1942

Schumpeter's creative destruction

Joseph Schumpeter popularised this expression, which he had already coined in previous works such as Business Cycles, through his book Capitalism, Socialism and Democracy. The economist explained business cycles thus: a major innovation triggers a growth phase and thereby job creation; certain companies, whose techniques or products have become obsolete, go bust, leading to a phase of depression that destroys jobs; this period of economic difficulty nevertheless fires the creative energy of new entrepreneurs, thereby leading to fresh innovations and a new phase of growth.