Home/Creative Destruction

The idea of creative destruction describes how new innovations are constantly being generated by entrepreneurs in order to displace older ones in a cyclical dynamic that is the driving force behind the evolution of capitalist economics. The idea of creative destruction was expressed in the work of Joseph Schumpeter in his book The Theory of Economic Development where he describes a circular flow to economic development which, excluding any innovative activities, leads to a stationary state of equilibrium, order, and predictability. The entrepreneur is the one that disturbs this equilibrium and is thus the prime cause of economic development, which proceeds in a cyclical fashion along several time scales. The central premise being that capitalism can only be understood as an evolutionary process of continuous innovation and “creative destruction.”

2016-10-17T11:05:40+00:00