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.…

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.…

“We created a way of raising standards of living that we can’t possibly pass on to our children. It has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate.’”

– Joe Romm, quoted in Thomas Friedman, Is the Inflection Point Near?, New York Times, March 7, 2009.

“Is there any more single-minded, simple pleasure than viewing with alarm? At times it is even better than sex.”

—Kenneth Boulding (1970), p. 160. [1]

Are free-market optimists the dumb ones who jump off tall buildings and report that everything is fine, even breezy, on the way down? Or are those who fear, rant, and make this analogy bungee-jumping with reality?

The optimists have been jumping off buildings ever since Robert Thomas Malthus’s An Essay on Population was published in 1798–and not hitting the ground.…

“As the Democrats become more committed to, and defined by, a green agenda, and as they become dependent on money from high-tech venture capitalists and their lobbyists, it becomes harder to describe them as a party for the little guy — or liberalism as a philosophy of distributive justice.”

– Charles Lane, “Liberals Green-Energy Contradictions,” The Washington Post, October 15, 2012.

Governor Mitt Romney strongly supports North American energy independence as the foundation of renewed U.S. employment and prosperity. There is much needed to fill-in the blanks, but the challenger’s guiding philosophy promises real reform. Free-marketeers, playing defense for the last four years, and during a lot of the Bush Administration too, actually have a chance to play offense should Romney prevail.

President Obama is waging a three-front war on hydrocarbon fuels in the spirit of Thomas Malthus, while promoting a jobless recovery in the name of John Maynard Keynes.…