Creative Destruction

Joseph Schumpeter, Economist

Schumpeter achieved prominence for his theories about the vital importance of the entrepreneur in business, emphasizing the entrepreneur's role in stimulating investment and innovation, thereby causing "creative destruction." Creative destruction occurs when innovation makes old ideas and technologies obsolete.

Schumpeter also predicted the sociopolitical disintegration of capitalism, which, he maintained, would be undermined eventually by its own success because it would create a class of intellectuals who would attack it. In addition, government controls would destroy the entrepreneur and innovation and would lead to a form of socialism.

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