Creative Destruction

Creative Destruction

Creative Destruction.  When you first hear this term, it seems somewhat counterintuitive or oxymoronic. On a second go round; you might wonder why we need to create destruction or why that destruction needs to be creative.


Joseph Schumpeter (1883-1950) first coined creative destruction in his work, Capitalism, Socialism, and Democracy.  It refers to the process in which technology and innovation create new ways of doing things and, in the process, leave the old ways behind. Technological innovation might destroy entire businesses, industries, or streams of employment while allowing new enterprises to grow in their wake. Schumpeter believed the process of creative destruction, “which essentially revolutionizes the economic structure from within” was the hallmark of capitalism. Marx originally hinted at this idea in Das Capital when he stated that, “the violent destruction of capital was not by relations external to it, but rather as a condition of self preservation.” In a nutshell, Marx believed that the “destruction of capital” was necessary for a blossoming capitalist system. 

Schumpeter also believed that entrepreneurs set this process of creative destruction in motion. Entrepreneurs were the disruptive economic force that maintained and fed economic growth. As these entrepreneurs create more advanced technology or more sophisticated organizational structures, they increase the efficiency of production. This rising productivity reduces per unit costs and increases profits for the individual entrepreneurs but also increases output, and promotes growth for the economy as whole. For Schumpeter, destroying the old ways of doing things was a necessary pre-condition for growth and continued profitability. 

In Schumpeter’s famous example of creative destruction, he discusses railroads, and specifically the Illinois Central Railroad. As the railroads expanded, so did manufacturing of trains, of products that could be transported on the railways, and of the infrastructure around the railroads themselves. Towns began to pop up all along the railroads. However, this expansion of the railroads, led to the destruction of certain types of farming and agricultural systems in the Midwest.  As new and more efficient means of transportation were created, an entire way of life was destroyed. Farmers moved from subsistence farming, growing crops that they needed, to more commercial farming, growing crops for the market that could be transported by rail.

What does creative destruction look like today?

COVID-19 amplified America’s devastating health gap. Can we bridge it?

The COVID-19 pandemic is making health disparities in the United States crystal clear. It is a clarion call for health care systems to double their efforts in vulnerable communities.

Willie Mae Daniels makes melted cheese sandwiches with her granddaughter, Karyah Davis, 6, after being laid off from her job as a food service cashier at the University of Miami on March 17, 2020.

Credit: Joe Raedle/Getty Images
Sponsored by Northwell Health
  • The COVID-19 pandemic has exacerbated America's health disparities, widening the divide between the haves and have nots.
  • Studies show disparities in wealth, race, and online access have disproportionately harmed underserved U.S. communities during the pandemic.
  • To begin curing this social aliment, health systems like Northwell Health are establishing relationships of trust in these communities so that the post-COVID world looks different than the pre-COVID one.
Keep reading Show less

Chernobyl fungus could shield astronauts from cosmic radiation

A recent study tested how well the fungi species Cladosporium sphaerospermum blocked cosmic radiation aboard the International Space Station.

C. sphaerospermum

Medmyco / Wikimedia Commons
Surprising Science
  • Radiation is one of the biggest threats to astronauts' safety during long-term missions.
  • C. sphaerospermum is known to thrive in high-radiation environments through a process called radiosynthesis.
  • The results of the study suggest that a thin layer of the fungus could serve as an effective shield against cosmic radiation for astronauts.
Keep reading Show less

Bruce Lee: How to live successfully in a world with no rules

Shannon Lee shares lessons from her father in her new book, "Be Water, My Friend: The Teachings of Bruce Lee."

Bruce Lee: How to live successfully in a world with no rules ...
Videos
  • Bruce Lee would have turned 80 years old on November 27, 2020. The legendary actor and martial artist's daughter, Shannon Lee, shares some of his wisdom and his philosophy on self help in a new book titled "Be Water, My Friend: The Teachings of Bruce Lee."
  • In this video, Shannon shares a story of the fight that led to her father beginning a deeper philosophical journey, and how that informed his unique expression of martial arts called Jeet Kune Do.
  • One lesson passed down from Bruce Lee was his use and placement of physical symbols as a way to help "cement for yourself this new way of being, or this new lesson you've learned." By working on ourselves (with the right tools), we can develop the skills necessary to rise and conquer new challenges.
Keep reading Show less

3 reasons for information exhaustion – and what to do about it

How to deal with "epistemic exhaustion."

Photo by Filip Mishevski on Unsplash
Mind & Brain
An endless flow of information is coming at us constantly: It might be an article a friend shared on Facebook with a sensational headline or wrong information about the spread of the coronavirus.
Keep reading Show less
Culture & Religion

Top 5 theories on the enigmatic monolith found in Utah desert

A strange object found in Utah desert has prompted worldwide speculation about its origins.

Scroll down to load more…
Quantcast