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The Revolutionary Center: The Lost Genius of Liberalism

by Adrian Wooldridge  · 7 Apr 2026  · 342pp  · 129,097 words

more flexible and inclusive but not compromised out of existence. Information capitalism needs to be prevented from running amok but without killing the spirit of creative destruction. Everything needs to be calmed down. Walter Lippmann began his book A Preface to Morals (1929) with a quote from Aristophanes: ‘Whirl is King, having

of England, losses are nationalized while gains are privatized. Tech entrepreneurs have proved particularly adept at rent extraction despite being widely hailed as examples of creative destruction at its most ruthless. In the old days – the early 2000s – founders got rich by holding onto their (usually A-class) shares and working to

’s problem of overindulged appetites is commonplace. We have long assumed that modernity brings longer life – indeed, that longer life is proof that all that creative destruction is worth it. That has not been the case in the US since 2014. In 2021, life expectancy fell to 76.1 years – the lowest

There are good reasons why governments have been nervous about over-regulating business since the malaise of the 1970s. The essence of capitalism is creative destruction; the agents of creative destruction are trouble-causing entrepreneurs. Countries that have recognized this fact such as the US have roared ahead. Those who have ignored it have

world’s seven biggest advanced economies, including Japan and Germany. Today it accounts for 58 per cent.35 We must be careful not to destroy creative destruction in the name of order. Europe’s stagnation suggests that there is still more to do with the 1980s liberal agenda of lifting the burdens

anarchy and anomie, solutions to problems of and 58–9 Axis of Autocracy and 174 Bolsheviks and 88 civilized society and 316 corporations see corporations creative destruction xxiii, 206, 245, 260 crony capitalism xii dark side of, leaders of liberalism concern about 201–2 debate, freedom of and 214–16 globalization and

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

by Daron Acemoglu and James Robinson  · 20 Mar 2012  · 547pp  · 172,226 words

examples, they show how institutional developments, sometimes based on very accidental circumstances, have had enormous consequences. The openness of a society, its willingness to permit creative destruction, and the rule of law appear to be decisive for economic development.” —Kenneth J. Arrow, Nobel laureate in economics, 1972 “The authors convincingly show

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.” —Scott E.

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

income was from landholdings or from trading privileges they enjoyed thanks to monopolies granted and entry barriers imposed by monarchs. Consistent with the idea of creative destruction, the spread of industries, factories, and towns took resources away from the land, reduced land rents, and increased the wages that landowners had to

just a process of more and better machines, and more and better educated people, but also a transformative and destabilizing process associated with widespread creative destruction. Growth thus moves forward only if not blocked by the economic losers who anticipate that their economic privileges will be lost and by the political

somewhat, even if not completely, inclusive economic institutions. Many societies with extractive political institutions will shy away from inclusive economic institutions because of fear of creative destruction. But the degree to which the elite manage to monopolize power varies across societies. In some, the position of the elite could be sufficiently secure

develop military technologies and even pull ahead of the United States in the space and nuclear race for a short while. But this growth without creative destruction and without broad-based technological innovation was not sustainable and came to an abrupt end. In addition, the arrangements that support economic growth under

oceans just at the wrong time, when Ming emperors decided in the late fourteenth and early fifteenth centuries that increased long-distance trade and the creative destruction that it might bring would be likely to threaten their rule. In India, institutional drift worked differently and led to the development of a

either because of infighting over the spoils of extraction, leading to the collapse of the regime, or because the inherent lack of innovation and creative destruction under extractive institutions puts a limit on sustained growth. How the Soviets ran hard into these limits will be discussed in greater detail in the

getting locally autonomous groups under control. But absolutism persisted until the First World War, and reform efforts were thwarted by the usual fear of creative destruction and the anxiety among elite groups that they would lose economically or politically. While Ottoman reformers talked of introducing private property rights to land in

, a commodity coveted worldwide. The production of sugar based on gangs of slaves was certainly not “efficient,” and there was no technological change or creative destruction in these societies, but this did not prevent them from achieving some amount of growth under extractive institutions. The situation was similar in the Soviet

not to have changed. Building and artistic techniques became much more sophisticated over time, but in total there was little innovation. There was no creative destruction. But there were other forms of destruction as the wealth that the extractive institutions created for the k’uhul ajaw and the Maya elite led

different in nature from growth created under inclusive institutions, however. Most important, it is not sustainable. By their very nature, extractive institutions do not foster creative destruction and generate at best only a limited amount of technological progress. The growth they engender thus lasts for only so long. The Soviet experience gives

toward fully inclusive institutions looked unstoppable. But there was a tension in all this. Economic growth supported by the inclusive Venetian institutions was accompanied by creative destruction. Each new wave of enterprising young men who became rich via the commenda or other similar economic institutions tended to reduce the profits and economic

was based on relatively high agricultural productivity, significant tribute from the provinces, and long-distance trade, but it was not underpinned by technological progress or creative destruction. The Romans inherited some basic technologies, iron tools and weapons, literacy, plow agriculture, and building techniques. Early on in the Republic, they created others:

used existing technology, though the Romans perfected it. There could be some economic growth without innovation, relying on existing technology, but it was growth without creative destruction. And it did not last. As property rights became more insecure and the economic rights of citizens followed the decline of their political rights, economic

is good news, until the government decides that it is not interested in technological development—an all-too-common occurrence due to the fear of creative destruction. The great Roman writer Pliny the Elder relates the following story. During the reign of the emperor Tiberius, a man invented unbreakable glass and

they will often resist and try to stop such innovations. Thus society needs newcomers to introduce the most radical innovations, and these newcomers and the creative destruction they wreak must often overcome several sources of resistance, including that from powerful rulers and elites. Prior to seventeenth-century England, extractive institutions were the

, as shown in the last two chapters, especially when they’ve contained inclusive elements, as in Venice and Rome. But they did not permit creative destruction. The growth they generated was not sustained, and came to an end because of the absence of new innovations, because of political infighting generated by

by Dionysius Papin, a French physicist and inventor. The story of Papin’s invention is another example of how, under extractive institutions, the threat of creative destruction impeded technological change. Papin developed a design for a “steam digester” in 1679, and in 1690 he extended this into a piston engine. In

to cotton, as Foster did. Newcomers were needed to develop and use the new technologies. The rapid expansion of cotton decimated the wool industry—creative destruction in action. Creative destruction redistributes not simply income and wealth, but also political power, as William Lee learned when he found the authorities so unreceptive to his invention

moved policy in the direction favored by these newly represented interests; in 1846 they managed to get the hated Corn Laws repealed, demonstrating again that creative destruction meant a redistribution not just of income, but also of political power. And naturally, changes in the distribution of political power in time would

further redistribution of income. It was the inclusive nature of English institutions that allowed this process to take place. Those who suffered from and feared creative destruction were no longer able to stop it. WHY IN ENGLAND? The Industrial Revolution started and made its biggest strides in England because of her

the same urges as any other person. They wanted to block others from entering their businesses and competing against them and feared the process of creative destruction that might put them out of business, as they had previously bankrupted others. But after 1688 this became harder to accomplish. In 1775 Richard

can master literacy. This threatened to undermine the existing status quo, where knowledge was controlled by elites. The Ottoman sultans and religious establishment feared the creative destruction that would result. Their solution was to forbid printing. THE INDUSTRIAL REVOLUTION created a critical juncture that affected almost every country. Some nations, such as

particularly pernicious form of Russian serfdom. Absolutism was not the only type of political institution preventing industrialization. Though absolutist regimes were not pluralistic and feared creative destruction, many had centralized states, or at least states that were centralized enough to impose bans on innovations such as the printing press. Even today,

weak, political centralization are two different barriers to the spread of industry. But they are also connected; both are kept in place by fear of creative destruction and because the process of political centralization often creates a tendency toward absolutism. Resistance to political centralization is motivated by reasons similar to resistance to

the scheme went nowhere because Emperor Francis again simply said no. The opposition to industry and steam railways stemmed from Francis’s concern about the creative destruction that accompanied the development of a modern economy. His main priorities were ensuring the stability of the extractive institutions over which he ruled and

corrupted and eventually turn into a class as miserable as they are dangerous for their masters. Just as with Francis I, Nicholas feared that the creative destruction unleashed by a modern industrial economy would undermine the political status quo in Russia. Urged on by Nicholas, Kankrin took specific steps to slow

usual logic of extractive institutions. As most rulers presiding over extractive institutions, the absolutist emperors of China opposed change, sought stability, and in essence feared creative destruction. This is best illustrated by the history of international trade. As we have seen, the discovery of the Americas and the way international trade was

trading relations worthless or even worse. The reasoning of the Ming and Qing states for opposing international trade is by now familiar: the fear of creative destruction. The leaders’ primary aim was political stability. International trade was potentially destabilizing as merchants were enriched and emboldened, as they were in England during

other absolutist regimes—for example, in Austria-Hungary, Russia, the Ottoman Empire, and China, though in these cases the rulers, because of fear of creative destruction, not only neglected to encourage economic progress but also took explicit steps to block the spread of industry and the introduction of new technologies that

playing field: Thomas Edison’s 1880 patent for the lightbulb Records of the Patent and Trademark Office; Record Group 241; National Archives Economic losers from creative destruction: machine-breaking Luddites in early-nineteenth-century Britain Mary Evans Picture Library/Tom Morgan Consequences of a complete lack of political centralization in Somalia REUTERS

people of Western European countries, while black South Africans were scarcely richer than those in the rest of sub-Saharan Africa. This economic growth without creative destruction, from which only the whites benefited, continued as long as revenues from gold and diamonds increased. By the 1970s, however, the economy had stopped

of economic growth. Australia and the United States could industrialize and grow rapidly because their relatively inclusive institutions would not block new technologies, innovation, or creative destruction. Not so in most of the other European colonies. Their dynamics would be quite the opposite of those in Australia and the United States. Lack

monarchs and by aristocracies whose major source of income was from their landholdings or from trading privileges they enjoyed thanks to prohibitive entry barriers. The creative destruction that would be wrought by the process of industrialization would erode the leaders’ trading profits and take resources and labor away from their lands.

its responsibility was for the development of infrastructure, such as ports and roads, but as in Austria-Hungary, Russia, and Sierra Leone, this often threatened creative destruction and could have destabilized the system. Therefore, the development of infrastructure, rather than being implemented, was often resisted. For example, the development of a port

more inclusive political institutions following the Glorious Revolution and the French Revolution. The first was new merchants and businessmen wishing to unleash the power of creative destruction from which they themselves would benefit; these new men were among the key members of the revolutionary coalitions and did not wish to see

in the middle of a boom in the world prices of these commodities. Like all such experiences of growth under extractive institutions, it involved no creative destruction and no innovation. And it was not sustainable. Around the time of the First World War, mounting political instability and armed revolts induced the

that growth under extractive institutions will not be sustained, for two key reasons. First, sustained economic growth requires innovation, and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics. Because elites dominating extractive institutions fear

institutions. Despite the recent emphasis in China on innovation and technology, Chinese growth is based on the adoption of existing technologies and rapid investment, not creative destruction. An important aspect of this is that property rights are not entirely secure in China. Every now and then, just like Dai, some entrepreneurs

heavy industry. Such growth was feasible partly because there was a lot of catching up to be done. Growth under extractive institutions is easier when creative destruction is not a necessity. Chinese economic institutions are certainly more inclusive than those in the Soviet Union, but China’s political institutions are still

about the case on the New York Times and Financial Times Web sites. Because of the party’s control over economic institutions, the extent of creative destruction is heavily curtailed, and it will remain so until there is radical reform in political institutions. Just as in the Soviet Union, the Chinese

political institutions in China, though likely to continue for a while yet, will not translate into sustained growth, supported by truly inclusive economic institutions and creative destruction. Second, contrary to the claims of modernization theory, we should not count on authoritarian growth leading to democracy or inclusive political institutions. China, Russia,

The Age of Turbulence: Adventures in a New World (Hardback) - Common

by Alan Greenspan  · 14 Jun 2007

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

status as the icon of American business, and the glamour had shifted to high-growth companies like IBM. What Schumpeter called "the perennial gale of creative destruction" was starting to hit Big Steel. Though my work at Townsend-Greenspan was in demand, I was careful not to expand too fast. I focused

the benefits took years to unfold—rail freight rates, for example, hardly budged at first. Yet deregulation set the stage for an enormous wave of creative destruction in the 1980s: the breakup of AT&T and other 72 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was

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

1957 Chevrolets on the streets of Havana, it embodied a key difference between a centrally planned society and a capitalist one: here there was no creative destruction, no impetus to build better tools. No wonder centrally planned economic systems have great difficulty in raising standards of living and creating wealth. Production and

. T he fast-paced high-tech boom is what finally gave broad currency to Schumpeter's idea of creative destruction. It became a dot-com buzz phrase—indeed, once you accelerate to Internet speed, creative destruction is hard to overlook. In Silicon Valley, companies were continually remaking themselves and new businesses were constantly flaring

the stage for the Internet's seemingly sudden and rapid emergence. Business now had an enormous capacity to gather and disseminate information. This accelerated the creative-destruction process as capital shifted from stagnant or mediocre companies and industries to those at the cutting edge. Silicon Valley venture capital firms with names like

times that of GM's. In fact, the General Motors pension fund owned Google shares—a textbook example of capital shifting as a result of creative destruction. Why should information technology have such a vast transforming effect? Much of corporate activity is directed at reducing uncertainty. For most of the twentieth century

my youth, technology began in a major way to upend white-collar occupations. Suddenly millions of Americans found themselves exposed to the dark side of creative destruction. Secretarial and clerical functions got absorbed into computer software, as did drafting jobs in architecture and in automotive and industrial design. Job insecurity, historically a

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

left Interlaken she had jokingly declared our trip so far "the least romantic honeymoon in history." And then we arrived in Venice. As necessary as creative destruction is for material standards of living to improve, it's no coincidence that some of the world's most cherished places are those that have

right. But the conversation helped crystallize something that had been in the back of my mind for months. Venice, I realized, is the antithesis of creative destruction. It exists to conserve and appreciate a past, not create a future. But that, I realized, is exactly the point. The city caters to a

are on the rise—as well as nostalgia for a slower and simpler time. Nothing is more stressful for people than the perennial gale of creative destruction. Silicon Valley is without question an exciting place to work, but its allure as a honeymoon destination has, I would guess, thus far gone largely

incidents in China suggest how politically destabilizing that can be. In the endeavor to modernize, many provincial and local Chinese authorities in their version of creative destruction periodically confiscate peasants' land for development. Riots have been widespread. Granting clear legal ownership rights to peasants for the land they till would go a

its reception repays special attention. It also serves to pave the way for my next chapter, which addresses the great "problem" inherent in capitalism: that creative destruction is often, and by a great many, viewed simply as destruction. The history of Smith's ideas is the history of attitudes toward the social

off for it. So were my clients, and I suspect so were my competitors as well. Down deep that is probably the message of capitalism: "creative destruction"—the scrapping of old technologies and old ways of doing things for the new—is the only way to increase productivity and therefore the only

, less fundamental suppressants of competitive behavior as well. Most politically prominent is the inclination of many societies to protect "national treasures" from the winds of creative destruction, or worse, foreign ownership. That is a dangerous restraint on international competition and another issue that differentiates one culture from another. In 2006, for example

it with a more modern, efficient office building. However, no matter what one's depth of feeling is on such issues, to the extent that creative destruction is restrained to preserve icons, some improvement in material standards of living is forgone. Of course, there are other disturbing and counterproductive examples of government

constraining web of new government regulations on previously unfettered competition, much of which remains in place to this day Some of the rougher edges of creative destruction were legislated away. Congress enacted the Employment Act of 1946, which formalized many of the ad hoc initiatives of the 1930s. It committed the U

, but before globalization took hold, governments were able to construct social safety nets and engage in other policies to shelter citizens from the gale of creative destruction. In the United States, major expansions of Social Security, unemployment insurance, worker-safety legislation, and, of course, Medicare headed a much longer list. Most industrialized

ccebook.cn form the internet, the author keeps the copyright. T H E AGE OF T U R B U L E N C E creative destruction, advocates of markets convinced their populations of capitalism's benefits, thereby gaining electoral dominance. Because of deeply different cultures, however, each nation practiced its own

in late-nineteenth-century economic cartelization that was fostered in part by the needs of the military. In the decades immediately following World War II, creative destruction in Europe was largely "creative." Most of the "destruction" of what would have been obsolescent facilities after the war had been done by the bombing

fading. West Germany had largely worked through the backlog of reconstruction demand that so buoyed its economy. Demand was easing off and economic growth slowed. Creative destruction—the need for painful economic changes and redeployment of economic resources—largely dormant since the war, reemerged. Much of the economic infrastructure that had been

industrial powers. Its immigration laws generally discourage anyone of other than Japanese origin, and it encourages conformity. It is a very civil society, which eschews creative destruction. The Japanese frown upon the large turnover of jobs and the frequent discharging of workers associated with the elimination or evolution of obsolescent companies. Nonetheless

(SOEs) has made significant progress, and other SOEs are undergoing major restructuring. As a consequence, employment in these organizations has fallen sharply, an indication that creative destruction is moving at a reasonably good clip. 304 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook

, the extension of capitalism to world markets, like capitalism itself, is the object of intense criticism from those who see only the destructive side of creative destruction. Yet all credible evidence indicates that the benefits of globalization far exceed its costs, even beyond the realm of economics. For example, economist Barry Eichengreen

[and] .. . democracies are more likely to remove capital controls." Accordingly, we should focus on addressing and assuaging the fears induced by the dark side of creative destruction rather than imposing limits on the economic edifice on which worldwide prosperity depends. Innovation is as important to our global financial marketplace as it is

women between ages twenty-five and fifty-four were employed or seeking jobs. (Today the number is more than 75 percent.) But as competition spurred creative destruction, the pace of job turnover quickened and the visions of a lifetime with a single employer faded. interestingly, despite the marked increase in income concentration

management occurs outside the boardroom. I do not wish to cast aspersions on the corporate takeover. On the contrary, it is a key facilitator of creative destruction, and doubtless the most effective remaining means by which shareholder voices can mold a corporation. But while change in management is often necessary, you cannot

allocation of a nation's resources are distorted, the markets will be less effective in fostering rising standards of living. Capitalism expands wealth primarily through creative destruction—the process by which the cash flow from obsolescent, low-return capital coupled with new savings is invested in high-return, cutting-edge technologies. But

management. Shareholders who seek anonymity can be protected by listing in street names.* Mergers, acquisitions, and spin-offs are a vital part of competition and creative destruction. The emergence of private equity funds appears to be a market response to the unwillingness of pension funds and other large institutional investors to engage

shareholder capital from corporations with less promising investment opportunities for investment in companies with cutting-edge technologies is an important example of the financing of creative destruction. 472 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps

of induced obsolescence, have had to reinvent large segments of their businesses every couple of years. Confronted with the angst of the baneful side of creative destruction, virtually all of the developed world and an ever-increasing part of the developing world have elected to accept a lesser degree of material well

, 226, 276, 292, 294-310, 3 1 1 , 334n, 389, 503 AG's visits to, 294-97, 299, 301 banks in, 298, 302, 307, 308 creative destruction in, 254, 304 currency of, 302-3, 306 current account surplus of, 351 energy and, 446, 459, 460 foreign direct investment in, 12-13, 296

, 249-50,279,446-47,494 AG as chairman of, 63-76, 373 description of, 64 counterparty surveillance, 3 7 0 - 7 1 , 373, 489 creative destruction, 4 8 - 5 1 , 127, 174, 282, 285, 401,504 buffers against, 279, 280 in China, 254, 304 corporate governance and, 432, 436 deregulation and

Mae, 241, 242 farm bill, 234 fear, 17-18, 183, 191, 306, 347, 366, 369, 397, 440, 461,468,486,488 in Congress, 70 of creative destruction, 260, 376 stock-market crashes and, 4 6 5 - 6 6 terrorism and, 3, 469 Federal Bulldozer, The (Anderson), 57 Federal Deposit Insurance Corporation, 116

-33 central planning in, 62 central planning vs., 12, 123, 125, 127-28, 129, 131-34, 139, 141 conflicted attitudes toward, 261, 268-72 creative destruction and, see creative destruction Fed's orientation toward, 373 French vs. American views of, 273 Riture of, 464-506 historical continuity in, 464-65 institutional foundations of, 139

Strategy: A History

by Lawrence Freedman  · 31 Oct 2013  · 1,073pp  · 314,528 words

4, 2001: “The books of various gurus have singled out the company as paragon of good management, for LEADING THE REVOLUTION (Gary Hamel, 2000), practising CREATIVE DESTRUCTION (Richard Foster and Sarah Kaplan, 2001), devising STRATEGY THROUGH SIMPLE RULES (Kathy Eisenhardt and Donald Sull, 2001), winning the WAR FOR TALENT (Ed Michaels, 1998

Innovation and Its Enemies

by Calestous Juma  · 20 Mar 2017

.T4 (ebook) | DDC 338/.064—dc23 LC record available at http://lccn.loc.gov/2015043807 To my son Eric Contents Acknowledgments Introduction 1. Gales of Creative Destruction 2. Brewing Trouble: Coffee 3. Stop the Presses: Printing the Koran 4. Smear Campaigns: Margarine 5. Gaining Traction: Farm Mechanization 6. Charged Arguments: Electricity 7

new technologies offer a rich source of heuristics that can help us to gain deeper understanding of the dynamics of sociocultural evolution. 1 Gales of Creative Destruction People are very open-minded about new things—as long as they’re exactly like the old ones. CHARLES KETTERING The new millennium brought a

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

new, such as the gun replacing archery and the mobile phone replacing the landline. To fully grasp the implications and scope of the process of creative destruction, we need to return to Schumpeter’s original thinking, as laid out in his 1911 book The Theory of Economic Development, about innovation as “creative

of an industrial sector.16 The term can be applied to any of the five areas of innovation identified by Schumpeter. As elaborated by Swedberg, creative destruction and the associated resistance to innovation can be identified in any of those five areas and any additional ones that expand the categories of new

why segments of society fear change; at the same time the concept can help individuals embrace innovation. The concept of creative destruction as articulated by Schumpeter gained currency largely because it has universal appeal.18 It manifests itself in a variety of forms across cultures and it

“process of industrial mutation … that incessantly revolutionizes 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.”22 Schumpeter challenged the idea of economic equilibrium using non-Darwinian evolutionary thinking.23 He focuses on transformations arising

resisted the change and have had to be educated up by elaborate psychotechnics of advertising.”26 One of the key features of the concept of creative destruction is technological discontinuity. A popular derivative of the thinking is the concept of “disruptive innovation.”27 As noted by Christensen in his original formulation of

to the Christensen formulation. All references to innovation in this book, unless stated otherwise, will be assumed to be transformational in the sense of Schumpeterian “creative destruction.” There is a classical outlook that simply defines institutions as the glue that keeps society together. This static view ignores the role that institutions play

adoption of seemingly inferior but nascent technologies with steep but rewarding learning curves ahead of them. This is the essential feature of technological succession and creative destruction.106 Economic comparisons between emerging and incumbent technologies are therefore not very helpful because they often fail to account for the potential for improvement in

. Conclusions This chapter has sought to articulate a view of both technological success and challenges to innovation that builds on Schumpeter’s seminal concept of creative destruction. The kinds of technological transitions needed to address today’s global grand challenges will inherently build on rapid momentum generated by exponential growth in scientific

religious authorities who transmitted it orally. In this respect, books carried with them the germ of subversion. The “Ottoman sultans and religious establishment feared the creative destruction that would result. Their solution was to forbid them.”63 The Ottoman Empire eventually saw the wide adoption of the printing press. In 1802 the

Schumpeterian confrontation as the defenders of entrenched methods appealed to popular sentiments and tried to capture legal and political institutions to forestall the process of creative destruction.”2 Sensing that they were swimming against the tide, however, they sought accommodation and coexistence. This chapter examines how the champions of the two sources

the music industry. For a Song Schumpeter put considerable emphasis on the economic gains arising from innovation. He also understood, however, that the process of “creative destruction” caused considerable misery for those affected. He visualized large sections of society being crushed by the wheels of novelty.1 One of the biggest fears

labor organizations to ban certain technologies. Throughout the last century, the music industry developed under a wide range of technological successions. Its Schumpeterian “gales of creative destruction” were in most cases the source of new economic opportunities. But the waves of technological innovation also came with welfare costs. Previous chapters illustrated how

from the debate around technological innovation and music production is the importance of understanding responses from organized labor. In many cases what appears as positive “creative destruction” to one group is viewed by others as “destructive creation” without obvious benefits to society. Managing such technological transitions therefore requires a better understanding of

whom the critics associate with new technologies. Demonizing innovation is often associated with campaigns to romanticize past products and practices. Indeed, the Schumpeterian process of creative destruction entails the sweeping away of the new. These efforts use nostalgia to amplify a communal sense of loss, often captured by the cliché, “the good

Case Studies from China,” Journal of Engineering and Technology Management 28, nos. 1–2 (2011): 93–108. 7. See, for example, Eric J. Topol, The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care (New York: Basic Books, 2013). 8. Nicholas G. Carr, The Glass Cage: Automation and

: Edward Elgar, 2007), 188–203. 18. Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York: HarperCollins, 2008), 82. 19. Hugo Reinert and Erik S. Reinert, “Creative Destruction in Economics: Nietzsche, Sombart and Schumpeter,” in Friedrich Nietzsche: Economy and Society, ed. Jürgen G. Backhaus and Wolfgang Drechsler (Boston: Kluwer, 2005), 55–85. 20

. Haley, Subsidies to Chinese Industry: State Capitalism, Business Strategy, and Trade Policy (Oxford: Oxford University Press, 2013). Chapter 8 1. Christian Schubert, “How to Evaluate Creative Destruction: Reconstructing Schumpeter’s Appproach,” Cambridge Journal of Economics 37, no. 2 (2013): 227–250. 2. David Morton, Off the Record: The Technology and Culture of

Innovation: The Case of the US Recording Industry,” Technology Analysis and Strategic Management 23, no. 5 (2011): 473–487. 48. Stan J. Liebowitz, “File Sharing: Creative Destruction or Just Plain Destruction?,” Journal of Law and Economics 49, no. 1 (2006): 1–28. 49. Mark Coleman, Playback: From the Victrola to MP3, 100

, Freedom to Innovate: Biotechnology in Africa’s Development (Addis Ababa: African Union and New Partnership for Africa’s Development, 2007). 23. Mariana Mazzucato, “Financing Innovation: Creative Destruction vs. Destructive Creation,” Industrial and Corporate Change, 22, no. 4 (2013): 851–867. 24. Joseph A. Schumpeter, “The Creative Response to Economic History,” Journal of

Novelty Always a Good Thing? Towards an Evolutionary Welfare Economics,” Journal of Evolutionary Economics 22, no. 3 (2012): 586–619; Christian Schunbert, “How to Evaluate Creative Destruction: Reconstructing Schumpeter’s Appproach,” Cambridge Journal of Economics 37, no. 2 (2013); 227–250. 38. Mariana Mazzucato, “Financial Innovation: Destruction vs. Destructive Creation,” Industrial and

), 269–270 Centrifugal cream separator, 98 Cerf, Vinton, 3 CFCs (chlorofluorocarbons), 197 Chain broadcasting, 208 Challenges to innovation. See Barriers to innovation Change fear of, creative destruction and, 16–17 social institutions and adaption to, 20 The Character of a Coffee House, by an Eye and Ear Witness (pamphlet), 58 Charles II

on, 291 Coşgel, Metin M., 88–89 Cosmetics, antifreeze protein in, 275 Cotton industry, 234, 242, 246, 253, 291–292 Cottonseed oil, in margarine, 114 Creative destruction, 11–43. See also Disruptive innovation conclusions on, 42–43 creative construction, 16 impact of, 203 intellectual responses, 31–32 overview, 8, 11 Schumpeter, social

Crops. See Transgenic crops; specific types of crops Crosby, Howard, 166 Cullen, William, 179 Culture. See also Resistance to innovation coffee consumption and, 46–47 creative destruction and, 17 cultural evolution (transformation), 4, 42–43, 140–141 cultural identities, innovation and concern over, 7 cultural inertia, 315 democratic governance of, 287 existing

, 173, 340n1. See also Edison, Thomas Disease-resistant wheat cultivars, 228 Disgust, technological innovation and, 24, 93 Disruptive innovation, 17–18, 169, 301. See also Creative destruction Distrust communication and, 312 of gas industry, 147–148 of ice industry, 185 of institutions, 5, 8 Doctrines, established, vs. technological innovation, 26 Domestic fat

and entrepreneurship, 1, 16, 26, 29, 39, 77, 80, 142, 145, 168, 199, 258, 261, 269, 275, 277, 282–283, 286, 290, 293, 296, 312 creative destruction by, 16–17, 19, 39 entrepreneurial leaders, need for, 282–283, 286 as source of innovation, 1, 258, 296–297 technological discontinuities and, 145 Environment

and technological innovation AquAdvantage salmon, 257–279. See also AquAdvantage salmon barriers to, 33–34, 36–37 coffee, 44–67. See also Coffee creative destruction, 11–43. See also Creative destruction cycles, 12 electricity, 144–173. See also Electricity farm mechanization, 121–143. See also Farm mechanization improved support for, 280–316. See also

in ice cooling, 177 Sandoz company, 232–233 Schools, computers in, 41 Schultz, Theodore William, 95, 116 Schumpeter, Joseph on consumers’ tastes, changes in, 45 creative destruction, concept of, 16–17, 19, 39, 42, 47, 121, 129, 139, 280, 309 economic development, application of complex systems thinking to, 27 on economic gains

Defending the Free Market: The Moral Case for a Free Economy

by Robert A. Sirico  · 20 May 2012  · 267pp  · 70,250 words

Aid That Doesn’t The Moral Appeal of Good Work A Theology of Enterprise Suggestions for Further Reading CHAPTER 4 - Why the “Creative Destruction” of Capitalism Is More Creative than Destructive Creative Destruction, Creative Flourishing Globalization, Christianity, and Culture Globalization and Coercive Destruction Globalization and Culture Suggestions for Further Reading CHAPTER 5 - Why Greed

, 2009). PovertyCure website (www.povertycure.org). Robert Sirico, The Entrepreneurial Vocation (Acton Institute, 2001). CHAPTER 4 Why the “Creative Destruction” of Capitalism Is More Creative than Destructive Q: It’s easy to talk about “creative destruction” when it’s not your job, your family, or your town being destroyed. Unemployment ruins lives. Shouldn’t

my depth. What he was saying made sense to me on a technical level, but all my intuitions cried out against it. It looked horrible. Creative Destruction, Creative Flourishing I relate this story as an illustration of the fact that sometimes what appears to be beaten back and damaged is really healthy

and preparing for new growth. This is the case with what economists call creative destruction—the phenomenon whereby old skills, companies, and sometimes entire industries are eclipsed as new methods and businesses take their place

. Creative destruction is seen in layoffs, downsizing, the obsolescence of firms, and, sometimes, serious injury to the communities that depend on them. It looks horrible, and, especially

though every ditch digger is going to lose his job when bulldozers come on line. Let’s not forget the creative and progressive part of creative destruction. Technological advance does not destroy ditch diggers, even the ones who lose their jobs. It places them behind the controls of bulldozers or in factories

a false nostalgia blind us to the good of human progress. If we were to eliminate the positive results of even a hundred years of creative destruction—eliminate them overnight—the result would be the swift death of literally billions of human beings, since the resources available to civilization a hundred years

to live in an alternate reality, and if we are to preserve it we need to recognize that it is only when the process of creative destruction is allowed that new jobs, new skills, new ways of leveraging human energy can spring up and create the opportunities that previous generations never even

going to help us. What is needed, rather, is an economically informed perspective. We need to look more closely at all the factors contributing to creative destruction, and consider both the positives and negatives of a creative market economy. That involves not only attending to the people thrown out of work as

industries and technologies change but also thinking about what would happen to the people if there were no creative destruction. Once we realize that we have to attend to all of the long-range consequences, then we can start coming at the problems generated by

creative destruction from the most productive angle. The challenge for all who are concerned with promoting a free and virtuous society is to minimize the damage done

like the holly bush that is never pruned. Of course, workers and other economic players who are caught in the midst of this drama of creative destruction aren’t landscape plants; they are human persons and members of families. Every job is filled by a human being of inestimable inherent dignity and

effect on their co-workers or the consumers of their products. There is something fundamentally alarming about that. To resist the creative destruction inherent in a dynamic economy is only to replace creative destruction with a slow destruction without creativity. This isn’t theory. It’s the present reality in the United States. For

, and setbacks is a recipe for decline. Globalization, Christianity, and Culture It is impossible to talk about creative destruction without talking about the increasingly interconnected global economy. The global economy is where we see creative destruction writ large, and in recent years many Americans have had to come face to face with the destructive

Brooklyn Tabernacle Choir Brooks, Arthur bureaucracy business, environment for global business morality of poverty and profits and small business “Business as Mission,” C capital capitalism “creative destruction” and global capitalism greed and Caritas in Veritate Catholicism Catholics in Alliance for the Common Good Center for Faith and Public Life Centesimus Annus central

competition Congress consumerism consumption Constitution, The Consumer Reports contraception contracts Copernicus Cornwall Declaration on Environmental Stewardship cost-benefit analysis Council for Environmental Stewardship Cox, Harvey “creative destruction,” Cronyism CT scans D Dalrymple, Theodore de Soto, Hernando de Sales, Francis de Tocqueville, Alexis “Dead, The,” Decalogue Declaration of Independence, the Department of Health

Open: The Story of Human Progress

by Johan Norberg  · 14 Sep 2020  · 505pp  · 138,917 words

a new controversy over trade, which is threatening to rip globalization apart and create new geopolitical tensions. The benefits from trade come to us through creative destruction. We benefit from trading with a hunter because we stop our own hunting and instead specialize in producing arrows. The US benefits from importing shoes

country’s foreign trade by ten percentage points is associated with an increase in productivity between 1.4 and 9.6 per cent.58 This creative destruction is, of course, also what condemns free trade in the eyes of many people. Competition from imports hurts particular sectors, and results in the dislocation

to impose ‘order and stability’, and stifle dissent and innovation that threatened the established order. They were just not very good at it. Attacks on creative destruction that sound like they are straight out of the Ming or Qing handbook proliferated in Europe. Queen Elizabeth denied William Lee a patent for his

, but the result was that they destroyed their own industrial base and chased the industry out to Yorkshire. And parliament consistently refused to legislate against creative destruction. A resolution by the Justices of the Peace in Preston reflects the attitude of the authorities: ‘if a total stop were put by the legislature

his Facebook page, ‘in my next life I want to be a trade myth: I’ll never again die.’20 As I’ve made clear, creative destruction also creates losers – the word ‘destruction’ is a giveaway. But for open Western countries the benefits of international trade outweigh the cost by roughly twenty

economy during the post-war era. These are the profits that innovators and entrepreneurs make above the normal return on investments when they engage in creative destruction – introducing new goods, technologies and methods into the economy, such as computers that replace hand calculations and barcodes that replace manual sorting. Nordhaus’ conclusion is

competed away. Other companies imitate or innovate around the Schumpeterian companies, and soon others come up with superior goods and services.25 Not only is creative destruction not a zero-sum game. It creates massive amounts of wealth, and the best thing is that all of us who took no part in

that Congress enact a law that cyclists must buy a hat, otherwise the industry would be destroyed.20 My favourite example of the fear of creative destruction is that infamous disturber of the peace, the umbrella. It came late to Europe, adopted from the Chinese, and at first was mostly carried by

just as open to social change as liberals were.12 In a way, this sounds like a caricature of comfortable globalist elites, feeling invulnerable to creative destruction and yet lecturing the more unfortunate about how they must welcome technological change and cultural transformation. It’s the proverbial liberal who does not have

, 354, 379 Cheddar Man, 74 Cobden–Chevalier Treaty (1860), 53–4 coffee houses, 166 colonies, 84, 191, 194, 200 Corn Laws repeal (1846), 53, 191 creative destruction in, 179 crime in, 119, 120 Dutch War (1672–4), 101 English Civil War (1642–1651), 148, 183, 184, 201 Glorious Revolution (1688), 101, 185

, 54, 56, 215, 302–5, 314–18 Communist Manifesto, The (Marx and Engels), 33 compensatory control, 322–3 competition, 60 benefit–cost ratio and, 62 creative destruction and, 57, 190 Great Depression and, 54 guilds and, 190 immigration and, 117 Rust Belt and, 64, 65–6 competitive advantage, 28–9 computers, 302

, 312 corruption, 317, 345, 381 COVID-19 pandemic (2019–20), 3, 4, 10–12, 162–3, 312 cowboys, 73 Cowen, Tyler, 257 Coxe, Tench, 103 creative destruction, 57, 179, 182, 190, 270, 339 automation, 63, 312–13 nostalgia and, 296–9, 313 Schumpeterian profits, 273–4 Crete, 89 crime, 110, 119–20

, 10, 27, 80 ancient world, 32, 42, 44, 46 authoritarianism and, 318 bureaucratic inertia and, 318–21 canon and, 195 cities and, 40, 53, 79 creative destruction, 57, 179, 182, 190 cultural evolution, 28 immigration and 81–4 patent systems, 189–90 population and, 27, 51, 53 Schumpeterian profits, 273–5 resistance

Bourgeois Dignity: Why Economics Can't Explain the Modern World

by Deirdre N. McCloskey  · 15 Nov 2011  · 1,205pp  · 308,891 words

often more penetrating than his contemporary Max Weber—noted in 1908 that “usually, the poisonous, divisive, destructive effects of competition are stressed” (though it is creative destruction): But, in addition . . . competition compels the wooer who has a co-wooer, . . . to go out to the wooed, come close to him, establish ties with

, to so speak, for the table of contents): We were poor but now are rich. Why? Answer: The change in attitude toward the bourgeoisie and creative destruction. But why did they change? Answer: The egalitarian accidents of 1517–1789. But why were they important? Answer: Because earlier times were fiercely antibourgeois, being

worry about the young (“From the young . . . the change is coming. . . . Then it’s the end of Solness the master builder”) is worry about the creative destruction of entry, characteristic of a liberated economy, which the bourgeoisie advocates but then routinely seeks state protection from.14 In Austen the admiration for prudence

laws about to be implemented, the ignorant and jealous people did not, in the economy, have the upper hand. Such protecting of existing interests from creative destruction was anciently usual. William Lee’s stocking frame had been denied a patent by Queen Elizabeth and then again by James I on the grounds

of Congress deals among people makes the people better off. The second S, Schumpeter, with his “Austrian” emphasis on betterment, had got it right on creative destruction, such as Henry Ford’s destroying the exclusively high-class car industry or Charlie Parker’s destroying swing jazz or Pablo Picasso destroying Postimpressionism. Schumpeter

by Ian Watt, who noted in Robinson Crusoe “the dynamic tendency of capitalism.”3 The European novel later became news about the middling sort practicing creative destruction—the bettering merchants and craftsmen and yeoman farmers—a class that had earlier been thought unworthy of attention. As Coetzee put it recently in his

the middleman, the boss, the banker—vile things—if it gets beyond cheap talk, and it often does, can stop cold all discovery, betterment, and creative destruction. Smith and Schumpeter are stymied. Stupidity comes to reign. It needs to be contradicted, and in Britain in the eighteenth century it was. 33 As

of the merchant republic so irritating to aristocratic England.) What is admired in the play is honorable hierarchy and its stability, not the bourgeois upheavals, creative destruction, and wave of gadgets to be commended in the eighteenth century and especially in the nineteenth. Bevington observes that Dekker’s Eyre “is not ‘middle

, accepting the position with good grace. The money transactions in the play have nothing to do with ordinary business, much less with the financing of creative destruction. They reinforce status differentials, as a tip or a bribe given to lesser folk. Income is taken to be bullion in the style of mercantilists

possessing Armstrongian wealth by God’s grace and giving it out to suitable objects of largess, especially to attractive boys. It is not achieved by creative destruction. With few exceptions (such as Smiles), the theorists of betterment, or the ministers criticizing it, or the writers of 110 novels for boys, didn’t

voluntary rules which in the field of morals makes gradual evolution and spontaneous growth possible, which allows further modifications and betterments.7 Betterments require disobedience, creative destruction, an overturning or remaking or redirecting of what already exists, Steve Jobs and Bill Gates challenging Big Blue, autos replacing horses—not a bigger centralized

.1 God, and history, moves in mysterious ways. One of the half-millennium turns was the Reform of the Western church. The great turnings of creative destruction depend not on institutions, which serve routinely as drags on progress—another chronic flaw in neo-institutionalist theorizing—but on individual souls coming to move

government of the day, as spectacularly in French history—in contrast with the struggle against governments in the Radical Reformation. The governments did not want creative destruction if the destruction had any chance of disturbing their powers. And so Christ stopped at Eboli, and did not continue to Lucania. All Christian churches

of the law about cold-beer sales that had artificially favored liquor stores. Such new interests in the past few centuries have bred toleration for creative destruction, and for unpredictable lives, and for most children having much more than their grandparents. For this reason it is unlikely that India will return to

rhetorical concept, from those who advocated creation to those who opposed destruction. Ideas and rhetoric in northwestern Europe had begun to change in favor of creative destruction. * One can admire, appropriately, the entrepreneurial vigor of heroic figures, as in 1958, for example, the Austrian sociologist and anthropologist Helmut Schoeck did: “We tend

race on the eve of the migrations out of Africa. The social hostility to the man of business and the rulers’ hostility to hierarchy-disturbing creative destruction was suppressing betterment. The ancient problem was, as Schoeck put it, “social controls . . . imposed in the name and interest of ‘the whole society.’” Andrew Coulson

“betterments” are boondoggles for well-connected chaps, or monuments for the already rich. They are Baconian research projects of doubtful worth, destructive creation rather than creative destruction. That is what is wrong with Thorstein Veblen’s notion that engineers, not the price system, should rule. Engineers are full of bad ideas too

betterment out of existence in the first act, to “protect jobs” on the railways, or to “guard public safety,” they would have done so, and creative destruction would have been smothered in the cradle. Swift persuaded a minor railway running between Chicago and Detroit, the Grand Trunk, to take on his new

of national income—usually below about 15 percent if you do not mix up routine payment of interest with the rewards to minor or major creative destruction. But its signaling function is worth the price. The shift of attention caused by the varying profits on capital invested in oil wells or furniture

you all rich. (Up his sleeve, to himself, according to Marxian lore: Ha, ha, suckers!) Workers, the left says, mistakenly accept a false claim of creative destruction. Wake up, you workers! Arise, you prisoners of starvation! But suppose the Bourgeois Deal is sound. Then the falsity in consciousness is attributable not to

30 or 100. And they did. The descendants of the horribly poor of the 1930s, for instance, are doing much better than their ancestors. Radically creative destruction piled up ideas, such as the railways creatively destroying walking and the stagecoaches, or electricity creatively destroying kerosene lighting and the hand-washing of clothes

an unusually violent one.) But restoring relations is an egalitarian ideal, characteristic of societies suspicious of the Bourgeois Deal and suspicious of the forward-looking creative destruction it implements. In the actual case, the cost of the restoration fell on the wrong parties, “wrong” considering the rule of liability that would do

the nineteenth century writers like Macaulay or Manzoni read and understood the new political economy, and acknowledged the force of cooperation, entry, arbitrage, scarcity, and creative destruction. But later intellectuals construed economics as the faculty of reason, arrayed against the freedom they so loved, a misunderstanding encouraged by the talk among classical

(Greek: “homecoming-ache”). Not that there is nothing in the past we might regret losing and ache to come home to. After all, “gales of creative destruction” (to use the vivid if alarming phrase describing trade-tested betterment that Schumpeter popularized from a 1913 book by Sombart) involves destruction. Modern wireless telephones

is, can be doubted, item by item. The old Kentucky home we ache for was miserable, unless you were the slave owner. And if the creative destruction producing its irritating novelties is tested commercially we can at least be assured that on balance the mass of the people prefer it, in their

the bullock carts and horse-drawn mail coaches often cursed the railways.” Yet “for every citizen who cursed ten cheered.”3 That’s the point: creative destruction is good for the society as a whole, viewed democratically. Sympathetically considered, the right and left unhappiness with the rich modern world can be viewed

profits of conventional taxis, of banks with credit cards, of hotels, and of copyright holders of TV programs.5 The regulators did not ask whether creative destruction was better for the mass of people, or whether as regulators they were, sometimes unintentionally, carrying water for monopolies of taxis, credit cards, hotels, and

, 62; youth unemployment, 63 Cowper, William, 158, 645 Cox, Michael W.: recent betterment, 37 Craig, A. M.: censorship in East, 684n8 Crayen, Dorothee: numeracy, 316 creative destruction: destructive creation, 522; Franklin on, 154; Great Enrichment and, 583; interests in, 465; opposition to, 477; opposition to, Johnson on, 153; in retail, 60, 619

, 11 Gann, David, 685n23, 55 García Garrosa, Maria Jesus, 675n10 Gardiner, Luke, 447 Gardner, Roy, 652n22 Gary, Indiana: pollution, 68 Gaskell, Mrs., 592 Gates, Bill: creative destruction, 362 Gaus, Gerald: hierarchy and agriculture, 19; hunter-gatherers, 19, 636–637 Gay, John: The Beggar’s Opera, 311 Gay, Paul du. See du Gay

, xxxiii, 63; Smith on preserving, 464; sweatshop, 572; and sweet talk, 491, 496. See also job protection; Reich, Robert; technological unemployment; wage slavery Jobs, Steve: creative destruction, 362 Johansson, Sheila, 517 Johns Hopkins: on Harvard College, 679n15 Johnson, Noel: acknowledged, xxxviii Johnson, Samuel, 87, 151, chap. 17; quotes Addison, 673n15 John XXII

, 400. See also Scottish equality License Raj of India, 414, 501, 624–625; end of, 501 Lieber, Franz: habits of the heart, 361 Lienhard, John: creative destruction, 362; patent on railway, 668n8 Liggio, Leonard: acknowledged, xxxviii Lilburne, John: quoted by Brailsford, 677n4 Lillo, George, chap. 28, 267; bourgeois dignity, 268, 592; bourgeois

Papin, Denis, 174 Papua New Guinea: justice in, 583–585 Pareto improving. See win-win Park, Robert: alienation in big cities, 396 Parker, Charlie “Bird”: creative destruction, 205; Larkin on, 334 Parker, Geoffrey: Chinese and Japanese military, 397; poor relief in Low Countries, 342 Parker, R. A. C.: German army’s quality

pessimism, 61 Phillips, Susan M.: SEC regulations, 665n9 Phillipson, Nicholas: quotes Molesworth, 676n11 photography: and anti-capitalism, 595 physiocrats, 206 Piaget, Jean, 652n23 Picasso, Pablo: creative destruction, 205 Piers Ploughman: and individualism, 669n10 Piketty, Thomas: on capital, xiii; ethical claims by rich, xxix; ethics, 48; inheritance, 48, 49; politics, 582; relative poverty

editions of The London Merchant, 675n10 Schumpeter, Joseph Alois: and Austrian economics, 646; capitalist achievement, 37; causes of betterment, 105; contrast with Smithian growth, 205; creative destruction, 618; critique of Smith, 207; cultural contradictions of capitalism, 540; dueling, 224; entry of new men, 40–41; ideology, 514; materialism, 643; for Smith and

, xxvii. See also Weber, Max Sokoloff, Kenneth. See Engerman-Sokoloff hypothesis on Latin America Solman, Paul: acknowledged, xxxviii Sombart, Werner: Arabic numerals, 316; calculation, 271; creative destruction, 618; German sociological Romanticism, 676n19; prudence, 273 Somers, Margaret, 551; Polanyist, 551; state provision, 551 Song dynasty: Goldstone on, 98; and Great Enrichment, 435; industrial

Shoemaker’s Holiday, 309. See also mercantilism; win-win Ziliak, Stephen: statistical significance, 675n10 Zimbabwe, 74, 290, 625 Zola, Émile, 42; Caillebotte, 590; consumerism, 609; creative destruction, 60; entry of the department store, 59–60; Germinal, 42, 591; The Ladies’ Paradise, 59 zoning and building codes, 51, 144, 605, 625, 641; Italian

Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole

by Benjamin R. Barber  · 1 Jan 2007  · 498pp  · 145,708 words

not only democracy but capitalism itself. Much will depend on our capacity to make sense out of infantilization and relate it to the not-so-creative destruction of consumerism’s survival logic. The idea of an “infantilist ethos” is as provocative and controversial as the idea of what Weber called the “Protestant

about the virtues of hybridization as he goes, will slither on in search of new prey. Cultural exchange may be a form of Schumpeter’s “creative destruction,” but over time dialectic is trumped by power, and destruction merely destroys, leaving behind an ever more homogenized, monocultural marketplace. Creolization does not create very

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

business, confronting monopolies, and dealing with corporate crime all point to a renewal of popular sovereignty rather than to marketplace solutions based on innovation or creative destruction.30 Consumer advocate Ralph Nader also turns to government for enforcement of the consumer standards he continues to promote. Breaking the vicious cycle from within

Consumption, p. 182. 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

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

expansive. Tyler Cowen offers a similarly straightforward celebration of consumerism, especially in its putative capacity to sustain serious culture, in the book that preceded his Creative Destruction discussed earlier, a book appropriately titled In Praise of Commercial Culture (Cambridge, Mass.: Harvard University Press, 1998). 56. Johnson, Everything Bad Is Good for You

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

Capitalism in America: A History

by Adrian Wooldridge and Alan Greenspan  · 15 Oct 2018  · 585pp  · 151,239 words

history of GDP, both nominal and real, for the early years of the republic (see appendix).6 We draw on that work throughout this book. CREATIVE DESTRUCTION Creative destruction is the principal driving force of economic progress, the “perennial gale” that uproots businesses—and lives—but that, in the process, creates a more productive

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

. It was a time in which the federal government focused overwhelmingly on protecting property rights and enforcing contracts rather than on “taming” the process of creative destruction. Thanks to relentless innovation the unit cost (a proxy for output per hour) of Bessemer steel fell sharply, reducing its wholesale price from 1867 to

similar cascade of improvements in almost every area of life produced a doubling of living standards in a generation. The most obvious way to drive creative destruction is to produce more powerful machines. A striking number of the machines that have revolutionized productivity look like improvised contraptions. Cyrus McCormick’s threshing machine

percentage points a year to real GDP growth. That added 10.6 percent to the level of real GDP in 1899. An additional aspect of creative destruction is the reduction in transportation costs. Cold-rolled steel sheet is worth more on a car located in a car dealership than rolling off a

ever closer together within an integrated circuit in order to produce ever-greater amounts of computing capacity. THE CUNNING OF HISTORY In the real world, creative destruction seldom works with the smooth logic of Moore’s law. It can take a long time for a new technology to change an economy: the

could ring up payments by 30 percent and reduced labor requirements of cashiers and baggers by 10 to 15 percent. THE DOWNSIDE OF CREATIVE DESTRUCTION The destructive side of creative destruction comes in two distinct forms: the destruction of physical assets as they become surplus to requirements, and the displacement of workers as old

jobs are abandoned. To this should be added the problem of uncertainty. The “gale of creative destruction” blows away old certainties along with old forms of doing things: nobody knows which assets will prove to be productive in the future and which

bubbles that can pop, sometimes with dangerous consequences. Partly because people are frightened of change and partly because change produces losers as well as winners, creative destruction is usually greeted by what Max Weber called “a flood of mistrust, sometimes of hatred, above all of moral indignation.”16 The most obvious form

, and managerial capitalism by a more entrepreneurial capitalism. Resistance can come from business titans as well as labor barons. One of the great paradoxes of creative destruction is that people who profit from it one moment can turn against it the next: worried that their factories will become obsolete or their competitors

by electric shocks or set cities on fire.17 ENTER THE POLITICIANS America has been better at both the creative and the destructive side of creative destruction than most other countries: it has been better at founding businesses and taking those businesses to scale, but it has also been better at

greatest entrepreneurs, including Charles Goodyear, R. H. Macy, and H. J. Heinz, suffered from repeated business failures before finally making it. America’s appetite for creative destruction has many roots. The fact that America is such a big country meant that people were willing to pull up stakes and move on: from

least it avoided stagnation. The country’s political system has powerfully reinforced these geographical and cultural advantages. The biggest potential constraint on creative destruction is political resistance. The losers of creative destruction tend to be concentrated while the winners tend to be dispersed. Organizing concentrated people is much easier than organizing dispersed ones. The

have taken a more mature approach, admitting that creation and destruction are bound together, but claiming to be able to boost the creative side of creative destruction while eliminating the destructive side through a combination of demand management and wise intervention. The result has usually been disappointing: stagnation, inflation, or some other

on the idea that government was the problem rather than the solution. But can America continue to preserve its comparative advantage in the art of creative destruction? That is looking less certain. The rate of company creation is now at its lowest point since the 1980s. More than three-quarters of

value of hierarchy and authority and encouraged people to rely on their own judgment. For all their differences, these two traditions were both friendly toward creative destruction: they taught Americans to challenge the established order in pursuit of personal betterment and to question received wisdom in pursuit of rational understanding. Shortage of

was more than five times the amount invested in canals.40 The railway boom proceeded in a very American way. There was a lot of creative destruction: railways quickly killed canals because rails could carry fifty times as much freight and didn’t freeze over in winter. There was a lot of

” and “brings the noisy world into the midst of our slumberous peace.”45 The third revolution was an information revolution. Central to the process of creative destruction is knowledge of what combination of what resources yields maximum gains in living standards. Information-starved Americans recognized the importance of the old adage that

was the only one who was born to the purple, and he massively increased the power of his bank. One of the striking things about creative destruction is that it can affect members of the same family in very different ways: the very force that made Andrew Carnegie the world’s richest

improvement in living standards for all. These men were entrepreneurial geniuses who succeeded in turning the United States into one of the purest laboratories of creative destruction the world has seen: men who grasped that something big but formless was in the air and gave that something form and direction, men who

that tested America’s belief in equality of opportunity. America’s new plutocrats were increasingly keen on flaunting their wealth as Schumpeter’s spirit of creative destruction gave rise to Thorstein Veblen’s disease of conspicuous consumption. They were also increasingly keen on adopting European airs and graces. They competed to get

that boasted 175,000 square feet and 250 rooms, as well as farms, a village, a church, and agricultural laborers. RISING DISCONTENT The storm of creative destruction that swept across the country in the aftermath of the Civil War whipped up great concentrations of anger as well as wealth. The anger began

them on price. They were also the mail-order stores that by the late 1920s were forced to open physical stores, often in the suburbs. Creative destruction brought an inevitable political reaction: the losers banded together and eventually persuaded the Federal Trade Commission to pass retail price maintenance. HENRY FORD VERSUS ALFRED

ideal King-beaver.” Yet even Hoover’s abilities were soon to be tested beyond breaking point. The United States had enjoyed the bright side of creative destruction with three decades of barely punctuated economic growth culminating in seven years of unprecedented prosperity. It was about to experience the dark side. Seven THE

depression of 1893. But it was still possible in those days of small government and fatalistic politics for the government to stand pat and let creative destruction take its course. By the 1930s, people expected the government to “do something” but didn’t know what that “something” should be. The federal

retarded re-employment.” FDR responded to the complaints with a series of adjustments that had the perverse effect of making the contraption ever more complicated. Creative destruction was nowhere to be seen. The Supreme Court did FDR an unexpected (and certainly unacknowledged) favor by ruling that much of the NRA was unconstitutional

Microsoft in Albuquerque, New Mexico, in 1975 and Steve Jobs and Steve Wozniak founded Apple in 1976. And America had not lost its talent for creative destruction, even during the decade of malaise. America’s pharmaceutical industry escaped the general decline in management quality: Pfizer continued to invest heavily in R&D

be recombined with talent in imaginative new ways. Jack Welch became the most celebrated chief executive of the era because of his willingness to apply creative destruction to one of America’s most storied companies. He began his two-decade reign (1981–2001) with unflinching corporate brutality in pursuit of his belief

, left Fairchild and recruited Andy Grove to join them. More than anywhere else in America, Silicon Valley was a living embodiment of the principle of creative destruction as old companies died and new ones emerged, allowing capital, ideas, and people to be reallocated. From the mid-1970s onward, the IT revolution went

America’s declining dynamism. Twelve AMERICA’S FADING DYNAMISM THIS BOOK HAS REPEATEDLY shown that America’s greatest comparative advantage has been its talent for creative destruction. America was colonized by pioneers and forged by adventurers who were willing to take unusual risks in pursuit of a better life. Arjo Klamer once

—a barrier that offers stability and pricing power. Yet this highly productive America exists alongside a much more stagnant country. Look at any measure of creative destruction, from geographical mobility to company creation to tolerance of disruption, and you see that it is headed downward. The United States is becoming indistinguishable from

other mature slow-growth economies such as Europe and Japan in its handling of creative destruction: a “citadel society,” in Klamer’s phrase, in which large parts of the citadel are falling into disrepair. The Census Bureau reports that geographical mobility

teeth. Short? American life expectancy is more than twice what it was at the birth of the republic. THE PROBLEM WITH CREATIVE DESTRUCTION The central mechanism of this progress has been creative destruction: the restless force that disequilibrates every equilibrium and discombobulates every combobulation. History would be simple (if a little boring) if progress

competition. “All failed companies are the same,” Peter Thiel, the founder of PayPal, explains in Zero to One (2014), “they failed to escape competition.”6 Creative destruction cannot operate without generating unease: the fiercer the gale, the greater the unease. Settled patterns of life are uprooted. Old industries are destroyed. Hostility to

creative destruction is usually loudest on the left. You can see it in protests against Walmart opening stores, factory owners closing factories, bioengineers engineering new products. But

obvious than the benefits. The benefits tend to be diffuse and long-term while the costs are concentrated and up front. The biggest winners of creative destruction are the poor and marginal. Joseph Schumpeter got to the heart of the matter: “Queen Elizabeth [I] owned silk stockings. The capitalist achievement does not

unemployed silk workers put out of business by the silk-making factories than the millions of silk stockings. This leads to the second problem: that creative destruction can become self-negating. By producing prosperity, capitalism creates its own gravediggers in the form of a comfortable class of intellectuals and politicians

easier for the victims of “destruction” to band together and demand reform than it is for the victors to band together. The “perennial gale” of creative destruction thus encounters a “perennial gale” of political opposition. People link arms to protect threatened jobs and save dying industries. They denounce capitalists for their ruthless

greed. The result is stagnation: in trying to tame creative destruction, for example by preserving jobs or keeping factories open, they end up killing it. Entitlements crowd out productive investments. Regulations make it impossible to create

new companies. By trying to have your cake and eat it, you end up with less cake. The third problem is that creative destruction can sometimes be all destruction and no creation. This most frequently happens in the world of money. It’s impossible to have a successful capitalist

the like allocate society’s savings to the perceived most productive industries and the most productive firms within those industries. At its best, finance is creative destruction in its purest form: capital is more fleet-footed and ruthless than any other factor of production. At its worst, finance is pure destruction. Financial

best borrowers. Credit dries up. Companies collapse. People are laid off. Again the process is self-reinforcing: panic creates contraction; contraction creates further panic. FROM CREATIVE DESTRUCTION TO MASS PROSPERITY The best place to study the first problem—the fact that costs are more visible than benefits—is in the transition from

from the end of the Civil War to America’s entry into the First World War because it was the country’s greatest era of creative destruction. Railways replaced horses and carts for long-distance transport. Steel replaced iron and wood. Skyscrapers reached to the heavens. The years just before the

up all this discontent into successful political movements. The Sixteenth Amendment to the Constitution introduced an income tax for the first time. Yet all this creative destruction nevertheless laid the foundation for the greatest improvement in living standards in history. Technological innovations reduced the cost of inputs into the economy (particularly oil

, 246 Council of Economic Advisers, 275, 302–3 Countrywide Financial, 378 cowboys, 113, 116 Cowen, Tyler, 4 Cox, Michael, 431 Crain, Nicole and Mark, 413 creative destruction, 12, 14–21, 209, 324, 389, 390 downside of, 21–23 to mass prosperity, 426–32 political resistance and, 24–26 problems with, 420–26

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