Creative destruction (Germany: schÃÆ'¶pferische ZerstÃÆ'¶rung ), sometimes known as Schumpeter's storm , is a concept in economics that since 1950 has become the most easily identified with the Austrian-American economist Joseph Schumpeter who took it from Karl Marx's work and popularized it as a theory of economic innovation and business cycles.
According to Schumpeter, "the storm of creative destruction" describes "the process of industrial mutation that is constantly changing the economic structure from within, endlessly destroying the old, incessantly creating new ones". In Marxian economic theory, the concept refers more broadly to the processes associated with the accumulation and destruction of wealth under capitalism.
German Marxist sociologist Werner Sombart has been credited with the first use of these terms in his work Krieg und Capitalismus (War and Capitalism 1913). In Marx's early work, however, the idea of ​​creative destruction or destruction (German: Vernichtung ) implies that capitalism not only destroys and reconfigures the previous economic order but also that it must relentlessly devalue the existing wealth (whether through war, neglect, or regular and periodic economic crisis) to clear the ground for the creation of new wealth.
In Capitalism, Socialism and Democracy (1942), Joseph Schumpeter developed the concept from a careful reading of Marx's thought (the whole of Part I of this book is devoted), arguing (in Part II). ) that the creative destructive forces released by capitalism will ultimately lead to its destruction as a system (see below). Nevertheless, the term then gained popularity in neoliberal economics or the free market as a process description such as downsizing in order to improve the efficiency and dynamism of the company. Marxian usage, however, has been maintained and further developed in the work of social scientists such as David Harvey, Marshall Berman, Manuel Castells and Daniele Archibugi.
Video Creative destruction
Histori
Dalam pemikiran Marx
Although the modern term "creative destruction" is not used explicitly by Marx, it is largely derived from his analysis, especially in the work of Werner Sombart (described by Engels as the only German professor who understands Marx Capital ), and Joseph Schumpeter, who discussed the length of the origin of the idea in Marx's work (see below).
In the 1848 Communist Manifesto 1848, Karl Marx and Friedrich Engels described the tendency of the crisis of capitalism in terms of "the massive destruction of the mass of productive forces":
Modern bourgeois society, with relations of production, exchanges and property, a society that has conjured up giant means of production and exchange, such as a sorcerer who is no longer able to control the power of the underworld that he has summoned by his spell. [...] Enough to mention the commercial crisis that with their periodic repayment puts the existence of all bourgeois society in court, whenever it is more threatening. In this crisis, largely not only of the existing production, but also of the productive forces created earlier, are periodically destroyed . In these crises, there is an epidemic that, in all the times before, will appear to be absurd - the epidemic of overproduction. Society suddenly finds itself back to a state of barbarism for a moment; it seems as if hunger, universal destruction war, has stopped the supply of every means of subsistence; industry and commerce seem to be crumbling; and why? Because there are too many civilizations, too many means of subsistence, too many industries, too many trades. The productive forces at the disposal of society are no longer inclined to further develop the conditions of bourgeois property; on the contrary, they become too strong for this condition. [...] And how do the bourgeois overcome these crises? On the one hand by the forced destruction of the mass of productive forces ; on the other hand, with the conquest of new markets, and by a more thorough exploitation of the old. That is, by paving the way for a wider and more destructive crisis, and by reducing the means by which the crisis is prevented.
A few years later, at Grundrisse , Marx wrote of "the great destruction of capital not because of external relations, but as a condition of self-preservation". In other words, it builds the necessary connection between the generative or creative production forces in capitalism and the destruction of capital value as one of the main ways in which capitalism tries to overcome its internal contradictions:
These contradictions lead to explosions, natural disasters, crises, where [...] temporary work delays and the destruction of most capital [...] vigorously bring it back to the point where it is enabled [to continue] fully using force productive without suicide.
In the Surplus Value Theory ("Volume IV" of Capital , 1863), Marx refines this theory to distinguish between scenarios in which destruction (commodity) values ​​affect either use value or exchange rate or both together. The destruction of exchange rates combined with value preservation in order to provide a clear opportunity for new capital investment and therefore to repeat the production-devaluation cycle:
the destruction of capital through crisis means the depreciation of values ​​that prevent them from then renewing their reproductive processes as capital on the same scale. This is a destructive effect of falling commodity prices. It does not cause any destruction of values. What to lose, other advantages. The values ​​used as capital are prevented from re-acting as capital in the hands of the same person. The old capitalist went bankrupt. [...] Most of the nominal capital of society, ie the exchange rate of existing capital, once for all is destroyed, though this devastating destruction, as it does not affect the value of use, may greatly accelerate the new reproduction. This is also a period in which interest money enriches itself with the industry interest cost.
The social geographer David Harvey concludes the difference between the use of these concepts by Marx and Schumpeter: "Both Karl Marx and Joseph Schumpeter wrote at length about the 'destructive-creative' tendencies inherent in capitalism, while Marx clearly admired the creativity of his capitalism...] "Great emphasis on self-destruction. Schumpeter's people have all the wealth in the endless creativity of capitalism while treating destructively because most of the normal cost issues of doing business ".
Other initial uses
In the Origin of Species, published in 1859, Charles Darwin wrote that "the extinction of old forms is an almost inevitable consequence of the production of new forms." One notable exception to this rule is how dinosaur extinction facilitates adaptive mammalian radiation. In this case creation is a consequence, not a cause, of destruction.
In philosophical terms, the concept of "creative destruction" is close to the sub-concept of Hegel. In German economic discourse it is taken from Marx's writings by Werner Sombart, especially in his 1913 Krieg und Capitalismus text:
Again, however, from the destruction of renewed spirits, the scarcity of wood and the necessities of everyday life... forcing the discovery or invention of wood substitutes, forcing the use of coal for heating. , forcing the invention of coke for iron production.
Hugo Reinert argues that Sombart's formulation of the concept was influenced by Eastern mysticism, particularly the image of the Hindu god Shiva, presented in the paradoxical aspect of the destroyer and creator simultaneously. It is conceivable that this influence was transmitted from Johann Gottfried Herder, who brought Hindu thought into German philosophy in his Philosophy of Human History (Heren 1794-1992)., 41-64. through Arthur Schopenhauer and Orientalier Friedrich Maier through the writings of Friedrich Nietzsche. Nietzsche represents the destruction of modern creativity through the mythical character Dionysus, a figure he sees at the same time "destructively creative" and "destructive creative". In the following section of the Genealogy of Morality (1887), Nietzche argues for the universal principle of the cycle of creation and destruction, so that every creative act has destructive consequences:
But have you ever asked yourself how many erections every ideal on earth is? How much reality should be misunderstood and maligned, how many lies to be sanctified, how many conscience are disturbed, how many "Gods" are sacrificed at all times? If a temple is to be erected, a temple must be destroyed: it is the law - let anyone who can show me a case where it is not fulfilled! - Friedrich Nietzsche, On Genealogy of Morality
Other nineteenth-century formulations of this idea include Russian anarchist Mikhail Bakunin, who wrote in 1842, "The spirit for destruction is a creative desire, too!" Notice, however, that this earlier formulation might be more accurately called "destructive creation", and differs sharply from Marx and Schumpeter's formulations in its focus on the active destruction of the social and political order existing by human agents (as opposed to systemic forces or contradictions in case of Marx and Schumpeter).
Maps Creative destruction
Sponsorship with Joseph Schumpeter
<The phrase "creative destruction" was popularized and most closely related to Joseph Schumpeter, especially in his book Capitalism, Socialism and Democracy, first published in 1942. It is already in his 1939 book Business Cycle >, he seeks to perfect the innovative idea of ​​Nikolai Kondratieff and his long-wave cycle that Schumpeter believes to be driven by technological innovation. Three years later, in Capitalism, Socialism and Democracy Schumpeter introduced the term "creative destruction," which is explicitly derived from Marxist thought (analyzed extensively in Part I of this book) and uses it to describe the transformational process that disturbing that accompanies the innovation:
Capitalism [...] is essentially a form or method of economic change and not only never but can never become stationary. [...] The fundamental impetus that keeps and keeps the capitalist machine moving comes from new consumer goods, new methods of production or transportation, new markets, new forms of industrial organization created by capitalist companies.
[...] The opening of new, foreign or domestic markets, and organizational development of craft stores and factories to such worries as US Steel illustrates the process of industrial mutations that are constantly revolutionizing the economic structure of within, without ceaselessly destroying the old, unceasingly creating a new one. This Creative Destruction Process is an essential fact about capitalism. That is what capitalism has and what the capitalist concerns.
[... Capitalism requires] the eternal storm of Creative Destruction.
In Schumpeter's vision of capitalism, the innovative entry by entrepreneurs is a disruptive force that sustains economic growth, even as it destroys the value of established companies and workers who enjoy some degree of monopoly power derived from previous technological, organizational, regulatory and economic paradigms. However, Schumpeter is pessimistic about the continuity of this process, viewing it as leading ultimately undermining the framework of capitalism itself:
In undermining the pre-capitalist framework of society, capitalism not only breaks the barriers that hinder its progress but also blows the ground that prevents its collapse. The process, which impresses in its relentless need, not merely removes the institutional dead wood, but removes the capitalist layer partners, symbiotic with whom is an essential element of the capitalist scheme. [... T] he capitalist process in much the same way in which he destroys the institutional framework of the feudal society also undermines itself.
Schumpeter continued to elaborate on the concept, making it the center of his economic theory, and subsequently elevated to the central doctrine of the so-called Austrian School of free-market economic thought.
Example
Schumpeter (1949) in one example uses the "railroadization of Middle West as initiated by Illinois Central." He wrote, "The Illinois Center does not just mean excellent business while it is being built and while new cities are built around it and the land is cultivated, but it spelled the death penalty for the [old] West farm."
Companies that have once revolutionized and dominated new industries - for example, Xerox in photocopiers or Polaroid in instant photography - have seen their profits fall and their dominance vanishes when rivals launch an improved design or cut production costs. In technology, the tape cassette replaces the 8-track, only to be replaced in turn by a compact disc, which is trimmed by downloads to an MP3 player, now deprived by a web-based streaming service. Companies that make money from obsolete technology do not have to adapt well to the business environment created by new technologies.
One example is the way in which news sites supported by online advertising such as The Huffington Post lead to the creative destruction of traditional newspapers. The Christian Science Monitor announced in January 2009 that it will no longer continue publishing daily paper editions, but will be available online every day and provide a weekly print edition. The Seattle Post-Intelligencer became online-only in March 2009. At the national level in the US, employment in the newspaper business fell from 455,700 in 1990 to 225,100 in 2013. During the same period, jobs in Internet publishing and broadcasting grew from 29,400 to 121,200. Traditional French alumni networks, which typically charge their students to online networks or through paper directories, are in danger of creative destruction from free social networking sites like Linkedin and Viadeo.
In fact, successful innovation is usually a source of temporary market power, erodes old company profits and positions, but ultimately succumbs to the pressure of new discoveries that are commercialized by competing participants. Creative destruction is a powerful economic concept because it can explain many of the dynamics or kinetics of industrial change: the transition from competition to monopolistic markets, and back again. This has been the inspiration of the theory of endogenous growth as well as the evolutionary economy.
David Ames Wells (1890), who was a leading authority on the effects of technology on economics in the late nineteenth century, provided many examples of creative destruction (without terminology) generated by improved steam engine efficiency, delivery, international telegraph networks and agricultural mechanization.
Next development
Ludwig Lachmann
This economic fact has certain social consequences. Because critics of the current market economy prefer to take their position on a "social" basis, it may not be appropriate here to explain the true social outcomes of the market process. We've talked about it as a leveling process. More precisely, we can now describe this result as an example of what Pareto called "elite circulation." Wealth will not last long in the same hands. Passing from hand to hand as an unexpected change confers value, right now, now to a certain resource, generating profit and loss of capital. Owners of wealth, maybe we say with Schumpeter, like a guest at a hotel or passenger on a train: They are always there but never long for the same person.
David Harvey
Geographer and historian David Harvey in a series of works from the 1970s onwards ( Social and Municipal Justice <1973> Restrictions To Capital , 1982; Urbanization Capital , 1985; Spaces of Hope , 2000; Spaces of Capital , 2001; Neoliberalization Spaces , 2005; Enigma Capital and Crisis of Capitalism, 2010), describes Marx's thinking about the systemic contradictions of capitalism, particularly in relation to the production of urban environments (and wider production of space). He developed the idea that capitalism finds "spatial improvements" to periodic crises of overaccumulation through investments in fixed assets of infrastructure, buildings, etc.: "The built environment which is a vast area of ​​means of production and consumption collectively absorbs large amounts of capital both in its construction and maintenance. one way to absorb surplus capital ". While the creation of a built environment can act as a form of crisis transfer, it can also be a boundary within itself, as it tends to freeze productive forces into a fixed space. Because capital can not meet the limits of profitability, the more frantic forms of "time-fractional compression" (increased speed of turnover, faster innovation of transport and communications infrastructure, "flexible accumulation") occur, often driving technological innovation. Such innovations, however, are two-edged swords:
The effect of continuous innovation [...] is to devalue, if not destroy, past investments and labor skills. Creative destruction is embedded in the circulation of capital itself. Innovation exacerbates instability, insecurity, and ultimately, becomes the main force driving capitalism into the crisis of periodic paroxism. [...] The struggle to maintain profitability makes the capitalists racing to explore all sorts of other possibilities. A new product line is opened, and that means the creation of new wants and needs. Capitalists are forced to redouble their efforts to create new needs in others [...]. The result is worsening insecurity and instability, as the mass of capital and workers shift from one production line to another, causing all sectors to collapse [...]. The drive to move to more favorable places (the geographical movement of both capital and labor) periodically revolutionizes the division of international and territorial work, adding to the important geographic dimension to insecurity. The transformation resulting in the experience of space and place is matched by the revolution in the dimension of time, when capitalists seek to reduce their turnaround time to "the blink of an eye."
Globalization can be seen as an ultimate form of space-time compression, allowing capital investment to move almost instantaneously from one corner of the world to another, devaluing fixed assets and laying off labor in an urban conglomerate while opening new manufacturing centers on more profitable sites for production operations. Therefore, in this process of continuous creative destruction, capitalism does not solve its contradictions and crises, but simply "moves them geographically".
Marshall Berman
In his 1987 book, Especially in the chapter entitled "Innovative Self-Destruction" (pp.a, 98-104), Marshall Berman provides a reading of " Marxist creative destruction to explain the key processes that work in modernity. The title of this book is taken from the famous section of The Communist Manifesto . Berman describes this to be something of a Zeitgeist that has profound social and cultural consequences:
The truth of the matter, as seen by Marx, is that all that was built by bourgeois society was built to be torn down. "Everything solid" - from the clothes on our backs to the looms and factories that weave them, to the men and women working the machines, to the homes and neighborhoods of the workers, to companies and companies that exploit the workers, to the city - cities and towns and all regions and even countries that embrace them all - these are all damaged tomorrow, destroyed or shredded or crushed or disbanded, so they can be recycled or replaced next week, and the whole process can continue, and hopefully forever, in a more favorable form. The pathos of all bourgeois monuments are that their material strength and solidity are utterly useless and bear no burden at all, that they are fascinated as weak reeds by the forces of capitalist development that they celebrate. Even the most beautiful and impressive bourgeois buildings and public works can be discarded, capitalized for rapid depreciation and planned to become obsolete, closer in their social functions to tents and camps than to the "Egyptian pyramids, Roman aqueduct, Gothic cathedrals ".
Here Berman emphasizes Marx's perception of the fragility and excitement of the enormous creative forces of capitalism, and makes this contradiction one of the key figures of modernity.
Manuel Castells
Sociologist Manuel Castells, in his trilogy of the Information Age: Economy, Society and Culture (first volume, Community Awakening Network, appeared in 1996), reinterpreting the processes in where capitalism invests in certain areas of the world, while releasing from others, using the new paradigm of "information network". In the era of globalization, capitalism is characterized by instantaneous flow, creating a new dimension of space, the "flow space". While technological innovations have enabled this unprecedented instability, this process makes the entire region and the overwhelming population passed by the information network. Indeed, the new spatial form of the mega-city or megalopolis, defined by Castells as having a contradictory quality of being "globally and locally connected disconnected, physically and socially". Castells explicitly relates this argument to the idea of ​​creative destruction:
"The spirit of informationalism" is a culture of "creative destruction" that is accelerated to the speed of optoelectric circuits that process signals. Schumpeter met Weber in the virtual world of a networking company.
Daniele Archibugi
Developing Schumpeterian heritage, the School of Science Policy Research Unit of the University of Sussex has further detailed the importance of creative destruction, in particular, how new technologies are often idiosyncratic with existing productive regimes and will lead to bankrupt companies and even industries that fail to maintain the pace of change. Chris Freeman and Carlota Perez have developed this insight. Recently, Daniele Archibugi and Andrea Filippetti have linked the 2008 economic crisis with the slowing of opportunities offered by information and communication technology (ICT). Using as a film metaphor of Blade Runner, Archibugi argues that from the innovations described in the film in 1982, all those associated with ICT have become part of our daily lives. However, on the contrary, none of them in the field of Biotechnology has been fully commercialized. New economic recovery will occur when several key technology opportunities will be identified and maintained.
Technological opportunities do not enter into economic and social life without deliberate effort and choice. We should be able to imagine the new forms of organization associated with emerging technologies. ICTs have changed our lifestyles more than our economic lives: they have produced jobs and profits, but above all they have changed the way we use time and interact with the world. Biotech can bring a more radical social transformation at the core of our lives. Why has not this been sent? What can be done to unleash their potential? There are some basic questions that need to be addressed.
More
In 1992, the idea of ​​creative destruction was put into formal mathematical terms by Philippe Aghion and Peter Howitt, providing an alternative model of endogenous growth compared to Paul Romer's increasingly widespread varieties of varieties.
In 1995, Harvard Business School writers Richard L. Nolan and David C. Croson released Creative Destruction: The Six-Stage Process for Changing Organizations. This book advocates streamlining to free loosening resources, which can then be reinvested to create a competitive advantage.
Recently, the idea of ​​"creative destruction" was exploited by Max Page in his 1999 book, Creative Destruction of Manhattan, 1900-1940. This book explores the constant rediscovery in Manhattan, often at the expense of conservation. a concrete past. Describing this process as "creative destruction," Page describes the complex historical circumstances, economics, social conditions, and personalities that have resulted in significant changes in Manhattan Cityscape.
In addition to Max Page, others use the term "creative destruction" to describe the process of urban renewal and modernization. T.C. Chang and Shirlena Huang refer to "creative destruction" in their paper
The term "creative destruction" has been applied to art. Alan Ackerman and Martin Puncher (2006) edit the collection of essays under the title Against Theater: Creative Destruction at a modernist stage. They detail the changes and causal motivations experienced in the theater as a result of the modernization of both the production of the show and the underlying economy. They talk about how the theater has rediscovered itself in the face of anti-theatrics, straining traditional boundaries to include more physical production, which might be considered an avant-garde staging technique.
In his 1999 book, Still New World, American Literature in Creative Destruction Culture , Philip Fisher analyzes the themes of creative destruction while playing in literary works of the 20th century, including the works of such authors. such as Ralph Waldo Emerson, Walt Whitman, Herman Melville, Mark Twain, and Henry James, among others. Fisher argues that creative destruction exists in literary form as well as in technological change.
Neoconservative writer Michael Ledeen argues in his 2002 book, "The War Against Terror Leaders" that America is a revolutionary nation, destroying traditional society: "Creative destruction is our middle name, both within our own society and abroad, undermining the old order every day, from business to science, literature, art, architecture, and cinema to politics and law. "The characteristic of creative destruction as a model for social development has met with fierce opposition from paleoconservatives.
Creative destruction is also associated with sustainable development. The relationship was explicitly mentioned for the first time by Stuart L. Hart and Mark B. Milstein in their 1999 article on Global Sustainability and Industrial Creative Destruction, in which he argues that the new profit opportunities lie in a round of creative destruction driven by global sustainability. (An argument that they will reinforce in their 2003 article Creating Sustainable Value and, in 2005, with Innovation, Creative Destruction and Sustainability.) Andrea L. Larson agrees with this vision a year later in Sustainable Innovation through the Entrepreneurial Lens , which states that entrepreneurs should be open to opportunities for disruptive improvement based on sustainability. In 2005, James Hartshorn (et al.) Emphasized the opportunities for continuous and disruptive improvements in the construction industry in his article Creative Destruction: Building Towards Sustainability .
Alternate name
The following text seems to be the source of the phrase "Schumpeter's Gale" to refer to creative destruction:
The opening of new markets and organizational development from craft stores and factories to such concerns as US Steel illustrates the process of industrial mutations that are constantly revolutionizing the economic structure from within, constantly destroying the old, unceasingly creating new ones. [Process] must be seen in its role in the storm of lasting creative destruction; can not be understood in the hypothesis that there is a perpetual pause.
In popular culture
The Other People's Money movie (1991) provides a contrasting view of creative destruction, presented in two speeches on the acquisition of publicly traded wire and cable companies in a small town in New England. One speech is with corporate robbers, and the other is given by the company CEO, who is primarily interested in protecting his employees and his city.
See also
- Creativity techniques
- Destructionism
- Disruptive technology
- Event extinction
- Global Innovation Index (Boston Consulting Group)
- The parable about broken window
- Product life cycle
- Schumpeterian lease
References
Further reading
- Philippe Aghion and Peter Howitt. A growth model through Creative Destruction . Econometrica 60: 2 (1992), pp.Ã, 323-51.
- Philippe Aghion and Peter Howitt. Endogenous Growth Theory . MIT Press. 1997.
- Daniele Archibugi, Blade Runner Economics: Will Innovation Lead the Economic Recovery? , Social Science Research Network, January 29, 2015.
- Daniele Archibugi and Andrea Filippetti, Innovation and Economic Crisis Lessons and Prospects from Economic Slump , (London, Routledge, 2013)
- Daniele Archibugi, Andrea Filippetti, Marion Frenz, '' Economic crisis and innovation: Is the collapse happening more than accumulated? Policy Research, 42: 2, (2013), pp.Ã, 303-14.
- Richard Foster and Sarah Kaplan. "Creative Destruction: Why The Company Built to Beat the Last Market - And How To Successfully Change It". Currency publishers. 2001.
- J. Stanley Metcalfe. The Economics of Evolution and Creative Destruction (Graz Schumpeter Lectures, 1) . Routledge. 1998.
- Richard L. Nolan and David C. Croson, Creative Destruction: The Six-Stage Process for Changing Organizations . Harvard Business School Press. 1995.
- Max Pages. Creative Destruction of Manhattan, 1900-1940 . University of Chicago Press. 1999.
- Hugo Reinert and Erik S. Reinert. "Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter." In J.G. Backhaus and W. Drechsler, eds. Friedrich Nietzsche: Economics, and Society. Springer. 2006.
- Joseph A. Schumpeter. Capitalism, Socialism and Democracy (New York: Harper, 1975) [origin. pubs. 1942]
- Thomas G. Osenton. Demand Death: Finding Growth in a Global Economy Saturated (New Jersey: Financial Times Prentice Hall, 2004)
- James M. Utterback. Mastering Innovation Dynamics . Harvard Business School Press. 1996.
- Thomas Homer-Dixon. Reverse: Disaster, Creativity, and Civilization Renewal [1]. Island Press. 2006.
- Stanley I. Kutler, Privileges and Creative Destruction: The Case of Charles River Bridge , Norton Library, 1971.
- Rogers, Jim & amp; Sergio Sparviero, "Same Tune, Different Words: Creative Destruction of the Music Industry", Observatorio (OBS *) Journal, 5 (4), 2011, pp.Ã, 1-3.
Source of the article : Wikipedia
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