5/14/11

If capitalism is dependent on creative destruction, what is it without destruction?

Austrian economist Joseph Schumpeter
popularized and used the term to describe the process of transformation that accompanies radical innovation


 


…innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies


that enjoyed some degree of monopoly power


 


Creative Destruction


Wikipedia


 


If most economists still believe in the concepts that discounted the possibilities of the financial crisis, should economic policy rely on the same prognosticators who helped enable the worst financial distress since the Great Depression for economic tactics and forecasting?


 


The process of industrial mutation that incessantly revolutionizes the economic structure from within,  incessantly destroying the old one, incessantly creating a new one ...


 


[The process] must be seen in its role in the perennial gale of creative destruction, it cannot be understood on the hypothesis that there is a perennial lull


 


Joseph Schumpeter


The Process of Creative Destruction, 1942


 


If the natural cycle of laissez faire capitalism revolves between risk and aversion, what should happen if government intervention perverts the process


to forestall short term economic pain?


 


What should the electorate expect


from leadership dependent on the status quo?


 


Speaking the Truth in times of universal deceit is a revolutionary act


 


George Orwell

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