Print This!"Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. ... The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates. ...The opening...
Creative Destruction
Economist Joseph Schumpeter coined the term "creative destruction" to describe the evolutionary process in an economy in which new ideas, processes, equipment, products, technologies, skills and jobs are constantly destroying old ones. The process occurs because the new are more efficient and cost effective than the old. Adopting the new promotes wealth creation and holding onto the old prevents wealth creation.
It is often hard to give up the old, especially for politicians. No one likes seeing a proud steel mill worker of 28 years laid off because the steel mill was able to introduce a new labor saving machine or a new, cheaper transportation option that made it less costly to ship steel from overseas. But if we protect the old jobs against new innovations, we prevent the creation of wealth that would potentially create even more new jobs.
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