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Joseph Schumpeter

Original nameJoseph Schumpeter

Economist, author of "creative destruction"

Those Who Argued Over Markets for a Century · Critics & the Macro Debate
InnovationCreative DestructionEntrepreneursBusiness Cycles

Who they are

An Austrian-born economist. While others fixed their eyes on prices and equilibrium, he turned his gaze to change itself. He argued that the true engine of capitalism is the ceaseless "innovation" of entrepreneurs — new products, new technologies, new ways of organizing — which destroys old industries and structures and builds anew upon the ruins. He gave this process a precise and famous name: "creative destruction." To him capitalism was like a never-resting storm: it destroys and creates at once, and this very destruction is the secret of its vitality. The concept became one of the most powerful keys for understanding innovation, technology, and business change.

Primary sourcesSchumpeter, Capitalism, Socialism and DemocracyThe Theory of Economic Development

Key stories

The Storm of "Creative Destruction"

Schumpeter said the essence of capitalism is a "perennial gale of creative destruction": the automobile destroyed the carriage trade, yet created all of modern transport; the digital camera destroyed the film giants, yet put a camera in everyone’s pocket. The old is constantly destroyed, the new constantly created, and the economy advances precisely through this restless self-renewal. Today, whenever people speak of disruptive innovation, industry reshuffling, or technological revolution, they are using the very term Schumpeter coined a hundred years ago.

Relationships

Ally
🕊️Friedrich Hayek　shared the intellectual soil of the Austrian School

Echoes today

Below are how modern works borrow or reinterpret this name or story — not the original material. The two differ, so keep them apart.

"Creative destruction" a catchphrase of the tech world"Creative destruction" is now the most-used term in tech and business for describing disruptive innovation and industry reshuffling — from Silicon Valley to the investment world, people still understand change through this concept Schumpeter coined a hundred years ago.

Appears in

The Great Depression & the Macro DebateKeynes’s General Theory: The Visible Hand
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