Thursday, March 1, 2007

Creative Destruction

The fundamental impulse that sets and keeps the capitalist engine in motion comes from new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates. ...

...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. This process of Creative Destruction is the essential fact about capitalism.
--Joseph Schumpeter, Capitalism, Socialism and Democracy (3rd ed. 1950) Ch. VII

Update: Heavy Thinker, review by Robert M. Solow of Prophet of Innovation: Joseph Schumpeter and Creative Destruction by Thomas K. McCraw, from The New Republic Online, July 12, 2007

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