Friday, February 15, 2008

David Ames Wells on Creative Destruction

Joseph Schumpeter is generally cited as the economist who fashioned the concept of creative destruction in his book Capitalism, Socialism and Democracy, published in 1942. But David Ames Wells wrote this in 1889 in his well known book Recent Economic Changes (p. 31):

"In all commercial history, probably no more striking illustration can be found of the economic principle that nothing marks more clearly the rate of material progress than the rapidity with which that which is old and has been considered wealth is destroyed by the results of new inventions and discoveries."

In a footnote Wells quotes Edward Atkinson:

"'In the last analysis it will appear that there is no such thing as fixed capital; there is nothing useful that is very old except the precious metals, and all life consists in the conversion of forms. The only capital which is of permanent value is immaterial--the experience of generations and the development of science.'"

1 comment:

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