak, undermining long-term incentives for innovation and risk taking and weakening future growth prospects. Old and inefficient companies (and banks) are allowed to remain operational, limiting the room for “creative destruction”—the great Austrian economist Joseph Schumpeter’s term for how dynamic economies are constantly rebuilt, with new, more innovative, and more efficient businesses replacing the old. Feedback loops from citizens and business leaders to government leaders weaken over time as officials focus on maintaining power and control. There are many examples of authoritarian countries that were seen for a time as economic superstars, but where dictators held on to power for too long and progress slowed considerably or even came to a halt, including Argentina over the last century, the Soviet Union (and Russia today), and Japan and Germany in the late nineteenth and early twentieth centuries.

The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Computer Age
by Robert Wachter
Published 7 Apr 2015

The answer will depend on how much heat hospitals and doctors feel to improve their performance. And that will turn on how closely healthcare hews to the normal laws of thermodynamics of the capitalist economy. The business model of “creative destruction” was first described by Austrian economist Joseph Schumpeter in 1942. It holds that a key driver of corporate innovation is the knowledge that the companies that produce the most value will win, and the rest will be destroyed. The theory—a fundamental component of Christensen’s notion of disruptive innovation—is, in essence, economic Darwinism. Were such forces fully unleashed in healthcare, they would clearly drive not only the adoption of technology, but a headlong effort to develop and implement all the changes in work flow, staffing, and culture that are associated with getting the best results from these expensive digital tools.

Pathfinders: The Golden Age of Arabic Science
by Jim Al-Khalili
Published 28 Sep 2010

The reason I have not discussed him earlier is partly because he lived so much later than what is commonly regarded as the golden age, and because his greatest work was in history and the social sciences, rather than the natural sciences. However, he is in every way a match for al-Bīrūni in terms of the sheer number of disciplines he excelled in. The twentieth-century economist and political scientist Joseph Schumpeter has carefully studied the history of economic theory as far back as Aristotle and argues that Ibn Khaldūn is without doubt the true father of economic science. In fact, it is worth comparing him with the man whom many economists might regard as the father of modern economic theory, Adam Smith.

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used to Be
by Moises Naim
Published 5 Mar 2013

Is it fair to argue that the emergence of new giants that are operationally similar to the old ones, especially in business, is simply part of the regular working of capitalism? The answer to both questions is yes and no. The trends we are currently observing can be interpreted—or simply dismissed—as the manifestation of what economist Joseph Schumpeter (and before him Karl Marx) dubbed “creative destruction.” In Schumpeter’s words: “The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation . . . that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.

Black Box Thinking: Why Most People Never Learn From Their Mistakes--But Some Do
by Matthew Syed
Published 3 Nov 2015

The failure of companies in a free market, then, is not a defect of the system, or an unfortunate by-product of competition; rather, it is an indispensable aspect of any evolutionary process. According to one economist, 10 percent of American companies go bankrupt every year.4 The economist Joseph Schumpeter called this “creative destruction.” Now, compare this with centrally planned economies, where there are almost no failures at all. Companies are protected from failure by subsidy. The state is protected from failure by the printing press, which can inflate its way out of trouble. At first, this may look like an enlightened way to go about solving the problems of economic production, distribution, and exchange.

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory
by Kariappa Bheemaiah
Published 26 Feb 2017

Charles Darwin best known for the science of evolution, build his classification system on the work of Carl Linnaeus (1707-1778), the father of Taxonomy. 5The Differential Analyser consisted of multiple rotating disks and cylinders driven by electric motors linked together with metal rods that were manually set up (sometime taking up to two days) to solve any differential equation problem. 6In economics Kondratiev waves (named after The Soviet economist Nikolai Kondratiev), are cyclic phenomenon that link the cycle of a technology’s invention, expansion and ultimate replacement to their economic effects. Although Nikolai Kondratiev was the first to study the economic effects of technology on prices, wages, interest rates, industrial production and consumption in 1925, Joseph Schumpeter was responsible for their entry into academia. 7In this paper, the model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. 8See “A Failed Philosopher Tries Again.” 9(i) LatAm sovereign debt crisis - 1982, (ii) Savings and loans crisis - 1980s, (iii) Stock market crash - 1987, (iv) Junk bond crash - 1989, (v) Tequila crisis - 1994, (vi) Asia crisis - 1997 to 1998, (vii) Dotcom bubble - 1999 to 2000, (viii) Global financial crisis - 2007 to 2008. 10LHC: The Large Hadron Collider is the world’s largest and most powerful particle accelerator located at the CERN, the European Organization for Nuclear Research (Conseil Européen pour la Recherche Nucléaire).

Fed Up: An Insider's Take on Why the Federal Reserve Is Bad for America
by Danielle Dimartino Booth
Published 14 Feb 2017

Under the leadership of Rosenblum, the Dallas bank improved dramatically and became known as the Free-Market Fed. Rosenblum encouraged Cox and his new hires to think outside the box. As a champion of “creative destruction,” a seemingly paradoxical concept developed by renowned economist Joseph Schumpeter, Cox published frequently and about issues the public cared about, an anomaly in the Fed system. But the field of economics was undergoing a sea change, literally. The “saltwater” economists (East and West coasts, Harvard, Keynes, pro-government regulation and intervention) were challenging the “freshwater” economists (Midwest, University of Chicago, Friedman, free-market philosophy).

The Economics of Enough: How to Run the Economy as if the Future Matters
by Diane Coyle
Published 21 Feb 2011

Up to a point the trade-offs of the trilemma will not bite—for example some efficiency improvements might be possible within the prevailing standards of individuality and equality—but ultimately doing better on one or two of these fronts will involve doing worse on another. The existence of the trilemma is why so often there seems to be an innate dynamic to capitalist economies. Marx and Engels thought that capitalism contained the seeds of its own destruction. Others, notably Joseph Schumpeter, have seen the process as a continual reinvention driven by technology and enterprise. My take on the dynamic is that depending on the circumstances (including technology), the policies and the institutional framework of the economy must change in order to restore a balance between the three aims of efficiency, equity, and liberty.

Prosperity Without Growth: Foundations for the Economy of Tomorrow
by Tim Jackson
Published 8 Dec 2016

The first is that there are physical limits to efficiency improvement in specific processes. At the basic level, these constraints are laid down by the laws of thermodynamics.19 The second is that failing to diversify and innovate risks losing out to competitors producing newer and more exciting products. The economist Joseph Schumpeter was the first to suggest that it is in fact novelty, the process of innovation, that is vital in driving economic growth. Capitalism proceeds, he said, through a process of ‘creative destruction’. New technologies and products continually emerge and overthrow existing technologies and products.

Arguing With Zombies: Economics, Politics, and the Fight for a Better Future
by Paul Krugman
Published 28 Jan 2020

But the basic presumption of “neoclassical” economics (named after the late-19th-century theorists who elaborated on the concepts of their “classical” predecessors) was that we should have faith in the market system. This faith was, however, shattered by the Great Depression. Actually, even in the face of total collapse some economists insisted that whatever happens in a market economy must be right: “Depressions are not simply evils,” declared Joseph Schumpeter in 1934—1934! They are, he added, “forms of something which has to be done.” But many, and eventually most, economists turned to the insights of John Maynard Keynes for both an explanation of what had happened and a solution to future depressions. Keynes did not, despite what you may have heard, want the government to run the economy.

Arriving Today: From Factory to Front Door -- Why Everything Has Changed About How and What We Buy
by Christopher Mims
Published 13 Sep 2021

In an economy providing new services, like next-day delivery, automating one part of that service simply pushes workers toward other roles necessary to achieve it. But the robot I’ve come for, and the systems that support it, are, like the automated loom or the steam drill, a singular example of the kind of technological change that drives the economic “gale of creative destruction” first described by economist Joseph Schumpeter in 1942. In the center of this warehouse, surrounded by concentric rings of automation, the robot I’ve come for doesn’t look like much: just your run of the mill industrial robot arm, pneumatic tubes snaking down its length, ending in a suction device for grabbing items. Darin fires it up, and the hiss and pop of its air-powered system for grabbing packages adds to what was already a loud din.

Human Frontiers: The Future of Big Ideas in an Age of Small Thinking
by Michael Bhaskar
Published 2 Nov 2021

Out of this too came Karl Popper, perhaps the century's most significant philosopher of science and a major proponent of political liberalism. This émigré generation were nothing if not big thinkers: Peter Drucker originated management theory; Paul Lazarsfeld established sociology in America; economists of the Austrian School like Friedrich Hayek, Ludwig von Mises and Joseph Schumpeter set the neoliberal foundations for the modern discipline and thus, arguably, for society and capitalism. Throughout these years Vienna was a city of contradictions, riven with anxieties that gave life to this ferment: at once ordered, bourgeois, hard-headed and rational, politically illiberal, monarchist and stolid, and at the same time a seething mass of political and aesthetic transgression.22 The world described by Stefan Zweig is one of Hungarians and Czechs, Jews and Catholics mingling in coffeehouses and bouncing around challenging ideas.

The Code of Capital: How the Law Creates Wealth and Inequality
by Katharina Pistor
Published 27 May 2019

They obtain stronger rights against the world and even get to make them durable in order to withstand not only unexpected events, the “exogenous shocks” that create imbalances in standard economic models, but the forces of competition. Competition is essential for the operation of markets; it fuels the forces of creative destruction, which, according to Joseph Schumpeter, are the drivers of economic progress.37 But the legal code of capital does not follow the rules of competition; instead, it operates according to the logic of power and privilege. Property Rights as Industrial Policy The rulers over cities, regions, and countries discovered long ago how by offering special legal protection they could retain local and attract foreign craftsmen and artisans.

Can It Happen Here?: Authoritarianism in America
by Cass R. Sunstein
Published 6 Mar 2018

But the preferences of a majority of the motivated electorate are often highly volatile and unstable. In majoritarian referenda and the American Electoral College, moreover, the lex majoris partis creates a situation where a slight favorite for an evanescent moment can become the winner who takes all. As Joseph Schumpeter remarked, you cannot fool all of the people all of the time, but you can fool enough of the people for long enough to do irreversible damage.14 On an individual level, potentially self-destructive decisions are sometimes structured to include waiting periods as a way to sidestep the conclusiveness of momentary whims.15 Two-round voting, by informing the electorate about how other voters are likely to vote in the decisive election, roughly simulates a cooling-off period at the collective level.

Miracle Cure
by William Rosen
Published 14 Apr 2017

Pfizer is even bigger, a company with sales of more than $50 billion. Eli Lilly is a $23-billion company. The combination of Bristol-Myers and Squibb, which merged in 1989, weighs in at nearly $20 billion as does Abbott Laboratories. Others are no longer going concerns, run onto the rocks by waves of the “creative destruction” that the Austrian economist Joseph Schumpeter called the defining characteristic of capitalism. In 1988, Eastman Kodak acquired Winthrop (or Sterling Winthrop), a member of the original penicillin project and the discoverer of the first quinolone antibiotics. It was then broken apart and sold, in pieces: to the French pharmaceutical company Sanofi, to the British firm SmithKline Beecham (a successor to the original Beecham’s Pills, now known as GlaxoSmithKline), and to the revived German giant, Bayer, which, as a result, finally reacquired the rights to the name “Bayer Aspirin.”

Transaction Man: The Rise of the Deal and the Decline of the American Dream
by Nicholas Lemann
Published 9 Sep 2019

People like Drucker and Polanyi had witnessed two world wars, the Great Depression, and the rise of the Soviet Communists, the Nazis, and the Fascists (not to mention the advent of the corporation), and they had seen the thriving societies where they had been born fall into ruin. In the space of only a few years in the early 1940s Friedrich Hayek published The Road to Serfdom, and Joseph Schumpeter published Capitalism, Socialism, and Democracy; both authors were also from Vienna, and Drucker and Polanyi knew them. James Burnham, an American ex-communist, published The Managerial Revolution, a dire warning that professional business bureaucrats, comfortable with government regulation, were becoming the ruling class in modern society (Burnham devoted several pages to summarizing The Modern Corporation and Private Property).

Hacking Capitalism
by Söderberg, Johan; Söderberg, Johan;

These realities of the mundane will weight heavier upon the hacker community the more integrated FOSS development gets in the global economy and the world of business. Business Models Based on Free Software From a liberal perspective, FOSS development is understood as simply another business model that better approximates the free market. The economist Joseph Schumpeter’s idea about ‘creative destruction’ is often invoked at this point. According to him, the creative destruction of capitalism continuously leads to old monopolies being undercut by better technology and smarter entrepreneurs. The appeal of this narrative is twofold. Firstly, legislators, judges and the general public are more receptive to the arguments of FOSS advocates if the challenge to intellectual property rights is framed within a liberal discourse.

The Coming Wave: Technology, Power, and the Twenty-First Century's Greatest Dilemma
by Mustafa Suleyman
Published 4 Sep 2023

This conception of history as a series of waves of innovation is not novel. Sequential and disruptive clusters of technologies recur in discussions of technology. For the futurist Alvin Toffler, the information technology revolution was a “third wave” in human society following the Agricultural and Industrial revolutions. Joseph Schumpeter saw waves as explosions of innovation igniting new businesses in bursts of “creative destruction.” The great philosopher of technology Lewis Mumford believed the “machine age” was actually more like a thousand-year unfolding of three major successive waves. More recently the economist Carlota Perez has talked about “techno-economic paradigms” rapidly shifting amid technological revolutions.

Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry
by Steven Rattner
Published 19 Sep 2010

Countries, states, and regions had all seen it help their economies successfully evolve. When I lived in Britain thirty years ago, coal and steel were major industries. Today they are essentially gone, and yet Britain is far more prosperous now than it was then. This process of "creative destruction," famously articulated by Joseph Schumpeter, has also been, in fact, the engine of economic development for the older parts of the Northeast, where I've lived nearly all my life. Take Long Island City, a section of Queens just across the East River from Manhattan. Well into the twentieth century, the area was a center of American manufacturing, home to industrial businesses that made chewing gum, pianos, batteries, glass, chemicals, and many other products.

The Firm
by Duff McDonald
Published 1 Jun 2014

BusinessWeek went so far as to suggest that McKinsey had deliberately turned a “blind eye to signs of trouble” in order to perpetuate the lucrative relationship.21 It was also perpetuating McKinsey’s self-image as the cutting-edge intellectuals of the corporate suite. McKinsey partner Richard Foster’s 2001 book, Creative Destruction, was nothing short of a big wet kiss to Enron’s way of doing business. It was also a mere repackaging of economist Joseph Schumpeter’s own work on the strengths of capitalism a half century before, but with a crucial twist: It was celebrating the worst instincts of laissez-faire capitalism, not the best. The War for Talent, a 2001 book by McKinsey consultants Ed Michaels, Helen Handfield-Jones, and Beth Axelrod (now head of HR at eBay), might have been an even wetter kiss for Enron than Creative Destruction.

Common Wealth: Economics for a Crowded Planet
by Jeffrey Sachs
Published 1 Jan 2008

The rising income gap between skilled and unskilled workers, for example, requires higher taxes on the richer skilled workers, if only to help finance social outlays for those who are left behind. Many economists have argued that the social safety net should remain limited, lest the incentives for innovation and risk taking be diminished. Economist and political theorist Joseph Schumpeter developed the very influential theory of creative destruction in the 1940s, according to which economic success inherently requires the failure of some sectors in order to make room for the rise of new leading sectors. New ideas are constantly entering the market, jostling with old ones, and often defeating them; the weakest workers, businesses, and industries lose in this process.

Finance and the Good Society
by Robert J. Shiller
Published 1 Jan 2012

They may even start to look very much like the for-pro ts. But they are fundamentally di erent because they exist to serve an institutional cause rather than the individual causes of their owners, and so their organizational identity can have a stronger element of corporate idealism. The economist Joseph Schumpeter wrote about these organizations in his classic Capitalism, Socialism, and Democracy in 1950. He gave the example of a nonpro t hospital, an important institution in a capitalist society but one that is in a sense not capitalist since it does not have the pro t motive. He wrote, “It is nonetheless the product of capitalism not only, to repeat, because the capitalist process supplies the means and the will, but much more fundamentally because capitalist rationality supplied the habits of mind that evolved the methods used in these hospitals.”8 Indeed, nonpro t hospitals have nancial arrangements as complex as those of any for-pro t entity—with their donors, with their employees, with their creditors, and with the government.

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It
by Yascha Mounk
Published 15 Feb 2018

This particular formulation is taken from Steven Levitsky and Lucan Way, Competitive Authoritarianism (New York: Cambridge University Press, 2010), 5–6. 3. This problem, which stems from an overemphasis on the mechanism of elections, rather than the outcome of popular rule which that mechanism is supposed to ensure, also holds for even more minimalist definitions. Joseph Schumpeter, for example, defined a democracy as any political system in which the most powerful political offices are filled “through a competitive struggle for the people’s vote.” Joseph Alois Schumpeter, Capitalism, Socialism, and Democracy (1942; London: Routledge, 2004), 269. 4. Democracy, on this (and indeed any sensible) account, is a scale.

Building and Dwelling: Ethics for the City
by Richard Sennett
Published 9 Apr 2018

Madame Q and her colleagues have put real money into basic materials, and the workmanship is excellent; this care appears in outside tree plantings as well, which are dug and drained properly.24 ‘Creative destruction’ is the theory often cited to describe what has happened in places like Shanghai. The phrase comes from the economist Joseph Schumpeter. Core investing is a good example of what he had in mind in Capitalism, Socialism and Democracy: a property like Nehru Place is bought, perhaps levelled flat and built anew, or its people are swept away by gentrification; something new is created which is more profitable. ‘Creative Destruction’, he declares, ‘is the essential fact about capitalism.

Giving the Devil His Due: Reflections of a Scientific Humanist
by Michael Shermer
Published 8 Apr 2020

Corporations as Species If there is a specific analogy to make between evolution and economics beyond a description of bottom-up self-organized emergence, it is that species are analogous to companies and corporations, not to societies and nations. In evolution, extinction is the rule, survival the exception. Most species go extinct because they fail to adapt to changing environments, and in their stead arise new species that are better adapted … for the time being anyway. The economist Joseph Schumpeter’s descriptor for this process in an economy was “creative destruction.”12 Although Schumpeter derived the concept from a Marxian analysis of the negative implications of capitalism, the term has been adopted by modern economists to describe the natural evolution of firms, companies, corporations, and even entire industries that go extinct and/or are replaced with new ventures better adapted to the ever-changing needs and wants of consumers.13 The meteor impact 65 million years ago that wiped out the dinosaurs opened up new niches to be filled by fledgling mammals living in the nooks and crannies on the margins of ecosystems.

The Economics Anti-Textbook: A Critical Thinker's Guide to Microeconomics
by Rod Hill and Anthony Myatt
Published 15 Mar 2010

In 1995, the birth of the World Trade Organization (WTO) also saw a major victory for the pharmaceutical industry lobby: the Agreement on Trade-Related Aspects of Intellectual Property Rights (better known as TRIPs) came into effect. It guaranteed twenty-year patent protection in all WTO member countries.6 Monopoly power extracted from technological advantage is similarly temporary – competitors invariably succeed in catching up over time. Joseph Schumpeter believed that dominant firms are constantly subjected to competition as new innovations supplant the old. For example, throughout the 1960s, 1970s and 1980s, IBM had a near-monopoly in the production of computers. This was swept aside by the development of the personal computer and successive waves of technological innovations.

The Job: The Future of Work in the Modern Era
by Ellen Ruppel Shell
Published 22 Oct 2018

While in Europe schoolchildren are taught to revere poets and philosophers, in the United States schoolchildren are primed to lionize entrepreneurs like Steve Jobs, Bill Gates, and Elon Musk. The very term business hero has a distinctly American ring. And by hero, we generally mean “innovator,” regardless of what that innovation foretells for our futures, both individually and as a nation. For the question remains, innovation of what and for whom? Harvard economist Joseph Schumpeter coined the phrase creative destruction to describe the process by which innovation creates new technologies, businesses, and jobs at the cost of the old. The classic example of this is the aforementioned automobile—the innovation of the car brought untold numbers of new opportunities for factory workers, managers, administrators, engineers, designers, marketers, and salespeople, while killing off old opportunities for blacksmiths, harness makers, and others.

The End of Alchemy: Money, Banking and the Future of the Global Economy
by Mervyn King
Published 3 Mar 2016

The issue can never be resolved, for the simple reason that in a world of radical uncertainty it is impossible to know what the future holds and therefore whether or not any particular valuation is rational, only whether it seems to embody a wise or a foolish judgement. Stock prices move around because investors are trying to cope with an unknowable future. Their judgements about future profits can be highly unstable. This instability is fundamental to a capitalist economy. The Austrian economist Joseph Schumpeter coined the phrase ‘creative destruction’ for the way a capitalist economy promotes investment in new ideas and ventures, undermining investments in earlier undertakings.44 Sometimes the message from the markets provides a helpful signal to businesses about when and in what directions to invest.

Open Standards and the Digital Age: History, Ideology, and Networks (Cambridge Studies in the Emergence of Global Enterprise)
by Andrew L. Russell
Published 27 Apr 2014

It is a challenge to the status quo.”11 The philosopher Gerald Raunig, picking up on Foucault’s notion of critique as a response to existing conditions, suggested that it might also be the foundation of a more productive act: “At the same time,” he argued in 2008, “critique also means re-composition [and] invention.”12 In this view, critique is much more than a process of criticizing, belittling, or tearing down; it is also a process of creating, promoting, and building anew. Accordingly, the concept of critique in cultural theory can come to share common ground with Joseph Schumpeter’s notion of “creative destruction” in economic theory: both concepts emphasize that creativity and innovation do not occur in a vacuum, but rather respond in an active and at times aggressive way to that which already exists.13 Throughout this book, I extend this line of inquiry to study acts of critique (and, in many cases, creative destruction) that were advanced by telephone and computer engineers.

The Future of the Professions: How Technology Will Transform the Work of Human Experts
by Richard Susskind and Daniel Susskind
Published 24 Aug 2015

Chan Kim and Renée Mauborgne, Blue Ocean Strategy (2005). 4 Clayton Christensen, The Innovator’s Dilemma (1997). 5 Paul Geroski and Constantinos Markides, Fast Second (2005). 6 Philip Augar, The Death of Gentlemanly Capitalism: The Rise and Fall of London’s Investment Banks (2008). 7 Richard Susskind, Tomorrow’s Lawyers (2013), 19–22. 8 This is an updated version of the distinction between ‘automation’ and ‘innovation’ in Richard Susskind, The Future of Law (1996), 49–50. 9 Richard Susskind, Tomorrow’s Lawyers, The End of Lawyers? (2010), and The Future of Law. 10 See Clayton Christensen, The Innovator’s Dilemma (1997), and Jill Lepore, ‘The Disruption Machine’, New Yorker, 23 June 2014. 11 See e.g. Clayton Christensen and Henry Eyring, The Innovative University (2011). 12 Joseph Schumpeter describes the process of ‘creative destruction’ in Capitalism, Socialism and Democracy (1994), foreshadowing this contemporary literature. See part II, ch. VII. 13 See e.g. <http://www.data.gov> for the USA, <http://data.gov.uk> for the UK, and <http://www.data.go.jp> for Japan. 14 Erik Brynjolfsson and Andrew McAfee, The Second Machine Age (2014), ch. 12. 15 Most notably, the Sarbanes–Oxley Act of 2002 (enacted 30 July 2002), known also as the ‘Public Company Accounting Reform and Investor Protection Act’.

The Making of an Atlantic Ruling Class
by Kees Van der Pijl
Published 2 Jun 2014

Lenin ‘Any general theory of classes and class formation must explain the fact that classes coexisting at any given time bear the marks of different centuries on their brow, so to speak — that they stem from varying conditions. This is in the essential nature of the matter, an aspect of the nature of the class phenomenon. Classes, once they have come into being, harden in their mold and perpetuate themselves, even when the social conditions that created them have disappeared.’ Joseph Schumpeter ‘Also, the chances of classes in a struggle will depend upon their ability to win support from outside their own membership, which again will depend upon their fulfilment of tasks set by interests wider than their own. Thus, neither the birth nor the death of classes, neither their aims nor the degree to which they can attain them; neither their cooperation nor their antagonisms can be understood apart from the situation of society as a whole.’

The Future of Ideas: The Fate of the Commons in a Connected World
by Lawrence Lessig
Published 14 Jul 2001

Smith, “Semicommon Property Rights and Scattering in the Open Fields,” Journal of Legal Studies 29 (2000): 131, 161-62. 6 Rose, “The Comedy of the Commons,” 769. 7 Robert Merges offers a complementing argument, focusing on interoperability and the value brought by individuals' investment in, for example, learning the commands in a program. Robert Merges, “Who Owns the Charles River Bridge? Intellectual Property and Competition in the Software Industry” (working paper, 1999). 8 The classic text supporting a broad range of open or free resources, building on the work of Joseph Schumpeter, is Richard R. Nelson and Sidney G. Winter, An Evolutionary Theory of Economic Change (Cambridge, Mass.: Belknap Press of Harvard University Press, 1982). As they write: “[I]nnovation in the economic system—and indeed the creation of any sort of novelty in art, science, or practical life—consists to a substantial extent of a recombination of conceptual and physical materials that were previously in existence.

Virtual Competition
by Ariel Ezrachi and Maurice E. Stucke
Published 30 Nov 2016

Firms will also have greater incentives to innovate when they can recover the significant upfront costs by price discriminating: “if dynamic incentives are taken into 296 Notes to Page 118 account as well, price discrimination may ensure that long-run incentives to invest (e.g. in R&D) are preserved by providing fi rms with sufficient returns”; Papandropoulos, “How Should Price Discrimination Be Dealt with by Competition Authorities?” When the ability to innovate is present, the incentive to innovate is driven by the desire to appropriate financial gains associated with innovation. This economic framework is “often associated with the eminent economist Professor Joseph Schumpeter,” who suggested, “firms with market power will have the greatest incentive to innovate because of their large relative size and dominant position in a market” D. L. Weisman and R. B. Kulick, “Price Discrimination, Two-Sided Markets, and Net Neutrality Regulation,” Tulane Journal of Technology and Intellectual Property 13 (2010): 81, https://www.researchgate.net/profile/Dennis_Weisman /publication/228307995_Price _Discrimination _Two-Sided _ Markets _ and _Net _Neutrality_Regulation/links/0deec5187eadf2a5c8000000.pdf. 7.

The Streets Were Paved With Gold
by Ken Auletta
Published 14 Jul 1980

“Your representative owes you, not his industry only, but his judgment,” Edmund Burke admonished the Electors of Bristol; “and he betrays instead of serving you if he sacrifices it to your opinion.” Democracy requires that the electorate exercise self-restraint, the famed Austrian economist and philosopher Joseph Schumpeter wrote in Capitalism, Socialism and Democracy; but democracy also requires that when institutional checks fail, the ultimate check be the restraint and good judgment of leaders. After completing his survey of fifty-one cities, the University of Chicago’s Terry Nichols Clark concluded, “The most consistent message of these findings is that local leadership can make a substantial difference.

Factory Man: How One Furniture Maker Battled Offshoring, Stayed Local - and Helped Save an American Town
by Beth Macy
Published 14 Jul 2014

Its promotional mini-cedar-chest program was once so popular that nearly two-thirds of young women graduating from American high schools received certificates for them. “It’s the Real Love-Gift”: http://www.ebay.com/itm/1948-Lane-Cedar-Hope-Chest-Wanda-Hendrix-vintage-2pg-ad-/150536985049?pt=LH_DefaultDomain_0&hash=item230cb419d9. “creative destruction”: Joseph Schumpeter (1883–1950) coined the term to describe the free market’s messy way of delivering progress. He called capitalism “the perennial gale of creative destruction.” The World Is Flat: The benefits of globalization appear on page 143 of Friedman’s The World Is Flat (New York: Picador, 2005); he is quoting a study by Morgan Stanley that was originally reported in Fortune magazine on October 4, 2004.

The Dying Citizen: How Progressive Elites, Tribalism, and Globalization Are Destroying the Idea of America
by Victor Davis Hanson
Published 15 Nov 2021

“They are,” he wrote, “an army of scribes clamoring for a society in which planning, regulation, and supervision are paramount and the prerogative of the educated.”33 The philosophical theories and economic tenets of elites were no doubt based on logical premises, but often they guided public policy with little concern about their effects on real people. “Creative destruction”—which Joseph Schumpeter called “the central fact about capitalism”—is inherent and necessary in a free market. The constant creation and dismantling of businesses to meet rapidly changing consumer tastes, government policies, and national security and natural resource realities certainly are requisites of economic growth and flexibility in adapting to rapid global change.

Money Free and Unfree
by George A. Selgin
Published 14 Jun 2017

WHITE Economic policy has, up to the turn of the century, been motivated primarily by fiscal considerations. . . . [F]iscal measures have created and destroyed industries . . . even where this was not their intent, and have in this manner contributed directly to the construction (and distortion) of the edifice of the modern economy. —JOSEPH SCHUMPETER ([1918] 1954: 7) WHY DO GOVERNMENTS play the roles they do in the monetary system? In particular, why have national governments almost universally taken over the business of issuing coins and paper currency, and replaced precious metals with fiat money as the base supporting bank-issued money?

People, Power, and Profits: Progressive Capitalism for an Age of Discontent
by Joseph E. Stiglitz
Published 22 Apr 2019

His work spurred an enormous amount of research trying to parse out the role of technological change. The other major contributor to increases in productivity are investments in plant and equipment. Still other sources relate to shorter hours of work, better education, and improved allocation of resources. Earlier, Joseph Schumpeter in his 1943 book Capitalism, Socialism and Democracy had emphasized the importance of innovation, stressing that it was much more important than those things on which economists had conventionally focused. But he did not attempt to quantify the relative role of innovation in the way that Solow did.

Open: The Story of Human Progress
by Johan Norberg
Published 14 Sep 2020

Ironically, one reason for this is that entrepreneurs like Jeff Bezos, Bill Gates and Sam Walton have been allowed to get super-rich from business models that make all sorts of goods, services, foods, technologies, medical devices and drugs cheaper and therefore accessible to more people than ever before. As Joseph Schumpeter wrote: Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort.28 Our old measures of wealth underestimate such changes because they were created to measure how many bars of iron we produce and they are not very good at capturing the value created in a modern economy with choice, variation, innovation and quality improvements.

The Chaos Machine: The Inside Story of How Social Media Rewired Our Minds and Our World
by Max Fisher
Published 5 Sep 2022

It Got Angrier Instead,” Keach Hagey and Jeff Horwitz, Wall Street Journal, September 15, 2021. 19 “unhealthy side effects”: Ibid. 20 “forced them to skew”: “Whistleblower: Facebook Is Misleading the Public on Progress against Hate Speech, Violence, Misinformation,” Scott Pelley, 60 Minutes, October 4, 2021. 21 Stanford and New York University economists: “The Welfare Effects of Social Media,” Hunt Allcott et al., American Economic Review 110, no. 3, March 2020. 22 calling it a “turning point”: “‘Turning point’: Mitch Fifield Flags Further Government Regulation of the Internet,” Michael Koziol, Sydney Morning Herald, October 8, 2018. 23 “If we do not see”: “European Union Says Facebook Must Change Rules by End of 2018,” Alexander Smith and Jason Abbruzzese, NBC News, September 19, 2018. 24 “Facebook Morale Takes a Tumble Along with Stock Price,” Deepa Seetharaman, Wall Street Journal, November 14, 2018. 25 internal poll of 29,000: “15 Months of Fresh Hell Inside Facebook,” Nicholas Thompson and Fred Vogelstein, Wired, April 16, 2019. 26 their lock on democracy is over: Political scientists refer to democracy mediated by institutional gatekeepers as “Schumpeterian democracy,” after the theorist Joseph Schumpeter. For more on the causes and consequences of this system’s decline, see How Democracies Die, Steven Levitsky and Daniel Ziblatt, 2018: 97–117. 27 “rather than through”: “Mark Zuckerberg’s Letter to Investors: The Hacker Way,” CNN Money, February 1, 2012. 28 called this new era: “What Happened to the Public Sphere?

The Tyranny of Nostalgia: Half a Century of British Economic Decline
by Russell Jones
Published 15 Jan 2023

Those who hankered after a more active role for government remained largely on the fringes of debate until the catastrophic events of 1929–33 changed everything. The global slump shattered faith in laissez-faire. With the establishment convinced that whatever the market system yielded must be appropriate, and that the private sector should be left to its own devices, many prominent economists of the time – such as Joseph Schumpeter, Friedrich von Hayek, Ludwig von Mises and Lionel Robbins3 – averred that government interventions would only encourage a false revival that would ultimately make the situation worse. Depressions were seen as cleansing processes – necessary to eradicate previous excesses, reimpose discipline on workers and businessmen, facilitate structural change and breed future dynamism.

The Last Tycoons: The Secret History of Lazard Frères & Co.
by William D. Cohan
Published 25 Dec 2015

The decades of internal turmoil and paternalistic management led ultimately to the once-unthinkable: a Lazard Freres free from its founders, as a publicly traded company just like any other, its operational flaws and obscene profitability open to the world--its special cachet lost forever. The story of Lazard has always been one of internecine warfare, calamity, and resurrection, proving definitively that the forces of "creative destruction"--in the Austrian economist Joseph Schumpeter's famous observation--are alive and well to this day in American capitalism. OF ALL LAZARD'S Great Men, none was greater than Felix George Rohatyn. Felix was considered by many to be the world's preeminent investment banker. He was the man who saved, first, Wall Street and then New York City from financial ruin in the early 1970s.

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"Lazard is not exactly kicking down the door any more in terms of major new business coming to Felix Rohatyn," Eric Gleacher, then head of M&A at Morgan Stanley, told the magazine hopefully. But Michel dismissed this speculation. "The intimacy between Felix and I," he said, "has been the cornerstone of the firm's success--not a cornerstone, the cornerstone." Take that, Loomis. Part of Lazard's problem was the "cruelly ironic" fact that--as the economist Joseph Schumpeter said about capitalism itself--the seeds of its own destruction were being sown by its own unparalleled success. As Felix aged--he was sixty at the time of the BusinessWeek piece--he was steadily selling off the firm's historic clients, among them RCA, Revlon, and Owens-Illinois. Loomis had recognized this as a problem but had had no success in solving it.

The Social Animal: The Hidden Sources of Love, Character, and Achievement
by David Brooks
Published 8 Mar 2011

This scientism has expressed itself most powerfully, over the last fifty years, in the field of economics. Economics did not start out as a purely rationalist enterprise. Adam Smith believed that human beings are driven by moral sentiments and their desire to seek and be worthy of the admiration of others. Thorstein Veblen, Joseph Schumpeter, and Friedrich Hayek expressed themselves through words not formulas. They stressed that economic activity was conducted amidst pervasive uncertainty. Actions are guided by imagination as well as reason. People can experience discontinuous paradigm shifts, suddenly seeing the same situation in radically different ways.

Civilization: The West and the Rest
by Niall Ferguson
Published 28 Feb 2011

Each organic being … has to struggle for life … As natural selection acts solely by accumulating slight, successive, favourable variations, it can produce no great or sudden modification … 26 In that sense, it might make more sense for historians to talk about an Industrial Evolution, in Darwin’s sense of the word. As the economists Thorstein Veblen and Joseph Schumpeter would later remark, nineteenth-century capitalism was an authentically Darwinian system, characterized by seemingly random mutation, occasional speciation and differential survival or, to use Schumpeter’s memorable phrase, ‘creative destruction’.27 Yet precisely the volatility of the more or less unregulated markets created by the Industrial Revolution caused consternation among many contemporaries.

Endless Money: The Moral Hazards of Socialism
by William Baker and Addison Wiggin
Published 2 Nov 2009

Those who respect the virtues of the market know that it’s a fragile, rare occurrence in history that has produced the level of prosperity we enjoy. Sure there were hiccups in the credit markets. Yes, we witnessed what may be considered the largest global crash in markets in history. But as the economist Joseph Schumpeter observed during the Great Depression—the only challenge to capitalist values within immediate reach—“the capitalist reality is first and last a process of change.” Not the type of change promised by politicians, but the reality that one economic system has been destroyed under its own weight.

Goddess of the Market: Ayn Rand and the American Right
by Jennifer Burns
Published 18 Oct 2009

Through the campaign and her organizing efforts she had encountered the last remnant of nineteenth-century laissez-faire, loosing its final breath into Willkie’s anti–New Deal campaign. The pessimism of her compatriots was in many ways an accurate assessment of reality, for the intellectual climate had shifted decisively against limited government. Once influential free market economists like Frank Knight and Joseph Schumpeter had raised dire warnings against government interference in the economy, only to see their ideas eclipsed by the rising star of John Maynard Keynes, a Brit who argued that government stimulation should play a vital role in supporting industrial economies. First published in 1936, Keynes’s General Theory of Unemployment, Interest, and Money launched a full frontal assault on the received wisdom of classical economics and the hands-off doctrine of laissez-faire.

The Power of Gold: The History of an Obsession
by Peter L. Bernstein
Published 1 Jan 2000

The gold standard provided its believers with comfort, community, pride, and a sense of immortality. The group of nations that adopted the gold standard developed into a kind of fraternity-an enviable and exclusive group whose members protected one another from the hazards and uncertainties imposed on them by the world beyond their borders. The great economist and historian Joseph Schumpeter described the attraction of the gold standard as a search for national prestige, "a symbol of sound practice and badge of honor and decency," with a value that was independent of purely economic advantages.' A contemporary member of the Austrian parliament warned his colleagues about the loss of "esteem" that their nation suffered by being "a scrap-of-paper economy."2 A Russian economist asserted that "Membership in worldwide civilization is unthinkable without membership in the worldwide monetary economy."3 John Sherman, a prominent member of the U.S.

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society
by Will Hutton
Published 30 Sep 2010

The challenge is to understand what unifies such innovation, and so design political, economic and social systems that might foster it. Innovation on this scale does not come naturally, and human history demonstrates that the obstacles to introducing the new are deep and profound.11 The Austrian economist Joseph Schumpeter was among the first to focus on the innovation process as lying at the heart of the capitalist process. The key to capitalist dynamism, he hypothesised, was that it brought together risk-taking finance with risk-taking entrepreneurs to introduce new innovation. But it was hardly a smooth or consensual process.

Dealers of Lightning
by Michael A. Hiltzik
Published 27 Apr 2000

Young and agile, it was in a perfect position to build suitable factories and a computer-oriented sales force from the ground up—just as Xerox had been when it chose to commercialize another innovative and suspect technology, fifteen years earlier. In fact, the two companies’ relationship perfectly illustrates the “creative destruction” model of industrial evolution proposed by Joseph Schumpeter in the 1930s, in which entrepreneurial opportunists snatch markets away from their ana-chronistic precursors. Computers, moreover, did not lend themselves to the pricing regime that many considered Xerox’s most important invention: leasing the copiers and charging customers by the page. When 250 Xerox salesmen contemplated the Alto on Futures Day and wondered, “Where’s the click?”

Evil Geniuses: The Unmaking of America: A Recent History
by Kurt Andersen
Published 14 Sep 2020

It’s more like this: after surviving the Depression and winning the war, Americans cruised along together for almost four decades in glorious sunny weather that seemed like it would go on forever—then we hit rough seas, and suddenly the first-class passengers, saying they hoped everyone else could join them later, grabbed all the lifeboats for themselves and sped off to their own private luxury ship anchored in a safe harbor. * * * — Joseph Schumpeter was a brilliant economist at Harvard in the first half of the twentieth century who approved of entrepreneurs but also thought capitalism would eventually be replaced by some kind of democratic socialism—not through workers’ uprisings but by means of a subtle, nonviolent process. The “perennial gale of creative destruction” would drive this evolution of advanced economic systems, he wrote (without italics) in 1942, right after the Depression, “the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.

Empire of Things: How We Became a World of Consumers, From the Fifteenth Century to the Twenty-First
by Frank Trentmann
Published 1 Dec 2015

Other writers look at mentalities, such as the romantic imagination, with its dream-like disposition for future pleasure, or at practices, such as cooking or home improvement. Global power is conspicuous by its absence from all these approaches. Conversely, the classic theorists of imperialism had little to say about the desire, appropriation and use of things. For J. A. Hobson, Heinrich Friedjung and Joseph Schumpeter, all writing in the immediate aftermath of the European scramble for Africa in the late nineteenth century, imperialism was driven by finance capitalism, aggressive nationalism, or an ‘atavistic’ aristocracy that was clinging on to feudal power and glory. Consumers featured, if at all, as victims of a jingoist conspiracy that enriched the few at the expense of the many.

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Native princes covered in gold and diamonds were joined by 100,000 people to watch the arrival of the new king, who was spectacularly dressed in a robe of imperial purple, white satin breeches and silk stockings, and adorned with the collar of the Order of the Garter, rubies, emeralds and the Star of India.51 Such imperial spectacle was part of a strategy to shore up old Indian princes and present the British Raj as a legitimate successor to the Mughals, but they never reinstated the older tribute system. Gifts and goods no longer oiled the wheels of power.52 A centralized state bureaucracy took their place. Instead of a public demonstration of fealty and status, gifts were reduced to bribes collected in secret. This fundamental switch deserves emphasis, because ever since the economist Joseph Schumpeter wrote his Sociology of Imperialism in 1918, it has been fashionable to treat imperialism as an ‘atavism’, a living museum in which an outdated feudal elite could recreate traditional hierarchies and the ‘life habits of the dim past’.53 In fact, the opposite happened. The Raj spawned a new material culture.

Trust: The Social Virtue and the Creation of Prosperity
by Francis Fukuyama
Published 1 Jan 1995

Subjective personal judgments are replaced by impersonal bureaucratic rules, which, like job control unionism, are less effective and more costly to implement. The causes of the growth of American individualism at the expense of community are numerous. A primary one is capitalism itself.10 Modern capitalism is, as Joseph Schumpeter explained, a process of continual “creative destruction.” As the technological frontier moves outward, markets expand, and new forms of organization emerge. In the process, older forms of social solidarity are ruthlessly crushed underfoot. The original industrial revolution destroyed guilds, townships, extended families, cottage industries, and peasant communities.

The Power Elite
by C. Wright Mills and Alan Wolfe
Published 1 Jan 1956

Such harsh images of the big rich have been frequently challenged, not so much on the grounds of any error in the facts advanced, as on the grounds that they result from estimations from the point of view of legality, morality, and personality, and that the more appropriate view would consider the economic function that the propertied moguls have performed in their time and place. According to this view, which has been most ably summed up by Joseph Schumpeter, the propertied giants are seen as men who stand at the focal points of the ‘perennial gale of innovations’ that sweeps through the heyday of capitalism. By their personal acumen and supernormal effort, they create and combine private enterprises in which are embodied new technical and financial techniques or new uses for old ones.

MacroWikinomics: Rebooting Business and the World
by Don Tapscott and Anthony D. Williams
Published 28 Sep 2010

So artists will have to give customers a product that is better than free—a product that is more convenient, more compelling, and that provides more value than customers can get from illegitimate sources. For successful companies and artists, the ability to deliver exceptional value is their hallmark. Joseph Schumpeter, the great economic theorist, maintained that businesses must either embrace new technologies by giving up old methods and products or cede the market share to those who will. Of course, Schumpeter’s theories of creative destruction assume free competition: that firms will bring new technologies and products to market in a competitive environment and that customers, not government, will be the ultimate arbiters of who wins.

Boyd: The Fighter Pilot Who Changed the Art of War
by Robert Coram
Published 21 Nov 2002

Then confusion and disorder and uncertainty not only result but continue to increase. Ultimately, as disorder increases, chaos can result. Boyd showed why this is a natural process and why the only alternative is to do a destructive deduction and rebuild one’s mental image to correspond to the new reality. Thomas Kuhn, a philosopher of science, and Joseph Schumpeter, an economist, recognized the destructive side of creativity. But Boyd was unique in his explanation of how the process is grounded in fundamentals discovered by Godel and Heisenberg and by entropy. The dialectic engine, once refined and elevated, was to become the intellectual heart of the new war doctrine so craved by elements within the U.S. military.

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World
by Ruchir Sharma
Published 5 Jun 2016

What I find striking about the current mood now, in March of 2016, is the complete absence of optimism: When I ask journalist friends to name a country that they view favorably, I often get a blank look. They find it easier to knock a country’s economic prospects. I suspect they are judging economic potential by the standards of the BC era, which is why they can’t see it anywhere. To help keep things in perspective, it is worth remembering what the Austrian-born economist Joseph Schumpeter had to say: “Pessimistic visions about anything usually strike the public as more erudite than optimistic ones.” No nation is an economic utopia. At any given time, none will score well on all the ten rules, and countries with the best prospects tend to get high scores on six or seven rules at most.

Order Without Design: How Markets Shape Cities
by Alain Bertaud
Published 9 Nov 2018

Marx’s observation in his Communist Manifesto that markets produced “everlasting uncertainty and agitation” and that as a result “all that is solid melts into air” is still true today and could refer to the changes taking place in the most dynamic cities of emerging economies. Economist and Harvard professor Joseph Schumpeter, giving a more optimistic version of Marx’s original insight, called this process “creative destruction.” Markets thus recycle obsolete land use quasi-automatically through rising and falling prices. This constant land recycling is usually very positive for the long-term welfare of the urban population.

The Aristocracy of Talent: How Meritocracy Made the Modern World
by Adrian Wooldridge
Published 2 Jun 2021

The champions of mental measurement were advocating nothing less than a reconstruction of the established social order and the replacement of a ruling class based on lineage and tradition with one based on ability and achievement. ‘Reactionaries’ have never come in such a revolutionary form. Joseph Schumpeter, the great economist, noted that European society remained profoundly ‘old-fashioned’ until well into the twentieth century: topped by ‘divinely ordained’ monarchs and their courts (in Schumpeter’s Austria, only nobles with a direct link to the Habsburg family going back fourteen generations were admitted to the highest functions) and buttressed by the landed nobility and the Church (which was often staffed by nobles).

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated
by Gautam Baid
Published 1 Jun 2020

Fewer than 12 percent of the Fortune 500 companies in 1955 were still on the list sixty-two years later in 2017, and 88 percent of the companies in 1955 had either gone bankrupt or had merged with (or were acquired by) another firm. If they still exist, they have fallen from the top Fortune 500 companies (as ranked by total revenues).7 This is Joseph Schumpeter’s “creative destruction” at its very best. The market places a heavy weight on certainty. Stocks with the promise of years of predictable earnings growth tend to go into a long period of overvaluation, until such time that they are no longer able to grow earnings in a steady manner. Predictability of long-term growth matters more to the market than the absolute rate of near-term growth, so a stock that promises to grow earnings at 50 percent for the next couple of years, with no clarity thereafter, is given a lower valuation multiple by the market than a stock that has slower but highly predictable growth for a much longer period.

Adaptive Markets: Financial Evolution at the Speed of Thought
by Andrew W. Lo
Published 3 Apr 2017

The dialectic approach gave a dynamic account of economic change that was not convincingly rivaled in mainstream economics until the development of modern growth theory in the 1950s. As a result, many economic thinkers in Europe found themselves reacting to Marxist ideas, even if they disdained Marxist politics. The great champion of entrepreneurship, Joseph Schumpeter, took the Marxist idea of capital periodically destroying itself and spun it in a positive sense, calling it “creative destruction,” the necessary evolutionary innovation for the next phase of the capitalist system.39 Schumpeter’s ideas were taken even further by Sidney Winter and Richard Nelson, who applied natural selection to industrial organization and growth theory, finding this might explain changes in economic productivity and industrial structure.40 Other figures rejected Marxist thought entirely, but realized that the static approach of efficient markets was incomplete.

City: Urbanism and Its End
by Douglas W. Rae
Published 15 Jan 2003

xix C H A P T E R 1 CREATIVE DESTRUCTION AND THE AGE OF URBANISM Industrial mutation . . . incessantly revolutionizes the economic structure from within, incessantly destroying the old, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.— JOSEPH SCHUMPETER, 1946 All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new formed ones become antiquated before they can ossify. All that is solid melts into air. . . . During its rule of scarce one hundred years, [capitalism] has created more massive and more colossal productive forces than have all preceding generations together. — KARL MARX AND FRIEDRICH ENGELS, 1847 The old nations of the earth creep on at a snail’s pace; the Republic thunders past with the rush of the express.

Global Crisis: War, Climate Change and Catastrophe in the Seventeenth Century
by Geoffrey Parker
Published 29 Apr 2013

By the 1660s Amsterdam paid 150 lightly armed citizens to patrol the streets each night, with as many again in reserve, and they summarily arrested anyone observed committing anti-social behaviour: beating their wives or servants; engaged in rape, theft or blatant street prostitution; acting in a drunk or disorderly manner.71 Many cities in Germany and elsewhere in the Dutch Republic emulated the Amsterdam system and, by the end of the seventeenth century, humans had for the first time in world history tamed the night. Non-Creative Destruction In his influential analysis of ‘Creative Destruction’, Joseph Schumpeter recognized that, in certain circumstances, exceptions existed to the process of ‘incessantly destroying’ old economic structures and then ‘incessantly creating a new one’, which he saw as central to economic growth. He wrote: Let us assume that there is a certain number of retailers in a neighborhood who try to improve their relative position by service and ‘atmosphere’ but avoid price competition and stick as to methods to the local tradition – a picture of stagnating routine.

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In 1848 Marx and Engels noted that most human societies face a ‘crisis’ whenever ‘a famine [or] a widespread war of destruction cuts off every means of subsistence and destroys industry and trade’; and they argued that these setbacks stimulated both ‘the conquest of new markets’ and ‘the more thorough exploitation of the old ones’ (Communist manifesto, ch. 1). They did not use the term ‘Creative Destruction’, which first appeared a century later as the title of ch. 7 of Joseph Schumpeter's critique of Marxist theory, Capitalism, socialism and democracy. Schumpeter, however, expressly excluded ‘wars, revolutions and so on’ as the ‘prime movers’ of economic change. Instead, he meant by ‘Creative Destruction’ the internal process by which new economic markets, products and methods ‘incessantly revolutioniz[e] the economic structure from within, incessantly destroying the old one, incessantly creating a new one’ (Capitalism, 82–3).

Liberalism at Large: The World According to the Economist
by Alex Zevin
Published 12 Nov 2019

We listened to him spellbound’.107 In the 1930s, the progressive atmosphere spilled out from the office to the Mecklenburgh Square flat Graham Hutton shared with New Statesman and Nation editor Kingsley Martin. Parties at the flat often featured two young Hungarian economists: Thomas Balogh, who, armed with a letter from Joseph Schumpeter, was given a job at the London bank O. T. Falk & Co. in 1930, and the nickname ‘Oxballs’ by Keynes; and Nicholas Kaldor, a researcher and instructor at the London School of Economics since 1927.108 Both men became key post-war advisors to Labour (later trying to press the General Theory into service under Harold Wilson as industrial and incomes policies aimed at boosting growth).

Winds of Change
by Peter Hennessy
Published 27 Aug 2019

That night Wilson suggested that each new peak in production brought about by the spread of automation ‘is marked by a higher and higher level of unemployment’.32 What he did not foresee was the growth of service industries that would fill the place left by those jobs made technologically redundant by the power and reach of the computer, robotics and, increasingly, artificial intelligence. Wilson did have a sense of what the great Austrian-born Harvard economist Joseph Schumpeter had described twenty years earlier as the ‘creative destruction’ that technology-fuelled capitalism could wreak.33 It was as if Wilson’s idea of planning was devoted to boosting the ‘creative’ part of that juxtaposition while curbing its ‘destructive’ properties. In Schumpeter’s classic Capitalism, Socialism and Democracy of 1942, there is a vivid line on Karl Marx that could apply to Harold Wilson at his best: ‘The cold metal of economic history is in Marx’s pages immersed in such a wealth of steaming phrases as to acquire a temperature not naturally its own.’34 Wilson was skilled, too, at capturing the long sweeps of history and integrating them into his speeches.

The True and Only Heaven: Progress and Its Critics
by Christopher Lasch
Published 16 Sep 1991

A more critical view of the technical and managerial elite appears in James Burnham, The Managerial Revolution (1941); Peter Mayer, "The Soviet Union: A Class Society," Politics (March-April 1944): 48-55, 81-85; Milovan Djilas, The New Class (1957); Radovan Richta, Civilization at the Crossroads: Social and Human Implications of the Scientific and Technological Revolution (1967); Serge Mallet, "Bureaucracy and Technocracy in Socialist Countries," Socialist Revolution (May-June 1970): 44‐ 75; Anthony Giddens, The Class Structure of Advanced Societies (1973); and George Konrad and Ivan Szelenyi, The Intellectuals on the Road to Class Power (1979). Criticism of the revolutionary intelligentsia and its dream of power, and more recently of the "adversary culture"—the third tradition of speculation about the new class—begins with Burke and Tocqueville and continues with Julien Benda, The Betrayal of the Intellectuals (1927); Joseph Schumpeter, Capitalism, Socialism, and Democracy (1942); Raymond Aron, The Opium of the Intellectuals (1955); Lewis Feuer, The Conflict of Generations: The Character and Significance of Student Movements (1969); and Lionel Trilling, Beyond Culture (1965). George B. deHuszar, ed., The Intellectuals: A Controversial Portrait (1960), contains many examples of this kind of criticism.

Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State
by Paul Tucker
Published 21 Apr 2018

Thus, a deliberative democratist might hold that democracy works because of its “epistemic” qualities, for example, via bringing many voices and perspectives to debates, helping to avoid “groupthink” and overreliance on technical experts, and so on.22 An alternative view, most famously associated with the mid-twentieth-century political economist Joseph Schumpeter, might see democracy’s instrumental edge as based on electoral competition between parties, factions, and points of view, the contest turning on who does best at detaching floating voters from their habits or group loyalties.23 These two schools would apply very different legitimation standards to IA regimes, as chapter 11 lays bare.

Merchants of Truth: The Business of News and the Fight for Facts
by Jill Abramson
Published 5 Feb 2019

The ceiling had collapsed three times, but with its footprint in music, Vice attracted big-name acts like the Arctic Monkeys and Amy Winehouse. Having survived one near-death experience, Smith, the master marketer, was not about to see his company become a victim of what the Austrian economist Joseph Schumpeter called “creative destruction,” the process by which an industry is revolutionized from within, its old economic model destroyed by the new. Over the previous 25 years, the overall audience for network news had been cut in half. The concerns of those who remained were reflected in the ads for dentures, adult diapers, and pharmaceuticals to treat erectile dysfunction.

Wasps: The Splendors and Miseries of an American Aristocracy
by Michael Knox Beran
Published 2 Aug 2021

According to this mythology, the capitalist tycoon was a modern version of the Renaissance condottiere and the Elizabethan swashbuckler—a daring, piratical character like the protagonist of Byron’s The Corsair, an “incarnation of the will to power.” The German seer Oswald Spengler would celebrate the “metal-hard natures” of titans like John D. Rockefeller and Cecil Rhodes, men who, Oliver Wendell Holmes said, had a more “poignant” insight into the future than their duller-witted contemporaries. In the culmination of the new mythology Joseph Schumpeter, the Austro-Harvard economist, would depict the capitalist as a romantic hero like Shelley’s Prometheus or Milton’s Satan, a rebel against conventional order, a master of the arts of creative destruction. There was a touch of this romantic diablerie in Morgan himself. He had tremendous powers of will; meeting his gaze, the photographer Edward Steichen said, was like looking into the headlights of an oncoming express.

America in the World: A History of U.S. Diplomacy and Foreign Policy
by Robert B. Zoellick
Published 3 Aug 2020

Today, scholars refer to this university-industry-governmental system as the Triple Helix concept of innovation for a “knowledge society”; they contrast it with the “industry-government dyad in the Industrial Society.”77 The Cold War became a competition between Bush’s ideas—and the Triple Helix system—with the Soviet Union’s state-directed model. Enterprises in the USSR did not have the flexibility to reallocate resources freely, which Joseph Schumpeter identified as vital for entrepreneurship. Soviet universities lacked the academic freedom essential for research that changes paradigms of thought. The Chinese innovation model relies on government direction of university research and—to a substantial degree—industrial investment. Japan adopted a similar approach decades earlier.

The Atlantic and Its Enemies: A History of the Cold War
by Norman Stone
Published 15 Feb 2010

An export surplus might have led to inflation, as the profits returned to a domestic market, and the answer to that was to import so that domestic producers trying to increase their prices would face competition from abroad. Under Ludwig Erhard, Germany had a director pledged to liberalization there as well, even if in the short term it might harm some local producers. Erhard, like other prominent economists of that period, had learned from the Nazi era, when protection had been the rule, and Joseph Schumpeter (a brilliant economist who had once been Austrian finance minister before proceeding to a Chair at Harvard) even said that Germany in 1931 had ceased to be a capitalist country because so much was regulated by the State. An ex-NCO, thumbing through your underwear on a border, in search of paper money, said it all.

Security Analysis
by Benjamin Graham and David Dodd
Published 1 Jan 1962

“The first thing you know,” the judge had upbraided the suspects, “you’ll wind up as stock brokers in Wall Street with yachts and country homes on Long Island.”3 In ways now difficult to imagine, Murphy’s Law was the order of the day; what could go wrong, did. “Depression” was more than a long-lingering state of economic affairs. It had become a worldview. The academic exponents of “secular stagnation,” notably Alvin Hansen and Joseph Schumpeter, each a Harvard economics professor, predicted a long decline in American population growth. This deceleration, Hansen contended in his 1939 essay, “together with the failure of any really important innovations of a magnitude to absorb large capital outlays, weighs very heavily as an explanation for the failure of the recent recovery to reach full employment.”4 Neither Hansen nor his readers had any way of knowing that a baby boom was around the corner.

Capital in the Twenty-First Century
by Thomas Piketty
Published 10 Mar 2014

Furthermore, the fact that the Soviet Union joined the victorious Allies in World War II enhanced the prestige of the statist economic system the Bolsheviks had put in place. Had not that system allowed the Soviets to lead a notoriously backward country, which in 1917 had only just emerged from serfdom, on a forced march to industrialization? In 1942, Joseph Schumpeter believed that socialism would inevitably triumph over capitalism. In 1970, when Paul Samuelson published the eighth edition of his famous textbook, he was still predicting that the GDP of the Soviet Union might outstrip that of the United States sometime between 1990 and 2000.17 In France, this general climate of distrust toward private capitalism was deepened after 1945 by the fact that many members of the economic elite were suspected of having collaborated with the German occupiers and indecently enriched themselves during the war.

The Empire Project: The Rise and Fall of the British World-System, 1830–1970
by John Darwin
Published 23 Sep 2009

The policy has increased our armaments and our territory enormously in the last twenty years.’141 Experience of India, China, the Middle East and Africa also kept alive, in the heyday of laissez-faire, a variant of political or imperial capitalism that had little in common with the rational entrepreneurship imagined by Joseph Schumpeter in his Imperialism and Social Classes (1919). To businessmen like Goldie, Mackinnon, the Liverpool traders on the Niger, the taipans of the China coast and railway promoters like Bland, it was self-evident that political power should be used if necessary against the threat of monopolistic rivals and to clear the path of local ‘obstructions’.

Titan: The Life of John D. Rockefeller, Sr.
by Ron Chernow
Published 1 Jan 1997

I had a passion for detail which afterward I was forced to strive to modify.”35 Business historians and sociologists have stressed the centrality of accounting to capitalist enterprise. In The Protestant Ethic and the Spirit of Capitalism, Max Weber identified “rational bookkeeping” as integral to capitalism’s spirit and organization.36 For Joseph Schumpeter, capitalism “turns the unit of money into a tool of rational cost-profit calculations, of which the towering monument is double-entry bookkeeping.”37 It thus seems fitting that John D. Rockefeller, the archetypal capitalist, betrayed a special affinity for accounting and an almost mystic faith in numbers.