It is the second most famous term in the history of economics after Adam Smith’s metaphor invisible hand. It describes the competitive market process in the real world. It was coined in 1942 by the famous, iconoclastic Austrian-American economist Joseph Schumpeter, who would reminisce:
I set out to become the greatest lover in Vienna, the greatest horseman in Austria, and the greatest economist in the world. Alas, for the illusions of youth…. As a horseman, I was never really first rate.
“Creative Destruction” …
The best businesses rise to the top in consumer-driven markets. Less competitive firms contract and even disappear. Creative destruction is the process whereby the bad is eliminated, the better replaces the good, and past performance gives way to new strategies and victors. No firm is forever, and financial loss is a characteristic of capitalism, as is the more used term profit.…
“Tension in the room mounted. The old man … pleaded with the [California] planning commission to protect his pigeons from ‘the Cuisinarts of the air’. The arrow went straight home, sending up a roar from the audience. A new image had been created, and the cameras flashed it across the country. Although often credited to staging by Cerrell and Associates, the term was conceived by the Sierra Club.”
…– Paul Gipe, Wind Energy Comes of Age (New York: John Wiley & Sons, 1995, p. 450.
“I once believed in the Sierra Club, until the CLUB ( an insular bunch of activists who aren’t looking at the entire picture but only at their own agendas) started fully supporting [windpower] …. Everything the environmentalists (including myself for 20 years) have worked so hard to protect, is now being destroyed or in jeopardy.
Yesterday’s post presented a series of quotations on why a global agreement to ration the most utilitarian of energies–oil, gas, and coal–was doomed to failure. Today, Part II provides a series of quotations on the moral dilemma and economic distortions of trying to do so.
From this the question arises: what if the resources and spirit dedicated to the futile, misdirected climate crusade went instead to the truly noble cause of promoting capitalism and industrialization for the 1.3 billion living in statist poverty?
It is time to change minds one at a time to the heroic task of promoting human freedom to advance prosperity at home and abroad–an inspiration for many of us going in 2013.
More quotations follow on the pernicious wealth effects and all-pain/no-gain aspects of carbon rationing as envisioned by the Kyoto Protocol.…