Creative destruction

Uncommon card · No. 135257

In economics, creative destruction (German: schöpferische Zerstörung) is a process in which new innovations replace and make older innovations obsolete. The concept is usually identified with the economist Joseph Schumpeter, who derived it from the work of Karl Marx and popularized it as a theory of economic innovation and the business cycle. It is also sometimes known as Schumpeter's gale. In Marxian economic theory, the concept refers more broadly to the linked processes of the accumulation and annihilation of wealth under capitalism. The German sociologist Werner Sombart has been credited with the first use of these terms in his work Krieg und Kapitalismus (War and Capitalism, 1913). In the earlier work of Marx, however, the idea of creative destruction or annihilation (Vernichtung) implies not only that capitalism destroys and reconfigures previous economic orders, but also that it must continuously devalue existing wealth (whether through war, dereliction, or regular and periodic economic...

Read on Wikipedia