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Friday, January 22, 2016

Peak Creative Destruction

Joseph Schumpeter

In the world today, creation is destruction and destruction is creation.
This has been brought about by philosophers and economists and scientists, and has been handed down to the rest of us.

Markets no longer act like they did in 1955; markets are active growth/destroy machines now, wherein speculation - which used to provide a chaos in the movement of money smallish in comparison to the rest of the market - now dominates the marketspace.
This is reflected in the present day, where markets giddily swayed and zoomed up and down even before corporate earnings were presented...
corporate earnings are a smaller component of market movements.

Schumpeter stated that capitalism was a process of Creative Destruction, which was used to study innovation in the economy: steam locomotive manufacturing companies are destroyed and diesel engines made by GM take over.

However, the notion was derived from Marx's critique, and Marx wrote:
... And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented...

We have reached Peak Creative Destruction almost, and that is when creation and destruction merge into the Future Nausea we have created.


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