Freakonomics and Creative Destruction
Creative Destruction is not yet a household term like “laissez-faire” but it’s getting there — helped along today by the Freakonomics guys writing on their New York Times blog:
The turbulence of the U.S. economy has lots of people railing against capitalism itself, and with good reason: capitalism is inherently turbulent. That’s why the legendary economist Joseph Schumpeter called it “creative destruction.”
In my book Slackonomics — an obvious derivative of the Freakonomics title — I try to expand the term “creative destruction” beyond its strictly economic definition into a cultural realm. The subtitle of the book is “Generation X in the Age of Creative destruction,” and in the final chapter, I use graffiti and street art as a metaphor for creative destruction. But it’s more than just a metaphor, it IS creative destruction. The cultural milieu we create is very much a reflection of the economic era that we live in, from extreme sports to graffiti art to alternative comedy (i.e. a sardonic sense of humor as perfected by Banksy the graffiti artists, whose work is pictured above).
The idea — that for something to be born something else must die — is traceable back to ancient times, but the phrase itself was a major subject of philosophical inquiry by Nietzche: ‘Whoever must be a creator always annihilates.’ This is some pretty esoteric stuff,* but from Nietzche, the idea of creative destruction influenced the German economist Werner Sombart, who in turn influenced Schumpeter. But it is Schumpeter who is credited with defining capitalism as a process of creative destruction. Think the demise of General Motors and the rise of Google. But it could also be thought of as the demise of opera and the rise of television. It’s the same process in a different realm, but no less relevant.
* Taken from a paper titled, “Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter,” written by Hugo Reinert & Erik S. Reinert. It can be found by clicking here.