creative destruction

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pages: 261 words: 74,471

Good Profit: How Creating Value for Others Built One of the World's Most Successful Companies by Charles de Ganahl Koch

Abraham Maslow, Albert Einstein, big-box store, book value, British Empire, business process, commoditize, creative destruction, disruptive innovation, do well by doing good, Garrett Hardin, global supply chain, hiring and firing, income per capita, Internet of things, invisible hand, Isaac Newton, Joseph Schumpeter, low interest rates, oil shale / tar sands, personalized medicine, principal–agent problem, proprietary trading, Ralph Waldo Emerson, risk tolerance, Salesforce, Solyndra, tacit knowledge, The Wealth of Nations by Adam Smith, Tragedy of the Commons, transaction costs, transfer pricing

“The…process of industrial mutation…incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of creative destruction is the essential fact of capitalism,”4 Schumpeter wrote. Over the long term, Schumpeter’s concept of creative destruction benefits almost everyone who lives in a society that allows it—even if it doesn’t appear immediately evident to the owners or employees of a business whose ground has crumbled beneath them. When a business succeeds through creative destruction, a chain reaction ripples through a whole variety of businesses and communities, hurting some and helping others—but on the whole, making people in society better off.

We can’t squander resources by having our valuable talent applying continuous improvement to something that will create $100,000 in value when they can make a more radical improvement that could create $10 million in value. That’s why we replaced Deming’s continuous improvement with Schumpeter’s creative destruction. Creative destruction was more fundamental and more substantive. Continuous improvement, while beneficial, could mean just making modest incremental improvements to something that is becoming obsolete. Creative destruction involves finding new and better ways, making old ways obsolete. That’s a much better fit for Koch—or any company that wants to maximize value and growth. While our engagement with Deming didn’t result in a management marriage, it was actually quite beneficial in ways we never expected.

It may not feel comfortable to some, but if the goal is providing the factory girl the same silk stockings worn by Prince William’s wife, Kate Middleton (or the even better stockings made from our nylon or LYCRA®), then logic—and history—tells us that market-driven creative destruction is much better than government limiting progress by protecting established businesses. Of course, the downside is the discomfort of knowing the same girl’s factory job might not exist next year if her employers succumb to creative destruction. That consideration is no small thing. I won’t pretend this doesn’t cause the factory girl stress—or even sheer terror. But of this I am certain: Her standard of living will be many times higher in a society that allows constructive change than in a society that doesn’t—because the rate of innovation and the level of productivity will be so much higher.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, Alan Greenspan, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Bear Stearns, Berlin Wall, Blitzscaling, Bonfire of the Vanities, book value, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, cotton gin, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, driverless car, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fairchild Semiconductor, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, general purpose technology, George Gilder, germ theory of disease, Glass-Steagall Act, global supply chain, Great Leap Forward, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, land bank, Lewis Mumford, Louis Pasteur, low interest rates, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, McDonald's hot coffee lawsuit, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Michael Milken, military-industrial complex, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, Phillips curve, plutocrats, pneumatic tube, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, public intellectual, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, Sand Hill Road, savings glut, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, vertical integration, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

., a Kennedy Democrat, condemned the “onrush of capitalism” for its “disruptive consequences.” Daniel Bell, another centrist, worried about the “restless discontent” of capitalism. This unease makes creative destruction a difficult sell at the best of times. To make things worse, creative destruction is dogged by three big problems. The first is that the costs of creative destruction are often more obvious than the benefits. The benefits tend to be diffuse and long-term while the costs are concentrated and up front. The biggest winners of creative destruction are the poor and marginal. Joseph Schumpeter got to the heart of the matter: “Queen Elizabeth [I] owned silk stockings.

America did more than any other country to transform two new technologies—electricity and the internal combustion engine—into a cornucopia of consumer products: cars and trucks, washing machines and radios. HOW TO GET RICH In telling this story, this book will focus on three organizing themes: productivity, creative destruction, and politics. Productivity describes society’s ability to get more output from a given input. Creative destruction defines the process that drives productivity growth. Politics deals with the fallout of creative destruction. The first is a technical economic issue. The second is an economic issue that also touches on some of the most profound problems of social philosophy. The third takes us far from the world of charts and numbers into the world of practical politics.

Thus Henry Bessemer’s novel steel technology of 1855 displaced previous, more costly steelmaking. The world owes the idea of creative destruction to Joseph Schumpeter and his great work Capitalism, Socialism and Democracy (1942). “The process of creative destruction is the essential fact about capitalism,” Schumpeter argued. “It is what capitalism consists in and what every capitalist concern has got to live in.” Yet for all his genius, Schumpeter didn’t go beyond brilliant metaphors to produce a coherent theory of creative destruction: modern economists have therefore tried to flesh out his ideas and turn metaphors into concepts that acknowledge political realities, which is to say, the world as it really is.


pages: 547 words: 172,226

Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu, James Robinson

Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, banking crisis, Bartolomé de las Casas, Berlin Wall, blood diamond, bread and circuses, BRICs, British Empire, central bank independence, clean water, collective bargaining, colonial rule, conceptual framework, Corn Laws, Cornelius Vanderbilt, creative destruction, crony capitalism, Deng Xiaoping, desegregation, discovery of the americas, en.wikipedia.org, European colonialism, failed state, Fall of the Berlin Wall, falling living standards, financial independence, financial innovation, financial intermediation, flying shuttle, Francis Fukuyama: the end of history, Francisco Pizarro, full employment, Great Leap Forward, household responsibility system, Ida Tarbell, income inequality, income per capita, indoor plumbing, invention of movable type, invisible hand, James Hargreaves, James Watt: steam engine, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kickstarter, land reform, low interest rates, mass immigration, Mikhail Gorbachev, minimum wage unemployment, Mohammed Bouazizi, Paul Samuelson, price stability, profit motive, Robert Solow, Rosa Parks, Scramble for Africa, seminal paper, Simon Kuznets, spice trade, spinning jenny, Steve Ballmer, Steve Jobs, Suez canal 1869, trade liberalization, trade route, transatlantic slave trade, union organizing, upwardly mobile, W. E. B. Du Bois, Washington Consensus, working poor

Economic growth and technological change are accompanied by what the great economist Joseph Schumpeter called creative destruction. They replace the old with the new. New sectors attract resources away from old ones. New firms take business away from established ones. New technologies make existing skills and machines obsolete. The process of economic growth and the inclusive institutions upon which it is based create losers as well as winners in the political arena and in the economic marketplace. Fear of creative destruction is often at the root of the opposition to inclusive economic and political institutions. European history provides a vivid example of the consequences of creative destruction.

Fear of creative destruction is often at the root of the opposition to inclusive economic and political institutions. European history provides a vivid example of the consequences of creative destruction. On the eve of the Industrial Revolution in the eighteenth century, the governments of most European countries were controlled by aristocracies and traditional elites, whose major source of income was from landholdings or from trading privileges they enjoyed thanks to monopolies granted and entry barriers imposed by monarchs. Consistent with the idea of creative destruction, the spread of industries, factories, and towns took resources away from the land, reduced land rents, and increased the wages that landowners had to pay their workers.

Those without it, such as many in sub-Saharan Africa, will find it difficult to achieve even limited growth. Even though extractive institutions can generate some growth, they will usually not generate sustained economic growth, and certainly not the type of growth that is accompanied by creative destruction. When both political and economic institutions are extractive, the incentives will not be there for creative destruction and technological change. For a while the state may be able to create rapid economic growth by allocating resources and people by fiat, but this process is intrinsically limited. When the limits are hit, growth stops, as it did in the Soviet Union in the 1970s.


Innovation and Its Enemies by Calestous Juma

3D printing, additive manufacturing, agricultural Revolution, Asilomar, Asilomar Conference on Recombinant DNA, autonomous vehicles, behavioural economics, big-box store, biodiversity loss, business cycle, Cass Sunstein, classic study, clean water, collective bargaining, colonial rule, computer age, creative destruction, CRISPR, Daniel Kahneman / Amos Tversky, deskilling, disruptive innovation, driverless car, electricity market, energy transition, Erik Brynjolfsson, fail fast, financial innovation, global value chain, Honoré de Balzac, illegal immigration, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, invention of the printing press, Joseph Schumpeter, knowledge economy, loss aversion, Marc Andreessen, means of production, Menlo Park, mobile money, New Urbanism, Nicholas Carr, pensions crisis, phenotype, precautionary principle, Ray Kurzweil, Recombinant DNA, refrigerator car, Second Machine Age, self-driving car, smart grid, smart meter, stem cell, Steve Jobs, synthetic biology, systems thinking, tacit knowledge, technological singularity, The Future of Employment, Thomas Kuhn: the structure of scientific revolutions, Travis Kalanick

In his original view, innovation constitutes five areas: the introduction of new production, development of new processes, opening up of new markets, sourcing of new materials and semimanufactured goods, and finally the reorganization of an industrial sector.16 The term can be applied to any of the five areas of innovation identified by Schumpeter. As elaborated by Swedberg, creative destruction and the associated resistance to innovation can be identified in any of those five areas and any additional ones that expand the categories of new combinations.17 Creative destruction explains why segments of society fear change; at the same time the concept can help individuals embrace innovation. The concept of creative destruction as articulated by Schumpeter gained currency largely because it has universal appeal.18 It manifests itself in a variety of forms across cultures and it is therefore easily applied without precise definition.19 By thinking of the economy as an integrated whole akin to an ecosystem, Schumpeter was able to identify the forces of economic transformation that resulted from waves of technological succession as illustrated by the impact of the introduction of railroads.20 For him, “The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process,”21 which he elaborates as the “process of industrial mutation … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.

As Lynn White observed in Medieval Technology and Social Change, “The acceptance or rejection of an invention, or the extent to which its implications are realized if it is accepted, depends quite as much upon the conditions of society, and upon the imagination of its leaders, as upon the nature of the technological item itself.”15 Schumpeter, Innovation, and Social Transformation The preceding discussion illustrates “creative destruction,” a term coined by Austrian economist Joseph Schumpeter in his 1942 book Capitalism, Socialism and Democracy. Schumpeter believed that capitalism is a system that must always evolve, and with the evolution comes change. The change requires the destruction of something old, replaced by something new, such as the gun replacing archery and the mobile phone replacing the landline. To fully grasp the implications and scope of the process of creative destruction, we need to return to Schumpeter’s original thinking, as laid out in his 1911 book The Theory of Economic Development, about innovation as “creative construction” or the carrying out of new combinations.

., 70 “Hughli” ice, 176–177 Human capital, erosion of, 40–41 Human labor in agriculture, 122 Human needs, record of meeting, 5 Human spirit, 315 Huss, Magnus, 63 Hydrogenation, discovery of, 113 Hypothetical claims of technological innovation, 311–312 Hy-Vee (grocery stores), 271 IAR (International Association of Refrigeration, later International Institute of Refrigeration), 191–193, 198–199 Ibercaja (bank), 244 IBM, pharmaceutical research by, 13 Ibn al’Arraq, Muhammad, 50 Ibn Nujaym, 51 Ice and refrigeration, 174–189 Ice and Refrigeration (journal) founding of, 190 on ice plant accidents, 183 role of, 198 ICI (Imperial Chemical Industries), 232–233 Identity, 11, 42 coffee and loss of, 67 cultural, 60, 67, 141 political, of Europe, 229 Ijazah (authorization) system, 74–75 Illinois, use of tractors in, 128 Imperial Chemical Industries (ICI), 232–233 Imperial edict (ferman), 83, 85 Impotence from drinking coffee, 44, 56, 60, 310 from eating margarine, 115 Improved support for innovation, 280–316 conclusions on, 315–316 inclusive innovation, 291–302 institutional adaptation, 302–307 leadership, importance of, 282–285 overview, 280–281 public education and, 307–315 technological changes, leadership for, 285–291 Impurity, of technological innovation, 24 Inaction, 268–269, 283, 289, 308, 315 Incandescent lighting, 144, 148, 149–150, 168 Incentivization, by social institutions, 21 Inclusive economic development, 5 Inclusive innovation, 291–302 Incremental innovation, 84 Incubators for newborns, 306 Incumbency in agricultural systems, 228–229 benefits to challenging forces, 250 incumbent enterprises, failure of, 18–19 innovation, tensions with, 6, 42–43, 44–45, 299–300, 315 margarine and, 117 power of, 9–10 socioeconomic, 45 technological discontinuities and, 145 uncertainty and, 141 Incunabula, numbers of, 76 India Bt technology adoption by, 234, 246 Green Revolution, 283 ice sales to, 176–177 Mughal, lack of printing press use in, 70 printing presses in, 71 transgenic cotton seed in, 291–292 Indiana, use of tractors in, 128 Industrial mutation, 17 Industrial Revolution, 26 Industrialization, 13, 64, 98, 100 Inequity, technological controversies and, 7 Inertia, 23, 28, 250, 315 Infant incubators, 306 Innovation. See also Regulation; Technology and technological innovation AquAdvantage salmon, 257–279. See also AquAdvantage salmon barriers to, 33–34, 36–37 coffee, 44–67. See also Coffee creative destruction, 11–43. See also Creative destruction cycles, 12 electricity, 144–173. See also Electricity farm mechanization, 121–143. See also Farm mechanization improved support for, 280–316. See also Improved support for innovation inclusive, 291–302 incremental, 18, 69, 85–90, 94, 127, 234, 280, 305 Koran, printing of, 68–94.


pages: 267 words: 70,250

Defending the Free Market: The Moral Case for a Free Economy by Robert A. Sirico

Affordable Care Act / Obamacare, barriers to entry, Berlin Wall, corporate governance, creative destruction, delayed gratification, demographic winter, Fall of the Berlin Wall, financial engineering, Ford Model T, George Gilder, Gordon Gekko, greed is good, happiness index / gross national happiness, Herbert Marcuse, Hernando de Soto, informal economy, Internet Archive, liberation theology, means of production, moral hazard, obamacare, On the Revolutions of the Heavenly Spheres, Plato's cave, profit motive, road to serfdom, Tragedy of the Commons, zero-sum game

What he was saying made sense to me on a technical level, but all my intuitions cried out against it. It looked horrible. Creative Destruction, Creative Flourishing I relate this story as an illustration of the fact that sometimes what appears to be beaten back and damaged is really healthy and preparing for new growth. This is the case with what economists call creative destruction—the phenomenon whereby old skills, companies, and sometimes entire industries are eclipsed as new methods and businesses take their place. Creative destruction is seen in layoffs, downsizing, the obsolescence of firms, and, sometimes, serious injury to the communities that depend on them.

Table of Contents Praise Title Page Dedication Introduction CHAPTER 1 - A Leftist Undone Left Turn Suggestions for Further Reading CHAPTER 2 - Why You Can’t Have Freedom without a Free Economy Freedom and Chaos From Reason to the Reason for Property Property in Practice Trade, Contracts, and Interest Rates Suggestions for Further Reading CHAPTER 3 - Want to Help the Poor? Start a Business Jobs: The Best Anti-Poverty Program The Fallacy of the Fixed Pie Foreign Aid That Doesn’t The Moral Appeal of Good Work A Theology of Enterprise Suggestions for Further Reading CHAPTER 4 - Why the “Creative Destruction” of Capitalism Is More Creative than Destructive Creative Destruction, Creative Flourishing Globalization, Christianity, and Culture Globalization and Coercive Destruction Globalization and Culture Suggestions for Further Reading CHAPTER 5 - Why Greed Is Not Good–and Why You Can Get More of It with Socialism ...

Glenn Hubbard and William Duggan, The Aid Trap: Hard Truths About Ending Poverty (Columbia Business School Publishing, 2009). PovertyCure website (www.povertycure.org). Robert Sirico, The Entrepreneurial Vocation (Acton Institute, 2001). CHAPTER 4 Why the “Creative Destruction” of Capitalism Is More Creative than Destructive Q: It’s easy to talk about “creative destruction” when it’s not your job, your family, or your town being destroyed. Unemployment ruins lives. Shouldn’t we do all we can to have less of it? Shouldn’t the government and unions protect workers from losing their jobs? A: Ironically, a truly free labor market is the way to have less unemployment.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, low-wage service sector, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Schumpeter makes the case emphatically for capitalism. He argues that people’s lives had improved tremendously because of ‘creative destruction’: The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the same process of industrial mutation – if I may use that biological term – that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.22 Schumpeter’s firms were not powerless to influence the economic environment, in stark contrast to standard economic models.

Schumpeter argued that such ‘trustified’ capitalism did not stifle innovation or prevent the growth of new businesses. Alongside US multinationals, thousands of new companies emerged. Through the process of ‘creative destruction’, the most innovative survived. Schumpeter notes that from 1897 to 1904, 4,227 American companies merged into 257 large corporations, including such well-known names as Goodyear, Pepsico, Kellogg, Gillette, Monsanto, 3M and Texaco. In Schumpeter’s view, few monopolies survived in the long term, owing to ‘creative destruction’. The successful innovator might reap monopoly profits for a while, but others in the same industry will soon try to imitate the product.

In summary, Schumpeter sees entrepreneurship as ‘essentially one and the same thing’ as technological progress that raises the growth of the economy.40 The challenge of staying on top as innovators Nokia and BlackBerry In the process of ‘creative destruction’, innovative products will displace old ones. In aggregate, the efforts of companies to improve the level of technological innovation hold the key to the success of the economy. The transition from old to new, though, is rarely seamless and includes the rise and fall of not just individual businesses but entire industries. Nokia and BlackBerry phones are good illustrations of Schumpeter’s ‘creative destruction’. Nokia was once worth $150 billion but was eventually sold for just $7 billion. How did all of this market value disappear?


Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Pérez

agricultural Revolution, Alan Greenspan, Big bang: deregulation of the City of London, Bob Noyce, Bretton Woods, business cycle, capital controls, commoditize, Corn Laws, creative destruction, David Ricardo: comparative advantage, deindustrialization, distributed generation, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, Ford Model T, full employment, Hyman Minsky, informal economy, joint-stock company, Joseph Schumpeter, junk bonds, knowledge economy, late capitalism, market fundamentalism, military-industrial complex, new economy, nuclear winter, offshore financial centre, post-industrial society, profit motive, railway mania, Robert Shiller, Sand Hill Road, satellite internet, scientific management, Silicon Valley, Simon Kuznets, South Sea Bubble, Suez canal 1869, technological determinism, The Theory of the Leisure Class by Thorstein Veblen, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, trade route, tulip mania, Upton Sinclair, vertical integration, Washington Consensus

The recession creates the conditions for institutional restructuring and for re-routing growth onto a sustainable path. 36 The Propagation of Paradigms: Times of Installation, Times of Deployment Degree of diffusion of the technological revolution Figure 4.1 37 Two different periods in each great surge INSTALLATION PERIOD Turning point DEPLOYMENT PERIOD Time big-bang Next big-bang This chapter takes a broad look at the interrelated technological, economic and institutional changes involved in the process. A. Creative Destruction and Social Polarization Schumpeter’s notion of ‘creative destruction’ aptly portrays the effects of radical innovations. When the core products of a technological revolution start coming together, they inevitably clash with the established environment and the ingrained ways of doing things. Arkwright’s water frame was a clear threat to hand spinners both in England and in India.

Societies are profoundly shaken and shaped by each technological revolution and, in turn, the technological potential is shaped and steered as a result of intense social, political and ideological confrontations and compromises. It is precisely this systemic character that makes the whole question of technical change so crucial in understanding capitalist development. A. From Technological Innovations to Institutional Revolutions The notion of ‘creative destruction’, very much influenced by Nietzsche, was a significant element in the European Zeitgeist of the early twentieth century, as the nature of progress by innovation. Much in the same spirit as that of the Renaissance, it was seen as Mankind’s noble and pleasurable duty to invent,23 to break the forces of inertia that threatened to chain and enslave society in a cult of status quo.

Much in the same spirit as that of the Renaissance, it was seen as Mankind’s noble and pleasurable duty to invent,23 to break the forces of inertia that threatened to chain and enslave society in a cult of status quo. It was the German economist Werner Sombart, in his Krieg und Kapitalismus, who first used the term ‘the creative spirit of destruction’ in economics.24 Today we usually credit Schumpeter with the notion of ‘creative destruction’ as the way to describe the contradictory nature of technological revolutions.25 In fact, he understood innovation, be it new products, new processes or simply new ways of doing things, as the very essence of the capitalist engine of growth. He saw capitalism as a ‘process of industrial mutation ... that inces- 23. 24. 25.


pages: 383 words: 81,118

Matchmakers: The New Economics of Multisided Platforms by David S. Evans, Richard Schmalensee

Airbnb, Alvin Roth, Andy Rubin, big-box store, business process, cashless society, Chuck Templeton: OpenTable:, creative destruction, Deng Xiaoping, digital divide, disruptive innovation, if you build it, they will come, information asymmetry, Internet Archive, invention of movable type, invention of the printing press, invention of the telegraph, invention of the telephone, Jean Tirole, John Markoff, Lyft, M-Pesa, market friction, market microstructure, Max Levchin, mobile money, multi-sided market, Network effects, PalmPilot, Productivity paradox, profit maximization, purchasing power parity, QR code, ride hailing / ride sharing, sharing economy, Silicon Valley, Snapchat, Steve Jobs, the long tail, Tim Cook: Apple, transaction costs, two-sided market, Uber for X, uber lyft, ubercab, vertical integration, Victor Gruen, Wayback Machine, winner-take-all economy

Schumpeter described the results of innovation in market economies:28 [The] process of industrial mutation … incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one … [This process] must be seen in its role in the perennial gale of creative destruction. These turbocharged matchmakers are the forces behind a gale of “creative destruction” that is revolutionizing economies worldwide. There is plainly more to come, but new turbocharged matchmakers have already roiled existing industries. In some cases, they have created value by reducing frictions without threatening existing firms.

The prices of taxi medallions—which provide a permanent right to drive a taxicab in some cities—are falling.34 Medallion prices declined 23 percent in New York City between 2013 and 2015.35 In part III of this book, we present case studies of two major examples of creative destruction. In 2007, a multisided platform that uses mobile phones to move money between people started in an impoverished country in Africa. It grew explosively. As a result, it leapfrogged the traditional banking industry as well as payment cards. Meanwhile, in the United States, creative destruction has swept through one of the largest sectors of the economy—retail trade. It has completely destroyed some categories, such as video-rental stores, forced existing players to reinvent their businesses, and resulted in an accelerating wave of innovation in how people shop and buy.

See also critical mass; ignition money side of the platform, 33–34, 93–94 Monster, 50, 124 Motorola, 113, 116 M-PESA, 164, 167–181, 205 additional services in, 178–180 critical mass for, 170–171 economic development and, 180–181 how it works, 170 ignition at, 174–178 pricing in, 173 M-Shwari, 178–179 MSN, 82 multi-homing, 28 multisided platforms building, 35–37 challenges of, 9 communication and trust in, 58–61 as communities, 137 critical issues to address in, 36–37 critical mass for, 9–12, 14, 68, 69–83 definition of, 8 designing, 35–37 differentiation in, 28 discovery of/research on, 14–17 economic influence of, 205–206 economic rules and, 1–2, 12–14 evaluating new/potential, 149–164 examples of, 17–18 foundational, 40 friction reduction by, 55–68 future of, 197–206 governance of, 135–148 groups connected by, 1 growth/prominence of, 37–51 history of, 2–3, 12–14, 39–40, 198, 199–201 how many sides to have in, 109–110 identifying, 18–19 ignition of, 35–37, 68–83 pioneering, 37 pricing in, 85–100 retail transformed by, 183–196 technology in turbocharging, 19–20, 39–51 thick markets and, 30 traditional economic rules and, 1–2 value creation and division in, 57–58 MySpace, 28, 74, 138 governance of, 146–148 Video, 82 near-field communication (NFC) chips, 158, 159, 160–161, 162, 163 Netflix, 105, 191, 192 network effects, 21–31 behavioral externalities and, 136–140 creative destruction and, 49 definition of, 21 demand interdependency and, 32–33 direct, 22–25, 29, 137 first-mover advantages and, 23–24 indirect, 25–30, 136–137, 203 mastering, 27–30 number of platform sides and, 109–110 positive and negative, 22–23, 29 pricing and, 32 on shopping malls, 193 value creation/division and, 57–58 newspapers advertising in, 200–201 creative destruction and, 50 pricing, 94, 96, 99–100 pricing of, 32 New York Times, 184, 192–193 Nokia, 111, 112, 118 omnichannel retailing, 194–196 Open Handset Alliance (OHA), 115–116 open source licensing, 115–116 OpenTable, 7–8, 9–14 creative destruction and, 50 critical mass for, 9–12 ecosystem for, 103–104 fee structure of, 10, 13–14, 82, 90, 95 friction solved by, 57, 152 ignition strategy at, 79, 80, 82, 155 network effects at, 21, 25 no-show policy, 144 table management system, 10 thickness of market, 30 time to reach ignition, 164 two-sided platform of, 16–17 operating systems.


pages: 374 words: 113,126

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Schumpeter makes the case emphatically for capitalism. He argues that people’s lives had improved tremendously because of ‘creative destruction’: The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the same process of industrial mutation – if I may use that biological term – that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.22 Schumpeter’s firms were not powerless to influence the economic environment, in stark contrast to standard economic models.

Schumpeter argued that such ‘trustified’ capitalism did not stifle innovation or prevent the growth of new businesses. Alongside US multinationals, thousands of new companies emerged. Through the process of ‘creative destruction’, the most innovative survived. Schumpeter notes that from 1897 to 1904, 4,227 American companies merged into 257 large corporations, including such well-known names as Goodyear, Pepsico, Kellogg, Gillette, Monsanto, 3M and Texaco. In Schumpeter’s view, few monopolies survived in the long term, owing to ‘creative destruction’. The successful innovator might reap monopoly profits for a while, but others in the same industry will soon try to imitate the product.

In summary, Schumpeter sees entrepreneurship as ‘essentially one and the same thing’ as technological progress that raises the growth of the economy.40 The challenge of staying on top as innovators Nokia and BlackBerry In the process of ‘creative destruction’, innovative products will displace old ones. In aggregate, the efforts of companies to improve the level of technological innovation hold the key to the success of the economy. The transition from old to new, though, is rarely seamless and includes the rise and fall of not just individual businesses but entire industries. Nokia and BlackBerry phones are good illustrations of Schumpeter’s ‘creative destruction’. Nokia was once worth $150 billion but was eventually sold for just $7 billion. How did all of this market value disappear?


pages: 180 words: 55,805

The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future by Jeff Booth

3D printing, Abraham Maslow, activist fund / activist shareholder / activist investor, additive manufacturing, AI winter, Airbnb, Albert Einstein, AlphaGo, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, Bretton Woods, business intelligence, butterfly effect, Charles Babbage, Claude Shannon: information theory, clean water, cloud computing, cognitive bias, collapse of Lehman Brothers, Computing Machinery and Intelligence, corporate raider, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, dark matter, deep learning, DeepMind, deliberate practice, digital twin, distributed ledger, Donald Trump, Elon Musk, fiat currency, Filter Bubble, financial engineering, full employment, future of work, game design, gamification, general purpose technology, Geoffrey Hinton, Gordon Gekko, Great Leap Forward, Hyman Minsky, hype cycle, income inequality, inflation targeting, information asymmetry, invention of movable type, Isaac Newton, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, late fees, low interest rates, Lyft, Maslow's hierarchy, Milgram experiment, Minsky moment, Modern Monetary Theory, moral hazard, Nelson Mandela, Network effects, Nick Bostrom, oil shock, OpenAI, pattern recognition, Ponzi scheme, quantitative easing, race to the bottom, ride hailing / ride sharing, self-driving car, software as a service, technoutopianism, TED Talk, the long tail, the scientific method, Thomas Bayes, Turing test, Uber and Lyft, uber lyft, universal basic income, winner-take-all economy, X Prize, zero-sum game

True to his impulse as an entrepreneur—a thinker, but also a doer—he concludes with a call to action. Business leaders, entrepreneurs, policy makers, and youth committed to working towards a brighter future should read this book.” Ajay Agrawal professor at the University of Toronto and founder of the Creative Destruction Lab “As someone who understands the exponential rate at which technology is advancing, Jeff Booth has a unique ability to connect the dots to something bigger in this must-read book. Few books offer a more succinct, provocative, and enlightening view of the world as it is today, and what it could be tomorrow.

Contents Preface Introduction: The End of Inflation The age of inflation The shrinking world of technology Reactionary economics 1. How the Economy Works, Part I: Printing Money What the experts got wrong The world in balance The Ponzi economy Cheap money Changing the rules 2. How the Economy Works, Part II: Creative Destruction Out with the old, in with the new The BuildDirect journey The windows of opportunity The rise of the platforms On the eve of destruction 3. It Is Hard to Think Differently Building on weak foundations Two-speed thinking Myths we live by How do we overcome our errors? 4. The Technology Boom Doubling up Self-driving cars Virtual and augmented reality Additive manufacturing and 3D printing The coming sonic boom 5.

In the rest of this book, I’ll look in depth at the situation: how we got here, where we’re set to go from here, and what we can do about it. Prepare to be challenged. 1 How the Economy Works, Part I: Printing Money Ihad dinner recently with Chen Fong, a friend of mine from the Creative Destruction Lab, where we mentor, invest, and advise numerous technology startups. He is also a professor emeritus at the Faculty of Medicine at the University of Calgary, cofounder of Calgary Scientific, and a member of the Order of Canada. In addition to the fifty or so companies that Chen mentors and invests in, he still finds the time to sit on six charitable boards.


pages: 348 words: 83,490

More Than You Know: Finding Financial Wisdom in Unconventional Places (Updated and Expanded) by Michael J. Mauboussin

Alan Greenspan, Albert Einstein, Andrei Shleifer, Atul Gawande, availability heuristic, beat the dealer, behavioural economics, Benoit Mandelbrot, Black Swan, Brownian motion, butter production in bangladesh, buy and hold, capital asset pricing model, Clayton Christensen, clockwork universe, complexity theory, corporate governance, creative destruction, Daniel Kahneman / Amos Tversky, deliberate practice, demographic transition, discounted cash flows, disruptive innovation, diversification, diversified portfolio, dogs of the Dow, Drosophila, Edward Thorp, en.wikipedia.org, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, fixed income, framing effect, functional fixedness, hindsight bias, hiring and firing, Howard Rheingold, index fund, information asymmetry, intangible asset, invisible hand, Isaac Newton, Jeff Bezos, John Bogle, Kenneth Arrow, Laplace demon, Long Term Capital Management, loss aversion, mandelbrot fractal, margin call, market bubble, Menlo Park, mental accounting, Milgram experiment, Murray Gell-Mann, Nash equilibrium, new economy, Paul Samuelson, Performance of Mutual Funds in the Period, Pierre-Simon Laplace, power law, quantitative trading / quantitative finance, random walk, Reminiscences of a Stock Operator, Richard Florida, Richard Thaler, Robert Shiller, shareholder value, statistical model, Steven Pinker, stocks for the long run, Stuart Kauffman, survivorship bias, systems thinking, The Wisdom of Crowds, transaction costs, traveling salesman, value at risk, wealth creators, women in the workforce, zero-sum game

Staying Ahead of the Curve 1 In fact, one of the new leader’s first actions is often to kill all of the cubs in the pride. This allows the new leader to sire new cubs that carry his genes. 2 See Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them (New York: Doubleday, 2001), 47. 3 Alfred Rappaport and Michael J. Mauboussin, Expectations Investing: Reading Stock Prices for Better Returns (Boston: Harvard Business School Press, 2001). 4 See Foster and Kaplan, Creative Destruction; Everett Rodgers, The Diffusion of Innovation (New York: Free Press, 1995); and Geoffrey A. Moore, Paul Johnson, and Tom Kippola, The Gorilla Game: Picking Winners in High Technology (New York: HarperBusiness, 1999). 5 Michael J.

See also innovation complex adaptive systems; cause and effect and; control and; properties and mechanisms; stock market complexity theory Complexity (Waldrop) compliance with requests computer industry conformity, preference for consciousness consilience; areas to address Consilience (Wilson) consistency constructs context control: complex adaptive systems and; loss of conventions Cornell, Bradford corporate routines Corporate Strategy Board corpus callosum correctness, frequency vs. magnitude of correlation cost of capital, reversion to costs: agency; portfolio turnover and Craven, John creative destruction Creative Destruction (Foster and Kaplan) creative thinking Crist, Steven critical state cycle time Daimler-Benz Aerospace (DASA) Damasio, Antonio Darwin, Charles decision making: accuracy of collective; analytical; certainty; decentralized systems; decision markets; emotions and; experiential system; frame of; individual vs. collective; input diversity; by insects; markets and; principles; prospect theory; suboptimal; weighing probabilities.

Speculation and Enterprise Visiting El Farol Kidding Yourself Chapter 16 - Right from the Gut Guns and Better (Decisions) Chopping Down the Decision Tree Investing au Naturel The Fine Print Chapter 17 - Weighted Watcher I Do—Do You? Sifting Weights Misleading by Sample Tell Me Something the Market Doesn’t Know Part 3 - Innovation and Competitive Strategy INTRODUCTION Chapter 18 - The Wright Stuff Take Off with Recombination How Does Wealth Happen? Sic Itur ad Astra (This Is the Way to the Stars) Creative Destruction—Here to Stay Chapter 19 - Pruned for Performance Too Clever by Half The Dynamics of Innovation Investors: Use the Brain Chapter 20 - Staying Ahead of the Curve Losing Pride Goldilocks Expectations: Too Cold, Too Hot, Just Right Out with the Old, In with the New The Mind Makes a Promise That the Body Can’t Fill Expectations and Innovation Chapter 21 - Is There a Fly in Your Portfolio?


The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

addicted to oil, air freight, airline deregulation, Alan Greenspan, Albert Einstein, asset-backed security, bank run, Berlin Wall, Black Monday: stock market crash in 1987, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon tax, central bank independence, collateralized debt obligation, collective bargaining, compensation consultant, conceptual framework, Corn Laws, corporate governance, corporate raider, correlation coefficient, cotton gin, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, currency risk, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Glass-Steagall Act, Hernando de Soto, income inequality, income per capita, information security, invisible hand, Joseph Schumpeter, junk bonds, labor-force participation, laissez-faire capitalism, land reform, Long Term Capital Management, low interest rates, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, new economy, North Sea oil, oil shock, open economy, open immigration, Pearl River Delta, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, Reminiscences of a Stock Operator, reserve currency, Right to Buy, risk tolerance, Robert Solow, Ronald Reagan, Savings and loan crisis, shareholder value, short selling, Silicon Valley, special economic zone, stock buybacks, stocks for the long run, Suez crisis 1956, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tipper Gore, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, We are all Keynesians now, working-age population, Y2K, zero-sum game

"I hope you will allow me to agree with the reasons you've given for lowering the rate," he said, "without signing on to your brave-new-world scenario, which I am not quite ready to do." Actually that was fine. I didn't expect the committee to agree with me—yet. Nor was I asking them to do anything. Just ponder. T he fast-paced high-tech boom is what finally gave broad currency to Schumpeter's idea of creative destruction. It became a dot-com buzz phrase—indeed, once you accelerate to Internet speed, creative destruction is hard to overlook. In Silicon Valley, companies were continually remaking themselves and new businesses were constantly flaring up and flaming out. The reigning powers of technology—giants like AT&T, Hewlett-Packard, and IBM—had to scramble to catch up with the trend, and not all succeeded.

INDEX Lopez Obrador, Andres Manuel, 341 Los Angeles, Calif, 8 1 , 406 Lott, Trent, 7 Lynn, Jim, 67, 73 MacArthur, Douglas, 38 McCain, John, 115,244 McCarthy, Joseph, 34 McDonald's, 402 McDonough, Bill, 193,194 McFarlane, Ian, 292 Mackey, Judith, 74 McTeer, Bob, 212 Maddison, Angus, 335 Maestro (Woodward), 224 Mahathir Mohamad, 312 Malan, Pedro, 334-35, 341 Malaysia, 188, 260, 312, 330 Mandel, Johnny, 27 Mandela, Nelson, 153 manufacturing, 314, 383, 486, 493 in China, 304-5 in India, 320, 322 in United States, 5-6, 46, 49-50, 62, 77-78, 103, 306n, 395-96, 470, 475-76, 495n Mao Zedong, 299, 302, 504 market economies, market capitalism: accurate accounting in, 432-33 central planning in, 62 central planning vs., 12, 123, 125, 127-28, 129, 131-34, 139, 141 conflicted attitudes toward, 261, 268-72 creative destruction and, see creative destruction Fed's orientation toward, 373 French vs. American views of, 273 Riture of, 464-506 historical continuity in, 464-65 institutional foundations of, 139 Keynes's view of, 30 in Latin America, 337, 338 modes of, 267-93 property rights in, see property rights rediscovery of, 14, 281 requirements of, 251-55 Smith and, 10, 2 6 0 - 6 6 market revolution (shock therapy), 132-34, 138-40 Marshall Plan, 281 Martin, William McChesney, Jr., 111 Marx, Karl, 140n, 252, 264, 299, 300, 339 Maslyukov, Yuri, 128 math education, 399, 4 0 4 - 6 Matlock, Jack, 123, 124 Mattingly, Virgil, 375 Mayaguez, 65 MCI, 200 Meany, George, 70-71 Medicaid, 418, 418n medical insurance, 398n, 418 Medicare, 18, 95, 185, 2 1 1 , 215, 237, 280, 41 In, 414-19,498,504 prescription drug benefit for, 233, 243, 414, 415 medicine, 257 Meese,Ed,90,91 Meet the Press (TV show), 119 Melzer,Tom, 103, 173 Menem, Carlos, 342 Menezes, Fradique de, 258 Mengers, Sue, 81 mercantilism, 261, 263-64, 354 mergers and acquisitions, 425, 432, 436 Merkel, Angela, 500 Merrill, Dina, 78 Merrill Lynch, 257, 316 Merton, Robert, 193 Mexico, 275, 330, 334n, 335 energy and, 438n, 446, 456, 459 inflation in, 3 4 1 , 3 8 0 NAFTA and, 149, 157 near default of, 156-61, 250, 341, 380 populism in, 336-37, 341 Meyer, Laurence, 162 Microsoft, 167,494 military spending, 4 1 - 4 3 , 56, 143, 146, 234, 238, 243 millennium events, 202-5 Miller, Glenn, 23-24 Miller, Paul, 428 Miller, William "Bill," 83, 84, 125 Miller, Zell, 218 Minehan, Cathy, 214 Mitchell, Andrea, 2-5, 80, 177, 198 AG's dating of, 97, 102, 115-16, 119, 157-58 marriage and honeymoon of, 179-81 as NBC reporter, 2 , 4 , 9 6 - 9 8 , 115-16, 148, 197 Mitchell, Joan, 39-40, 45 Mitchell, Wesley Clair, 35 Miyazawa, Kiichi, 289-90 Mobil Corporation, 77, 78, 427-28, 440 Mondale, Walter, 89n, 97 monetarists, 85 monetary policy, 14, 83, 101, 103, 119, 146, 162, 167, 174, 198, 3 9 0 - 9 1 , 478, 479, 491-92 Fed's biannual report on, 150 just-in-time, 213 treasury securities and, 214 see also discount rate; federal funds rate; interest rates money supply, 85, 92, 9 3 , 306, 329 monopolies, 97, 275, 324, 336n, 438 natural, 493-94 Moore, Geoffrey, 31 Moore, Gordon, 474 Morgan, Helen, 20 Morgan, J.

or "What is the likelihood of the markup changing between broad-woven fabrics on the one hand and the market for men's suits on the other?" I would define what was going on in general terms and then translate that into the implications for individual businesses. That was my value-added, and we prospered. Working with heavy industry gave me a profound appreciation of the central dynamic of capitalism. "Creative destruction" is an idea that was articulated by the Harvard economist Joseph Schumpeter in 1942. Like many powerful ideas, his is simple: A market economy will incessantly revitalize itself from within by scrapping old and failing businesses and then reallocating resources to newer, more productive ones.


pages: 369 words: 94,588

The Enigma of Capital: And the Crises of Capitalism by David Harvey

accounting loophole / creative accounting, Alan Greenspan, anti-communist, Asian financial crisis, bank run, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, cotton gin, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, equal pay for equal work, European colonialism, failed state, financial innovation, Frank Gehry, full employment, gentrification, Glass-Steagall Act, global reserve currency, Google Earth, Great Leap Forward, Guggenheim Bilbao, Gunnar Myrdal, guns versus butter model, Herbert Marcuse, illegal immigration, indoor plumbing, interest rate swap, invention of the steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, Just-in-time delivery, land reform, liquidity trap, Long Term Capital Management, market bubble, means of production, megacity, microcredit, military-industrial complex, Money creation, moral hazard, mortgage debt, Myron Scholes, new economy, New Urbanism, Northern Rock, oil shale / tar sands, peak oil, Pearl River Delta, place-making, Ponzi scheme, precariat, reserve currency, Ronald Reagan, Savings and loan crisis, sharing economy, Shenzhen special economic zone , Silicon Valley, special drawing rights, special economic zone, statistical arbitrage, structural adjustment programs, subprime mortgage crisis, technological determinism, the built environment, the market place, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, Timothy McVeigh, too big to fail, trickle-down economics, urban renewal, urban sprawl, vertical integration, white flight, women in the workforce

It is also abundantly clear that the reproduction of capitalism entails the making of new geographies and that the making of new geographies through creative destruction of the old is one very good way to deal with the perpetually present capital surplus disposal problem. But this search for a geographical ‘fix’ to the problem of surplus absorption also constitutes an ever-present danger. While there are innumerable parallels now being drawn between the crisis of the 1930s and the current one, the one potential parallel that is almost totally ignored is the collapse of international collaboration, the descent into geopolitical rivalries and the vast tragedy of one of the greatest of all episodes of creative destruction in human history: the Second World War. 8 What is to be done?

The irrational way to do this in the past has been through the destruction of the achievements of preceding eras by way of war, the devaluation of assets, the degradation of productive capacity, abandonment and other forms of ‘creative destruction’. The effects are felt not only throughout the world of commodity production and exchange. Human lives are disrupted and even physically destroyed, whole careers and lifetime achievements are put in jeopardy, deeply held beliefs are challenged, psyches wounded and respect for human dignity is cast aside. Creative destruction is visited upon the good, the beautiful, the bad and the ugly alike. Crises, we may conclude, are the irrational rationalisers of an irrational system.

Library of Congress Cataloging-in-Publication data is available ISBN: 978-0-19-975871-5 Printed in the United States of America on acid-free paper Contents Preamble 1 The Disruption 2 Capital Assembled 3 Capital Goes to Work 4 Capital Goes to Market 5 Capital Evolves 6 The Geography of It All 7 Creative destruction on the Land 8 What is to be done? and Who is Going to Do it? Appendices Sources and Further Reading Index Preamble This book is about capital flow. Capital is the lifeblood that flows through the body politic of all those societies we call capitalist, spreading out, sometimes as a trickle and other times as a flood, into every nook and cranny of the inhabited world.


pages: 287 words: 80,180

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim, Renée A. Mauborgne

Asian financial crisis, Blue Ocean Strategy, borderless world, call centre, classic study, cloud computing, commoditize, creative destruction, disruptive innovation, endogenous growth, Ford Model T, haute couture, index fund, information asymmetry, interchangeable parts, job satisfaction, Joseph Schumpeter, Kickstarter, knowledge economy, machine translation, market fundamentalism, NetJets, Network effects, RAND corporation, Salesforce, Skype, telemarketer, The Wealth of Nations by Adam Smith, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, Vanguard fund, zero-sum game

But again, upon closer examination, deficiencies in some of the visionary companies spotlighted in Built to Last have come to light. As illustrated in the book Creative Destruction, much of the success attributed to some of the model companies in Built to Last was the result of industry-sector performance rather than the companies themselves.15 For example, Hewlett-Packard (HP) met the criteria of Built to Last by outperforming the market over the long term. In reality, while HP outperformed the market, so did the entire computer-hardware industry. What’s more, HP did not even outperform the competition within the industry. Through this and other examples, Creative Destruction questioned whether “visionary” companies that continuously outperform the market have ever existed.

Hence, while understanding how to compete in existing market space is important, blue ocean strategy addresses the critical challenge of how to redefine industry boundaries and create new market space when structural conditions work against you. This is how blue ocean strategy deals with competition to produce continuous renewal and the growth of industries. Red Ocean Trap Ten: The belief that blue ocean strategy is synonymous with creative destruction or disruption. Creative destruction or disruption occurs when an innovation disrupts an existing market by displacing an earlier technology or existing product or service. The word “displacement” is important here, as without displacement, disruption would not occur. In the case of photography, for example, the innovation of digital photography disrupted the photographic film industry by effectively displacing it.

In the case of photography, for example, the innovation of digital photography disrupted the photographic film industry by effectively displacing it. So today digital photography is the norm, and photographic film is seldom used. Disruption is, hence, largely consonant with Schumpeter’s concept of creative destruction, whereby the old is incessantly destroyed or replaced by the new. Unlike disruption, however, blue ocean strategy does not necessitate displacement or destruction. Blue ocean strategy is a broader concept that goes beyond creative destruction to embrace nondestructive creation, which is its overriding emphasis. Take Viagra, which created a blue ocean in lifestyle drugs. Did Viagra effectively disrupt an existing industry by displacing an earlier technology or existing product or service?


pages: 355 words: 63

The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly

Andrei Shleifer, business climate, business cycle, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, creative destruction, endogenous growth, financial repression, foreign exchange controls, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, large denomination, low interest rates, manufacturing employment, Money creation, Network effects, New Urbanism, open economy, PalmPilot, Productivity paradox, purchasing power parity, rent-seeking, Robert Solow, Ronald Reagan, selection bias, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, Tragedy of the Commons, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War

The economist Joseph Schumpeter noted as long ago as 1942 that the process of economic growth ”incessantly revolutionizesthe economic structure from 178 Chapter 9 within, incessantly destroying the oldone, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.”12 The economists Philippe Aghion and Peter Howitt have stressed this kind of approach to growth in recent research.13 They note that the process of creative destruction complicates incentives for innovation. They give more reasons why a free market economy could have a rate of technological innovation that is too slow. Innovators cannot capture all of the returns to their innovation because others can imitate them (Apple never got the full returns to its innovative graphical userinterface because Microsoft imitated it with Windows).

In 1997, there was still only one Internet-linked computer for every twentythree people in the United States, but the number of Internet-linked computers is growing at 50 percent a year.17 In many poorcountries, the Internet is growing even faster, as they can skip some of the intermediate steps and jump to the frontier. Mexico already has 36 Creative 181 Internet service providers, including one in its most backward state of Chiapas. Vested Interests and Creative Destruction Another insight of creative destruction is that there will be losers as well as winners from economic growth. As growth proceeds, old industries die and new ones are created. Growth alters the landscape, turning farms intofast-food restaurants and factory sites. And because growth involves losers as well as winners, it’s easy to see why there has always been a vocal antigrowth faction, even aside from the concern for the environment.

On balance, backwardness seems to be a disadvantage becauseof the complementaryinvention effect.) New inventions will happenwhere they can draw onexisting inventions. This is path dependence again. Third, sometimes new inventions give new life to existing inventions, as opposed to the creative destruction emphasized for most of this chapter.41 This does not invalidate creative destruction; the two processes can live side by side, with some technologies destroyed by newinventions and other technologies perpetuatedbyeverextending invention. Finally, technological change will accelerate over time. If new inventions are complementary to existing technology, their rate of return will increase as technology advances, meaning faster technological progress.


pages: 829 words: 187,394

The Price of Time: The Real Story of Interest by Edward Chancellor

"World Economic Forum" Davos, 3D printing, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, asset allocation, asset-backed security, assortative mating, autonomous vehicles, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, bitcoin, blockchain, bond market vigilante , bonus culture, book value, Bretton Woods, BRICs, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, cashless society, cloud computing, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, commodity super cycle, computer age, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cryptocurrency, currency peg, currency risk, David Graeber, debt deflation, deglobalization, delayed gratification, Deng Xiaoping, Detroit bankruptcy, distributed ledger, diversified portfolio, Dogecoin, Donald Trump, double entry bookkeeping, Elon Musk, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, everywhere but in the productivity statistics, Extinction Rebellion, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global reserve currency, global supply chain, Goodhart's law, Great Leap Forward, green new deal, Greenspan put, high net worth, high-speed rail, housing crisis, Hyman Minsky, implied volatility, income inequality, income per capita, inflation targeting, initial coin offering, intangible asset, Internet of things, inventory management, invisible hand, Japanese asset price bubble, Jean Tirole, Jeff Bezos, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, land bank, large denomination, Les Trente Glorieuses, liquidity trap, lockdown, Long Term Capital Management, low interest rates, Lyft, manufacturing employment, margin call, Mark Spitznagel, market bubble, market clearing, market fundamentalism, Martin Wolf, mega-rich, megaproject, meme stock, Michael Milken, Minsky moment, Modern Monetary Theory, Mohammed Bouazizi, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, Northern Rock, offshore financial centre, operational security, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, peer-to-peer lending, pensions crisis, Peter Thiel, Philip Mirowski, plutocrats, Ponzi scheme, price mechanism, price stability, quantitative easing, railway mania, reality distortion field, regulatory arbitrage, rent-seeking, reserve currency, ride hailing / ride sharing, risk free rate, risk tolerance, risk/return, road to serfdom, Robert Gordon, Robinhood: mobile stock trading app, Satoshi Nakamoto, Satyajit Das, Savings and loan crisis, savings glut, Second Machine Age, secular stagnation, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, stock buybacks, subprime mortgage crisis, Suez canal 1869, tech billionaire, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tim Haywood, time value of money, too big to fail, total factor productivity, trickle-down economics, tulip mania, Tyler Cowen, Uber and Lyft, Uber for X, uber lyft, Walter Mischel, WeWork, When a measure becomes a target, yield curve

Andrew Mellon, 1932 In his book Capitalism, Socialism and Democracy, Joseph Schumpeter describes capitalism as a ‘process of industrial mutation … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.’1 That phrase stuck. If Schumpeter is widely remembered today, it’s because he owns the intellectual copyright on creative destruction – the evolutionary process by which new technologies and business methods displace older, less efficient ways of doing things. Schumpeter’s borrowing from Darwin’s theory of natural selection is as important to our understanding of the nature of capitalism as Adam Smith’s ‘invisible hand’. Most discussion of creative destruction revolves around the adoption of new technologies, the roles played by entrepreneurs as harbingers of change and by competition in selecting the most efficient businesses.

By guiding selection of the most efficient businesses, Hadley added, interest ensures the ‘productive forces of the community are better utilized’.2 Schumpeter himself saw interest as arising from the profits of creative destruction. ‘The true function of interest,’ he wrote, ‘is, so to speak, the brake, or governor’ on economic activity.3 A ‘necessary brake’, in Schumpeter’s opinion.4 Interest turns time into a cost of production. Time is money. Entrepreneurs who save time in production, who bring goods most quickly to market, emerge as winners in the game of creative destruction. Interest rations capital.fn1 From this perspective, interest is not a deadweight but a spur to efficiency – a hurdle that determines whether an investment is viable or not.

The lowest interest rates in history put the brake on Schumpeter’s evolutionary process. Creative destruction was replaced by unnatural selection and capital destruction. As the tempo of business life slowed, the economy returned to a stationary state. FIREFIGHTERS AND ARSONISTS Market economies are complex systems. Their order is spontaneous – that’s to say, they operate without any central guiding hand. The same is true of ecological systems, which also suffer at times from misguided, if well-intentioned, interference by public bodies. The part played by economic downturns in promoting creative destruction has a parallel in nature. Fires have an important role in regenerating forests.


pages: 1,205 words: 308,891

Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

"Friedman doctrine" OR "shareholder theory", Airbnb, Akira Okazaki, antiwork, behavioural economics, big-box store, Black Swan, book scanning, British Empire, business cycle, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, classic study, clean water, Columbian Exchange, conceptual framework, correlation does not imply causation, Costa Concordia, creative destruction, critique of consumerism, crony capitalism, dark matter, Dava Sobel, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, Deng Xiaoping, do well by doing good, Donald Trump, double entry bookkeeping, electricity market, en.wikipedia.org, epigenetics, Erik Brynjolfsson, experimental economics, Ferguson, Missouri, food desert, Ford Model T, fundamental attribution error, Garrett Hardin, Georg Cantor, George Akerlof, George Gilder, germ theory of disease, Gini coefficient, God and Mammon, Great Leap Forward, greed is good, Gunnar Myrdal, Hans Rosling, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, immigration reform, income inequality, interchangeable parts, invention of agriculture, invention of writing, invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, John Harrison: Longitude, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labor-force participation, lake wobegon effect, land reform, liberation theology, lone genius, Lyft, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, means of production, middle-income trap, military-industrial complex, Naomi Klein, new economy, Nick Bostrom, North Sea oil, Occupy movement, open economy, out of africa, Pareto efficiency, Paul Samuelson, Pax Mongolica, Peace of Westphalia, peak oil, Peter Singer: altruism, Philip Mirowski, Pier Paolo Pasolini, pink-collar, plutocrats, positional goods, profit maximization, profit motive, public intellectual, purchasing power parity, race to the bottom, refrigerator car, rent control, rent-seeking, Republic of Letters, road to serfdom, Robert Gordon, Robert Shiller, Ronald Coase, Scientific racism, Scramble for Africa, Second Machine Age, secular stagnation, seminal paper, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, spinning jenny, stakhanovite, Steve Jobs, tacit knowledge, TED Talk, the Cathedral and the Bazaar, The Chicago School, The Market for Lemons, the rule of 72, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, total factor productivity, Toyota Production System, Tragedy of the Commons, transaction costs, transatlantic slave trade, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, very high income, wage slave, Washington Consensus, working poor, Yogi Berra

The local drapers, like the local hardware stores facing Menards and Home Depot, “are no longer of their age, too bad for them!”12 And good for the consumer. The sociologist Georg Simmel—about the economy often more penetrating than his contemporary Max Weber—noted in 1908 that “usually, the poisonous, divisive, destructive effects of competition are stressed” (though it is creative destruction): But, in addition . . . competition compels the wooer who has a co-wooer, . . . to go out to the wooed, come close to him, establish ties with him. . . . To be sure, this often happens at the price of the competitor’s own dignity and of the objective value of his product [that is, by driving down the price]. . . .

Narrative, in other words, has the problem that mere sequence (metonymy is the technical word) gives an impression that the questions of analysis (metaphor, models) have in fact, by that very sequence, been somehow solved. The arrangement of the present book can be summarized thus (in a table of contents, to so speak, for the table of contents): We were poor but now are rich. Why? Answer: The change in attitude toward the bourgeoisie and creative destruction. But why did they change? Answer: The egalitarian accidents of 1517–1789. But why were they important? Answer: Because earlier times were fiercely antibourgeois, being holy and hierarchical, And they were so even though markets and “capitalism” have always existed, contrary to Karl Polanyi.

Luigi Einaudi, who advocated commercial liberty, not regulation (libertà vs. controllo di commercio), wrote in 1919 that I Promessi Sposi was “one of the best treatises on political economy that has ever been written.”13 The master builder in Ibsen’s play of 1892, Halvard Solness, achieves his profit and his transcendence by sitting on other people’s lives, such as that of his gifted young draftsman. His worry about the young (“From the young . . . the change is coming. . . . Then it’s the end of Solness the master builder”) is worry about the creative destruction of entry, characteristic of a liberated economy, which the bourgeoisie advocates but then routinely seeks state protection from.14 In Austen the admiration for prudence is undercut, I say, when it shows as prudence only. The minor characters are often idiotically strategic, mothers pushing their daughters up the marital tree with a single-mindedness that would delight a Marxian or a Samuelsonian economist.


pages: 361 words: 81,068

The Internet Is Not the Answer by Andrew Keen

"World Economic Forum" Davos, 3D printing, A Declaration of the Independence of Cyberspace, Airbnb, AltaVista, Andrew Keen, AOL-Time Warner, augmented reality, Bay Area Rapid Transit, Berlin Wall, Big Tech, bitcoin, Black Swan, Bob Geldof, Boston Dynamics, Burning Man, Cass Sunstein, Charles Babbage, citizen journalism, Clayton Christensen, clean water, cloud computing, collective bargaining, Colonization of Mars, computer age, connected car, creative destruction, cuban missile crisis, data science, David Brooks, decentralized internet, DeepMind, digital capitalism, disintermediation, disruptive innovation, Donald Davies, Downton Abbey, Dr. Strangelove, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, fail fast, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, Frank Gehry, Frederick Winslow Taylor, frictionless, fulfillment center, full employment, future of work, gentrification, gig economy, global village, Google bus, Google Glasses, Hacker Ethic, happiness index / gross national happiness, holacracy, income inequality, index card, informal economy, information trail, Innovator's Dilemma, Internet of things, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, John Perry Barlow, Joi Ito, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kevin Roose, Kickstarter, Kiva Systems, Kodak vs Instagram, Lean Startup, libertarian paternalism, lifelogging, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Mary Meeker, Metcalfe’s law, military-industrial complex, move fast and break things, Nate Silver, Neil Armstrong, Nelson Mandela, Network effects, new economy, Nicholas Carr, nonsequential writing, Norbert Wiener, Norman Mailer, Occupy movement, packet switching, PageRank, Panopticon Jeremy Bentham, Patri Friedman, Paul Graham, peer-to-peer, peer-to-peer rental, Peter Thiel, plutocrats, Potemkin village, power law, precariat, pre–internet, printed gun, Project Xanadu, RAND corporation, Ray Kurzweil, reality distortion field, ride hailing / ride sharing, Robert Metcalfe, Robert Solow, San Francisco homelessness, scientific management, Second Machine Age, self-driving car, sharing economy, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Skype, smart cities, Snapchat, social web, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, subscription business, TaskRabbit, tech bro, tech worker, TechCrunch disrupt, Ted Nelson, telemarketer, The future is already here, The Future of Employment, the long tail, the medium is the message, the new new thing, Thomas L Friedman, Travis Kalanick, Twitter Arab Spring, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber for X, uber lyft, urban planning, Vannevar Bush, warehouse robotics, Whole Earth Catalog, WikiLeaks, winner-take-all economy, work culture , working poor, Y Combinator

Rather than just a static market economy that enables trading, capitalism is what the Austrian economist Joseph Schumpeter called an “evolutionary” process of economic change that “never can be stationary.” In his 1942 magnum opus Capitalism, Socialism and Democracy, Schumpeter used the term “Creative Destruction” to describe the constant cycles of disruptive invention and reinvention that drive capitalism. “This process of Creative Destruction is the essential fact about capitalism,” Schumpeter insisted. “It is what capitalism consists in and what every capitalist concern has got to live with.”106 Internet economics, therefore, needs to be understood as a historical narrative rather than as just a static set of market relationships.

The guy, who might have been outfitted to hang out at the Battery, was wielding a sledgehammer with which he was energetically smashing some plastic objects into smithereens. REALLY CREATIVE DESTRUCTION, the magazine’s headline screamed in letters as black as the dude’s goatee and glasses.8 One doesn’t need to be a semiotician to grasp the significance of seeing this picture—with its “move fast and break things” message—in Rochester, of all places. Much of Rochester’s industrial economy had itself been smashed into smithereens over the last twenty-five years by a Schumpeterian hurricane of creative destruction. The significance of that magazine cover was, therefore, hard to miss: the sledgehammer mirrored the destructive might of the digital revolution; while the plastic objects being destroyed represented the broken city itself.

“It is what capitalism consists in and what every capitalist concern has got to live with.”106 Internet economics, therefore, needs to be understood as a historical narrative rather than as just a static set of market relationships. In both the Web 1.0 and 2.0 periods, the Internet mostly disrupted media, communications, and retail. And so, in the twenty years after Jim Clark and Marc Andreessen founded Netscape in April 1994, Schumpeter’s gale of creative destruction mostly swirled around the photography, music, newspaper, telecommunications, movie, publishing, and retail industries. Over the next twenty-five years, however, that digital gale will grow into a Category 5 hurricane and radically disrupt every industry from education, finance, and transportation to health care, government, and manufacturing.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

Airbnb, Alan Greenspan, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, Blue Ocean Strategy, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, classic study, Clayton Christensen, Colonization of Mars, commoditize, commodity super cycle, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Dr. Strangelove, driverless car, Elon Musk, Erik Brynjolfsson, Fairchild Semiconductor, fear of failure, financial engineering, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, general purpose technology, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, Greenspan put, Herman Kahn, high net worth, hiring and firing, hockey-stick growth, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, low interest rates, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, middle-income trap, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, precautionary principle, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, subprime mortgage crisis, technological determinism, technological singularity, TED Talk, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, vertical integration, Yogi Berra

Of all the internet start-ups, for example, three-quarters fail because of “premature scaling” alone, according to the Startup Genome Report.32 Yet here we are, with rising venture capital investment in internet start-ups – many of them rushing to scale up their businesses faster than the others. Joseph Schumpeter, the Austrian-born economist, argued along the same lines and, partly inspired by German scholar Werner Sombart, portrayed the capitalist innovation process as “a perennial gale of creative destruction.” For Schumpeter, creation and destruction were part of the same process of economic renewal. In fact, in his “vision of capitalism,” the entry of new technologies and entrepreneurs, and the exit of the old, were the central dynamic of progression.33 Capitalism in this school of thought is not a reflection of the way Karl Marx had treated capital accumulation.

Business investment is generally following the same declining trend as total investment in Western economies. Again, take the United States as an example. Compared to other Western economies, the US economy has followed a pattern of economic growth that is less reliant on a big trade sector but more dependent on Schumpeterian innovation and creative destruction. Figure 2.4 tells the story of business investment in the US economy between 1975 and 2014. The trend of US business investment has been declining since the late 1970s, when measured as a share of GDP.36 Private investment as a share of business capital stock is on the same trend.37 Just as for the West as a whole, there was a spurt in the 1990s, and during that period productivity growth in the US accelerated too as the business sector invested more money in absorbing new technology.

Rentiers make the economy hidebound. 4 THE RISE AND RISE AGAIN OF CORPORATE MANAGERIALISM The modern large Western corporation and the modern apparatus of socialist planning are variant accommodations to the same need. John Kenneth Galbraith, The New Industrial State Modern corporate behavior increasingly conforms to the spirit of managerialism. Gray capital helped to shape such corporations, but firm managers equally assisted in the gradual corrosion of capitalism. Today, the appetite for creative destruction, the zeitgeist of capitalism, is all too often displaced by a custodian corporate culture that is defensive about the future and protective of its privileges. It is a culture that incubates habits, strategies and models that cannot be married with uncertainty or a disposition for radical innovation and life-or-death competition.


pages: 366 words: 94,209

Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity by Douglas Rushkoff

activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, bank run, banking crisis, barriers to entry, benefit corporation, bitcoin, blockchain, Burning Man, business process, buy and hold, buy low sell high, California gold rush, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, centralized clearinghouse, citizen journalism, clean water, cloud computing, collaborative economy, collective bargaining, colonial exploitation, Community Supported Agriculture, corporate personhood, corporate raider, creative destruction, crowdsourcing, cryptocurrency, data science, deep learning, disintermediation, diversified portfolio, Dutch auction, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, fiat currency, Firefox, Flash crash, full employment, future of work, gamification, Garrett Hardin, gentrification, gig economy, Gini coefficient, global supply chain, global village, Google bus, Howard Rheingold, IBM and the Holocaust, impulse control, income inequality, independent contractor, index fund, iterative process, Jaron Lanier, Jeff Bezos, jimmy wales, job automation, Joseph Schumpeter, Kickstarter, Large Hadron Collider, loss aversion, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, Marshall McLuhan, means of production, medical bankruptcy, minimum viable product, Mitch Kapor, Naomi Klein, Network effects, new economy, Norbert Wiener, Oculus Rift, passive investing, payday loans, peer-to-peer lending, Peter Thiel, post-industrial society, power law, profit motive, quantitative easing, race to the bottom, recommendation engine, reserve currency, RFID, Richard Stallman, ride hailing / ride sharing, Ronald Reagan, Russell Brand, Satoshi Nakamoto, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, social graph, software patent, Steve Jobs, stock buybacks, TaskRabbit, the Cathedral and the Bazaar, The Future of Employment, the long tail, trade route, Tragedy of the Commons, transportation-network company, Turing test, Uber and Lyft, Uber for X, uber lyft, unpaid internship, Vitalik Buterin, warehouse robotics, Wayback Machine, Y Combinator, young professional, zero-sum game, Zipcar

Whether it’s MOOCs replacing in-person college courses, Web sites replacing stores, apps replacing newspapers, or streaming MP3s replacing radio, it’s only creative destruction. Either get with the program or get run over by it. That’s the sanguine interpretation of creative destruction, held by the winners since industrialism began. If you’re the unhappy victim of a plant closing, the resident of an abandoned community, or the owner of an undercut small business, you are an unfortunate but necessary sacrifice to business innovation and free-market competition. Free-market advocates celebrate creative destruction as the way that scrappy young upstarts come and unseat the most powerful companies on the block.

Meanwhile, the company’s path to success involves destroying the dozens or hundreds of independent taxi companies in the markets it serves. On the surface, it’s the creative destruction of centralized taxi commissions and bureaucracy. The result, however, is the elimination of independently operating businesses and their replacement with a single platform. Former business owners become Uber’s unprotected contractors.* Market pricing and competition are replaced by a monopoly’s algorithmic price-fixing. Creative destruction? Perhaps—but with a twist: the new businesses of the digital era aren’t stand-alone companies like stores or manufacturers but, as they say, entire platforms.

In the purely rational light of the computer program, a digital corporation is optimized to convert cash into share price—money and value into pure capital. Most of the people enabling this have no reason to believe it is harmful to the business landscape, much less to human beings. At worst, argue today’s generation of technopreneurs, we are undergoing a whole lot of “creative destruction.” That’s the process, first coined by Marx but popularized by Austrian-American economic philosopher Joseph Schumpeter,20 through which the economy achieves a natural churn. Simply put, it’s a description of how young companies with superior technologies or processes invariably unseat established ones.


pages: 345 words: 75,660

Prediction Machines: The Simple Economics of Artificial Intelligence by Ajay Agrawal, Joshua Gans, Avi Goldfarb

Abraham Wald, Ada Lovelace, AI winter, Air France Flight 447, Airbus A320, algorithmic bias, AlphaGo, Amazon Picking Challenge, artificial general intelligence, autonomous vehicles, backpropagation, basic income, Bayesian statistics, Black Swan, blockchain, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, carbon tax, Charles Babbage, classic study, collateralized debt obligation, computer age, creative destruction, Daniel Kahneman / Amos Tversky, data acquisition, data is the new oil, data science, deep learning, DeepMind, deskilling, disruptive innovation, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, financial engineering, fulfillment center, general purpose technology, Geoffrey Hinton, Google Glasses, high net worth, ImageNet competition, income inequality, information retrieval, inventory management, invisible hand, Jeff Hawkins, job automation, John Markoff, Joseph Schumpeter, Kevin Kelly, Lyft, Minecraft, Mitch Kapor, Moneyball by Michael Lewis explains big data, Nate Silver, new economy, Nick Bostrom, On the Economy of Machinery and Manufactures, OpenAI, paperclip maximiser, pattern recognition, performance metric, profit maximization, QWERTY keyboard, race to the bottom, randomized controlled trial, Ray Kurzweil, ride hailing / ride sharing, Robert Solow, Salesforce, Second Machine Age, self-driving car, shareholder value, Silicon Valley, statistical model, Stephen Hawking, Steve Jobs, Steve Jurvetson, Steven Levy, strong AI, The Future of Employment, the long tail, The Signal and the Noise by Nate Silver, Tim Cook: Apple, trolley problem, Turing test, Uber and Lyft, uber lyft, US Airways Flight 1549, Vernor Vinge, vertical integration, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, William Langewiesche, Y Combinator, zero-sum game

We also thank Carl Shapiro and Hal Varian for their book Information Rules, which served as a source of inspiration for our project. The Creative Destruction Lab and Rotman School staffs have been fantastic, particularly Steve Arenburg, Dawn Bloomfield, Rachel Harris, Jennifer Hildebrandt, Anne Hilton, Justyna Jonca, Aidan Kehoe, Khalid Kurji, Mary Lyne, Ken McGuffin, Shray Mehra, Daniel Mulet, Jennifer O’Hare, Gregory Ray, Amir Sariri, Sonia Sennik, Kristjan Sigurdson, Pearl Sullivan, Evelyn Thomasos, and the rest of the Lab team and Rotman staff. We thank our dean, Tiff Macklem, for his enthusiastic support of our work on AI at the Creative Destruction Lab and throughout the Rotman School. Thanks also to the leadership and staff at The Next 36 and The Next AI.

See also trade-offs computers cheap arithmetic from, 12 programming of, effect of prediction on, 38, 40 conditional average, 33 consumer preferences data, 176–177 Consumer Reports, 169 Cook, Tim, 189–190 cookies, 175 Copenhagen metro, 104 corn, hybrid, 158–160, 181 correlations, unanticipated, 36–37 cost, 7–20 of data acquisition, 44 effects of reduced AI, 9–11 of foundational inputs, 11–13 internet, 10–11 of prediction, 13–15, 29 strategy and, 15–17, 169 counterfactual, 62–63 crashes, 200 creative destruction, 215 Creative Destruction Lab (CDL), 2, 134 credit card fraud detection, 24–25, 27, 91 judgment in, 84–88 creditworthiness, 27–28, 66–67 Croesus, King of Lydia, 23 crowd behavior, alterations in, 191 crystal balls, 24 customer churn, 32–36 Daimler, 164 Dartmouth College conference, 31–32, 39 data, 18, 43–51 acquiring, 46–47 business transformation and, 174–176 on customer churn, 35–36 decisions about, 47–49 economies of scale and, 49–50, 216 feedback, 43, 46, 204–205 homogeneity in, 201–202 how machines learn from, 45–47 input, 43 necessity of for prediction, 44–45 prediction with little, 98–102 privacy issues with, 189–190 quality of, 163, 200 real world, autonomous vehicles and, 186–187 retention practices, 216 roles of, 43 security risks with, 199–205 selling consumer, 176–177 signal vs. noise in, 48 strategic advantage from unique, 176–177 as strategic asset, 163–164 strategy and, 174–176 training, 43, 45–47, 202–204 types that humans have and machines don’t, 98 decision making, 18, 73–82.

The three of us have observed the advances in AI from a distinctive vantage point. We are economists who built our careers studying the last great technology revolution: the internet. During years of research, we learned how to cut through the hype to focus on what technology means for decision makers. We also built the Creative Destruction Lab (CDL), a seed-stage program that increases the probability of success for science-based startups. Initially, the CDL was open to all kinds of startups, but by 2015, many of the most exciting ventures were AI-enabled companies. As of September 2017, the CDL had, for the third year in a row, the greatest concentration of AI startups of any program on earth.


pages: 288 words: 64,771

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality by Brink Lindsey

Airbnb, Asian financial crisis, bank run, barriers to entry, Bernie Sanders, Build a better mousetrap, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Cass Sunstein, collective bargaining, creative destruction, Credit Default Swap, crony capitalism, Daniel Kahneman / Amos Tversky, David Brooks, diversified portfolio, Donald Trump, Edward Glaeser, endogenous growth, experimental economics, experimental subject, facts on the ground, financial engineering, financial innovation, financial intermediation, financial repression, hiring and firing, Home mortgage interest deduction, housing crisis, income inequality, informal economy, information asymmetry, intangible asset, inventory management, invisible hand, Jones Act, Joseph Schumpeter, Kenneth Rogoff, Kevin Kelly, knowledge worker, labor-force participation, Long Term Capital Management, low skilled workers, Lyft, Mark Zuckerberg, market fundamentalism, mass immigration, mass incarceration, medical malpractice, Menlo Park, moral hazard, mortgage debt, Network effects, patent troll, plutocrats, principal–agent problem, regulatory arbitrage, rent control, rent-seeking, ride hailing / ride sharing, Robert Metcalfe, Robert Solow, Ronald Reagan, Savings and loan crisis, Silicon Valley, Silicon Valley ideology, smart cities, software patent, subscription business, tail risk, tech bro, too big to fail, total factor productivity, trade liberalization, tragedy of the anticommons, Tragedy of the Commons, transaction costs, tulip mania, Tyler Cowen, Uber and Lyft, uber lyft, Washington Consensus, white picket fence, winner-take-all economy, women in the workforce

III STIFLING GROWTH Modern growth theory, beginning with the pioneering work of Robert Solow and continuing with more recent “endogenous growth” models, makes clear that the ultimate source of economic growth is innovation: the development of new products and production methods that increase the level of output per given unit of capital and labor inputs.15 Of course, the mere introduction of new products and methods is only the first step; innovation’s full effect comes as the new products and methods diffuse throughout the economy. Introduction and diffusion together make for the dynamic process of creative destruction: new ideas originate and spread, old ways of doing things are displaced, and resources are reallocated from less to more productive combinations of capital and labor. Economists’ best measure of this process is total factor productivity (TFP) growth, or growth in output per unit of capital and labor. Regulatory rents do their main damage by interfering with creative destruction. By hampering the formation and growth of new businesses, they impede both the introduction of new products and production methods and the reallocation of resources that accompanies the diffusion of innovations.

Unless we take steps to unrig our liberal democracy, we run a serious risk that the tide of authoritarian populism will extend itself, all the while entrenching the very crony capitalism that it purports to assault. Market rigging by the already powerful is the primary mechanism by which high status is entrenched. While markets naturally produce unequal returns, they also have powerful mechanisms of creative destruction as well. When there are extraordinary returns by a particular firm, a market with low barriers to entry will encourage challengers to undercut incumbents, thereby driving down their rate of return. Challengers, or even the prospect of challenge, can force incumbents to invest their resources in innovation rather than accumulation, thereby driving economic growth.

It requires combining the best of the two liberal traditions of the left and right into a liberalism that fuses both sides of a modernized Madisonian vision—a state strong enough to support a capitalist economy, but one made less susceptible to exploitation by the powerful. At the root of our political economy problem is a failure of competition. As we will show in Chapter 2, the machinery of creative destruction is slowing down, the evidence of which is increasing corporate profits, declining new firm formation, and disturbingly increasing stability of the top firms over time. There is growing recognition of the connection between our sclerotic economy and increasing concentration of ownership, which has generated increasing monopoly rents.


pages: 382 words: 92,138

The Entrepreneurial State: Debunking Public vs. Private Sector Myths by Mariana Mazzucato

Apple II, banking crisis, barriers to entry, Bretton Woods, business cycle, California gold rush, call centre, carbon footprint, carbon tax, Carmen Reinhart, circular economy, clean tech, computer age, creative destruction, credit crunch, David Ricardo: comparative advantage, demand response, deskilling, dual-use technology, endogenous growth, energy security, energy transition, eurozone crisis, everywhere but in the productivity statistics, Fairchild Semiconductor, Financial Instability Hypothesis, full employment, G4S, general purpose technology, green transition, Growth in a Time of Debt, Hyman Minsky, incomplete markets, information retrieval, intangible asset, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, knowledge worker, linear model of innovation, natural language processing, new economy, offshore financial centre, Philip Mirowski, popular electronics, Post-Keynesian economics, profit maximization, Ralph Nader, renewable energy credits, rent-seeking, ride hailing / ride sharing, risk tolerance, Robert Solow, shareholder value, Silicon Valley, Silicon Valley ideology, smart grid, Solyndra, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tony Fadell, too big to fail, total factor productivity, trickle-down economics, vertical integration, Washington Consensus, William Shockley: the traitorous eight

It is not just about setting up a new business (the more common definition), but doing so in a way that produces a new product, or a new process, or a new market for an existing product or process. Entrepreneurship, he wrote, employs ‘the gale of creative destruction’ to replace, in whole or in part, inferior innovations across markets and industries, simultaneously creating new products including new business models, and in so doing destroying the lead of the incumbents (Schumpeter 1949). In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. Each major new technology leads to creative destruction: the steam engine, the railway, electricity, electronics, the car, the computer, the Internet.

It was indeed Leonardo’s work with Ford that inspired the first meetings and work that led to another research project, funded by the Institute for New Economic Thinking (INET), in which Randy Wray and I are today banging heads: a project on how to bring together the thinking of Joseph Schumpeter on innovation and Hyman Minsky on finance, to understand the degree to which finance can be turned into a vehicle for creative destruction rather than its current obsession with Ponzi-like destructive creation. Amongst other friends and colleagues who have provided inspiration through interaction and feedback, I want to mention Fred Block, Michael Jacobs, Paul Nightingale and Andy Stirling, the latter two from SPRU, my new academic home.

While Chapters 3 and 4 look at sectors, Chapter 5 focuses on the history of one particular company – Apple – a company that is often used to laud the power of the market and the genius of the ‘garage tinkerers’ who revolutionize capitalism. A company that is used to illustrate the power of Schumpeterian creative destruction.4 I turn this notion on its head. Apple is far from the ‘market’ example it is often used to depict. It is a company that not only received early stage finance from the government (through the SBIC programme, which is related to the SBIR programme discussed in Chapter 4), but also ‘ingeniously’ made use of publicly funded technology to create ‘smart’ products.


pages: 72 words: 21,361

Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy by Erik Brynjolfsson

Abraham Maslow, Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, business cycle, business process, call centre, combinatorial explosion, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, driverless car, easy for humans, difficult for computers, Erik Brynjolfsson, factory automation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, general purpose technology, hiring and firing, income inequality, intangible asset, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, Kickstarter, knowledge worker, Loebner Prize, low skilled workers, machine translation, minimum wage unemployment, patent troll, pattern recognition, Paul Samuelson, Ray Kurzweil, rising living standards, Robert Gordon, Robert Solow, self-driving car, shareholder value, Skype, the long tail, too big to fail, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, wealth creators, winner-take-all economy, zero-sum game

eISBN 978-0-9847251-0-6 1. Technological innovations – Economic Aspects. I. McAfee, Andrew. II. Title. eBooks created by www.ebookconversion.com Contents 1. Technology’s Influence on Employment and the Economy 2. Humanity and Technology on the Second Half of the Chessboard 3. Creative Destruction: The Economics of Accelerating Technology and Disappearing Jobs 4. What Is to Be Done? Prescriptions and Recommendations 5. Conclusion: The Digital Frontier 6. Acknowledgments To my parents, Ari and Marguerite Brynjolfsson, who always believed in me. To my father, David McAfee, who showed me that there’s nothing better than a job well done.

Chapter 2 discusses digital technology, giving examples of just how astonishing recent developments have been and showing how they have upset well-established ideas about what computers are and aren’t good at. What’s more, the progress we’ve experienced augurs even larger advances in coming years. We explain the sources of this progress, and also its limitations. Creative Destruction: The Economics of Accelerating Technology and Disappearing Jobs Chapter 3 explores the economic implications of these rapid technological advances and the growing mismatches that create both economic winners and losers. It concentrates on three theories that explain how such progress can leave some people behind, even as it benefits society as a whole.

And these days, that means essentially all industries; even the least IT-intensive American sectors like agriculture and mining are now spending billions of dollars each year to digitize themselves. Note also the choice of words by Basu and Fernald: computers and networks bring an ever-expanding- set of opportunities to companies. Digitization, in other words, is not a single project providing one-time benefits. Instead, it's an ongoing process of creative destruction; innovators use both new and established technologies to make deep changes at the level of the task, the job, the process, even the organization itself. And these changes build and feed on each other so that the possibilities offered really are constantly expanding. This has been the case for as long as businesses have been using computers, even when we were still in the front half of the chessboard.


pages: 491 words: 131,769

Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini, Stephen Mihm

Alan Greenspan, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, dark matter, David Ricardo: comparative advantage, debt deflation, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, Glass-Steagall Act, global pandemic, global reserve currency, Gordon Gekko, Greenspan put, Growth in a Time of Debt, housing crisis, Hyman Minsky, information asymmetry, interest rate swap, invisible hand, Joseph Schumpeter, junk bonds, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, means of production, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, Northern Rock, offshore financial centre, oil shock, Paradox of Choice, paradox of thrift, Paul Samuelson, Ponzi scheme, price stability, principal–agent problem, private sector deleveraging, proprietary trading, pushing on a string, quantitative easing, quantitative trading / quantitative finance, race to the bottom, random walk, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, subprime mortgage crisis, Suez crisis 1956, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, too big to fail, tulip mania, Tyler Cowen, unorthodox policies, value at risk, We are all Keynesians now, Works Progress Administration, yield curve, Yom Kippur War

The Austrians even criticize Herbert Hoover, arguing that by overseeing the Reconstruction Finance Corporation, a government agency that made loans to beleaguered banks and local governments, he too stood in the way of the necessary but painful process of “creative destruction.” This dispute over distant crises may seem academic, but it’s not: Austrian School economists make a historical case that the policy response to the recent crisis will eventually give us the worst of all worlds. Instead of letting weak, overleveraged banks, corporations, and even households perish in a burst of creative destruction, thereby allowing the strong to survive and thrive, governments around the world have meddled, creating an economy of the living dead: zombie banks that cling to life with endless lines of credit from central banks; zombie firms like General Motors and Chrysler that depend on government ownership for their continued survival; and zombie households across the United States, kept alive by legislation that keeps creditors at bay and that spares them from losing homes they could not afford in the first place.

It is is an admittedly selective history of economic theory, but its ambition is straightforward: to highlight what’s useful. As always, pragmatism informs our choices. Keynes is here, as is his most radical interpreter, Hyman Minsky, but so are economists from other camps: Robert Shiller, one of the most visible proponents of behavioral economics; Joseph Schumpeter, the grand theorist of capitalist “creative destruction”; and economists of a historical bent, from Charles Kindleberger to Carmen Reinhart and Kenneth Rogoff. Their disparate strands of thought inform our idiosyncratic approach to understanding crises. When Markets Behave Badly Crisis economics is the study of how and why markets fail. Much of mainstream economics, by contrast, is obsessed with showing how and why markets work—and work well.

This skepticism toward government intervention goes hand in hand with another hallmark of the Austrian approach: a focus on individual entrepreneurs as the unit of economic analysis. Though he was hardly a libertarian, Joseph Schumpeter developed a powerful theory of entrepreneurship that is often distilled down to a pair of powerful words: creative destruction. In Schumpeter’s worldview, capitalism consists of waves of innovation in prosperous times, followed by a brutal winnowing in times of depression. This winnowing is to be neither avoided nor minimized: it is a painful but positive adjustment, whose survivors will create a new economic order.


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

affirmative action, Alan Greenspan, Albert Einstein, Andrei Shleifer, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Boeing 747, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Cass Sunstein, central bank independence, classic study, clean water, collapse of Lehman Brothers, congestion charging, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency risk, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, fixed income, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, Great Leap Forward, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, libertarian paternalism, low interest rates, low skilled workers, Malacca Straits, managed futures, market bubble, microcredit, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, school vouchers, seminal paper, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, tech worker, The Market for Lemons, the rule of 72, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional, zero-sum game

Similarly, many states are using money from the massive legal settlement with the tobacco industry to compensate tobacco farmers whose livelihoods are threatened by declining tobacco use. There is a crucial distinction, however, between using the political process to build a safety net for those harmed by creative destruction and using the political process to stop that creative destruction in the first place. Think about the telegraph and the Pony Express. It would have been one thing to help displaced Pony Express workers by retraining them as telegraph operators; it would have been quite another to help them by banning the telegraph. Sometimes the political process does the equivalent of the latter for reasons related to the mohair problem.

First, a market economy inspires hard work and progress not just because it rewards winners, but because it crushes losers. The 1990s were a great time to be involved in the Internet. They were bad years to be in the electric typewriter business. Implicit in Adam Smith’s invisible hand is the idea of “creative destruction,” a term coined by the Austrian economist Joseph Schumpeter. Markets do not suffer fools gladly. Take Wal-Mart, a remarkably efficient retailer that often leaves carnage in its wake. Americans flock to Wal-Mart because the store offers an amazing range of products cheaper than they can be purchased anywhere else.

The pattern is well established: Wal-Mart opens a giant store just outside of town; several years later, the small shops on Main Street are closed and boarded up. Capitalism can be a brutal, cruel process. We look back and speak admiringly of technological breakthroughs like the steam engine, the spinning wheel, and the telephone. But those advances made it a bad time to be, respectively, a blacksmith, a seamstress, or a telegraph operator. Creative destruction is not just something that might happen in a market economy. It is something that must happen. At the beginning of the twentieth century, half of all Americans worked in farming or ranching.15 Now that figure is about one in a hundred and still falling. (Iowa is still losing roughly fifteen hundred farmers a year.)


pages: 238 words: 73,121

Does Capitalism Have a Future? by Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian, Craig Calhoun, Stephen Hoye, Audible Studios

affirmative action, blood diamond, Bretton Woods, BRICs, British Empire, business cycle, butterfly effect, company town, creative destruction, deindustrialization, demographic transition, Deng Xiaoping, discovery of the americas, distributed generation, Dr. Strangelove, eurozone crisis, fiat currency, financial engineering, full employment, gentrification, Gini coefficient, global village, hydraulic fracturing, income inequality, Isaac Newton, job automation, joint-stock company, Joseph Schumpeter, junk bonds, land tenure, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, loose coupling, low skilled workers, market bubble, market fundamentalism, mass immigration, means of production, mega-rich, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, offshore financial centre, oil shale / tar sands, Ponzi scheme, postindustrial economy, reserve currency, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, Suez crisis 1956, too big to fail, transaction costs, vertical integration, Washington Consensus, WikiLeaks

Systemic crisis loosens and shatters the structural constraints that are themselves the inheritance of past dilemmas and the institutional decisions of prior generations. Business as usual becomes untenable and divergent pathways emerge at such historical junctures. Capitalism, along with its creative destruction of older technologies and forms of production, has also been a source of inequality and environmental degradation. Deep capitalist crisis may be an opportunity to reorganize the planetary affairs of humanity in a way that promotes more social justice and a more livable planet. Our big contention is that historical systems can have more or less destructive ways of going extinct while morphing into something else.

A similar reduction in the administrative/service sector is plausible. Schumpeter, the best theorist of capitalist innovation, theorizes that new products—and hence the major sources of profit—come on the market by reorganizing the factors of production into new combinations; this always involves what Schumpeter called “creative destruction.” Nevertheless, Schumpeter-inspired economists also rely on nothing more than extrapolation of past trends for the argument that the number of jobs created by new products will make up for the jobs lost by destruction of old markets. None of these theories take account of the technological displacement of communicative labor, the escape valve that in the past has brought new employment to compensate for the loss of old employment.

We cannot begin to envisage their consumer fads, but we can be sure there will be some. Markets are not fixed by territory. Planet Earth can be filled and yet new markets can be created. That, of course, depends on what some have called the “technological fix” and it is more or less what Joseph Schumpeter called “creative destruction,” which he identified as being the core of capitalist dynamism—entrepreneurs pour money into technological innovation which results in the creation of new industries and the destruction of old ones. The Great Depression in the United States was partially caused by the stagnation of the major traditional industries, while the new emerging industries, though vibrant, were not yet big enough to absorb the surplus capital and labor of the period.


pages: 505 words: 138,917

Open: The Story of Human Progress by Johan Norberg

Abraham Maslow, additive manufacturing, affirmative action, Albert Einstein, anti-globalists, basic income, Berlin Wall, Bernie Sanders, Bletchley Park, Brexit referendum, British Empire, business cycle, business process, California gold rush, carbon tax, citizen journalism, classic study, Clayton Christensen, clean water, cognitive dissonance, collective bargaining, Corn Laws, coronavirus, COVID-19, creative destruction, crony capitalism, decarbonisation, deindustrialization, Deng Xiaoping, digital map, Donald Trump, Edward Jenner, fake news, Fall of the Berlin Wall, falling living standards, Filter Bubble, financial innovation, flying shuttle, Flynn Effect, Francis Fukuyama: the end of history, future of work, Galaxy Zoo, George Gilder, Gini coefficient, global pandemic, global supply chain, global village, green new deal, humanitarian revolution, illegal immigration, income per capita, Indoor air pollution, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, Jeff Bezos, job automation, John von Neumann, joint-stock company, Joseph Schumpeter, Kickstarter, knowledge economy, labour mobility, Lao Tzu, liberal capitalism, manufacturing employment, mass immigration, negative emissions, Network effects, open borders, open economy, Pax Mongolica, place-making, profit motive, RAND corporation, regulatory arbitrage, rent control, Republic of Letters, road to serfdom, Ronald Reagan, Schrödinger's Cat, sharing economy, side project, Silicon Valley, Solyndra, spice trade, stem cell, Steve Bannon, Steve Jobs, Steve Wozniak, Steven Pinker, tacit knowledge, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade liberalization, trade route, transatlantic slave trade, Tyler Cowen, Uber for X, ultimatum game, universal basic income, World Values Survey, Xiaogang Anhui farmers, zero-sum game

Over the same period, even though the world population increased by two billion, the number of extremely poor declined on average by almost 130,000 people every day.57 But these rapid advances have been accompanied by a new controversy over trade, which is threatening to rip globalization apart and create new geopolitical tensions. The benefits from trade come to us through creative destruction. We benefit from trading with a hunter because we stop our own hunting and instead specialize in producing arrows. The US benefits from importing shoes from China because Americans get cheaper shoes and can stop having capital and people employed in shoe manufacturing. We destroy old ways of doing things but for a creative purpose: to get the things we want at a lower cost, and to employ capital and labour in sectors where we can produce more.

We destroy old ways of doing things but for a creative purpose: to get the things we want at a lower cost, and to employ capital and labour in sectors where we can produce more. An increase in a country’s foreign trade by ten percentage points is associated with an increase in productivity between 1.4 and 9.6 per cent.58 This creative destruction is, of course, also what condemns free trade in the eyes of many people. Competition from imports hurts particular sectors, and results in the dislocation of workers. In his inaugural address in 2017, US president Donald Trump echoed the protectionists of the 1920s in saying that free trade had resulted in ‘the ravages of other countries making our products, stealing our companies, and destroying our jobs’.59 The election of Trump has been widely interpreted as a reaction to the loss of US manufacturing jobs and the collapse of the American Rust Belt, just as similar dislocation in other parts of the world has resulted in protectionist reactions there.

They thought very much like Emperor Francis I of Austria-Hungary, who declared to an assembly of teachers in 1821 that if anyone ‘comes with new ideas, he can go, or I will remove him’.13 They were just as likely as the Chinese rulers to try to impose ‘order and stability’, and stifle dissent and innovation that threatened the established order. They were just not very good at it. Attacks on creative destruction that sound like they are straight out of the Ming or Qing handbook proliferated in Europe. Queen Elizabeth denied William Lee a patent for his pioneering knitting machine in 1589 with the argument that it would eliminate jobs. The Privy Council banned a needle-making machine in 1623 and ordered all the needles made with it destroyed.


pages: 537 words: 200,923

City: Urbanism and Its End by Douglas W. Rae

agricultural Revolution, barriers to entry, business climate, City Beautiful movement, classic study, complexity theory, creative destruction, desegregation, edge city, Ford Model T, gentrification, ghettoisation, Glass-Steagall Act, Gunnar Myrdal, income per capita, informal economy, information asymmetry, interchangeable parts, invisible hand, James Watt: steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, Kickstarter, Lewis Mumford, manufacturing employment, New Economic Geography, new economy, New Urbanism, open immigration, Peter Calthorpe, plutocrats, public intellectual, Saturday Night Live, streetcar suburb, the built environment, The Death and Life of Great American Cities, the market place, urban planning, urban renewal, vertical integration, War on Poverty, white flight, Works Progress Administration

I apologize to my colleagues in the Daniels administration both for the numerous deficiencies in my performance on the field of battle in 1990–91 and for the timing of my analysis of the city’s problems nearly a decade after they left office in 1994. With that, I will not further delay the reader. xix C H A P T E R 1 CREATIVE DESTRUCTION AND THE AGE OF URBANISM Industrial mutation . . . incessantly revolutionizes the economic structure from within, incessantly destroying the old, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.— JOSEPH SCHUMPETER, 1946 All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new formed ones become antiquated before they can ossify.

Seen a day or a year at a time, and a neighborhood at a time, the changes seem increasingly normal—as unworthy of discussion as, say, the sharpening cold of morning while the calendar pages for October and November fall away. Only as changes shingle up—one over another and another—does the cumulative effect of creative destruction emerge for all to know.6 Classic Phases of Creative Destruction At any given moment, there will be zones where creation rises and other places where the lengthening shadows of destruction fall. In one such moment, cities of a given type may create themselves and grow larger, only to be eroded with the passage of time. None of this follows a tidy plan; all of it unfolds with the complex interaction of capital, technology, and the gifts of nature or intellect available to each place.

The sum of such casual, public contact at a local level—most of it fortuitous, most of it associated with errands, all of it metered by the person concerned and not thrust upon him by anyone—is a feeling for the public identity of people, a web of public respect and trust, and a resource in time of personal or neighborhood need. The absence of this trust is a disaster to a city street. Its cultivation cannot be institutionalized. Jane Jacobs, 1961 CONTENTS Preface, ix 1 Creative Destruction and the Age of Urbanism, 1 PART ONE / URBANISM 2 Industrial Convergence on a New England Town, 35 3 Fabric of Enterprise, 73 4 Living Local, 113 5 Civic Density, 141 6 A Sidewalk Republic, 183 PART TWO / END OF URBANISM 7 Business and Civic Erosion, 1917–1950, 215 C O N T E N T S 8 Race, Place, and the Emergence of Spatial Hierarchy, 254 9 Inventing Dick Lee, 287 10 Extraordinary Politics: Dick Lee, Urban Renewal, and the End of Urbanism, 312 11 The End of Urbanism, 361 12 A City After Urbanism, 393 Notes, 433 Bibliography, 477 Acknowledgments, 499 Index, 503 viii PREFACE City: Urbanism and Its End pursues the course of urban history across the boundaries that separate political science from sociology, geography, economics, and history itself.


pages: 573 words: 115,489

Prosperity Without Growth: Foundations for the Economy of Tomorrow by Tim Jackson

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, banks create money, Basel III, basic income, biodiversity loss, bonus culture, Boris Johnson, business cycle, carbon footprint, Carmen Reinhart, Cass Sunstein, choice architecture, circular economy, collapse of Lehman Brothers, creative destruction, credit crunch, Credit Default Swap, critique of consumerism, David Graeber, decarbonisation, degrowth, dematerialisation, en.wikipedia.org, energy security, financial deregulation, Financial Instability Hypothesis, financial intermediation, full employment, Garrett Hardin, Glass-Steagall Act, green new deal, Growth in a Time of Debt, Hans Rosling, Hyman Minsky, impact investing, income inequality, income per capita, intentional community, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, liberal capitalism, low interest rates, Mahatma Gandhi, mass immigration, means of production, meta-analysis, Money creation, moral hazard, mortgage debt, Murray Bookchin, Naomi Klein, negative emissions, new economy, ocean acidification, offshore financial centre, oil shale / tar sands, open economy, paradox of thrift, peak oil, peer-to-peer lending, Philip Mirowski, Post-Keynesian economics, profit motive, purchasing power parity, quantitative easing, retail therapy, Richard Thaler, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, science of happiness, secular stagnation, short selling, Simon Kuznets, Skype, smart grid, sovereign wealth fund, Steve Jobs, TED Talk, The Chicago School, The Great Moderation, The Rise and Fall of American Growth, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Tragedy of the Commons, universal basic income, Works Progress Administration, World Values Survey, zero-sum game

‘In such an environment, no firm dares to fall behind in the innovation race, in which the penalty for the laggards is often the death of the company.’22 Clearly, the economy as a whole doesn’t care if individual companies go to the wall. Indeed that must inevitably be the destruction part of the process of creative destruction. It’s a different matter, though, if the process of creative destruction stops, because without it economic expansion eventually stops as well. The role of the entrepreneur – as visionary – is critical here. But so is the role of the investor. It is only through the continuing cycle of investment that creative destruction is possible. When credit dries up, so does innovation. And when innovation stalls, according to Schumpeter, so does the long-term potential for growth itself.

The economist Joseph Schumpeter was the first to suggest that it is in fact novelty, the process of innovation, that is vital in driving economic growth. Capitalism proceeds, he said, through a process of ‘creative destruction’. New technologies and products continually emerge and overthrow existing technologies and products. Ultimately, this means that even successful companies cannot survive simply through cost minimisation.20 The Venezuelan economist Carlota Perez describes how creative destruction has given rise to successive ‘epochs of capitalism’. Each technological revolution ‘brings with it, not only a full revamping of the productive structure, but eventually a transformation of the institutions of governance, of society, and even of ideology and culture’.21 In this climate, the ability to adapt and to innovate – to design, produce and market not just cheaper products but newer and more exciting ones – is vital.

Accordingly, this chapter confronts the structure of modern capitalist economies head on. In particular, it explores two interrelated features of economic life that are central to the growth dynamic. On the one hand, the profit motive stimulates newer, better or cheaper products and services through a continual process of innovation and ‘creative destruction’. At the same time, the market for these goods relies on an expanding consumer demand, driven by a complex social logic. These two factors combine to drive ‘the engine of growth’ on which modern economies depend and lock us in to an ‘iron cage’ of consumerism.3 It’s essential to get a better handle on this twin dynamic, not least so that we can identify the potential to escape from it.


pages: 293 words: 78,439

Dual Transformation: How to Reposition Today's Business While Creating the Future by Scott D. Anthony, Mark W. Johnson

activist fund / activist shareholder / activist investor, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Amazon Web Services, Andy Rubin, Apollo 13, asset light, autonomous vehicles, barriers to entry, behavioural economics, Ben Horowitz, Big Tech, blockchain, business process, business process outsourcing, call centre, Carl Icahn, Clayton Christensen, cloud computing, commoditize, corporate governance, creative destruction, crowdsourcing, death of newspapers, disintermediation, disruptive innovation, distributed ledger, diversified portfolio, driverless car, Internet of things, invention of hypertext, inventory management, Jeff Bezos, job automation, job satisfaction, Joseph Schumpeter, Kickstarter, late fees, Lean Startup, long term incentive plan, Lyft, M-Pesa, Marc Andreessen, Marc Benioff, Mark Zuckerberg, Minecraft, obamacare, Parag Khanna, Paul Graham, peer-to-peer lending, pez dispenser, recommendation engine, Salesforce, self-driving car, shareholder value, side project, Silicon Valley, SimCity, Skype, software as a service, software is eating the world, Steve Jobs, subscription business, the long tail, the market place, the scientific method, Thomas Kuhn: the structure of scientific revolutions, transfer pricing, uber lyft, Watson beat the top human players on Jeopardy!, Y Combinator, Zipcar

Any leader who has gone through a reorganization or reinvention will tell you that, as hard as it is to decide to change, it is easier than actually making the change. The term often used to describe what happened to Kodak, newspaper companies, and Nokia is creative destruction. The phrase is generally credited to economist Joseph Schumpeter from his landmark book Capitalism, Socialism and Demography. In that work he vividly described the “gale of creative destruction” that tears down established institutions. Schumpeter described the destructive power of this gale, coupled with the innovative creation spurred by entrepreneurs, noting, “[T]he problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them.”

However, while we celebrate these vibrant gains, let’s stop and consider the losses when the transition involves the rise of a new company and the death of an old one. Thousands of jobs, if not tens of thousands, are displaced. Communities that grew up around enterprises are torn apart. Tens of thousands of years of accumulated know-how are lost. This kind of creative destruction carries a heavy transaction tax. What if, instead, leaders could harness the underlying forces behind these kinds of changes to power new waves of growth for their companies? More specifically, what if a company sensed the gale coming early enough and built a wall to protect its core business?

It is worth emphasizing, however, that if you can do what you’re currently doing better, faster, and cheaper, that may be good, is likely necessary, and certainly helps support what follows; but it is not the kind of strategic transformation described in this book. Cost cutting, in particular, might be brutally difficult, but on its own it is not what we mean by the word transformation. If all you are doing is playing yesterday’s game better, your odds of surviving Schumpeter’s creative destruction are low. FIGURE 1-5 Strategic choices for leaders Janssen’s decision to focus on disease area strongholds and develop the capability to identify and ingest external innovation is transformation A, because it is a new way to solve an old problem—a move along the horizontal axis of figure 1-5.


pages: 418 words: 128,965

The Master Switch: The Rise and Fall of Information Empires by Tim Wu

accounting loophole / creative accounting, Alfred Russel Wallace, Andy Rubin, AOL-Time Warner, Apple II, barriers to entry, British Empire, Burning Man, business cycle, Cass Sunstein, Clayton Christensen, commoditize, corporate raider, creative destruction, disinformation, disruptive innovation, don't be evil, Douglas Engelbart, Douglas Engelbart, Eben Moglen, Ford Model T, Howard Rheingold, Hush-A-Phone, informal economy, intermodal, Internet Archive, invention of movable type, invention of the telephone, invisible hand, Jane Jacobs, John Markoff, Joseph Schumpeter, Menlo Park, open economy, packet switching, PageRank, profit motive, radical decentralization, road to serfdom, Robert Bork, Robert Metcalfe, Ronald Coase, scientific management, search costs, seminal paper, sexual politics, shareholder value, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, Telecommunications Act of 1996, The Chicago School, The Death and Life of Great American Cities, the long tail, the market place, The Wisdom of Crowds, too big to fail, Upton Sinclair, urban planning, vertical integration, Yochai Benkler, zero-sum game

It is a vision to out-Darwin Darwin: “competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives.” Schumpeter termed this process “creative destruction.” As he put it, “Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.”* Schumpeter’s cycle of industrial life and death is an inspiration for this book. His thesis is that in the natural course of things, the new only rarely supplements the old; it usually destroys it.

The attendant gains are meant to encourage investment in invention. But in the hands of an outside inventor, a patent serves a different function: as sort of corporate shield that can prevent a large industrial power from killing you off or seizing control of your company and the industry. In that oblique sense, a strong patent can sow the seeds of creative destruction. The Bell patent is an example, perhaps the definitive example, of such a seeding patent. Had it not existed, there would never have been a telephone industry independent of the telegraph. Yet it was hardly a foregone conclusion that Bell’s patent would be its salvation. The validity of the license was somewhat in question: Elisha Gray, remember, had filed a similar patent, arguing, not without foundation, that Alexander Bell had stolen from his design the features that made the telephone actually work.

He presents us therefore with a challenging figure: an unabashed monopolist, but a benign one, who lived up to his own ideals of enlightened despotism. The fault in this arrangement therefore lay not so much with Theodore Vail as with the men who would succeed him. * There is a difference between creative destruction and merely destructive destruction. * Technically, Congress declared telephony and the telegraph a common carrier in the Mann Elkins Act of 1910. But more important was Vail’s embrace of the role. † The alternative phrase for a common carrier is a “public calling,” and the latter may capture more of the original meaning


pages: 398 words: 108,889

The Paypal Wars: Battles With Ebay, the Media, the Mafia, and the Rest of Planet Earth by Eric M. Jackson

bank run, business process, call centre, creative destruction, disintermediation, Elon Musk, index fund, Internet Archive, iterative process, Joseph Schumpeter, market design, Max Levchin, Menlo Park, Metcalfe’s law, money market fund, moral hazard, Multics, Neal Stephenson, Network effects, new economy, offshore financial centre, PalmPilot, Peter Thiel, Robert Metcalfe, Sand Hill Road, shareholder value, Silicon Valley, Silicon Valley startup, telemarketer, The Chicago School, the new new thing, Turing test

I may not have fully appreciated it when I accepted the CEO’s invitation to join what was then a tiny startup, but it stands to reason that the creation of most technology ventures is by necessity a tumultuous process. Joseph Schumpeter, a Harvard economist, dubbed the process of entrepreneurs unleashing new innovations into the marketplace as “creative destruction” because it invariably shakes up the existing economic order.1 Looking back, this term is certainly appropriate to describe what PayPal set out to do, and it also hints at the turbulence that accompanied our efforts. Vigorous competition provided one source of that tumult. A torrent of competitors, including multinational banks and established Internet players, also saw the profit potential of our startup’s payment system and raced to construct their own versions.

Scheming Mafioso, capricious regulators, opportunistic lawyers, savvy online identity thieves, volatile capital markets, an antagonistic press—collectively these external challenges proved more daunting than we could have ever foreseen. The modern business environment itself turned out to be more hostile to our band of entrepreneurs than even our fiercest competitor. While Schumpeter intended to imply a certain level of instability when he coined the phrase “creative destruction,” he didn’t mean to suggest that entrepreneurs should have to worry more about these non-competitive threats than about the products they wanted to bring to market. And yet, as PayPal’s experience suggests, today’s innovators must often do just that. These daunting threats and the blood, sweat, and tears they extracted make PayPal’s story all the more important to tell.

Management teams also need to motivate their employees by making them feel that their company is somehow special. Both cases certainly applied to Confinity. But those observations alone don’t diminish the magnitude of Peter’s vision. Even though he never used the exact words, he was pledging to turn Confinity into nothing less than an initiator of the “creative destruction” that Joseph Schumpeter described sixty years earlier. He genuinely seemed to believe that this little startup had the ability to upend the world’s financial systems by giving consumers unparalleled power over their own finances. Say what you will about this vision’s credibility, but in the days that followed his speech I became convinced that Peter wasn’t the only person in the office who believed it.


pages: 337 words: 103,273

The Great Disruption: Why the Climate Crisis Will Bring on the End of Shopping and the Birth of a New World by Paul Gilding

"World Economic Forum" Davos, airport security, Alan Greenspan, Albert Einstein, biodiversity loss, Bob Geldof, BRICs, carbon credits, carbon footprint, carbon tax, clean tech, clean water, Climategate, commoditize, corporate social responsibility, creative destruction, data science, decarbonisation, energy security, Exxon Valdez, failed state, fear of failure, geopolitical risk, income inequality, Intergovernmental Panel on Climate Change (IPCC), John Elkington, Joseph Schumpeter, market fundamentalism, mass immigration, Medieval Warm Period, Naomi Klein, negative emissions, Nelson Mandela, new economy, nuclear winter, Ocado, ocean acidification, oil shock, peak oil, Ponzi scheme, precautionary principle, purchasing power parity, retail therapy, Ronald Reagan, shareholder value, systems thinking, The Spirit Level, The Wealth of Nations by Adam Smith, union organizing, University of East Anglia, warehouse automation

A Very Big Problem 4. Beyond the Limits—The Great Disruption 5. Addicted to Growth 6. Global Foreshock—The Year That Growth Stopped 7. The Road Ahead—Our Planetary Sat Nav 8. Are We Finished? 9. When the Dam of Denial Breaks 10. The One-Degree War 11. How an Austrian Economist Could Save the World 12. Creative Destruction on Steroids—Out with the Old, In with the New 13. Shifting Sands—From Middle Eastern Oil to Chinese Sun 14. The Elephant in the Room—Growth Doesn’t Work 15. The Happiness Economy 16. Yes, There Is Life After Shopping 17. No, the Poor Will Not Always Be with Us 18. Ineffective Inequality 19.

I also do so because I have believed for many years that we are going to need business and markets fully mobilized if we are to achieve the historic task ahead of us. This is where my favorite economist comes in. Both as an activist and as an entrepreneur, I have always been particularly fond of the Austrian economist Joseph Schumpeter and his theories of creative destruction. He pointed out that markets are basically “a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” When I first read these words, I realized they could be describing an ecosystem like a rain forest.

Markets are not an entity or a sector of society, but a system and process that we are all part of. This is what led me to advocate while I was at Greenpeace in the 1990s that markets could be a powerful delivery mechanism for social change. In the context of the scale of change we are discussing with the Great Disruption, we will be seeing Schumpeter’s creative destruction on steroids. First, though, a few comments on business and markets in general. Some people see the behavior of many of our current companies and their executives and respond with a generalized view that companies are bad and markets are inherently destructive because of their single-minded and at times brutal pursuit of financial wealth.


pages: 464 words: 116,945

Seventeen Contradictions and the End of Capitalism by David Harvey

accounting loophole / creative accounting, Alvin Toffler, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, Charles Babbage, classic study, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, company town, cotton gin, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, death from overwork, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, drone strike, end world poverty, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, gentrification, global reserve currency, Great Leap Forward, Guggenheim Bilbao, Gunnar Myrdal, Herbert Marcuse, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, military-industrial complex, Money creation, Murray Bookchin, new economy, New Urbanism, Occupy movement, peak oil, phenotype, planned obsolescence, plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, Savings and loan crisis, scientific management, short selling, Silicon Valley, special economic zone, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

Contradictions have the nasty habit of not being resolved but merely moved around. Mark this principle well, for we will come back to it many times in what follows. The contradictions of capital have often spawned innovations, many of which have improved the qualities of daily life. Contradictions when they erupt into a crisis of capital generate moments of ‘creative destruction’. Rarely is it the case that what is created and what is destroyed is predetermined and rarely is it the case that everything that is created is bad and everything that was good was destroyed. And rarely are the contradictions totally resolved. Crises are moments of transformation in which capital typically reinvents itself and morphs into something else.

The long and painful history of deindustrialisation has left whole cities, like Detroit, bereft of activity and therefore sinks of lost value even as other cities, like Shenzhen or Dhaka, become hubs of activity that demand massive investments in fixed capital coupled with rental extractions and property market booms if they are to succeed. The history of capital is rife with stories of localised booms and crashes in which the contradiction between fixed and circulating capital, between fixity and motion, is strongly implicated. This is the world where capital as a force of creative destruction becomes most visible in the physical landscape we inhabit. The balance between creativity and destruction is often hard to discern, but the costs imposed on whole populations through deindustrialisation, gyrations in property values and land rents, disinvestment and speculative building all emanate from the underlying and perpetual tension between fixity and motion which periodically and in specific geographical locations heightens to the point of an absolute contradiction and, hence, produces a serious crisis.

It sets up a train of technological accommodations and of new problems, and in so doing it creates new opportunity niches that call forth fresh combinations which in turn introduce further technologies – and further problems … The economy therefore exists always in a perpetual openness of change – in perpetual novelty. It exists perpetually in a process of self-creation. It is always unsatisfied … The economy is perpetually constructing itself.6 New technological configurations displace the old and in so doing initiate phases of what the economist Joseph Schumpeter famously dubbed ‘gales of creative destruction’.7 Whole ways of life and modes of being and thinking have to drastically alter to embrace the new at the expense of the old. The recent history of deindustrialisation and its association with dramatic technological reconfigurations is an obvious case in point. Technological change is neither costless nor painless and the cost and the pain are not evenly shared.


The Half Has Never Been Told: Slavery and the Making of American Capitalism by Edward E. Baptist

banks create money, barriers to entry, book value, British Empire, California gold rush, Cass Sunstein, colonial rule, cotton gin, creative destruction, desegregation, double helix, financial innovation, Joseph Schumpeter, manufacturing employment, Monroe Doctrine, moral hazard, mortgage debt, new economy, public intellectual, Ralph Waldo Emerson, scientific management, Scientific racism, Silicon Valley, South Sea Bubble, Thomas Malthus, trade route, transatlantic slave trade, transcontinental railway, vertical integration, Works Progress Administration

Instead, they figure out how to reap their benefits in order to rip market share and profits away from other capitalists who are invested in status-quo technologies and staler business models. They are architects of the dynamic of “creative destruction” that iconoclastic economist Joseph Schumpeter identified as the core engine of capitalism’s growth. Creative destruction produces wrenching shocks, devastating depressions following dramatic expansions, wars and conquests and enslavements. Here, in New Orleans, cotton—and slaves—enabled creative destruction to produce the modern economy.20 Nolte said he did what he did because of something he wanted to feel—what he called “the charm,” the spell he wove upon himself by knitting a “vast web of extended commerce” with himself at the center.

Here, in New Orleans, cotton—and slaves—enabled creative destruction to produce the modern economy.20 Nolte said he did what he did because of something he wanted to feel—what he called “the charm,” the spell he wove upon himself by knitting a “vast web of extended commerce” with himself at the center. And Maspero’s was a room full of Noltes, for whom creative destruction was motivation as much as process. Along with McDonogh and Shepherd and Nolte, their ranks at the tables included such men as Beverley Chew and Richard Relf, William Kenner, Stephen Henderson, and French-speakers like merchant Louis Lecesne and broker P. F. DuBourg, who cut deals with Creole planters. They, too, loved the sense of power they got from exerting what Nolte called the “enterprising mercantile spirit”: cutting out rivals, knowing that people far away were bending to their wills.

Slavery’s defenders had won the arguments that mattered. Even a man whose parents had named him after Granville Sharp had become a speculator.23 In the 1820s, enslaved people on slavery’s frontier faced the yoked-together powers of the world economy, a high demand for their most crucial commodity, and the creatively destructive ruling class of a muscular young republic. And they faced it all alone. For many years, enslaved people could only push back with hushed breaths around ten thousand fires on the southwestern cotton plantations—or in the Southeast, among those left behind. Although they had to keep them from white ears, the words that made up their critique of slavery mattered tremendously to them and to the future.


pages: 183 words: 17,571

Broken Markets: A User's Guide to the Post-Finance Economy by Kevin Mellyn

Alan Greenspan, banking crisis, banks create money, Basel III, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, bond market vigilante , Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, compensation consultant, corporate governance, corporate raider, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, currency risk, disintermediation, eurozone crisis, fiat currency, financial innovation, financial repression, floating exchange rates, Fractional reserve banking, Glass-Steagall Act, global reserve currency, global supply chain, Home mortgage interest deduction, index fund, information asymmetry, joint-stock company, Joseph Schumpeter, junk bonds, labor-force participation, light touch regulation, liquidity trap, London Interbank Offered Rate, low interest rates, market bubble, market clearing, Martin Wolf, means of production, Michael Milken, mobile money, Money creation, money market fund, moral hazard, mortgage debt, mortgage tax deduction, negative equity, Nixon triggered the end of the Bretton Woods system, Paul Volcker talking about ATMs, Ponzi scheme, profit motive, proprietary trading, prudent man rule, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, rising living standards, Ronald Coase, Savings and loan crisis, seigniorage, shareholder value, Silicon Valley, SoftBank, Solyndra, statistical model, Steve Jobs, The Great Moderation, the payments system, Tobin tax, too big to fail, transaction costs, underbanked, Works Progress Administration, yield curve, Yogi Berra, zero-sum game

w 163 I Index A C Anglo-Saxon capitalism, 84 Card Act, 68, 70 Anglo-Saxon-type banking systems, 156 CHIPS.See Clearing House Interbank Payment System Asset securitization, 66 Association of Community Organizers for Reform Now (ACORN), 65 Austerity definition, 98 Euro, real unification, 99 Germany, 99–101 B BankAmericard, 29 Bankcard association/card scheme, 29 Bank-centric system, 110 Bank for International Settlements (BIS), 108 Basel III process, 50–51 Basel process, 27–28 Basel standards, 61 Bipartisan government policy, 72 Boom optimistic entrepreneurs, 77 Bretton Woods system, 26, 111 Bureaucracies, 21 Civilization, 64 Clearing House Interbank Payment System (CHIPS), 106, 107 Committee of Payment and Settlement Systems (CPSS), 108 Community Reinvestment Act (CRA), 65–66 Consumer banking BankAmericard, 29 bankcard association/card scheme, 29 branch-based customer relationship, 29 credit card industry, 30 Depression-era Glass-Steagall Act, 33 “diseconomies of scale”, 35 FDIC, 34 four-party model, 29 institutional investors, 34 “market-centric” financial system, 33 merchant/customer relationship, 29 Pac-Man banking, 34 risky business, 31–33 RTC, 31 SEC, 33 S&L industry, 28, 30 1 166 Index Consumer banking (continued) statistical analysis, 30 US “flow-of-funds” data, 28 usury laws, 30 Consumer Finance Protection Bureau (CFPB), 68 Continuous Linked Settlement (CLS), 108 Creative destruction, 85 Credit-driven economy, 76–77 Crony capitalism, 85 Cross-Pacific economy, 97 D Debtor Nation, 64 Dirigisme, 83 Dollar-centric financial system, 112 Durbin Amendment, 70 E ECB.See European Central Bank Economic consequences, financial regulation, 55 bank P & Ls and balance sheets bureaucratic regulation, 59 capital allocation, 57 capitalism, 57 clearinghouse/transaction switch, 58 contradictory rules, 59 creative destruction, 63 free-market capitalism, 57 full-blown panic leading, 57 lender-of-last-resort function, 58 payments system, 58–59 private-sector banks, 58 consumer protection vs. access, 67–68 financial access restriction brick-and-mortar branches, 66 civilization, 64 clearinghouse, 63 CRA, 65–66 credit judgments, 65 economic enfranchisement, 64 government paternalism, 65 joint-stock banks, 63 loan securitization, 66 mass-market retail banking, 66 national and multilateral development agencies, 65 non-credit worthy segments, 66 ownership society, 66 paychecks, 64 premium/reward cards, 66 individual banker accountability, 55 interest reduction, 56 predatory lending, 56 product differentiation, 68–69 public utility, 55, 56 regulatory, capital, and litigation costs, 56 regulatory compliance and fraud losses, 56 savers and investors, 71–73 shell game asset-securitization process, 61 commercial and industrial loans, 62 credible assessment, 62 Dodd-Frank Act, 63 Federal Reserve Bank, 63 free-market creative destruction, 63 globalization, 62–63 Great Depression, 61 Great Moderation, 61 least-regulated jurisdictions, 61 regulatory arbitrage, 61 relationship banking, 62 retail banking revolution, 63 return-on-equity business, 62 rules-based regulation, 61 securitization and market-based funding, 63 supervision vs. rule making, 59–60 unbanking, 70–71 utility-style banking, 56 European Central Bank (ECB), 6, 99, 102–103 F Federal Deposit Insurance Corporation (FDIC), 34 Index Federal Reserve, 101 Finance consumers, 117 American Revolutionary War song, 118 bondholders and money market funds, 138 Bureau of Labor Statistics, 126 business-to-business commerce, 119 consumerism, 118 credit score, 120–121 debt free, 138–139 “dot-com” bubble, 1264 employment and consumer credit, 121–122 Gallup polling organization, 127 Great Society, 126 house prices, 133 “infrastructure”, 119 innovation and education, America advantage, 129 American living standards, 129 global success, 128 high-stakes examinations, 130 industrial policy, 128 student loans, 131 mass-market pottery, 119 money saving, 136–137 New Class, new elite educated caste, 132–133 non-tradable private sector, 127 one’s station in life, 118 overseas trade, 119 pent-up demand, 119 private-sector employment, 125 property taxes, 127 “self-liquidating”, definition, 119 shelter asset bubbles and distorts markets, 133 electoral process, 134 Japanese economy, 135–136 retirement plans and financial advisors, 134 Travellers Club, 133 wealth effect, 133 short-term insurance scheme, unemployment assistance, 127 stock market, 137–138 structural unemployment American economy, 123–125 labor force participation rate, 123 labor markets, Europe, 122 solidarity, 123 three-tiered system, 122 subsidy-based industries, 125 super-safe government debt, 125 technological creativity and economic progress, 117 unionized public-service employees, 125 US job growth, 126 “welfare to work” requirements, 126 You, Inc., 139 Finance-driven economy, 1, 72 anti-capitalism, 2 capitalism, 1 chronic debt crisis, 22 corporate America, 20 current movie artificial bank earnings, 7 asset prices, 6 banking implosions, 6 borrowers and investors connection, 10 borrowing demand, 7 catastrophic financial bubble, 10 civilization, 10 corporatism, 9 democratic crony capitalism, 9 Dodd-Frank act, 8 economic growth and social stability, 10 financial repression, 9 Glass-Steagall Act, 8 human ingenuity, 10 interbank funding markets, 6 low interest rates and easy money, 6 market collapse, 10 money market, 6 overexuberence, 6 overinvestment and speculation, 6 pre-crisis conditions, 8 printing money, 7 private capital, 7 167 168 Index Finance-driven economy (continued) profitability, 7 quantitative easing, 8 recovery, 8 regulation, 8 regulatory capital rules, 8 resources and tools, 9 shell-shocked enterprises and households, 8 end of employment, 21–22 financial leverage magic and poison CEO class, 14–15 consumer debt, 15–16 disconnection problem, 11–12 market bargain, 10 real economy, 10 wealth financialization, 13–14 working capital, 11 global financial crisis, 2 Great Moderation, 16–18 Great Panic, 18–19 household sector agony, 19–20 investor class, 22 Marx, Karl asset bubble, 5 cash nexus, 4 dot-com bubble, 5 economic revolution, 3 First World War, 4 free markets, 3 French Revolution, 3 globalization, 3 Great Depression, 5 liberalism, 3 normalcy, 4 overproduction and speculation, 3 Wall Street, 4, 5 revolutionary socialism, 2 sovereign debt, 8, 22 Finance reconstruction, 142 bank bashing, 146 “bankers”, 142 business model, challenges, 145 Citigroup, 145 cyclical businesses, 143 government management, 142 legitimacy bonus culture, 148–150 privileged opportunity, longestablished bank, 146 short-term share-price manipulation, 148 state and legal systems, 147 stock price, 147 mark-to-market price, 144 “producers”, 143 profession, definition, 163 prudence, 145, 161–163 root-and-branch transformation, 145 talent pool, 144 “the race for talent”, 143 trust cash management, 160 Financial Market Meltdown, 159 FSA, 159 hackneyed term, 159 information asymmetry, 159 non-bank financial service provider, 161 oversold/up-sold products, 159 utility Anglo-Saxon-type banking systems, 156 big data tools, 158 bills-of-exchange market, 150 branch and payment services, 157 clearinghouse creation, 158 core banking, 154 economic value transmission, 150 exchange of claims, 151 fee-income growth, 155 fiat money system, 151 financial intermediation, 150 financial transactions, 157 flexible contractor/subcontractor relationship, 158 information technology, 156 “liquidity premium”, 152 multidivisional/M-form organization, 153 non-interest income, 155 old-media companies, 157 Index overhead value analysis, 154 “privileged opportunity”, 152 quill pen–era practice, 158 sheer utility value, 155 silos, product business, 153 transaction accounts, 152 venture capital industry, 142 “War for Talent”, 143 Financial crises, 23 affordable housing, 24 banking “transmission” mechanism, 43 Basel III process, 50–51 basel process, 27–28 consumer banking(see Consumer banking) Dodd-Frank, 49–50 domestic banking system, 38 European Union, 51–53 FDIC, 40 finance-driven economy’s leverage machine, 43 Financial Market Meltdown, 25 GDP, 38 Government Policy and Central Banks, market meltdown(see Regulation process) government policy failure, 45 “government-sponsored” public companies, 24 Great Depression, 44 GSEs, 24 legal missteps, 47–48 New Deal, 43 panic-stricken markets, 40 political missteps, 45–47 Ponzi scheme, 42 postwar financial order, 25–27 printing money, 38 private profits and socialized losses, 40 private-sector demand, 43 public-sector demand, 42 quantitative approach, 25 TARP, 39 too-big-to-fail institutions, 41 Triple A bonds, 41 US Federal Reserve System, 38 Financial liberalization, 89 Financial Market Meltdown, 25, 61, 89, 109, 159 Financial repression, 9, 78, 111 Financial Services Authority (FSA), 60, 159 Food and Drug Administration (FDA), 69 Fordism, 68 Free-market capitalism, 89 Free markets, 3 French Revolution, 3 Front-end trading systems, 107 FSA.See Financial Services Authority G GDP, 11 “Giro” payments systems, 151 Global imbalance, 96 Globalization, 3 Global whirlwinds, 93 Asia, finance movement cultural differences, 110–111 Financial Market Meltdown, 109 Interest Equalization Tax, 109 language, law, and business culture, 109 primacy, 109 austerity(see Austerity) British Empire, 30 Chimerica, 97 China and United States cross-Pacific economy, 97 foreign interference and aggression, 98 headline growth rates, 97 repression revolution and series, 97–98 Second World War, 98 Smoot-Hawley Tariff, 98 surpluse trade, 97 sustainable development, 98 Chinese ascendancy, 113 clearing and settlement bottleneck, 106–107 Dynastic China, 112 169 Download from Wow!

The markets and the largest investment-banking operations increasingly came to believe that the authorities would step in to prevent any reckoning for financial bets gone wrong. In this sense, the Great Moderation was at least as much a product of governments as it was of markets, something that pains the heart of free-market fundamentalists. The problem is that in a free market, everyone is free to fail. Indeed, something that Joseph Schumpeter called “creative destruction” is essential to economic progress.The Great Moderation was largely a one-way bet for market participants. Financial crises of one sort or another, which affected companies ranging from Japanese and Swedish banks to Long Term Capital, an American hedge fund, continued to occur. In fact, they became more frequent.

eBook <www.wowebook.com> Distortion of Bank P & Ls and Balance Sheets Banking is often viewed by the uninformed as the very model and engine of capitalism, which is why critics of capitalism choose to occupy Wall Street and the City of London. Actually, banking has always been in many ways a creature of government and politics. Capitalism demands what the great Austrian economist Josef Schumpeter called “creative destruction.” When markets decide which firms deserve money and which don’t, the latter will fail; and along with the failure of firms, whole communities and thousands of workers may suffer real hardship. However, by trial and error, markets will tend to give capital to new, innovative companies, such as Apple, and take it away from companies with no future, such as GM.


Driverless: Intelligent Cars and the Road Ahead by Hod Lipson, Melba Kurman

AI winter, Air France Flight 447, AlphaGo, Amazon Mechanical Turk, autonomous vehicles, backpropagation, barriers to entry, butterfly effect, carbon footprint, Chris Urmson, cloud computing, computer vision, connected car, creative destruction, crowdsourcing, DARPA: Urban Challenge, deep learning, digital map, Donald Shoup, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, General Motors Futurama, Geoffrey Hinton, Google Earth, Google X / Alphabet X, Hans Moravec, high net worth, hive mind, ImageNet competition, income inequality, industrial robot, intermodal, Internet of things, Jeff Hawkins, job automation, Joseph Schumpeter, lone genius, Lyft, megacity, Network effects, New Urbanism, Oculus Rift, pattern recognition, performance metric, Philippa Foot, precision agriculture, RFID, ride hailing / ride sharing, Second Machine Age, self-driving car, Silicon Valley, smart cities, speech recognition, statistical model, Steve Jobs, technoutopianism, TED Talk, Tesla Model S, Travis Kalanick, trolley problem, Uber and Lyft, uber lyft, Unsafe at Any Speed, warehouse robotics

The 739,900 employees in the United States who currently work as automotive service technicians might argue about who’s going to take the 3 am shift, but no one will be there to overhear them.8 As jobs disappear, whether or not new jobs will appear in their place remains an open question. In the 1940s economist Joseph Schumpeter coined the term creative destruction to describe the restructuring process that follows the introduction of a disruptive technology. While this restructuring process touches several major parts of the economy, including equipment used and regulatory structures, its most visible and controversial manifestation is in the destruction of jobs. Economists who are Schumpeterians take a positive view of the cycle of creative destruction. They believe that the net long-term effect of disruptive technology is job creation. Although a disruptive technology may displace an entire sector of workers, Schumpeterian thinking would argue that the long-term effect will be the creation of more and better jobs, as new industries spring out of the ashes of the old one.

Although a disruptive technology may displace an entire sector of workers, Schumpeterian thinking would argue that the long-term effect will be the creation of more and better jobs, as new industries spring out of the ashes of the old one. Proponents of creative destruction point out that as technology destroys old industries, new industries emerge. Countless examples of creative destruction abound. Desktop-publishing software eliminated typesetting jobs, but it created new market opportunities for creative people and small firms who finally had their own tools to design and publish their own brochures, books, and newsletters.

Yet when travelers gained the ability to make their own travel arrangements, Expedia also helped spark the creation of a much larger and more active global tourism industry. As artificial-intelligence software and robots become increasingly sophisticated and skilled, however, the notion that the process of creative destruction ushers in newer and better jobs for displaced workers is falling under greater scrutiny. In the previous two centuries, human workers displaced by a new technology could (at least in theory) find jobs in the industries spawned by the new technology. In contrast, in recent years as the automation of jobs climbs the skill ladder from manual factory jobs to white-collar analytical jobs, it’s harder to find uses for the human workers automation displaces.


pages: 354 words: 105,322

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis by James Rickards

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, Bayesian statistics, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Benoit Mandelbrot, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, blockchain, Boeing 747, Bonfire of the Vanities, Bretton Woods, Brexit referendum, British Empire, business cycle, butterfly effect, buy and hold, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, cellular automata, cognitive bias, cognitive dissonance, complexity theory, Corn Laws, corporate governance, creative destruction, Credit Default Swap, cuban missile crisis, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, disintermediation, distributed ledger, diversification, diversified portfolio, driverless car, Edward Lorenz: Chaos theory, Eugene Fama: efficient market hypothesis, failed state, Fall of the Berlin Wall, fiat currency, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, Fractional reserve banking, G4S, George Akerlof, Glass-Steagall Act, global macro, global reserve currency, high net worth, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Isaac Newton, jitney, John Meriwether, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, Long Term Capital Management, low interest rates, machine readable, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Minsky moment, Money creation, money market fund, mutually assured destruction, Myron Scholes, Naomi Klein, nuclear winter, obamacare, offshore financial centre, operational security, Paul Samuelson, Peace of Westphalia, Phillips curve, Pierre-Simon Laplace, plutocrats, prediction markets, price anchoring, price stability, proprietary trading, public intellectual, quantitative easing, RAND corporation, random walk, reserve currency, RFID, risk free rate, risk-adjusted returns, Robert Solow, Ronald Reagan, Savings and loan crisis, Silicon Valley, sovereign wealth fund, special drawing rights, stock buybacks, stocks for the long run, tech billionaire, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transfer pricing, value at risk, Washington Consensus, We are all Keynesians now, Westphalian system

The opening up of new markets … incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. As with many original observations, what seems obvious in hindsight was revolutionary when it was offered. The fact that capitalism is a dynamic, wealth-creating force was long recognized, starting with Adam Smith in 1776, and by the nineteenth-century classical economists. What was new in Schumpeter’s creative destruction was not the creative force, but the destructive force, the idea that capital must be destroyed to unlock resources for new capitalist endeavors.

Schumpeter, writing in 1942, anticipated Uber’s disruption of taxi monopolies and Matt Drudge’s demolition of daily newspapers. No business, however large, is safe. What keeps a monopolist up at night is not the competition; it’s the future. Schumpeter’s legacy became captive to his devotees—a common fate of iconoclasts. The creative destruction meme is now commonplace (although it may be more urgent than those who recite the cliché realize). What strikes one about Schumpeter is that his creative destruction sketch is a vignette. It takes up five pages in a standard 430-page edition of Capitalism, Socialism and Democracy—barely 1 percent of the book. The remainder, on historical processes, and the inevitability of socialism, is more important for comprehending the economic path we traverse today.

Schumpeter, in his 1942 classic, Capitalism, Socialism and Democracy, wrote, “Traditional theory … has since the time of Marshall and Edgeworth been discovering an increasing number of exceptions to the old propositions about perfect competition and … free trade, that have shaken that unqualified belief in its virtues cherished by the generation which flourished between Ricardo and Marshall. …” Schumpeter wrote this in an analysis of how large-scale enterprises produce positive externalities that offset the perceived problems of bigness. Schumpeter’s point was that the entrepreneur is not as concerned about static competition as the dynamic forces he called “creative destruction.” The latter drives innovation. Modern analysts make the same point about the benefits of smart protectionist policy. American business is not really competing with foreigners, it’s competing with the future, and losing. The issue is not that Ricardian theory is wrong; it’s that the theory relies on assumptions that don’t conform to the real world, and is therefore useless as a guide to policy.


pages: 387 words: 110,820

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

accelerated depreciation, Alan Greenspan, barriers to entry, behavioural economics, Berlin Wall, big-box store, bread and circuses, business cycle, cognitive dissonance, computer age, cotton gin, creative destruction, Daniel Kahneman / Amos Tversky, delayed gratification, deskilling, Donald Trump, Edward Glaeser, fear of failure, Ford Model T, Ford paid five dollars a day, Frederick Winslow Taylor, George Akerlof, global supply chain, global village, Howard Zinn, income inequality, interchangeable parts, inventory management, invisible hand, James Watt: steam engine, Joseph Schumpeter, Just-in-time delivery, knowledge economy, Lewis Mumford, loss aversion, market design, means of production, mental accounting, Monkeys Reject Unequal Pay, Pearl River Delta, planned obsolescence, Ponzi scheme, price anchoring, price discrimination, race to the bottom, Richard Thaler, Ronald Reagan, Salesforce, scientific management, side project, Steve Jobs, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, traveling salesman, Triangle Shirtwaist Factory, ultimatum game, Victor Gruen, washing machines reduced drudgery, working poor, yield management, zero-sum game

Schumpeter, the Harvard economist who in 1943 published the iconic Capitalism, Socialism, and Democracy. The seventh chapter of that work, entitled “The Process of Creative Destruction,” is for many academics a sacred text. “The process of creative destruction,” Schumpeter writes, “is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.” Creative destruction is an elegantly simple idea describing the industrial mutation of old structures into new ones. The department store evolves from and “creatively destructs” the country store; the auto industry evolves from and replaces the horse and buggy business, automation makes many factory and farm jobs obsolete but creates new jobs in information technology, engineering, healthcare, and biotech.

The department store evolves from and “creatively destructs” the country store; the auto industry evolves from and replaces the horse and buggy business, automation makes many factory and farm jobs obsolete but creates new jobs in information technology, engineering, healthcare, and biotech. Creative destruction is a critical and necessary driver of progress. In the stampede toward ever greater efficiencies we have come to expect that institutions will get torn down, factories closed, stores shuttered, workers made redundant, and lives detoured. And that is as it should be: Nostalgia aside, we know deep down that the good old days were not always so good. Few of us would want our own children operating a dangerous machine in a hot, dirty factory or spending blistering summers under the sun behind a plow. But in the Age of Cheap we have lost our balance: Creative destruction is as destructive as ever.

This can be difficult for workers who are displaced and need to find jobs in new growing industries. But the economy overall benefits.” Mankiw’s comments echoed those made by former Federal Reserve Chairman Alan Greenspan, by which he reassured workers hurt by outsourcing by saying they “can be confident that new jobs will displace old ones as they always have.” This brand of “creative destruction,” Mankiw, Greenspan, and others have argued, will allow Americans to focus on what we do best: invention and entrepreneurship. On the surface this seems to make sense. The United States is an innovative powerhouse, a place where ideas are born, raised, and coaxed into profitable ventures. Indian and Chinese workers indeed do good work, and they do it cheaply.


pages: 385 words: 101,761

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire by Bruce Nussbaum

"World Economic Forum" Davos, 3D printing, Airbnb, Albert Einstein, Berlin Wall, Black Swan, Chuck Templeton: OpenTable:, clean water, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Danny Hillis, declining real wages, demographic dividend, disruptive innovation, Elon Musk, en.wikipedia.org, Eugene Fama: efficient market hypothesis, fail fast, Fall of the Berlin Wall, follow your passion, game design, gamification, gentrification, housing crisis, Hyman Minsky, industrial robot, invisible hand, James Dyson, Jane Jacobs, Jeff Bezos, jimmy wales, John Gruber, John Markoff, Joseph Schumpeter, Kevin Roose, Kickstarter, Larry Ellison, lone genius, longitudinal study, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, Max Levchin, Minsky moment, new economy, Paul Graham, Peter Thiel, QR code, race to the bottom, reality distortion field, reshoring, Richard Florida, Ronald Reagan, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, SimCity, six sigma, Skype, SoftBank, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, Tesla Model S, The Chicago School, The Design of Experiments, the High Line, The Myth of the Rational Market, thinkpad, TikTok, Tim Cook: Apple, too big to fail, tulip mania, Tyler Cowen, We are the 99%, Y Combinator, young professional, Zipcar

If Americans shifted just half of their combined $30 trillion of investments in multinational conglomerates to local businesses, argues Cortese, “we’d be living in a far different world.” CREATIVE DESTRUCTION AND CREATIVE EDUCATION In Capitalism, Socialism and Democracy, Joseph Schumpeter wrote, “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.” Schumpeter, the father of “creative destruction,” saw a version of capitalism in which entrepreneurs were the central, disruptive energy sustaining economic growth. The process of creative destruction undermined established monopolies and toppled existing big businesses that made profits from older regulatory, organizational, technological, and ideological regimes.

The process of creative destruction undermined established monopolies and toppled existing big businesses that made profits from older regulatory, organizational, technological, and ideological regimes. We see Schumpeter’s creative destruction thriving in Silicon Valley and among start-ups in general. Apple is pushing aside RIM and Nokia, Facebook is pressuring Google to move into social, online shopping is mauling the malls. But the brutality of the free market isn’t in operation in many industries where large corporations hold sway by virtue of their powerful connections, not their innovations. Creative destruction is the enemy of crony capitalism, as well as a force that’s essential for innovation. An economic model based on creativity would require a transparent economic playing field, a vigorous antitrust policy that breaks up unfair monopolies, and curbs lobbyists who manipulate tax and regulatory policies for special interests.

See also Knowledge mining kinds of knowledge and, 56–57 in knowledge mining, 44 Ziba Design’s work with Lenovo as, 52–56 Immigrants, embodiment and, 49–50 Impossibilities, what-if framing and, 109–10 Improv comedy troupe, 142–43 Incubators, start-up, 203, 244 India, 68–70, 73–76 Indie Capitalism, 223–50 aspects and potentials of, 247–50 creative destruction, creative education, and, 245–47 economics of creativity and, 37–38, 240–45 financial capitalism vs., 227–37 Hewlett-Packard’s failure to innovate and, 223–27 rise of, 237–40 Individual creativity, 20–24, 27–28 Industrial Technology Research Institute, 61–62 IN: Inside Innovation magazine, 11–12, 122 Inkjet printers, 190–97 Innovation. See also Creative Intelligence (CQ) author’s writing and research on (see also Research, creativity) creative destruction and, 242 disruptive, 28–29, 37, 122 evolving models and methodologies of, 27–33 failure of, in Hewlett-Packard, 223–27 financial capitalism and failure of, 234–37 measurement of, 11–14 rising value for, 263–66 Innovation & Design online channel, 11–12, 96 Innovation Awards, 89–90, 105 Innovation gyms, 122, 123–24, 144 Instability.


pages: 483 words: 134,377

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly

air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, classic study, clean water, colonial rule, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Ford Model T, Francisco Pizarro, fundamental attribution error, gentrification, germ theory of disease, greed is good, Gunnar Myrdal, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, low interest rates, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, public intellectual, risk/return, road to serfdom, Robert Solow, Silicon Valley, Steve Jobs, tacit knowledge, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, WikiLeaks, World Values Survey, young professional

Not even shooting and jailing the opposition, manipulating aid to starve the opposition, seizing the lands of villagers and relocating them against their will, and perpetrating violence against villagers who protested has been enough to shake the technocratic faith that autocrats can be trusted to be benevolent implementers of technical solutions. THE COST OF OPPRESSION Oppression has broad consequences that hold back development. It promotes a lack of trust that inhibits trade and facilitates more oppression. It entrenches a hereditary political and economic elite that blocks the creative destruction necessary for development. Oppressive rulers under-invest in public goods for the majority. This last point will bear on the question raised by the contemporary Ethiopia story on whether autocrats are usually good for reducing child mortality. Of course, the abuses of the Meles regime constitute a very small body of evidence, just as its good performance on child mortality over a few years did in the previous chapter.

GHOST COUNTRIES The hostility toward migration as poverty relief in development continues even when migration does benefit those left behind. A big reason for West Virginia’s out-migration was the long-term decline of its coal industry. Among other things, the replacement of trains by automobiles shifted energy demand from coal to petroleum—West Virginia was a victim of creative destruction. Employment in West Virginia coal declined even faster than production did, as mines were mechanized. Other industries suffered badly in West Virginia as its leading industry tanked. Let’s leave behind now the focus only on movement of brains and consider population migration of both skilled and unskilled workers.

Watt’s spending twelve years improving an invention and a factory owner’s financing him only happened because Watt had gotten a patent on his steam engine. Conventional wisdom is that patents are the main or only way the West solved the inadequate incentives for invention problem. But there is also an even more bottom-up solution that was first sketched out by Joseph Schumpeter early in the twentieth century in his famous theory of “creative destruction.” Schumpeter postulated that an innovator has a jump on everyone else on commercializing his or her own idea. The innovator can develop new products that use his ideas, keeping the idea itself secret from other would-be users. What this means is that he has a monopoly on a product, the new product that resulted from his idea, and as with all monopolies he can realize high profits.


pages: 588 words: 131,025

The Patient Will See You Now: The Future of Medicine Is in Your Hands by Eric Topol

23andMe, 3D printing, Affordable Care Act / Obamacare, Anne Wojcicki, Atul Gawande, augmented reality, Big Tech, bioinformatics, call centre, Clayton Christensen, clean water, cloud computing, commoditize, computer vision, conceptual framework, connected car, correlation does not imply causation, creative destruction, crowdsourcing, dark matter, data acquisition, data science, deep learning, digital divide, disintermediation, disruptive innovation, don't be evil, driverless car, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Firefox, gamification, global village, Google Glasses, Google X / Alphabet X, Ignaz Semmelweis: hand washing, information asymmetry, interchangeable parts, Internet of things, Isaac Newton, it's over 9,000, job automation, Julian Assange, Kevin Kelly, license plate recognition, lifelogging, Lyft, Mark Zuckerberg, Marshall McLuhan, meta-analysis, microbiome, Nate Silver, natural language processing, Network effects, Nicholas Carr, obamacare, pattern recognition, personalized medicine, phenotype, placebo effect, quantum cryptography, RAND corporation, randomized controlled trial, Salesforce, Second Machine Age, self-driving car, Silicon Valley, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, Snapchat, social graph, speech recognition, stealth mode startup, Steve Jobs, synthetic biology, the scientific method, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, traumatic brain injury, Turing test, Uber for X, uber lyft, Watson beat the top human players on Jeopardy!, WikiLeaks, X Prize

Read this book and empower yourself for total well-being.” —DEEPAK CHOPRA “I have experienced Dr. Topol’s healing touch as my personal physician after a 99% heart blockage, in his capacity as cardiology advisor to Men’s Health magazine’s 12 million readers, and as the visionary author of The Creative Destruction of Medicine. With The Patient Will See You Now, he’s extending his healing powers where they’ll do the most good: to the patients themselves. Book an appointment to read it now, and you’ll save yourself a lot of copays later.” —PETER MOORE, EDITOR OF Men’s Health MAGAZINE “Eric Topol’s book focuses us on the most important development in health care today: putting the patient at the center of everything.

If you want to know about what medicine looks like today, you should read this book. But if you want to know what medicine will look like tomorrow, then you must absolutely read this book.” —SIDDHARTA MUHKERJEE, M.D., AUTHOR OF The Emperor of All Maladies: A Biography of Cancer The Patient Will See You Now ALSO BY ERIC TOPOL The Creative Destruction of Medicine Copyright © 2015 by Eric Topol Published by Basic Books, A Member of the Perseus Books Group All rights reserved. Printed in the United States of America. No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews.

Beyond that, the CEO is a kind and compassionate manager, exceptionally good at both communication and multitasking. The CEO is really into IT, too, realizing that both her performance and the company’s are greatly enhanced when everyone can make full use of computer resources. How We Get There In the The Creative Destruction of Medicine,29 I delved into how medicine would become digitized, how we had a new capability of digitizing human beings. But that is a far cry from medicine becoming democratized. As Wael Ghonim wrote in Revolution 2.0, “the power of the people is greater than the people in power.”30 While his book was about the Egypt part of the Arab Spring, enabled by smartphones and social media, the assertion now clearly pertains to medicine, too.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, benefit corporation, Black Swan, blood diamond, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, company town, compensation consultant, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Glass-Steagall Act, Gordon Gekko, Greenspan put, hiring and firing, Ida Tarbell, income inequality, independent contractor, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, Money creation, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, Paul Volcker talking about ATMs, pension reform, performance metric, Pershing Square Capital Management, pirate software, plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, prosperity theology / prosperity gospel / gospel of success, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, rolling blackouts, Ronald Reagan, Sand Hill Road, Savings and loan crisis, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, stock buybacks, subprime mortgage crisis, The Chicago School, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

That sentiment also informed the works of political scientist Joseph Schumpeter. He fathered the concept of “creative destruction,” which describes the capitalist process: new, innovative competitors—Apple or Google, for example—arise to challenge established giants such as Microsoft or IBM. The level of such enterprise destruction runs about 10 percent annually in the United States; between 1989 and 1997 an average of 611,000 US firms disappeared each year, out of about 5.7 million.62 Antitrust policy is designed explicitly to promote and nurture this creative destruction process by limiting the ability of aging dinosaur firms to metamorphose into conglomerates that restrict competition; without it, capitalism stagnates as dinosaurs stagger on, dominating weaker innovators.

“Flexicurity” to Ensure Northern Europe Labor Market Flexibility The family capitalism countries recognize the vital role played by flexible labor markets in enhancing productivity growth. They are keenly aware that the Schumpeterian creative destruction process means job churning is an inevitable byproduct of highly beneficial entrepreneurial activity and of economies integrated with international trade. And they have taken to heart economist Eichengreen’s admonition. “Trying to prevent this creative destruction from happening is a recipe for less economic growth and less productivity.”6 As economists at the OECD have explained, there is awareness now in countries such as the Netherlands that “strict employment protections reduce labor market fluidity and prolong unemployment.”7 That appreciation has inculcated a culture of labor market experimentation and continual reform in recent decades in northern Europe with names like “flexicurity.”

The consequence becomes what Mario Monti, sometime Prime Minister of Italy and former President of Milan’s Bocconi University, an antitrust expert, derisively terms, “destruction conservation.”63 Families are harmed by less innovation and also lower living standards, because cartels impose price penalties of 20–25 percent or even higher.64 The Reagan era deregulation of antitrust enforcement derailed Schumpeter’s creative destruction process, with investigations and prosecutions rolled back. For example, there are almost 8,000 banks in America, yet the largest 20 came during this period to control 90 percent of the market, and the top three control 44 percent.65 In the 1980s, the ten biggest banks held fewer than 30 percent of total deposits, but held 54 percent of them in 2012.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

activist fund / activist shareholder / activist investor, Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, bond market vigilante , bonus culture, Bretton Woods, business climate, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, Glass-Steagall Act, God and Mammon, Golden arches theory, Gordon Gekko, greed is good, Hyman Minsky, income inequality, industrial research laboratory, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, labour market flexibility, liberal capitalism, light touch regulation, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, mass immigration, means of production, Menlo Park, money market fund, moral hazard, moveable type in China, Myron Scholes, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Paul Samuelson, plutocrats, price stability, principal–agent problem, profit motive, proprietary trading, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, Veblen good, We are the 99%, Wolfgang Streeck, zero-sum game

As Karl Marx rightly perceived, industrial capitalism has always been inherently unstable, which is the first and most palpable defect of the system. The cycle of profit, speculation, irrational exuberance, stock market panic and recession has been an endemic feature of capitalism since the industrial revolution began. Creative destruction, the process identified by the Austrian-American economist Joseph Schumpeter as the essential dynamic of capitalism, has long been troublesome for those thrown out of work as a result of increasing competition and technological innovation. It also subverts the sense of community. And today, not only is the business cycle made worse by ill-judged monetary policies and manic bankers – there have been more than 100 major banking crises worldwide in the past three decades – but globalisation and economic interdependence have caused basic manufacturing industries to evacuate wholesale from the developed to the developing world, at a high cost in lost jobs.

For some, like Keynes, the motive could still be highly distasteful. In forecasting how the world might look to his generation’s grandchildren, he wrote that the love of money would ultimately be recognised as ‘a somewhat disgusting morbidity’. For others, such as Joseph Schumpeter, the economist best known for identifying creative destruction as the motor of capitalism, there remained a question as to how far the profit-maximising business person could be regarded as an admirable role model. He argued that something was lost in the transition from a society governed by aristocrats, whose values were essentially military, to an industrial age; and, unlike Thomas Carlyle, he saw the businessman as woefully unheroic: With the utmost ease and grace the lords and knights metamorphosed themselves into courtiers, administrators, diplomats, politicians and into military officers of a type that had nothing whatever to do with that of the medieval knight.

And that is why resilience in an entrepreneur is more important than brilliance – grit trumps almost every other trait.’29 Nowadays there is what I would call grudging assent to the proposition that entrepreneurship has a vital role in generating economic growth, an idea that was first given its proper due by the Austrian school of economists in the twentieth century. Joseph Schumpeter, in particular, lauded the role of entrepreneurs in the capitalist process of creative destruction, whereby inefficient businesses are wiped out in the downturn of the economic cycle, and new, more competitive businesses emerge. The Austrians were bested in argument by Keynes in the 1930s on the question of whether to rely on laissez-faire, or on the monetary and fiscal activism that Keynes preferred, as a remedy for unemployment in the Great Depression.


pages: 486 words: 150,849

Evil Geniuses: The Unmaking of America: A Recent History by Kurt Andersen

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, airline deregulation, airport security, Alan Greenspan, always be closing, American ideology, American Legislative Exchange Council, An Inconvenient Truth, anti-communist, Apple's 1984 Super Bowl advert, artificial general intelligence, autonomous vehicles, basic income, Bear Stearns, Bernie Sanders, blue-collar work, Bonfire of the Vanities, bonus culture, Burning Man, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Cass Sunstein, centre right, computer age, contact tracing, coronavirus, corporate governance, corporate raider, cotton gin, COVID-19, creative destruction, Credit Default Swap, cryptocurrency, deep learning, DeepMind, deindustrialization, Donald Trump, Dr. Strangelove, Elon Musk, ending welfare as we know it, Erik Brynjolfsson, feminist movement, financial deregulation, financial innovation, Francis Fukuyama: the end of history, future of work, Future Shock, game design, General Motors Futurama, George Floyd, George Gilder, Gordon Gekko, greed is good, Herbert Marcuse, Herman Kahn, High speed trading, hive mind, income inequality, industrial robot, interchangeable parts, invisible hand, Isaac Newton, It's morning again in America, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jeff Bezos, jitney, Joan Didion, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kevin Roose, knowledge worker, lockdown, low skilled workers, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, Menlo Park, Naomi Klein, new economy, Norbert Wiener, Norman Mailer, obamacare, Overton Window, Peter Thiel, Picturephone, plutocrats, post-industrial society, Powell Memorandum, pre–internet, public intellectual, Ralph Nader, Right to Buy, road to serfdom, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, Saturday Night Live, Seaside, Florida, Second Machine Age, shareholder value, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Stewart Brand, stock buybacks, strikebreaker, tech billionaire, The Death and Life of Great American Cities, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, union organizing, universal basic income, Unsafe at Any Speed, urban planning, urban renewal, very high income, wage slave, Wall-E, War on Poverty, We are all Keynesians now, Whole Earth Catalog, winner-take-all economy, women in the workforce, working poor, young professional, éminence grise

* * * — Joseph Schumpeter was a brilliant economist at Harvard in the first half of the twentieth century who approved of entrepreneurs but also thought capitalism would eventually be replaced by some kind of democratic socialism—not through workers’ uprisings but by means of a subtle, nonviolent process. The “perennial gale of creative destruction” would drive this evolution of advanced economic systems, he wrote (without italics) in 1942, right after the Depression, “the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.” I feel sorry for Schumpeter, who died in 1950, because three decades after his death, with the rise of new-fangled old-fashioned free-market mania, he got famous when that phrase was revived and reduced to a meme, repeated endlessly to explain and justify the sudden obsolescence of blue-collar production workers (and then the lesser white-collar workers).

I feel sorry for Schumpeter, who died in 1950, because three decades after his death, with the rise of new-fangled old-fashioned free-market mania, he got famous when that phrase was revived and reduced to a meme, repeated endlessly to explain and justify the sudden obsolescence of blue-collar production workers (and then the lesser white-collar workers). “Creative destruction” was popularized in a way Schumpeter hadn’t meant it, as a celebratory sorry-suckers catchphrase for the way rootin’-tootin’ Wild West American capitalism permanently is, where the rich and tough and lucky win and losers lose hard. In the 1980s the term and its distorted meaning were enthusiastically embraced by the right and accepted with a shrug by college-educated liberals whose livelihoods didn’t look likely to be creatively destroyed anytime soon by competition from computers or foreigners.

The fraction of all American workers employed in manufacturing peaked in the 1950s, but the actual number of those jobs had held steady through the 1960s and ’70s. In 1980 manufacturing workers’ salaries and benefits still provided the livings for a third of all Americans. But then came this latest wave of creative destruction, and that was that. The collapse of the steel industry came right around 1980—spectacularly, because most of us hadn’t seen it coming, and steel plants were so gigantic, and geographically concentrated, each one the economic foundation of a town or city or whole region. Those were well-paid union jobs that had seemed secure.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

"World Economic Forum" Davos, Alan Greenspan, banking crisis, big-box store, bike sharing, blue-collar work, business cycle, car-free, carbon footprint, collapse of Lehman Brothers, company town, congestion charging, congestion pricing, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial engineering, financial innovation, Ford paid five dollars a day, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, Lewis Mumford, low skilled workers, manufacturing employment, McMansion, megaproject, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, social intelligence, sovereign wealth fund, starchitect, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

Despite the massive deprivation and human suffering they caused, these crises played a fundamental role in propelling the economy forward. They were critical moments when existing economic and social arrangements were remade, enabling new periods of economic growth. Born in the same year that Marx died, the great theorist of innovation and entrepreneurship, Joseph Schumpeter, used the phrase “creative destruction” to describe how economic crises sweep away old firms and outmoded economic systems and practices, clearing the way for entrepreneurs to introduce new technologies and even entirely new industries and setting into motion a new era of growth. John Maynard Keynes saw in these crises the need for government spending to essentially protect capitalism from itself.

Locks, mechanical reapers, typewriters, sewing machines, and eventually bicycles and engines,” notes the economic historian Joel Mokyr.5 Adding to this were major strides forward in continuous-flow technology, initially pioneered in the huge meat-processing factories of Chicago, where it was initially used to speed up the disassembly of livestock, which paved the way for modern mass production à la Henry Ford. These innovations, and many others that were developed during the First Reset, actually helped shape Schumpeter’s theory of creative destruction. Innovation does not slow down during crises, but because the economy is depressed, they tend to accumulate and bunch up. They then come bursting forward as the economy recovers.6 “Well, one reason why upturns follow downturns is that downturns tend to overshoot,” explains the Nobel Prize–winning economist Edmund Phelps regarding the way that crises spur invention and lead to the formation of new businesses.

Just as Hansen and others were advancing this theory and capturing the attention of policy makers and the public, his Harvard colleague Joseph Schumpeter was developing his own, more accurate assessment of the role of innovation in overcoming economic crises. Schumpeter, notes Field, had a much “better fix on what was going on. He developed his homage to the power of creative destruction against the backdrop of what has turned out to be the most technologically dynamic epoch of the twentieth century.”4 Field’s contention about the innovativeness of the Second Reset is based on detailed and meticulous research. Delving deeply into the statistical record, he tracks trends in innovation and in total factor productivity over the entire twentieth century, and examines in detail the rise of specific new technologies.


pages: 593 words: 183,240

An Economic History of the Twentieth Century by J. Bradford Delong

affirmative action, Alan Greenspan, Andrei Shleifer, ASML, asset-backed security, Ayatollah Khomeini, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, centre right, collapse of Lehman Brothers, collective bargaining, colonial rule, coronavirus, cotton gin, COVID-19, creative destruction, crowdsourcing, cryptocurrency, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, Donald Trump, en.wikipedia.org, ending welfare as we know it, endogenous growth, Fairchild Semiconductor, fake news, financial deregulation, financial engineering, financial repression, flying shuttle, Ford Model T, Ford paid five dollars a day, Francis Fukuyama: the end of history, full employment, general purpose technology, George Gilder, German hyperinflation, global value chain, Great Leap Forward, Gunnar Myrdal, Haber-Bosch Process, Hans Rosling, hedonic treadmill, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, housing crisis, Hyman Minsky, income inequality, income per capita, industrial research laboratory, interchangeable parts, Internet Archive, invention of agriculture, invention of the steam engine, It's morning again in America, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, means of production, megacity, Menlo Park, Mikhail Gorbachev, mortgage debt, mutually assured destruction, Neal Stephenson, occupational segregation, oil shock, open borders, open economy, Paul Samuelson, Pearl River Delta, Phillips curve, plutocrats, price stability, Productivity paradox, profit maximization, public intellectual, quantitative easing, Ralph Waldo Emerson, restrictive zoning, rising living standards, road to serfdom, Robert Gordon, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Simon Kuznets, social intelligence, Stanislav Petrov, strikebreaker, structural adjustment programs, Suez canal 1869, surveillance capitalism, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Great Moderation, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, transatlantic slave trade, transcontinental railway, TSMC, union organizing, vertical integration, W. E. B. Du Bois, Wayback Machine, Yom Kippur War

With the coming of the industrial research lab, the modern corporation, and truly cheap ocean and land transport and communication, we went from a world in which economic patterns formed a semistable backdrop of grinding mass poverty to one where the economy was constantly revolutionizing itself, entering into states of increasing prosperity via the discovery, development, and deployment of new technologies. This Schumpeterian process of creative destruction doubled humanity’s potential productive power in each generation. And in the years that followed, the foundations and underpinnings of society were repeatedly shaken and fractured. Long centuries like the one from 1870 to 2010 are, obviously, made up of many, many moments. The twentieth century’s important moments were set in motion by this creative destruction and the corresponding shaking and fracturing. Here are two moments I see as important. Both come from about the long twentieth century’s midpoint: The first moment occurred in 1930 when John Maynard Keynes gave his speech “Economic Possibilities for Our Grandchildren” (quoted in Chapter 7), in which he concluded that economic problems were not humanity’s most “permanent problem,” but that instead, once our economic problems were solved, the real difficulty would be “how to use… freedom from pressing economic cares… to live wisely and agreeably and well.”

.… The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.… Industrial mutation… incessantly revolutionizes the economic structure from within, incessantly destroying the old one.… This process of creative destruction is the essential fact about capitalism.”27 Great wealth is created by the creation. Poverty is imposed by the destruction. And uncertainty and anxiety are created by the threat. Someone had to manage this process, to contain rebellions against the consequences of the “destruction” part if the future of technological possibilities was in fact to be forged.

I would trace the current for which Joseph Schumpeter, born in 1882 one hundred miles away from Vienna in the primarily Czech-speaking part of the Austro-Hungarian Empire, is a convenient marker: society needing to be altered to elevate the role of the entrepreneur and provide space for the “creative destruction” of economic and other patterns of organization he set in motion to counterbalance growing bureaucratization brought about by the increasing scale of capital intensity needed to deploy technological advances.2 I would trace the current for which Karl Popper, born in Vienna in 1902, is a convenient marker: society needing to double down on liberalism and freedom in all their forms to create a truly “open society.”3 I would trace the current for which Peter Drucker, born in Vienna in 1909, is a convenient marker: how freedom, entrepreneurship, cooperation, and organization could never be reconciled by either the laissez-faire market or the really-existing socialist plan, but instead required persuasion, in the form of managers and management, to reconcile points of view and actually get humans to, you know, work cooperatively semiefficiently.4 Moreover, I would trace the current for which Michael Polanyi, born in 1891 in Budapest, is a convenient marker: society needing not just the decentralized mercenary institution of the market, and definitely not needing comprehensive central planning, which can never be more than a fiction, but also needing decentralized fiduciary institutions focused on advancing knowledge about theory and practice, in which status is gained by teaching others—such as in modern science, communities of engineering practice, communities of legal interpretation, honorable journalism, evidence-based politics, and others—and in which people follow rules that have been half-constructed and that half emerged to advance not just the private interests and liberties of the participants but the broader public interest and public liberties as well.5 But as there is neither time nor space for all of that, in this book I can trace only two currents of thought and action: first, the current we have seen before, for which Friedrich von Hayek (born in Vienna in 1899) is a convenient marker (that all that needed to be altered was that market-economic institutions had to be purified and perfected, and supported by an antipermissive social and cultural order) and the current we have seen before for which Michael Polanyi’s older brother Karl, born in Vienna in 1886, is the convenient marker (that the market presumes people only have property rights; but society is made up of humans who insist they have more rights; and society would react—left or right, sensibly or stupidly, but powerfully—against the market presumption).


pages: 205 words: 61,903

Survival of the Richest: Escape Fantasies of the Tech Billionaires by Douglas Rushkoff

"World Economic Forum" Davos, 4chan, A Declaration of the Independence of Cyberspace, agricultural Revolution, Airbnb, Alan Greenspan, Amazon Mechanical Turk, Amazon Web Services, Andrew Keen, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, basic income, behavioural economics, Big Tech, biodiversity loss, Biosphere 2, bitcoin, blockchain, Boston Dynamics, Burning Man, buy low sell high, Californian Ideology, carbon credits, carbon footprint, circular economy, clean water, cognitive dissonance, Colonization of Mars, coronavirus, COVID-19, creative destruction, Credit Default Swap, CRISPR, data science, David Graeber, DeepMind, degrowth, Demis Hassabis, deplatforming, digital capitalism, digital map, disinformation, Donald Trump, Elon Musk, en.wikipedia.org, energy transition, Ethereum, ethereum blockchain, European colonialism, Evgeny Morozov, Extinction Rebellion, Fairphone, fake news, Filter Bubble, game design, gamification, gig economy, Gini coefficient, global pandemic, Google bus, green new deal, Greta Thunberg, Haight Ashbury, hockey-stick growth, Howard Rheingold, if you build it, they will come, impact investing, income inequality, independent contractor, Jane Jacobs, Jeff Bezos, Jeffrey Epstein, job automation, John Nash: game theory, John Perry Barlow, Joseph Schumpeter, Just-in-time delivery, liberal capitalism, Mark Zuckerberg, Marshall McLuhan, mass immigration, megaproject, meme stock, mental accounting, Michael Milken, microplastics / micro fibres, military-industrial complex, Minecraft, mirror neurons, move fast and break things, Naomi Klein, New Urbanism, Norbert Wiener, Oculus Rift, One Laptop per Child (OLPC), operational security, Patri Friedman, pattern recognition, Peter Thiel, planetary scale, Plato's cave, Ponzi scheme, profit motive, QAnon, RAND corporation, Ray Kurzweil, rent-seeking, Richard Thaler, ride hailing / ride sharing, Robinhood: mobile stock trading app, Sam Altman, Shoshana Zuboff, Silicon Valley, Silicon Valley billionaire, SimCity, Singularitarianism, Skinner box, Snapchat, sovereign wealth fund, Stephen Hawking, Steve Bannon, Steve Jobs, Steven Levy, Steven Pinker, Stewart Brand, surveillance capitalism, tech billionaire, tech bro, technological solutionism, technoutopianism, Ted Nelson, TED Talk, the medium is the message, theory of mind, TikTok, Torches of Freedom, Tragedy of the Commons, universal basic income, urban renewal, warehouse robotics, We are as Gods, WeWork, Whole Earth Catalog, work culture , working poor

Along with hundreds of other editorials from business experts, the New York Times ’s op-ed page extolled the virtues of the deal . I got the piece I wrote placed in the Guardian , where contrarian views of American capitalism were more welcome. But the overwhelming consensus was that we were witnessing a tidal change in business history: the young eating the mature, new media conquering old media, creative destruction, the dawn of the digital economy, or the Internet Revolution. From my perspective, this wasn’t the beginning of the Internet Revolution, but the end. We were starting to care less about how this technology could augment humanity and more about how it could bolster a flagging stock exchange.

The company sold off productive assets such as Six Flags theme parks and even their cable company, Roadrunner. In order to survive, Time Warner eventually had to spin off AOL entirely, leaving Time Warner back where it was—except without its assets, personnel, cash, or stock value. So, at least in this case, creative destruction resulted in something more like destructive destruction. It turns out that Steve Case’s team had been looking for months for a way to spend his high-priced shares—an exit strategy—while there was still time. Instead of investing in digital innovation, he hired investment bank Salomon Smith Barney to find an acquisition target.

They seek monopolies because that’s the default structure for controlling a new market. They may use innovative technology to accomplish this, but they never challenge the underlying operating system or its demand for extraction and growth. They justify all the resulting social and economic devastation as what economist Joseph Schumpeter called “creative destruction.” While Schumpeter was quite specifically building on a Marxist idea that changes in industry can create a churn between old wealth and new wealth, the startup economy doesn’t really follow this path. A handful of entrepreneurs and developers may get very rich off their ideas, but for the most part it’s the same institutional investors and family funds profiting now off Google or Facebook who once profited off Intel and IBM or, before that, GE and AT&T.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

Consider, by way of example, how Warren Buffett, the most hallowed figure in America’s pantheon of officially virtuous billionaires, described his investing philosophy in his 2008 letter to shareholders. “A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital,” Buffett explained. “Though capitalism’s ‘creative destruction’ is highly beneficial for society, it precludes investment certainty. A moat that must be continuously rebuilt will eventually be no moat at all.” Like the Venetians who put themselves in the Book of Gold, Buffett understands that the creative destruction of an open economy is good for the country as a whole; but smart capitalists like him prefer to be defended by uncrossable moats. Buffett goes on to explain that his preferred moats are being a low-cost producer or possessing a well-known worldwide brand.

In egalitarian America, and even in aristocratic Europe, the industrial revolution eventually lifted all boats, but it also widened the social divide. One reason that process was traumatic was that it was pretty dreadful to be a loser—from their personal perspective, the Luddites, skilled weavers who wrecked the machines that made their trade unnecessary, had a point. But, as in all meritocratic 1 percent societies, the creative destruction of the industrial revolution was also traumatic for the many who made a good-faith effort to join the party but failed. Indeed, it was the pathos of these would-be winners that inspired Mark Twain to write the novel that gave the era its name. As Twain and coauthor Charles Dudley Warner explained in a preface to the London edition of their novel, The Gilded Age: “In America nearly every man has his dream, his pet scheme, whereby he is to advance himself socially or pecuniarily.

Vast swaths of mankind are having their chance to enjoy some of the fruits of wealth creation. This is the big story. Mr. O’Neill’s empathy for the prospering people of China and India isn’t the only reason to be optimistic about the twin gilded ages. Another is that the experience of the past two centuries has taught us that, with time, the creative destruction of capitalism inevitably brings an overall improvement in everyone’s standard of living. That was what John Baranowski, the general manager of accounting and operations at Greyhound Lines, the bus company based in Dallas, Texas, argued in reply to an essay by W. Brian Arthur, a professor at the Santa Fe Institute, about the computer revolution and the rise of a second economy in which most of the work is done by machines talking to other machines, with little intervention by humans.


pages: 590 words: 153,208

Wealth and Poverty: A New Edition for the Twenty-First Century by George Gilder

accelerated depreciation, affirmative action, Albert Einstein, Bear Stearns, Bernie Madoff, book value, British Empire, business cycle, capital controls, clean tech, cloud computing, collateralized debt obligation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, deindustrialization, diversified portfolio, Donald Trump, equal pay for equal work, floating exchange rates, full employment, gentrification, George Gilder, Gunnar Myrdal, Home mortgage interest deduction, Howard Zinn, income inequality, independent contractor, inverted yield curve, invisible hand, Jane Jacobs, Jeff Bezos, job automation, job-hopping, Joseph Schumpeter, junk bonds, knowledge economy, labor-force participation, longitudinal study, low interest rates, margin call, Mark Zuckerberg, means of production, medical malpractice, Michael Milken, minimum wage unemployment, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, mortgage debt, non-fiction novel, North Sea oil, paradox of thrift, Paul Samuelson, plutocrats, Ponzi scheme, post-industrial society, power law, price stability, Ralph Nader, rent control, Robert Gordon, Robert Solow, Ronald Reagan, San Francisco homelessness, scientific management, Silicon Valley, Simon Kuznets, Skinner box, skunkworks, Solyndra, Steve Jobs, The Wealth of Nations by Adam Smith, Thomas L Friedman, upwardly mobile, urban renewal, volatility arbitrage, War on Poverty, women in the workforce, working poor, working-age population, yield curve, zero-sum game

By 1910 the open hearth process, with its radically different capital plant, had usurped Bessemer and had taken over some two-thirds of the steel market in the United States. As Schumpeter so memorably wrote, “Creative destruction is the essential fact about capitalism... it is by nature a form or method of economic change, and not only never is, but never can be stationary.... The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumer goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.”3 In the struggles of creative destruction neither large nor small companies have a decisive advantage. In general large companies are most valuable in making incremental (though cumulatively very large) productivity improvements and in extending their markets into the world economy, where political and financial clout are often more important than innovation.

Excessive regulation to save us from risks will create the greatest danger of all: a stagnant society in a changing world. The choice is not between comfortable equilibrium and reckless progress. It is between random deterioration by time and change and creative destruction by human genius. Our current regulatory apparatus is in danger of becoming an enemy of creative destruction. Thus the EPA has relentlessly obstructed the use of new biological insecticides—pheromones, pesticidal bacteria, and other organic pest controllers of the sort celebrated by Rachel Carson as potential replacements for DDT. This stance led to continued use of chemicals such as parathion, which is far more poisonous and destructive than DDT, although most of the new biological substances pose no environmental threat at all.

Large firms can sometimes succeed in buying or forming subsidiaries that display much resourcefulness in imitating and improving the innovations of others. What large firms lack is the fertility of numbers and the flexibility of uncommitment. Although any particular small firm may be less creative than a large corporation, the millions of small businesses together are the prime source of creative destruction—the chief initiators of valuable change. The very virtues of size—the economies of scale they offer—are the corollary of their vices: their huge and settled investments in particular capital and management practices. Without expressing any hostility toward the large corporations, one can maintain that the struggle between past and future is in part a struggle between David and Goliath, and this struggle will never end.


pages: 511 words: 151,359

The Asian Financial Crisis 1995–98: Birth of the Age of Debt by Russell Napier

Alan Greenspan, Asian financial crisis, asset allocation, bank run, banking crisis, banks create money, Berlin Wall, book value, Bretton Woods, business cycle, Buy land – they’re not making it any more, capital controls, central bank independence, colonial rule, corporate governance, COVID-19, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, Deng Xiaoping, desegregation, discounted cash flows, diversification, Donald Trump, equity risk premium, financial engineering, financial innovation, floating exchange rates, Fractional reserve banking, full employment, Glass-Steagall Act, hindsight bias, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, if you build it, they will come, impact investing, inflation targeting, interest rate swap, invisible hand, Japanese asset price bubble, Jeff Bezos, junk bonds, Kickstarter, laissez-faire capitalism, lateral thinking, Long Term Capital Management, low interest rates, market bubble, mass immigration, means of production, megaproject, Mexican peso crisis / tequila crisis, Michael Milken, Money creation, moral hazard, Myron Scholes, negative equity, offshore financial centre, open borders, open economy, Pearl River Delta, price mechanism, profit motive, quantitative easing, Ralph Waldo Emerson, regulatory arbitrage, rent-seeking, reserve currency, risk free rate, risk-adjusted returns, Ronald Reagan, Savings and loan crisis, savings glut, Scramble for Africa, short selling, social distancing, South China Sea, The Wealth of Nations by Adam Smith, too big to fail, yield curve

The negative outflow of jobs was all too painful and visible, but the inflow of new forms of capital and capitalists was virtually invisible to the portfolio manager. Institutional investors were just too close to the destruction in the financial services sector to realise that it was a form of creative destruction that would, on a net basis, not be that negative for Hong Kong’s service industries. When it’s the investment professionals themselves who are in the eye of the storm of creative destruction, it becomes almost impossible to remain objective. While the stockbroking community contracted and deflated, the people of Hong Kong went to the polls to elect representatives to the Legislative Council in May 1998.

The prime minister of Malaysia believed these policies were necessary to reduce social tension, but others believed that such policies were best classified as crony capitalism. As market forces had delivered easy monetary conditions, the Malaysian state found it easy to continue to be in the business of pushing wealth towards its favoured Bumiputra entrepreneurs. However, when market forces dictated tighter monetary policy and even the creative destruction supposed to accompany economic contractions, would the government stand by and watch its work towards wealth redistribution reversed? As the then prime minister of Malaysia, Mahathir Mohammad, was a key architect of the New Economic Policy, he was, in my opinion, very unlikely to allow the market to reverse, partially or otherwise, what he saw as his life’s work.

As part of the capitalist infrastructure, it would be surprising if brokers and fund managers did not cheer the decision by Southeast Asian governments to announce liberalisation, which is simply to ‘let the markets work’. However, the euphoria surrounding the embracing of the market masks the reality that the United States/IMF has created this victory for markets to unleash the forces of ‘creative destruction’. Investors do not always cheer the operation of market forces. It was market forces that produced the great equity and bond bear markets of our time and market forces that put Asia into such a dire predicament in the first place. In the long term, it is good news that market forces are being fully unleashed but at this stage, those forces are destructive and are about to chew up and spit out great swathes of equity across Southeast Asia.


pages: 460 words: 131,579

Masters of Management: How the Business Gurus and Their Ideas Have Changed the World—for Better and for Worse by Adrian Wooldridge

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, affirmative action, Alan Greenspan, barriers to entry, behavioural economics, Black Swan, blood diamond, borderless world, business climate, business cycle, business intelligence, business process, carbon footprint, Cass Sunstein, Clayton Christensen, clean tech, cloud computing, collaborative consumption, collapse of Lehman Brothers, collateralized debt obligation, commoditize, company town, corporate governance, corporate social responsibility, creative destruction, credit crunch, crowdsourcing, David Brooks, David Ricardo: comparative advantage, disintermediation, disruptive innovation, do well by doing good, don't be evil, Donald Trump, Edward Glaeser, Exxon Valdez, financial deregulation, Ford Model T, Frederick Winslow Taylor, future of work, George Gilder, global supply chain, Golden arches theory, hobby farmer, industrial cluster, intangible asset, It's morning again in America, job satisfaction, job-hopping, joint-stock company, Joseph Schumpeter, junk bonds, Just-in-time delivery, Kickstarter, knowledge economy, knowledge worker, lake wobegon effect, Long Term Capital Management, low skilled workers, Mark Zuckerberg, McMansion, means of production, Menlo Park, meritocracy, Michael Milken, military-industrial complex, mobile money, Naomi Klein, Netflix Prize, Network effects, new economy, Nick Leeson, Norman Macrae, open immigration, patent troll, Ponzi scheme, popular capitalism, post-industrial society, profit motive, purchasing power parity, radical decentralization, Ralph Nader, recommendation engine, Richard Florida, Richard Thaler, risk tolerance, Ronald Reagan, science of happiness, scientific management, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Steven Levy, supply-chain management, tacit knowledge, technoutopianism, the long tail, The Soul of a New Machine, The Wealth of Nations by Adam Smith, Thomas Davenport, Tony Hsieh, too big to fail, vertical integration, wealth creators, women in the workforce, young professional, Zipcar

They create more firms than other people, as Silicon Valley demonstrates; circulate ideas, money, and skills; fill skills gaps; and mix and match knowledge from different parts of the world. A third thing that policymakers need to do is free their mind of one of Schumpeter’s most bewitching phrases: creative destruction. Creative destruction implies that the destructive part of entrepreneurship is just as weighty as the creative part. This is unnecessarily harsh. Amar Bhide points out that a great deal of creation is of the nondestructive variety. Rather than displacing existing products and services, many innovations promote and satisfy new demands.

Part four takes a closer look at the great debates that this management revolution has unleashed. How do you combine knowledge, learning, and, perhaps the greatest management buzzword of the current era, innovation (chapter nine)? How do companies steer a straight course in an era when old-fashioned strategic planning has fallen out of favor and the gale of creative destruction is raging as never before (chapter ten)? What does globalization actually mean for today’s hassled business people (chapter eleven)? Chapter twelve ponders what all this means for the boardroom. Are all these management ideas putting too much pressure on boards and making leadership impossible?

Some of Peters’s writing can be read as a long hymn of praise to California’s Silicon Valley (“through luck I ended up in Santa Clara county,” he once wrote, “a big god-awful mess populated by failures”).9 California’s computer industry has generated an extraordinary entrepreneurial, freewheeling, convention-busting management style. Schumpeter’s phrase “creative destruction” might have been minted to describe the area, with more than three hundred companies founded every year and almost as many going out of business. If a company succeeds, it is relatively easy to attract people and capital; if it fails, bankruptcy is a badge of honor rather than, as it is in many countries, a permanent black mark; the result is that people and capital are recycled quickly and efficiently to take advantage of changes in fashion or breakthroughs in technology.


pages: 470 words: 130,269

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas by Janek Wasserman

"World Economic Forum" Davos, Abraham Wald, Albert Einstein, American Legislative Exchange Council, anti-communist, battle of ideas, Berlin Wall, Bretton Woods, business cycle, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, different worldview, Donald Trump, experimental economics, Fall of the Berlin Wall, floating exchange rates, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, housing crisis, Internet Archive, invisible hand, John von Neumann, Joseph Schumpeter, laissez-faire capitalism, liberal capitalism, low interest rates, market fundamentalism, mass immigration, means of production, Menlo Park, military-industrial complex, Mont Pelerin Society, New Journalism, New Urbanism, old-boy network, Paul Samuelson, Philip Mirowski, price mechanism, price stability, public intellectual, RAND corporation, random walk, rent control, road to serfdom, Robert Bork, rolodex, Ronald Coase, Ronald Reagan, Silicon Valley, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, union organizing, urban planning, Vilfredo Pareto, Washington Consensus, zero-sum game, éminence grise

Socialism was technically feasible and seemed a logical consequence of industrial capitalism, yet the restrictions required to maintain it made repression a virtual certainty and democracy unattainable.29 At the heart of Schumpeter’s capitalist defense was creative destruction. “The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to the factory . . . incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new own. This process of Creative Destruction is the essential fact of capitalism.” Creative destruction has become Schumpeter’s most lasting contribution. For many people, it captures capitalism’s relentless energy and revolutionary power that boosters applaud and detractors deplore.

Like his predecessors, Schumpeter recognized that some individuals take greater risks to acquire more goods. In pressing their advantage, they transform values and disrupt economic stasis. This was how capitalism functioned best, ensuring constant change and future opportunity. Schumpeter called this process “creative destruction,” which served as the basis for his theory of innovation and development and for his most famous theoretical contribution.42 By the time Schumpeter was thirty, he had established himself as the most important young economist in the Habsburg Empire. His elders, Böhm and Wieser, recommended him for positions and saluted his intellect and ambition.

In the end, Schumpeter defended the capitalist process, even in the face of the Great Depression and the “end of laissez-faire”: “Capitalism and its civilization may be decaying, shading off into something else, or tottering toward a violent death. . . . But the world crisis does not prove it and has, in fact, nothing to do with it. It was not a symptom of a weakening or a failure of the system.” Schumpeter railed against efforts to dampen the creative destruction of capitalism, especially New Deal programs and Keynesian economics: “Without that change or, more precisely, that kind of change which we have called evolution, capitalist society cannot exist; . . . without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion.


pages: 459 words: 138,689

Slowdown: The End of the Great Acceleration―and Why It’s Good for the Planet, the Economy, and Our Lives by Danny Dorling, Kirsten McClure

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Anthropocene, Berlin Wall, Bernie Sanders, Boeing 747, Boris Johnson, British Empire, business cycle, capital controls, carbon tax, clean water, creative destruction, credit crunch, Donald Trump, drone strike, Elon Musk, en.wikipedia.org, Extinction Rebellion, fake news, Flynn Effect, Ford Model T, full employment, future of work, gender pay gap, global supply chain, Google Glasses, Great Leap Forward, Greta Thunberg, Henri Poincaré, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, It's morning again in America, James Dyson, Jeremy Corbyn, jimmy wales, John Harrison: Longitude, Kickstarter, low earth orbit, Mark Zuckerberg, market clearing, Martin Wolf, mass immigration, means of production, megacity, meta-analysis, military-industrial complex, mortgage debt, negative emissions, nuclear winter, ocean acidification, Overton Window, pattern recognition, Ponzi scheme, price stability, profit maximization, purchasing power parity, QWERTY keyboard, random walk, rent control, rising living standards, Robert Gordon, Robert Shiller, Ronald Reagan, School Strike for Climate, Scramble for Africa, sexual politics, Skype, Stephen Hawking, Steven Pinker, structural adjustment programs, Suez crisis 1956, the built environment, Tim Cook: Apple, time dilation, transatlantic slave trade, trickle-down economics, very high income, wealth creators, wikimedia commons, working poor

An apparent paradox, which contrasts the slowdown in productivity growth with accelerating technological change, may be explained by mismeasurement, implementation lags for technologies, and creative destruction processes.”16 What they did not say is that they don’t really know why things are slowing. As conventional economists, they still think there should be acceleration and that acceleration is good, so they try to explain away the slowdown as the result of recent “creative destruction,” the lull before yet another new capitalist dawn and a return to acceleration. Creative destruction, an idea that was devised very recently by an economist, is itself also now dying away. There is nothing creative about destruction, and nothing stable in pinning your hopes on slowdown being a mirage.

The past few generations have seen great progress as well as great suffering, including the worst of all wars in terms of fatalities, genocides, and the most despicable of all human behaviors—including the planning and construction required for the mass nuclear annihilation of our species. It may take us some time to accept that we now face a future of fewer discoveries, fewer new gizmos, and fewer “great men.” But is this such a bitter pill to swallow? We will also see fewer despots, less destruction, and less extreme poverty. And we will never again worship the “creative destruction” that twentieth-century economists so stupidly lauded at the height of the great acceleration. That was the bizarre idea that everything got better as firms went bust because only firms that deserved to go under did so. This nihilistic rhetoric was logical according to their weird (but at the time mainstream) survival-of-the-fittest theory of corporate evolution.

Since around the year 2000, there has been negligible growth in the development of new classes of invention in the United States, despite the tendency there to patent almost any new idea, despite that country’s still growing population, and despite the even more rapid growth of its universities and research and development establishments. Even patenting, after building up a head of steam, appears to have flatlined. A continual steady increase in innovation now requires ever-greater investment to produce any substantial results.17 Much of the current slowdown is still being described as creative destruction, and as the process of “market clearing,” wherein the obsolete is perpetually replaced by the new, as if the capitalist transition were some end-of-history process that we will always be stuck in. Financial analysts make arrogant claims based on the 1980s and 1990s economics they learned at school, failing to spot the new reality.


pages: 309 words: 114,984

The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Computer Age by Robert Wachter

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, AI winter, Airbnb, Atul Gawande, Captain Sullenberger Hudson, Checklist Manifesto, Chuck Templeton: OpenTable:, Clayton Christensen, cognitive load, collapse of Lehman Brothers, computer age, creative destruction, crowdsourcing, deep learning, deskilling, disruptive innovation, driverless car, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, general purpose technology, Google Glasses, human-factors engineering, hype cycle, Ignaz Semmelweis: hand washing, Internet of things, job satisfaction, Joseph Schumpeter, Kickstarter, knowledge worker, lifelogging, Marc Benioff, medical malpractice, medical residency, Menlo Park, minimum viable product, natural language processing, Network effects, Nicholas Carr, obamacare, pattern recognition, peer-to-peer, personalized medicine, pets.com, pneumatic tube, Productivity paradox, Ralph Nader, RAND corporation, Richard Hendricks, Robert Solow, Salesforce, Second Machine Age, self-driving car, seminal paper, Silicon Valley, Silicon Valley startup, six sigma, Skype, Snapchat, software as a service, Steve Jobs, Steven Levy, TED Talk, The future is already here, the payments system, The Wisdom of Crowds, Thomas Bayes, Toyota Production System, Uber for X, US Airways Flight 1549, Watson beat the top human players on Jeopardy!, Yogi Berra

Drucker, “The Coming of the New Organization,” Harvard Business Review, January 1988. 250 “Organizational factors that unlock the value of IT” E. Brynjolfsson and L. M. Hitt, “Beyond the Productivity Paradox: Computers Are the Catalyst for Bigger Changes,” Communications of the ACM 41:49–55 (1998). 250 The business model of “creative destruction” J. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper & Row, 1942). 250 In his 2012 book … Eric Topol E. Topol, The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care (New York: Basic Books, 2012). 252 In my own division of 60 hospitalists http://hospitalmedicine.ucsf.edu/home/index.html. 253 Today at UCSF, many specialty questions are answered R.

., 9–10, 11–12, 17 Bush, Jonathan, 89, 226–233 Carr, Nicholas, 275 case-mix adjustment, 40 Cedars-Sinai Medical Center, 67–68 CellScope, 240–241, 242 Cerner, 8, 86, 187, 222, 231 Chan, Benjamin, 139–141, 149–153, 155–157 Chang, Paul, 53, 62 the chart, 44–45 The Checklist Manifesto (Gawande), 121–122 Christensen, Clay, 12, 61, 217, 229 clinical research, 263–264 clinical trials, 33 clinicopathologic correlation, 31 Clinton, Hillary, 11 Clinton, William “Bill”, 9, 189 Code Blue, 2–4 Codman, Ernest, 36 cognitive computing, 146 cognitive load, 150–151 complementary innovations, 245 computer systems, replacing the physician’s brain, 93–104 computerized decision support for clinicians, 248, 251, 260 computerized provider order entry (CPOE), 130 “Connecting for Health” initiative, 10, 17 cookbook medicine, 120 Cramer, Jim, 233 creative destruction, 250–251 The Creative Destruction of Medicine (Topol), 250 CT scans, 50–51 quality of images, 52–53 stacking, 53 data. See big data data entry, 74 See also scribes data janitors, 117 data wrangling, 117 “death panel” canard, 15 deBronkart, Dave, 198 Delbanco, Tom, 172–178 DeSalvo, Karen, 115–116, 216–217 deskilling, 275 Dhaliwal, Gurpreet, 99, 110, 112 diagnosis, 94–104 See also Isabel DICOM, 51 differential diagnoses, 97 disruptive innovation, 61, 217 distractions, 83–84 doctor visits, 263 doctor-patient relationships, 29–30, 173–174 and technology, 27–28 Doctors and Their Patients (Shorter), 30 doctor’s notes, 30–34, 268 the faceless note, 78–80 See also medical records Donabedian, Avedis, 23 dosage errors, 127–130 See also Pablo Garcia medical error case dosage limits, 133–134 Dougherty, Michelle, 82 Doximity, 238 Doyle, Arthur Conan, 97 Dr.

But will a healthcare system that is depleted of energy and money after a big Go Live find the wherewithal to summon up more of both when the need to do so is subtle and the returns on investment so mysterious? The answer will depend on how much heat hospitals and doctors feel to improve their performance. And that will turn on how closely healthcare hews to the normal laws of thermodynamics of the capitalist economy. The business model of “creative destruction” was first described by Austrian economist Joseph Schumpeter in 1942. It holds that a key driver of corporate innovation is the knowledge that the companies that produce the most value will win, and the rest will be destroyed. The theory—a fundamental component of Christensen’s notion of disruptive innovation—is, in essence, economic Darwinism.


pages: 209 words: 80,086

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

active measures, affirmative action, An Inconvenient Truth, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, classic study, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, disruptive innovation, Dutch auction, Ford Model T, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, Great Leap Forward, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Jon Ronson, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, manufacturing employment, market bubble, market design, meritocracy, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shared worldview, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, tacit knowledge, tech worker, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, vertical integration, winner-take-all economy, working poor, zero-sum game

Hence, economies which had fallen into recession would automatically bounce back to a period of boom and full employment. Keynes rejected this idea and argued that governments could intervene effectively in market economies to solve the problem of recession, or what one of his contemporaries called the “gales of creative destruction.”3 Thus, when demand for goods slackened and workers were threatened with unemployment, governments could act to keep the wheels of industry turning. Keynes also endorsed the idea of a welfare state to protect people from the chronic insecurities that characterize the boom-and-bust nature of capitalist development.

This book explains why much of this money, effort, and enterprise will be wasted, as the neoliberal opportunity bargain fails to deliver on the promise of education, jobs, and rewards. Schooled in the belief that “learning equals earning,” many Americans have unrealistic expectations of a world that does not owe them a living. It has left them ill-prepared to meet the challenges posed by the new era of knowledge capitalism because they are caught in a gale of creative destruction that makes it difficult to find individual solutions to changing economic realities. The demand for managerial and professional jobs in the United States is not only far less than commonly assumed, but the quality of working life and rewards associated with those jobs will not live up to expectations.

Consequently, many of the things we only thought could be done in the West can now be done anywhere in the world not only cheaper but sometimes better. But the move to low-cost brainwork is not the end of the story. Third, although much of the focus has been on the development of new products and services that highlight the demand for creative people exploiting clever ideas, few seemed to notice that the forces of creative destruction are followed by the destruction of the creative. The productive application of new ideas depends on standardization giving employers greater control over the workplace. Improvements in productivity for much of the twentieth century rested on the principles of scientific management outlined by Fredrick Winslow Taylor.


pages: 206 words: 9,776

Rebel Cities: From the Right to the City to the Urban Revolution by David Harvey

Alan Greenspan, Bretton Woods, business cycle, collateralized debt obligation, commoditize, creative destruction, David Graeber, deindustrialization, financial innovation, Garrett Hardin, gentrification, Guggenheim Bilbao, Hernando de Soto, high-speed rail, housing crisis, illegal immigration, indoor plumbing, invisible hand, Jane Jacobs, late capitalism, Lewis Mumford, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, means of production, military-industrial complex, moral hazard, mortgage debt, mortgage tax deduction, Murray Bookchin, New Urbanism, Ponzi scheme, precariat, profit maximization, race to the bottom, radical decentralization, Robert Shiller, Savings and loan crisis, special economic zone, the built environment, the High Line, The Wealth of Nations by Adam Smith, Tragedy of the Commons, transcontinental railway, urban planning, We are the 99%, William Langewiesche, Works Progress Administration

Even relatively conservative urban administrations are seeking ways to use their powers to experiment with new ways of both producing the urban and of democratizing governance. Is there an urban alternative and, if so, from where might it come? Surplus absorption through urban transformation has, however, an even darker aspect. It has entailed rep e ated bouts of urban restructuring through "creative destruction." Th is nearly always has a class dimension, since it is usually the poor, the underprivileged, and those m arginalized from political power that suffer first and foremost from this pro cess. Violence is required to achieve the new urban world on the wreckage of the old. H aussmann tore thro ugh the old Parisian impoverished quar­ ters, using powe rs of expropriation for supposedly public benefit, and did so in the name of civic improvement, environmental restoration , and urban renovation.

Th is is the kind of structure that will block the exploration of more pro ductive alternatives. It certainly does not proffer any right to the city. 22 REBEL CITIES Urbanization, we may conclude, has played a crucial role in the absorp­ tion of capital surpluses and has done so at ever- increasing geographical scales, but at the price of burgeoning processes of creative destruction that entail the disp ossession of the urban masses of any right to the city whatsoever. Perio dically this ends in revolt, as in Paris in 1 87 1 , when the d ispossessed rose up seeking to reclaim the city they had lost. The urban so cial movements of 1 9 68, from Paris and B angkok to Mexico C ity and Ch icago, likewise sought to define a different way of urban living from that which was b e ing imposed upon them by capitalist developers and the state.

To b e sure, this would h ave extended the mission of the Federal Reserve b eyond its normal remit, and gone THE RIGHT TO THE CITY 25 against the ne oliberal ideological rule that, in the event of a conflict between the well-be ing of financial institutions and that of the people, then the people should be left to one side. It would also h ave gone against capitalist class preferences with respect to income d istribution and neo ­ liberal notions of personal responsibility. But just loo k at the price that was paid for observing such rules and the senseless creative destruction that resulted from it. Surely something can and should be done to reverse these political choices? But we h ave yet to see a coherent oppositional m ovement to all of this in the twenty- first century. Th ere is, of co urse, a multitude of diverse urban struggles and urban social movements (in the broadest sense of that term, including movements in the rural h interlands) already in existence.


pages: 272 words: 76,154

How Boards Work: And How They Can Work Better in a Chaotic World by Dambisa Moyo

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Airbnb, algorithmic trading, Amazon Web Services, AOL-Time Warner, asset allocation, barriers to entry, Ben Horowitz, Big Tech, bitcoin, Black Lives Matter, blockchain, Boeing 737 MAX, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon footprint, collapse of Lehman Brothers, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, cryptocurrency, deglobalization, don't be evil, Donald Trump, fake news, financial engineering, gender pay gap, geopolitical risk, George Floyd, gig economy, glass ceiling, global pandemic, global supply chain, hiring and firing, income inequality, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, knowledge economy, labor-force participation, long term incentive plan, low interest rates, Lyft, money: store of value / unit of account / medium of exchange, multilevel marketing, Network effects, new economy, old-boy network, Pareto efficiency, passive investing, Pershing Square Capital Management, proprietary trading, remote working, Ronald Coase, Savings and loan crisis, search costs, shareholder value, Shoshana Zuboff, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, SoftBank, sovereign wealth fund, surveillance capitalism, The Nature of the Firm, Tim Cook: Apple, too big to fail, trade route, Travis Kalanick, uber lyft, Vanguard fund, Washington Consensus, WeWork, women in the workforce, work culture

Forbes, January 22, 2019. www.forbes.com/sites/deloitte/2019/01/22/the-workforce-of-the-future-the-skills-challenge-becomes-more-apparent/#63a44c761ea8. Perry, Mark J. “Fortune 500 Firms 1955 v. 2017: Only 60 Remain, Thanks to the Creative Destruction That Fuels Economic Prosperity.” Carpe Diem (blog). American Enterprise Institute, October 20, 2017. www.aei.org/publication/fortune-500-firms-1955-v-2017-only-12-remain-thanks-to-the-creative-destruction-that-fuels-economic-prosperity/. Petroff, Alanna. “These Countries Want to Ban Gas and Diesel Cars.” CNN Business, September 11, 2017. https://money.cnn.com/2017/09/11/autos/countries-banning-diesel-gas-cars/index.html.

The result is an oligopoly, where a handful of companies (for example, airlines, banks, energy companies, pharmaceuticals, mining conglomerates) dominate their sectors on either a national or global scale. In such situations, there is a risk that companies will collude to set prices and thereby avoid being subject to market forces. Furthermore, the speed in the rise and consolidation of modern technology companies—in many ways the epitome of creative destruction—is adding to the number of companies that stall and simply disappear. According to the April 2014 McKinsey article “Grow Fast or Die Slow,” which studied nearly three thousand companies, only 28 percent reached $100 million in annual revenues, 3 percent achieved $1 billion in annual sales, and just 0.6 percent grew beyond $4 billion.

New York Times, December 16, 2008. www.nytimes.com/2008/12/17/business/economy/17fed.html. Ang, Yuen. “Autocracy with Chinese Characteristics.” Foreign Affairs, May–June 2018. www.foreignaffairs.com/articles/asia/2018-04-16/autocracy-chinese-characteristics. Anthony, Scott D., S. Patrick Viguerie, Evan I. Schwartz, and John Van Landeghem. 2018 Corporate Longevity Forecast: Creative Destruction Is Accelerating. Lexington, MA: Innosight, 2018. www.innosight.com/wp-content/uploads/2017/11/Innosight-Corporate-Longevity-2018.pdf. Anthony, Scott D., S. Patrick Viguerie, and Andrew Waldeck. Corporate Longevity: Turbulence Ahead for Large Organizations. Lexington, MA: Innosight, 2016. www.innosight.com/wp-content/uploads/2016/08/Corporate-Longevity-2016-Final.pdf.


pages: 360 words: 101,038

The Revenge of Analog: Real Things and Why They Matter by David Sax

Airbnb, barriers to entry, big-box store, call centre, cloud computing, creative destruction, death of newspapers, declining real wages, delayed gratification, dematerialisation, deskilling, Detroit bankruptcy, digital capitalism, digital divide, Elon Musk, Erik Brynjolfsson, game design, gentrification, hype cycle, hypertext link, informal economy, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kickstarter, knowledge economy, low cost airline, low skilled workers, mandatory minimum, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, military-industrial complex, Minecraft, new economy, Nicholas Carr, off-the-grid, One Laptop per Child (OLPC), PalmPilot, Paradox of Choice, Peter Thiel, Ponzi scheme, quantitative hedge fund, race to the bottom, Rosa Parks, Salesforce, Second Machine Age, self-driving car, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Steve Jobs, technoutopianism, TED Talk, the long tail, Travis Kalanick, Tyler Cowen, upwardly mobile, warehouse robotics, Whole Earth Catalog, work culture

But it also contains an inherent assumption: that analog economic activity, and its associated work, will gradually be replaced or simply disappear. The commonly stated goal behind the digital economy is the maxim of creative destruction, coined by economist Joseph Schumpeter in the 1950s to describe revolutionary industrial change that consumes old processes and ways of doing business. As the hundreds of thousands of people who once worked for Kodak can tell you, this destruction is real. Wherever the digital economy has staked a claim, analog incumbents have struggled to adapt. The narrative of the digital economy’s creative destruction truly blossomed during the expansion of two forces in the 1990s: the first major commercialization of the Internet through web browsers, and the rapid globalization of a post–cold war world, where American neoliberalism became the dominant economic and political philosophy.

Put down that shovel! Throw out your wrench! Pick up a mouse and make a website! If Netscape, Microsoft, and outsourcing defined the first round of the digital economy, then the current version is defined by Facebook, Apple, and automation. It is an advanced and accelerated version of the same creative destruction from twenty years ago, but on a larger scale, with much more computing power in the hands of billions. The digital economy has become even more attractive, especially in the wake of the Great Recession, which decimated traditionally dominant businesses such as manufacturing, real estate, and finance.

They point to previous disruptions in labor during the technological leaps of the industrial and mechanized ages, and show how these eventually led to greater middle-class wealth and job creation, as productivity increased. The difference now is the speed and scale of digital disruption, which has accelerated exponentially, and the fact that all of that digital progress has not resulted in any real gains in productivity. The creative destruction so beloved by the technology industry is destroying jobs far more quickly than it can create them. One of the factors Brynjolfsson and McAfee credit for this is the so-called superstar nature of technology companies. The digital technology industry tends to be dominated by monopolies with few, if any, competitors.


pages: 410 words: 101,260

Originals: How Non-Conformists Move the World by Adam Grant

"World Economic Forum" Davos, Abraham Maslow, Albert Einstein, Apple's 1984 Super Bowl advert, availability heuristic, barriers to entry, behavioural economics, Bluma Zeigarnik, business process, business process outsourcing, Cass Sunstein, classic study, clean water, cognitive dissonance, creative destruction, cuban missile crisis, Daniel Kahneman / Amos Tversky, Dean Kamen, double helix, Elon Musk, emotional labour, fear of failure, Firefox, George Santayana, Ignaz Semmelweis: hand washing, information security, Jeff Bezos, Jeff Hawkins, job satisfaction, job-hopping, Joseph Schumpeter, Kevin Roose, Kickstarter, Lean Startup, Louis Pasteur, Mahatma Gandhi, Mark Zuckerberg, meta-analysis, minimum viable product, Neil Armstrong, Nelson Mandela, Network effects, off-the-grid, PalmPilot, pattern recognition, Paul Graham, Peter Thiel, Ralph Waldo Emerson, random walk, risk tolerance, Rosa Parks, Saturday Night Live, Sheryl Sandberg, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, Steven Pinker, TED Talk, The Wisdom of Crowds, women in the workforce

Thank you for buying an authorized edition of this book and for complying with copyright laws by not reproducing, scanning, or distributing any part of it in any form without permission. You are supporting writers and allowing Penguin to continue to publish books for every reader. ISBN 978-0-698-40577-6 Version_1 For Allison Contents Also by Adam Grant Title Page Copyright Dedication Foreword by Sheryl Sandberg 1 Creative Destruction The Risky Business of Going Against the Grain 2 Blind Inventors and One-Eyed Investors The Art and Science of Recognizing Original Ideas 3 Out on a Limb Speaking Truth to Power 4 Fools Rush In Timing, Strategic Procrastination, and the First-Mover Disadvantage 5 Goldilocks and the Trojan Horse Creating and Maintaining Coalitions 6 Rebel with a Cause How Siblings, Parents, and Mentors Nurture Originality 7 Rethinking Groupthink The Myths of Strong Cultures, Cults, and Devil’s Advocates 8 Rocking the Boat and Keeping It Steady Managing Anxiety, Apathy, Ambivalence, and Anger Actions for Impact Acknowledgments References Index Foreword BY SHERYL SANDBERG Chief operating officer of Facebook and founder of LeanIn.Org Adam Grant is the perfect person to write Originals because he is one.

— Originals is one of the most important and captivating books I have ever read, full of surprising and powerful ideas. It will not only change the way you see the world; it might just change the way you live your life. And it could very well inspire you to change your world. 1 Creative Destruction The Risky Business of Going Against the Grain “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” George Bernard Shaw On a cool fall evening in 2008, four students set out to revolutionize an industry.

Although we may not all aspire to start our own companies, create a masterpiece, transform Western thought, or lead a civil rights movement, we do have ideas for improving our workplaces, schools, and communities. Sadly, many of us hesitate to take action to promote those ideas. As economist Joseph Schumpeter famously observed, originality is an act of creative destruction. Advocating for new systems often requires demolishing the old way of doing things, and we hold back for fear of rocking the boat. Among nearly a thousand scientists at the Food and Drug Administration, more than 40 percent were afraid that they would face retaliation if they spoke up publicly about safety concerns.


pages: 370 words: 102,823

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth by Michael Jacobs, Mariana Mazzucato

Alan Greenspan, balance sheet recession, banking crisis, basic income, Bear Stearns, Bernie Sanders, Bretton Woods, business climate, business cycle, carbon tax, Carmen Reinhart, central bank independence, circular economy, collaborative economy, complexity theory, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, decarbonisation, degrowth, deindustrialization, dematerialisation, Detroit bankruptcy, double entry bookkeeping, Elon Musk, endogenous growth, energy security, eurozone crisis, factory automation, facts on the ground, fiat currency, Financial Instability Hypothesis, financial intermediation, Ford Model T, forward guidance, full employment, G4S, general purpose technology, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Internet of things, investor state dispute settlement, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, low interest rates, low skilled workers, Martin Wolf, mass incarceration, military-industrial complex, Modern Monetary Theory, Money creation, Mont Pelerin Society, neoliberal agenda, Network effects, new economy, non-tariff barriers, ocean acidification, paradox of thrift, Paul Samuelson, planned obsolescence, Post-Keynesian economics, price stability, private sector deleveraging, quantitative easing, QWERTY keyboard, railway mania, rent-seeking, road to serfdom, savings glut, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Solyndra, Steve Jobs, stock buybacks, systems thinking, the built environment, The Great Moderation, The Spirit Level, Thorstein Veblen, too big to fail, total factor productivity, Tragedy of the Commons, transaction costs, trickle-down economics, universal basic income, vertical integration, very high income

It has been the primary source of improvements in productivity, and consequent rises in living standards, for the past 200 years.46 Thus a theory of how capitalist economies work must include at its centre the dynamics of innovation, understanding both the specific nature of the investments needed and the turbulent, non-equilibrium outcomes that result. But this requires a much more dynamic and accurate understanding of how innovation occurs than is provided by the orthodox economic theories of imperfect competition. Drawing on Schumpeter’s original analysis of the processes of ‘creative destruction’,47 modern evolutionary economics has done much to explain how firms operate with bounded rationality in circumstances of uncertainty, where markets tend towards disequilibrium and change is path-dependent. Growth results from the co-evolution of technologies, firms and industry structures and the social and public institutions which support them, connected by complex feedback processes.48 Promoting innovation therefore requires attention to be paid to each of these elements.

O’Sullivan, ‘Maximizing Shareholder Value: A New Ideology for Corporate Governance’, Economy and Society, vol. 29, no. 10, 2000, pp. 13–35. 15 Ibid. 16 W. Lazonick, ‘Profits without Prosperity’, Harvard Business Review, vol. 92, no. 9, 2014, pp. 46–55. 17 M. Mazzucato, ‘Financing innovation: creative destruction vs. destructive creation’, in special issue of Industrial and Corporate Change, M. Mazzucato, ed., vol. 22, no. 4, 851–67, See repurchases/R&D in Figure 1, p. 857. 18 J. Kay, ‘The Kay review of UK Equity Markets and Long-term Decision Making’, Final Report (July 2012). 19 P. A. Hall and D.

Daly, Beyond Growth: The Economics of Sustainable Development, Sussex, UK, Beacon Press, 1996 Edward Elgar Publishing Limited. Cheltenham, UK. Northampton, MA, USA; H. Daly, ‘Georgescu-Roegen versus Solow/Stiglitz’, Ecological Economics, vol. 22, no. 3, 1997, pp. 261–66. 17 P. Aghion and P. W. Howitt, ‘A model of growth through creative destruction’, Econometrica, vol. 60, no. 2, 1992. pp. 323–51; G. Grossman and E. Helpman, Innovation and Growth in the Global Economy, London, MIT Press, 1991, p. 77; P. Romer, ‘Endogenous technological change’, Journal of Political Economy, vol. 98, no. 5, 1990, pp. S71–S102; R. M. Solow, ‘Technical change and the aggregate production function’, Review of Economics and Statistics, vol. 39, no. 3, 1957, pp. 312–20R; R.


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Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole by Benjamin R. Barber

"World Economic Forum" Davos, Abraham Maslow, addicted to oil, AltaVista, American ideology, An Inconvenient Truth, AOL-Time Warner, Berlin Wall, Bertrand Russell: In Praise of Idleness, Bill Gates: Altair 8800, bread and circuses, business cycle, Celebration, Florida, collective bargaining, creative destruction, David Brooks, delayed gratification, digital divide, do well by doing good, Donald Trump, double entry bookkeeping, Dr. Strangelove, G4S, game design, George Gilder, Gordon Gekko, greed is good, Herbert Marcuse, Hernando de Soto, illegal immigration, informal economy, invisible hand, John Perry Barlow, Joseph Schumpeter, laissez-faire capitalism, late capitalism, liberal capitalism, Marc Andreessen, McJob, microcredit, Naomi Klein, new economy, New Journalism, Norbert Wiener, nuclear winter, Panopticon Jeremy Bentham, Paradox of Choice, pattern recognition, presumed consent, profit motive, race to the bottom, Ralph Nader, retail therapy, road to serfdom, Robert Bork, Ronald Reagan, Saturday Night Live, Silicon Valley, SimCity, spice trade, Steve Jobs, telemarketer, The Fortune at the Bottom of the Pyramid, the market place, The Wisdom of Crowds, Thomas L Friedman, Thorstein Veblen, trade route, Tyler Cowen, vertical integration, Virgin Galactic, X Prize

Also see Ulf Hannerz, Cultural Complexity: Studies in the Social Organization of Meaning (New York: Columbia University Press, 1992). 10. Tyler Cowen, Creative Destruction: How Globalization Is Changing the World’s Cultures (Princeton, N.J.: Princeton University Press, 2002), p. 22. Cowen’s title is drawn from classical economist Joseph Schumpeter’s description of the dialectic in which capitalism “creatively” destroys the stages it traverses as it evolves. For a detailed critique of Cowen, see my review “Brave New McWorld,” Los Angeles Times Book Review, February 2, 2003. 11. Cowen, Creative Destruction, p. 44. 12. Constance Classen, “Sugar Cane, Coca-Cola and Hypermarkets: Consumption and Surrealism in the Argentine Northwest,” in Howes, ed., Cross-Cultural Consumption, p. 39.

What is clear is that either capitalism will replace the infantilist ethos with a democratic ethos, and regain its capacity to promote equality as well as profit, diversity as well as consumption, or infantilization will undo not only democracy but capitalism itself. Much will depend on our capacity to make sense out of infantilization and relate it to the not-so-creative destruction of consumerism’s survival logic. The idea of an “infantilist ethos” is as provocative and controversial as the idea of what Weber called the “Protestant ethic.” Infantilization is at once both an elusive and a confrontational term, a potent metaphor that points on the one hand to the dumbing down of goods and shoppers in a postmodern global economy that seems to produce more goods than people need; and that points, on the other hand, to the targeting of children as consumers in a market where there are never enough shoppers.

Truth is, the hare has changed the snake as much as the snake has changed the hare!” But wait a week or two, as the python’s relatives will learn, and the hare will have vanished and the serpent, happily hissing about the virtues of hybridization as he goes, will slither on in search of new prey. Cultural exchange may be a form of Schumpeter’s “creative destruction,” but over time dialectic is trumped by power, and destruction merely destroys, leaving behind an ever more homogenized, monocultural marketplace. Creolization does not create very much: it may sometimes slow the pace of homogenization, but it cannot arrest it altogether. For every Christian rocker who thinks she can use pop music to displace pop culture’s secularism with religion conversions, there is a Christian skeptic who worries (with considerable reason) that being cool will always mean being “flippant, irreverent, quick with biting one-liners that exalt self and embarrass others” and that far from being designed by hip Christians hoping to strengthen spiritual resolve, “Christian rock was the invention of big, profit-motivated record companies who were looking for a way of selling more rock music.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

3D printing, Airbnb, Alan Greenspan, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, book value, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, clean tech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Crossrail, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, financial engineering, first-past-the-post, Ford Model T, forward guidance, full employment, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, high-speed rail, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land bank, liquidity trap, low interest rates, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, peer-to-peer rental, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, working-age population, Zipcar

Throw in insights from political economy, namely how policymakers get caught up with the crowd or captured by it, and the dangers of micromanagement become clear. The task for policymakers is particularly tricky because while the inherent instability of capitalism is a source of progress – the “gales of creative destruction” produced by innovators and entrepreneurs, as Joseph Schumpeter put it – it can also be extremely damaging: when the financial system runs away with itself and then crashes. Economies need to try to capture the benefits of entrepreneurs’ efforts – or the animal spirits of investors, as Keynes put it – while limiting the financial sector’s excesses.

As Keynes pointed out: “If the animal spirits are dimmed and the spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die.”541 While Keynes and Schumpeter are often viewed as polar opposites, there is merit in synthesising their insights. Keynes is right that governments need to step in to support demand in a slump, while Schumpeter is correct that we need to enable economies to adjust so that the process of creative destruction can resume. “In the long term, it is absolutely necessary for insolvent banks, firms, and households to go bankrupt and emerge anew; keeping them alive indefinitely only prolongs the problem,” economist Nouriel Roubini rightly observes. What does that mean for economic policy? It should be bold and modest.

As Chapter 12 will explain, a good way to encourage greater dynamism and decency would be to slash taxes on labour and replace them with a tax on land values. Policy changes Capitalism is inherently unstable. Often this is a good thing. Economic growth rarely proceeds in a straight line; rather it involves waves of creative destruction: entrepreneurial innovation that ditches the old for the new, as Chapter 11 will discuss. Trying to curb this inherent dynamism tends to lead to stagnation. So policymakers ought to unleash it, while helping people to adapt and providing them with the security they need to embrace change. Unfortunately, the financial system has an inherent tendency to amplify this instability and indeed create its own through the “destructive creation” of bubbles that end in busts.


pages: 403 words: 87,035

The New Geography of Jobs by Enrico Moretti

assortative mating, Bill Gates: Altair 8800, business climate, call centre, classic study, clean tech, cloud computing, corporate raider, creative destruction, desegregation, Edward Glaeser, Fairchild Semiconductor, financial innovation, gentrification, global village, hiring and firing, income inequality, industrial cluster, Jane Jacobs, Jeff Bezos, Joseph Schumpeter, knowledge economy, labor-force participation, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, medical residency, Menlo Park, new economy, peer-to-peer lending, Peter Thiel, Productivity paradox, Recombinant DNA, Richard Florida, Sand Hill Road, Shenzhen special economic zone , Silicon Valley, Skype, Solyndra, special economic zone, Startup school, Steve Jobs, Steve Wozniak, tech worker, thinkpad, Tyler Cowen, Tyler Cowen: Great Stagnation, Wall-E, Y Combinator, zero-sum game

This dynamic was first recognized by Karl Marx, who thought that it was evidence of the inherent instability of the capitalist system. Eighty years later, however, the Austrian economist Joseph Schumpeter pointed out that instead of being a flaw, this process of “creative destruction” is capitalism’s greatest strength and its engine of growth. By its very nature, the innovation sector is the part of a market economy where creative destruction matters the most. The Princeton economist Alan Blinder recently noted that in the 1950s, companies making television sets were at the heart of America’s high-tech sector and generating tens of thousands of high-paying jobs.

The forces of attraction anchor skilled labor and specialized services, but the exact kind of skills and services evolve over time, following the changing terrain of the technological frontier. This ensures that when good jobs turn into bad jobs, there is a wave of new jobs to replace them. In a sense, this creative destruction is the true hallmark of a successful cluster, one that leverages the forces of attraction in a dynamic way. “All politics is local,” as the former Speaker of the House Tip O’Neill said. For all its glamour, the world of innovation is even more local than politics. Different communities differ in their values and expertise, and this inevitably shapes the new ideas they generate, ultimately resulting in something unique and hard to reproduce elsewhere.

.), [>] geography of, [>]–[>] and charity, [>]–[>], [>] and divorce rate, [>]–[>], [>] and life expectancy, [>]–[>] and political participation, [>]–[>] of mobility, [>] and education level, [>]–[>], [>] relocation vouchers to remedy, [>]–[>] and skilled immigrants, [>] from under-investment in human capital, [>] worldwide decrease in, [>] Infant mortality, post-WWII drop in (U.S.), [>] Ingenuity, and iPhone, [>] Innovation, [>]–[>], [>], [>], [>] and Apple’s success, [>] benefits from, [>] and compensation for knowledge spillovers, [>] and creative destruction, [>]–[>] and need to adapt, [>] cross-fertilization in, [>] destruction and renovation from, [>] economic rent from, [>]–[>] ecosystem for, [>] and foreign competition, [>]–[>] global competition for, [>] Great Divergence heightened by, [>]–[>] by immigrants, [>] jobs creation by, [>]–[>] and outsourcing, [>]–[>] and locational freedom, [>]–[>] math and science as ingredients in, [>] and patents, [>] at Pixar, [>]–[>] and standard of living, [>] Innovation hubs, [>]–[>], [>], [>] and cluster building, [>]–[>] cost of living in, [>] location of, [>]–[>] (see also Forces of Agglomeration) and state educational programs, [>] in unlikely-seeming places, [>]–[>] unpredictable locations of, [>]–[>] and U.S. economic future, [>] in U.S. vs.


pages: 327 words: 84,627

The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth by Jeremy Rifkin

"World Economic Forum" Davos, 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, American Society of Civil Engineers: Report Card, autonomous vehicles, Bernie Sanders, Big Tech, bike sharing, blockchain, book value, borderless world, business cycle, business process, carbon footprint, carbon tax, circular economy, collective bargaining, corporate governance, corporate social responsibility, creative destruction, decarbonisation, digital rights, do well by doing good, electricity market, en.wikipedia.org, energy transition, failed state, general purpose technology, ghettoisation, green new deal, Greta Thunberg, high-speed rail, hydrogen economy, impact investing, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, it's over 9,000, Joseph Schumpeter, means of production, megacity, megaproject, military-industrial complex, Network effects, new economy, off grid, off-the-grid, oil shale / tar sands, peak oil, planetary scale, prudent man rule, remunicipalization, renewable energy credits, rewilding, Ronald Reagan, shareholder value, sharing economy, Sidewalk Labs, Silicon Valley, Skype, smart cities, smart grid, sovereign wealth fund, Steven Levy, subprime mortgage crisis, the built environment, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade route, union organizing, urban planning, vertical integration, warehouse automation, women in the workforce, zero-sum game

Stranded assets are part of the normal day-to-day operations of the market. But occasionally, an entire class of assets can suddenly and unexpectedly become stranded. This generally happens when a revolutionary new class of technologies and accompanying infrastructure platforms suddenly enter the marketplace, producing what Joseph Schumpeter termed “creative destruction,” quickly depreciating the value of existing assets, killing them off and moving them from the asset column to the liability column on the balance sheet. These types of disruptions most often characterize the great paradigm shifts in communication technology, sources of energy, modes of transport, and changes in habitats—for example, the shift from postal communication to the telephone, or from the horse and buggy to the automobile.

(Post-tax subsidies are, for the most part, the calculation of “environmental damages from energy consumption [which] are just as real as are supply costs … and any failure to fully internalize them means that some of the damages from fossil fuel use are not borne by fuel consumers and this constitutes a form of subsidy.”)5 The question being asked with growing urgency by some and with incredulity by others is how the fossil fuel civilization could be close to an endgame because of the upstart solar and wind energies when the latter made up only 3 percent of global energy capacity in 2017.6 There is a rule of thumb in economics that is little known and mostly ignored, even by the titans of the financial community and business sectors. Yet it is remarkably prescient in predicting Schumpeter’s “creative destruction.” Investors, on the whole, are not swayed as much by the size of an enterprise or sector as by its growth curve. They will continue to stay onboard as long as their investment shows increasing growth. If that growth loses momentum, they take notice and often lose interest. When new challengers emerge, even if they are seemingly inconsequential, if they begin to exhibit accelerating growth or even an exponential growth curve, investors begin to shift allegiance to the challenger.

That is, when a challenger captures just 3 percent of the market from an incumbent, the incumbent’s sales often peak and begin to decline, signaling its eventual demise.7 Kingsmill Bond, who is the lead energy strategist for the Carbon Tracker Initiative, the previously mentioned UK research organization of specialists tracking climate risks, observes that this rule of creative destruction holds across all areas of commerce but is particularly telling when analyzing the transitions in energy paradigms over history. For example, gas lighting demand peaked when electricity accounted for only 3 percent of the lighting.8 Once again, the correlation to consider is not the size of the market vis-à-vis an incumbent and a challenger but rather the sales growth of each player.


pages: 295 words: 87,204

The Capitalist Manifesto by Johan Norberg

AltaVista, anti-communist, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, Boris Johnson, business climate, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charles Babbage, computer age, coronavirus, COVID-19, creative destruction, crony capitalism, data is not the new oil, data is the new oil, David Graeber, DeepMind, degrowth, deindustrialization, Deng Xiaoping, digital map, disinformation, Donald Trump, Elon Musk, energy transition, Erik Brynjolfsson, export processing zone, failed state, Filter Bubble, gig economy, Gini coefficient, global supply chain, Google Glasses, Greta Thunberg, Gunnar Myrdal, Hans Rosling, Hernando de Soto, Howard Zinn, income inequality, independent contractor, index fund, Indoor air pollution, industrial robot, Intergovernmental Panel on Climate Change (IPCC), invention of the printing press, invisible hand, Jeff Bezos, Jeremy Corbyn, job automation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, lockdown, low cost airline, low interest rates, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, means of production, meta-analysis, Minecraft, multiplanetary species, Naomi Klein, Neal Stephenson, Nelson Mandela, Network effects, open economy, passive income, Paul Graham, Paul Samuelson, payday loans, planned obsolescence, precariat, profit motive, Ralph Nader, RAND corporation, rent control, rewilding, ride hailing / ride sharing, Ronald Coase, Rosa Parks, Salesforce, Sam Bankman-Fried, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, Snapchat, social distancing, social intelligence, South China Sea, Stephen Fry, Steve Jobs, tech billionaire, The Spirit Level, The Wealth of Nations by Adam Smith, TikTok, Tim Cook: Apple, total factor productivity, trade liberalization, transatlantic slave trade, Tyler Cowen, Uber and Lyft, uber lyft, ultimatum game, Virgin Galactic, Washington Consensus, working-age population, World Values Survey, X Prize, you are the product, zero-sum game

Climate change has the prerequisites to disturb all our plans in unpleasant ways. In all these areas, constructive free marketeers – and everyone else too – have an awe-inspiring to-do list. But even if we were to solve all these problems, capitalism is not always beautiful, because we humans aren’t and even our utopias are built on trade-offs. The creative destruction that constantly creates wealth and new jobs harms those who lose the old ones. When consumers control production, they will demand a lot of things that are surely illegal, immoral, fattening, addictive, vulgar or impossible. And business owners will not hesitate to satisfy them and become filthy rich and buy a stupid car.

And that is a rare thing in human history. We must not take it for granted, we must make sure that it survives and spreads, precisely because we cannot be satisfied with the progress we have seen so far. What we mustn’t do is throw it all away because it is not as perfect as our fantasies. Without the sometimes problematic creative destruction that is constantly transforming our economy and technology, we will stagnate and lose the opportunity to solve the problems we will be surprised by in the future. Without an open world economy and global supply chains, we would be deprived of future development and close the way out of poverty for hundreds of millions of people.

Michael Hicks & Srikant Devaraj, ‘The myth and reality of manufacturing in America’, Center for Business and Economic Research, Ball State University, 2015. 4. ‘China’s future economic potential hinges on its productivity’, The Economist, 14 August 2021. 5. Philippe Aghion, Céline Antonin & Simon Bunel, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations, Belknap Press, 2021, p.51f. 6. S. L. Price, Playing Through the Whistle, First Grove Atlantic, 2016, chap.11. 7. J. D. Vance, Hillbilly Elegy: A Memoir of a Family and Culture in Crisis, William Collins, 2016, p.55. 8. Daniel Clark, ‘Detroit autoworkers’ elusive post-war boom’, The Metropol Blog. 9.


pages: 217 words: 63,287

The Participation Revolution: How to Ride the Waves of Change in a Terrifyingly Turbulent World by Neil Gibb

Abraham Maslow, Adam Neumann (WeWork), Airbnb, Albert Einstein, blockchain, Buckminster Fuller, call centre, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, corporate social responsibility, creative destruction, crowdsourcing, data science, Didi Chuxing, disruptive innovation, Donald Trump, gentrification, gig economy, iterative process, Jeremy Corbyn, job automation, Joseph Schumpeter, Khan Academy, Kibera, Kodak vs Instagram, Mark Zuckerberg, Menlo Park, Minecraft, mirror neurons, Network effects, new economy, performance metric, ride hailing / ride sharing, shareholder value, side project, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Steve Jobs, Susan Wojcicki, the scientific method, Thomas Kuhn: the structure of scientific revolutions, trade route, urban renewal, WeWork

It is also a framework for the transformation of existing businesses and enterprises to thrive in the new economic order; how to pivot, realign and genuinely innovate. And, lastly, for anyone who might be interested, it shows how to be a billionaire…in three easy moves. Creative destruction “Every act of creation is first an act of destruction” Pablo Picasso In 1942 the Austrian-American economist Joseph Schumpeter popularised the concept of “creative destruction”, describing it as the “process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Schumpeter’s point is that every act of creation, and every act of groundbreaking innovation, however good and useful they are, is also an act of destruction, in that it supplants something.

In answering this question, we not only find what it takes to build successful businesses in the emerging new-world economic order, we actually have the answer to what it is going to take to successfully rebuild our societies in the networked age. Contents I. Introduction When things fall apart Disruption is the future calling The great transformation Creative destruction How to use this book The emergence of a new paradigm That thing we seek The rise of social economics The participation revolution Connected Strategic shifts The process of transformation Architecture II. Case stories 1. We are United! 2. The power of fans 3.

Schumpeter’s point is that every act of creation, and every act of groundbreaking innovation, however good and useful they are, is also an act of destruction, in that it supplants something. Thus the automobile destroyed demand for the horse-drawn carriage, digital photography for film, Netflix for video stores, and the iPhone for a whole host of things. Creative destruction tends to a maximum in periods of societal transformation such as the present one. Everything is up for grabs, and everything is at risk. In the next 10 to 20 years the chances are that 70 percent of current jobs will most likely no longer exist. Whereas the industrial revolution replaced skilled manual labour, digitisation and increasingly intelligent algorithms are replacing middle management and white collar jobs.


pages: 151 words: 38,153

With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough by Peter Barnes

adjacent possible, Alfred Russel Wallace, banks create money, basic income, Buckminster Fuller, carbon tax, collective bargaining, computerized trading, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, diversified portfolio, driverless car, en.wikipedia.org, Fractional reserve banking, full employment, Glass-Steagall Act, hydraulic fracturing, income inequality, It's morning again in America, Jaron Lanier, Jevons paradox, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land reform, Mark Zuckerberg, Money creation, Network effects, oil shale / tar sands, Paul Samuelson, power law, profit maximization, quantitative easing, rent-seeking, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, Stuart Kauffman, the map is not the territory, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Upton Sinclair, Vilfredo Pareto, wealth creators, winner-take-all economy

It therefore behooves us to take a longer view. As Charles Darwin and Alfred Russel Wallace noted in the nineteenth century, living systems evolve through a process of variation and selection. Many nonliving systems, including economies, evolve in a similar way. Capitalism in particular has been characterized as a system of “creative destruction.”1 One aspect of evolution that remained unclear for decades after Darwin and Wallace was whether the vary-and-select process proceeds gradually or in sudden bursts. In theory, it could work either way, but in 1972, paleontologists Niles Eldredge and Stephen Jay Gould published a landmark paper that argued, based on fossil records, that “the history of evolution is not one of stately unfolding, but a story of homeostatic equilibria, disturbed only rarely by rapid and episodic events of spe-ciation.”2 They called this pattern punctuated equilibrium, and it seems to apply not only to biological systems but to others as well.

., 24, 39 C California, climate dividends in, 117–118 California Air Resources Board (CARB), 117–118 California Public Utilities Commission (CPUC), 117–118 Canada, 53–54, 114 Cantwell, Maria, 110, 115 Cantwell-Collins Act, 142 Cap-and-dividend system, 105–107 legislation on, 109–110 property income and, 116–117 Cap-and-giveaway system, 105–107 Cap-and-trade system. See also Carbon capping in California, 117–118 Clean Air Act creating, 99 climate change and, 99–100 labor unions and, 131–132 offsets in, 104–105 Capital gains, 47 Capitalism creative destruction and, 120 everyone-gets-a-share capitalism, 3–4, 42, 126 types of income and, 27–28 winner-take-all capitalism, 3, 33–34 Carbon capping, 97–118 European carbon trading system, 99, 104–105 Carbon dioxide carbon capping, 97–118 carbon taxing, 113–116 environmental movement and, 135–136 pollution permits, 93 Carbon Limits and Energy for America’s Renewal (CLEAR) Act, 142 Carbon taxing, 113–116 CheatNeutral.com, 104 China, 25–26, 105 Citizen’s income, 79–80 Civil War, debt-free money distribution and, 91–92 Clean Air Act, 99 Climate change, 99–100 Clinton, William J., 99, 114 Coal-burning power plants, 99 Coase, Ronald, 98–99 Collective bargaining, 19 Collins, Chuck, 33 Collins, Susan, 110 Commercial banks.

See also Dividends; Rent adjacent possible and, 121 audit of, 62 benefits, entitlement to, 62 components of, 60–61 defined, 11 at economy-wide level, 140–141 externalities and, 64 guidelines for creating, 89–92 management of, 62 mental ideas and, 122–127 one person, one share, 123–124 political environment and, 120 potential dividends and, 139–146 pre-distribution and, 125–127 quantity of assets needed for, 93–95 shared wealth dividends, 124–125 specific assets and, 141–146 user fees for, 85–86 Copyrights, rent from, 144 Cowen, Tyler, 135 Creative destruction, 120 Credo, 45 Crisis preparing for, 121–127 to-do lists and preparing for, 127–131 Currency trading, 92 D Dales, John, 98 Darwin, Charles, 120 Debt fractional reserve banking and, 90 leverage, 47 Debt-free money distribution, 90–91 Lincoln, Abraham and, 91 Defined-benefits pensions, 123 Deindustrialization, 17 Dell Computers, 25–26 Democratic Congressional Campaign Committee, 109 Democrats and direct spending, 22 The Depression and the Townsend Plan, 133–134 Deregulation, 21 Derivatives, potential revenue from transaction fees, 143 Deunionization, 18–19 Distribution of wealth, 14 Dividends, 9–10.


pages: 389 words: 87,758

No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs, James Manyika

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, additive manufacturing, Airbnb, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, asset light, autonomous vehicles, Bakken shale, barriers to entry, business cycle, business intelligence, carbon tax, Carmen Reinhart, central bank independence, circular economy, cloud computing, corporate governance, creative destruction, crowdsourcing, data science, demographic dividend, deskilling, digital capitalism, disintermediation, disruptive innovation, distributed generation, driverless car, Erik Brynjolfsson, financial innovation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Gini coefficient, global supply chain, global village, high-speed rail, hydraulic fracturing, illegal immigration, income inequality, index fund, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, job automation, Just-in-time delivery, Kenneth Rogoff, Kickstarter, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, M-Pesa, machine readable, mass immigration, megacity, megaproject, mobile money, Mohammed Bouazizi, Network effects, new economy, New Urbanism, ocean acidification, oil shale / tar sands, oil shock, old age dependency ratio, openstreetmap, peer-to-peer lending, pension reform, pension time bomb, private sector deleveraging, purchasing power parity, quantitative easing, recommendation engine, Report Card for America’s Infrastructure, RFID, ride hailing / ride sharing, Salesforce, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Snapchat, sovereign wealth fund, spinning jenny, stem cell, Steve Jobs, subscription business, supply-chain management, synthetic biology, TaskRabbit, The Great Moderation, trade route, transaction costs, Travis Kalanick, uber lyft, urban sprawl, Watson beat the top human players on Jeopardy!, working-age population, Zipcar

Jacques Bughin and James Manyika, “Measuring the full impact of digital capital,” McKinsey Quarterly, July 2013. 42. Richard D. Kahlenberg, Broken Contract: A Memoir of Harvard Law School (NY: Hill and Wang, 1992). 43. “Creative destruction whips through corporate America,” Innosight Executive Briefing, winter 2012, www.innosight.com/innovation-resources/strategy-innovation/upload/creative-destruction-whips-through-corporate-america_final2012.pdf. 44. Ibid. 45. Ibid. 46. Bill Gurley, “A deeper look at Uber’s dynamic pricing model,” Above the Crowd, March 11, 2014, http://abovethecrowd.com/20l4/03/11/a-deeper-look-at-ubers-dynamic-pricing-model/; Matthew Panzarino, “Leaked Uber numbers, which we’ve confirmed, point to over $1B gross, $213M revenue,” TechCrunch, December 4, 2013, http://techcrunch.com/2013/12/04/leaked-uber-numbers-which-weve-confirmed-point-to-over-1b-gross-revenue-213m-revenue. 47.

Ewing Marion Kauffman Foundation, June 2012, www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2012/06/fortune_500_turnover.pdf. 11. Richard Dobbs, Jaana Remes, Sven Smit, James Manyika, Jonathan Woetzel, and Yaw Agyenm-Boateng, Urban world: The shifting global business landscape, McKinsey Global Institute, October 2013. 12. Ibid. 13. “Creative destruction whips through corporate America,” Innosight Executive Briefing, winter 2012, www.innosight.com/innovation-resources/strategy-innovation/upload/creative-destruction-whips-through-corporate-america_final2012.pdf. 14. Microsoft’s timeline from 1975–1990, The History of Computing Project, www.thocp.net/companies/microsoft/microsoft_company.htm. 15. Christopher Steiner, “Meet the fastest growing company ever,” Forbes.com, August 12, 2010, www.forbes.com/forbes/2010/0830/entrepreneurs-groupon-facebook-twitter-next-web-phenom.html. 16.

Those who govern will need to reset their intuition, just as business leaders will. In this chapter, we discuss the political leadership challenge these trend breaks present, and we highlight ways that government is rising—or not—to meet this challenge. THE CASE FOR CHANGE Global competition and technological change have sped up creative destruction and outpaced the ability of labor markets to adapt. Job creation is a critical challenge for most policy makers even as businesses complain about critical skill gaps. Meanwhile, graying populations are starting to fray social safety nets—and for debt-ridden societies in advanced economies, the challenge can only get more pressing as the cost of capital starts to rise.


pages: 234 words: 63,149

Every Nation for Itself: Winners and Losers in a G-Zero World by Ian Bremmer

airport security, banking crisis, barriers to entry, Berlin Wall, blood diamond, Bretton Woods, BRICs, capital controls, clean water, creative destruction, Deng Xiaoping, Doha Development Round, energy security, European colonialism, failed state, global rebalancing, global supply chain, Global Witness, income inequality, informal economy, information security, Intergovernmental Panel on Climate Change (IPCC), Julian Assange, Kickstarter, Martin Wolf, mass immigration, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nelson Mandela, Nixon shock, Nixon triggered the end of the Bretton Woods system, no-fly zone, nuclear winter, Parag Khanna, purchasing power parity, reserve currency, Ronald Reagan, smart grid, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, trade route, uranium enrichment, Washington Consensus, WikiLeaks, Yom Kippur War

But while Western mining companies and diamond-trading firms face an avalanche of bad press at home if they’re caught cheating on these rules, that’s not the case in many emerging-market states, where government and industry often exercise much greater direct influence over local media and where the demands of development often encourage governments to make and enforce their own rules.23 *** Finally, investors and companies can become G-Zero winners by recognizing these likely winners and losers—and placing their bets accordingly. Every stock picker looks great in a bull market, and that proved true in a world in which globalization lifted so many boats. The G-Zero will force investors to do a lot more homework. Those who do that work have much to gain. LOSERS The G-Zero is a process of creative destruction, as natural as it is inevitable. Institutions that no longer reflect the world they were created to promote and protect must give way to new ones. Those that struggle against this process of death and renewal are wasting time and resources that could be better spent on anticipating and shaping the post-G-Zero world.

The architects of U.S. foreign policy will have to do more with less in a G-Zero world, America will have fewer opportunities to get what it wants from other countries, and it’s entirely likely that Americans will struggle to accept their diminished international role. That does not mean that the United States is destined to be a G-Zero loser. Resilience in the new era will depend on adaptability and the power to profit from the processes of creative destruction. This is a crucial American advantage. Throughout its history, the United States has valued innovation more than security, technological change more than traditional ways of doing things, and hope for the future more than veneration of the past. In a world of constant change, these qualities are likely to serve the country well.

China will also have to create sustainable balance in its economy, by shifting its reliance for growth from its current heavy dependence on exports toward greater consumption at home—but without “decoupling” from Western consumers to a degree that would isolate China from the world’s other largest economies. Further, over time many of the country’s largest state-owned enterprises will outlive their usefulness. As with other dying institutions, those who profit from them will fight to keep them alive, and state officials will be tempted to artificially extend their life spans. Creative destruction can be either a powerful source of prosperity or a frightening source of turmoil, but only by letting these enterprises die a natural death and enabling more dynamic companies to take their place can China continue to extend its economic gains. That is the lesson of adapters and dinosaurs, and it ultimately applies to China just as surely as to America and Europe.


pages: 362 words: 97,288

Ghost Road: Beyond the Driverless Car by Anthony M. Townsend

A Pattern Language, active measures, AI winter, algorithmic trading, Alvin Toffler, Amazon Robotics, asset-backed security, augmented reality, autonomous vehicles, backpropagation, big-box store, bike sharing, Blitzscaling, Boston Dynamics, business process, Captain Sullenberger Hudson, car-free, carbon footprint, carbon tax, circular economy, company town, computer vision, conceptual framework, congestion charging, congestion pricing, connected car, creative destruction, crew resource management, crowdsourcing, DARPA: Urban Challenge, data is the new oil, Dean Kamen, deep learning, deepfake, deindustrialization, delayed gratification, deliberate practice, dematerialisation, deskilling, Didi Chuxing, drive until you qualify, driverless car, drop ship, Edward Glaeser, Elaine Herzberg, Elon Musk, en.wikipedia.org, extreme commuting, financial engineering, financial innovation, Flash crash, food desert, Ford Model T, fulfillment center, Future Shock, General Motors Futurama, gig economy, Google bus, Greyball, haute couture, helicopter parent, independent contractor, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Jevons paradox, jitney, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kickstarter, Kiva Systems, Lewis Mumford, loss aversion, Lyft, Masayoshi Son, megacity, microapartment, minimum viable product, mortgage debt, New Urbanism, Nick Bostrom, North Sea oil, Ocado, openstreetmap, pattern recognition, Peter Calthorpe, random walk, Ray Kurzweil, Ray Oldenburg, rent-seeking, ride hailing / ride sharing, Rodney Brooks, self-driving car, sharing economy, Shoshana Zuboff, Sidewalk Labs, Silicon Valley, Silicon Valley startup, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, SoftBank, software as a service, sovereign wealth fund, Stephen Hawking, Steve Jobs, surveillance capitalism, technological singularity, TED Talk, Tesla Model S, The Coming Technological Singularity, The Death and Life of Great American Cities, The future is already here, The Future of Employment, The Great Good Place, too big to fail, traffic fines, transit-oriented development, Travis Kalanick, Uber and Lyft, uber lyft, urban planning, urban sprawl, US Airways Flight 1549, Vernor Vinge, vertical integration, Vision Fund, warehouse automation, warehouse robotics

TOWNSEND IN MEMORY OF THE UNCLE I NEVER MET William Patrick Herrschaft, Petty Officer Second Class, US Navy, killed in an automobile accident, Patuxent, Maryland, April 4, 1961 Contents Tables and Illustrations Preface PART I On the Ghost Road 1.Fables of the Revolution 2.Deconstructing Driving 3.The Origin of (Vehicular) Species 4.Reprogramming Mobility PART II No Man’s Land 5.Continuous Delivery 6.Creative Destruction PART III Taming the Autonomous Vehicle 7.The New Highwaymen 8.Urban Machines 9.Wrestling with Regulation 10.Pushing Code Afterword Acknowledgments Notes Index Tables and Illustrations Figure 1-1. Self-driving ship Figure 3-1. Future car of the 1950s Figure 3-2. Conveyors, mules, driverless shuttles, and taxibots Figure 3-3.

We simply won’t survive without them. This “city” of mechanical minions is, for now, walled in. But can this ruthless geometry be contained? Or is Amazon’s inevitable next move to carry this new town plan out into the larger world? Rarely has capitalism produced such a pure mechanism for “creative destruction,” that “process of industrial mutation” described by Joseph Schumpeter “that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Will these parcel-purveying machines prove as ruthlessly efficient at restructuring our communities, too?

Tomorrow’s micro-sprawling neighborhoods will feel very weird—but it’s hard to know which of the good and bad characteristics of today’s walkable hubs and yesterday’s car-centric communities they’ll inherit. Smaller downtowns and village centers that already struggle to attract crowds may simply wither away, as rovers replace walking. Meanwhile, the same paths built for rovers will provide a distribution network for conveyors, accelerating the creative destruction wrought by continuous delivery on local shops and restaurants. Here’s the thing, though—achieving a massive increase in affordable housing and much-needed reductions in transportation-related carbon emissions may be worth sacrificing a few downtowns. The urgency of climate-change adaptation may present such gut-wrenching choices much sooner than we think.


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The Unbanking of America: How the New Middle Class Survives by Lisa Servon

Affordable Care Act / Obamacare, Airbnb, basic income, behavioural economics, Build a better mousetrap, business cycle, Cass Sunstein, choice architecture, creative destruction, Credit Default Swap, cross-border payments, do well by doing good, employer provided health coverage, financial exclusion, financial independence, financial innovation, gender pay gap, gentrification, George Akerlof, gig economy, Glass-Steagall Act, income inequality, independent contractor, informal economy, Jane Jacobs, Joseph Schumpeter, late fees, low interest rates, Lyft, M-Pesa, medical bankruptcy, microcredit, Occupy movement, payday loans, peer-to-peer lending, precariat, Ralph Nader, Richard Thaler, Robert Shiller, Ronald Reagan, Savings and loan crisis, sharing economy, subprime mortgage crisis, too big to fail, transaction costs, unbanked and underbanked, underbanked, universal basic income, Unsafe at Any Speed, We are the 99%, white flight, working poor, Zipcar

Enormous advances in technology, significant changes in consumer behavior, and a radically revised regulatory environment are coming together in ways that offer hope for more efficient, effective, and equitable provision of consumer financial services. This moment is notable for its rarity—this business sector “hasn’t changed materially in hundreds of years,” according to Brett King, an expert in retail banking. Creative destruction, a term coined by the Austrian economist Joseph Schumpeter, denotes the process by which capitalism destroys old economic orders and reinvents them through innovation. Here’s an example of this process at work: innovations in refrigeration and transportation technologies enabled the creation of supermarkets, which ultimately put many smaller food shops out of business.

Here’s an example of this process at work: innovations in refrigeration and transportation technologies enabled the creation of supermarkets, which ultimately put many smaller food shops out of business. More recently, Amazon, in its use of the Internet, its innovative approaches to shipping, and the creation of the Kindle reader, profoundly changed book selling. Technology always plays a big role in times of creative destruction, and the present moment is no different. Never before has so much information about each and every one of us been more available to more people. Although this situation raises important questions about privacy—we’re seeing how debt collectors and identity thieves abuse these resources—many innovators in consumer financial services are focused on how to harness this information for profit and for good.

the sharing economy: Havas Worldwide, “The New Consumer and the Sharing Economy,” Prosumer Report (New York: Havas, 2014). 8. INSIDE THE INNOVATORS 143 This moment is notable: Brett King, Breaking Banks: The Innovators, Rogues, and Strategists Rebooting Banking (Singapore: John Wiley & Sons, 2014), p. xv. Creative destruction, a term: Joseph Alois Schumpeter, The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle (London: Transaction Publishers, 1934). 144 Dave Birch, a director at: King, Breaking Banks, p. 42. Mobile phones have already: “The Future of Money,” 60 Minutes, CBS News, November 22, 2015. http://www.cbsnews.com/news/future-of-money-kenya-m-pesa-60-minutes/ 146 Smartphone use grew: Personal correspondence with Mike Mondelli, April 8, 2016. 163 interest rate of 36 percent: There’s a broader movement supporting the 36 percent rate.


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10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less by Garett Jones

Andrei Shleifer, Asian financial crisis, Brexit referendum, business cycle, central bank independence, clean water, corporate governance, correlation does not imply causation, creative destruction, Edward Glaeser, fake news, financial independence, game design, German hyperinflation, hive mind, invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jean Tirole, Kenneth Rogoff, low interest rates, Mark Zuckerberg, mass incarceration, military-industrial complex, minimum wage unemployment, Mohammed Bouazizi, Neil Armstrong, open economy, Pareto efficiency, Paul Samuelson, price stability, rent control, Robert Solow, The Wealth of Nations by Adam Smith, trade liberalization, Tyler Cowen

Caroline Wolf Harlow, “Education and Correctional Populations: Bureau of Justice Statistics Special Report” (2003). 23. Gordon Tullock, “The Transitional Gains Trap,” Bell Journal of Economics 6, no. 2 (1975): 671–678. 24. Mark J. Perry, “Chart of the Day: Creative Destruction, the Uber Effect, and the Slow Death of the NYC Taxi Cartel,” Carpe Diem, March 17, 2018, http://www.aei.org/publication/chart-of-the-day-creative-destruction-the-uber-effect-and-the-slow-death-of-the-nyc-yellow-taxi/. 25. American Medical Association. “AMA Code of Medical Ethics: Treating Self or Family,” accessed October 29, 2018, https://www.ama-assn.org/delivering-care/treating-self-or-family. 26.

Oneal, John R., and Bruce Russett. “Assessing the Liberal Peace with Alternative Specifications: Trade Still Reduces Conflict.” Journal of Peace Research 36, no. 4 (1999): 423–442. Perry, Mark J. “Chart of the Day: Creative Destruction, the Uber Effect, and the Slow Death of the NYC Taxi Cartel.” Carpe Diem, March 17, 2018. http://www.aei.org/publication/chart-of-the-day-creative-destruction-the-uber-effect-and-the-slow-death-of-the-nyc-yellow-taxi/. Polybius. The Histories, in The Portable Greek Historians: The Essence of Herodotus, Thucydides, Xenophon, Polybius, edited by Moses I. Finley, book VI, para. 3 .


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What's Wrong With Economics: A Primer for the Perplexed by Robert Skidelsky

additive manufacturing, agricultural Revolution, behavioural economics, Black Swan, Bretton Woods, business cycle, carbon tax, Cass Sunstein, central bank independence, cognitive bias, conceptual framework, Corn Laws, corporate social responsibility, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, degrowth, disruptive innovation, Donald Trump, Dr. Strangelove, full employment, George Akerlof, George Santayana, global supply chain, global village, Gunnar Myrdal, happiness index / gross national happiness, hindsight bias, Hyman Minsky, income inequality, index fund, inflation targeting, information asymmetry, Internet Archive, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labour market flexibility, loss aversion, Mahbub ul Haq, Mark Zuckerberg, market clearing, market friction, market fundamentalism, Martin Wolf, means of production, Modern Monetary Theory, moral hazard, paradox of thrift, Pareto efficiency, Paul Samuelson, Philip Mirowski, Phillips curve, precariat, price anchoring, principal–agent problem, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, shareholder value, Silicon Valley, Simon Kuznets, sunk-cost fallacy, survivorship bias, technoutopianism, The Chicago School, The Market for Lemons, The Nature of the Firm, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, transaction costs, transfer pricing, Vilfredo Pareto, Washington Consensus, Wolfgang Streeck, zero-sum game

Then there was Joseph Schumpeter, whose views could be summarised as ‘never let a recession go to waste’. He was the apostle of wealth-creation through ‘creative destruction’. Progress was not a smooth evolutionary process but a chaotic one, in which moribund giants are constantly being replaced by agile upstarts through a succession of crises. This is a concept that modern-day Silicon Valley has embraced under the softer label of ‘disruptive innovation’. For Schumpeter creative destruction is the way the capitalist system works. He would have said that it creates more ‘value’ than it destroys. The same reply is given by techno-enthusiasts.

Statics refers to an economy of given, known, and constant external conditions, such as tastes and technology. This has no resemblance to modern market economies. In dynamic analysis, external conditions not only change but such change is fundamental to a capitalist economy. Entrepreneurs try out innovations which in a process of creative destruction replace tried methods: ‘increasing destruction of age-old relationships for the sake of profit’.9 Schumpeter, like Marx, understood that technological progress is endogenous: it is impelled by the logic of competitive, profit-maximising capitalism. Cyclical theories are a long-run type of equilibrium theory.

INDEX absolute poverty rates (i) Acton, Peter (i) advertising (i), (ii), (iii) agency collective agency (i), (ii), (iii) of the individual (i) location of (i) moral agency (i) within social structures (i) Akerlof, George (i), (ii) Arrow, Kenneth (i) auction markets (i) Bayes’ theorem (i), (ii) Becker, Gary (i), (ii), (iii) behavioural economics on deviations from rationality (i), (ii) fallibility of testing procedures (i) fast and slow thinking (i) ‘nudge’ approach (i) overview of (i), (ii) systemic errors of human behaviour (i), (ii) use of heuristics (i) big push theories (i) Borjas, George J. (i) Bourdieu, Pierre (i) Buchanan, James M. (i), (ii) capital goods (i), (ii) capitalism and belief in predestination (i) capital as stored-up labour (i) creative destruction of (i) exploitation of labour (i) Frankenstein as a metaphor for (i) homo economicus’s evolution (i) moral cost of progress (i) peripheral economies (i) in sociological thought (i) Carlyle, Thomas (i) Chang, Ha-Joon (i), (ii) Chicago school (i), (ii) class analysis (i), (ii), (iii) classical economics definition of economics (i) economic growth (i), (ii) growth/stagnation problem (i) methodology (i) scarcity in (i) cliometrics (i) closed systems (i), (ii), (iii), (iv) Coase, Ronald (i) collectivism collective agency (i), (ii), (iii) liberal/collectivist cycles (i) comparative advantage theory (i), (ii) conspicuous consumption (i) consumer sovereignty (i), (ii), (iii) contracts in general equilibrium theory (i), (ii), (iii) within modern society (i) morality and (i), (ii) the power of the state as (i) regulation of (i) cost of production theory (i) Daly, Herman (i) Debreu, Gerard (i) decision-making processes agenda power and (i) in conditions of uncertainty (i) rationality and (i) systemic errors of human behaviour (i), (ii) dependency (dependencia) theory (i) Derrida, Jacques (i) development economics big push theories of structuralism (i) economic growth in (i), (ii) import-substitution policies (i), (ii) liberalisation policies in developing economies (i), (ii) of peripheral economies within capitalism (i) protectionist doctrines (i) role of the state (i) stadial theory (i) Washington Consensus (i), (ii) Devons, Ely (i) diamond-water paradox (i), (ii) doughnut economics (i) Durkheim, Emile (i) Easterlin Paradox (i) ecological economics (i) econometric testing (i), (ii) economic growth via accumulation (i), (ii) in classical economics (i), (ii) in development economics (i), (ii) division of labour (i) free trade doctrine (i), (ii), (iii), (iv), (v) Malthusian population problem (i) moral efficiency for (i) protectionism (i), (ii) role of institutions (i), (ii), (iii) role of the state (i), (ii) social purpose of (i) technological innovation for (i), (ii) Washington Consensus (i) for wealth creation (i) economic history for empirical evidence (i), (ii) liberal/collectivist cycles (i) productive division with economics (i) the study of (i), (ii) time-series analysis (i) use of econometrics (i) see also history; history of economic thought economics defined (i) a different approach to (i) within the political landscape (i) in relation to other social sciences (i) in relation to the laws of physics (i) as a science (i), (ii), (iii), (iv), (v) teaching of (i) see also scientific economics efficiency efficiency of choice (i) moral restraint for economic growth (i) morally efficient behaviour (i), (ii), (iii) trade-off with equity (i) emulation complex (i) the Enlightenment (i), (ii) environmental economics (i) epistemology within a broader understanding of economics (i) in economics (i) insufficient generality of premises (i) probability in (i) in relation to ontology (i), (ii) equilibrium theory contracts in (i), (ii), (iii) cyclical theories (i), (ii) dynamic equilibrium (i) in economic thought (i), (ii) frictions (i) in Keynesian economics (i) in the markets (i), (ii), (iii) Marxist thought on (i) optimum equilibrium (i) partial equilibrium (i) principle of (i), (ii), (iii) in the real world (i) role of self-interest (i) shocks, notion of (i), (ii) static equilibrium (i) supply and demand (competitive equilibrium) (i) Walrasian general equilibrium (GE) (i), (ii), (iii), (iv) ethics costs of progress (i) doughnut economics (i) in economics (i), (ii), (iii), (iv) ethical objections to homo economicus (i) the harm principle (i) justice of property rights (i) lack of in scientific economics (i), (ii) methodological individualism (i) procedural ethics (i) value theory (i) see also morality fallacy of composition (i) financial crisis (2008) complex system modelling (i) developments in economic thought since (i), (ii), (iii), (iv), (v) explanations for (i) failure to foresee (i), (ii), (iii), (iv), (v) firms as economic actors (i) functions of (i), (ii) impact of modern technology (i) moral responsibilities of (i) relationship with the consumer (i) within social networks (i) transaction cost theory (i) Fogel, Robert W.


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99%: Mass Impoverishment and How We Can End It by Mark Thomas

"there is no alternative" (TINA), "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, additive manufacturing, Alan Greenspan, Albert Einstein, anti-communist, autonomous vehicles, bank run, banks create money, behavioural economics, bitcoin, business cycle, call centre, Cambridge Analytica, central bank independence, circular economy, complexity theory, conceptual framework, creative destruction, credit crunch, CRISPR, declining real wages, distributed ledger, Donald Trump, driverless car, Erik Brynjolfsson, eurozone crisis, fake news, fiat currency, Filter Bubble, full employment, future of work, Gini coefficient, gravity well, income inequality, inflation targeting, Internet of things, invisible hand, ITER tokamak, Jeff Bezos, jimmy wales, job automation, Kickstarter, labour market flexibility, laissez-faire capitalism, Larry Ellison, light touch regulation, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, Modern Monetary Theory, Money creation, money: store of value / unit of account / medium of exchange, Nelson Mandela, Nick Bostrom, North Sea oil, Occupy movement, offshore financial centre, Own Your Own Home, Peter Thiel, Piper Alpha, plutocrats, post-truth, profit maximization, quantitative easing, rent-seeking, Robert Solow, Ronald Reagan, Second Machine Age, self-driving car, Silicon Valley, smart cities, Steve Jobs, The Great Moderation, The Wealth of Nations by Adam Smith, Tyler Cowen, warehouse automation, wealth creators, working-age population

According to market capitalism, government intervention, no matter how well-intentioned, consumes resources which would be better used in the private sector and therefore inevitably makes matters worse economically. Ronald Reagan summarized this view succinctly: ‘Government isn’t the solution; government is the problem.’3 Free markets, according to this doctrine, while they may occasionally experience painful periods of creative destruction, are the only way to guarantee the best use of resources, the highest levels of economic growth and the fairest distribution of the wealth that they create. It’s a persuasive story: clear, simple and underpinned by a compelling work ethic. For many years I believed it myself. Institutionally, the biggest change from the Golden Age of Capitalism to the Age of Market Capitalism was that government intervention was no longer perceived as a vital way of alleviating economic woes.

The Industrial Revolution, then, was a revolution for the economy as a whole but, especially for the first thirty years or so, all the benefits went to the rich. Although the new technology did create new jobs, these were often less skilled and less well-paid than the jobs they destroyed. It was not until the process of industrialization was essentially complete, and the ‘creative destruction’ was finished, that wages could resume their upward progress. This is not, of course, an argument that ordinary people never benefitted from the Industrial Revolution – of course, over the very long-term, we have all benefitted enormously and our standard of living today is vastly higher than any prior period in history – which it would not be had the world not industrialized.

I think the global professional middle class is about to be blindsided.27 She cites a recent competition at Columbia University between human lawyers and their artificial counterparts, in which both read a series of non-disclosure agreements with loopholes in them. The AI found 95 per cent of them, and the humans 88 per cent. But the human took 90 minutes to read them. The AI took 22 seconds. The optimistic view would be that this represents capitalism at its best: new technology enabling a leap forward in productivity; creative destruction releasing resources currently tied up in inefficient old approaches to providing products and services, and freeing them up to provide newer, higher added-value products and services. It is certainly true that there will be new jobs created – at least in the short term – for people to design, program, commission and service all the new machines.


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Cogs and Monsters: What Economics Is, and What It Should Be by Diane Coyle

3D printing, additive manufacturing, Airbnb, Al Roth, Alan Greenspan, algorithmic management, Amazon Web Services, autonomous vehicles, banking crisis, barriers to entry, behavioural economics, Big bang: deregulation of the City of London, biodiversity loss, bitcoin, Black Lives Matter, Boston Dynamics, Bretton Woods, Brexit referendum, business cycle, call centre, Carmen Reinhart, central bank independence, choice architecture, Chuck Templeton: OpenTable:, cloud computing, complexity theory, computer age, conceptual framework, congestion charging, constrained optimization, coronavirus, COVID-19, creative destruction, credit crunch, data science, DeepMind, deglobalization, deindustrialization, Diane Coyle, discounted cash flows, disintermediation, Donald Trump, Edward Glaeser, en.wikipedia.org, endogenous growth, endowment effect, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, Evgeny Morozov, experimental subject, financial deregulation, financial innovation, financial intermediation, Flash crash, framing effect, general purpose technology, George Akerlof, global supply chain, Goodhart's law, Google bus, haute cuisine, High speed trading, hockey-stick growth, Ida Tarbell, information asymmetry, intangible asset, Internet of things, invisible hand, Jaron Lanier, Jean Tirole, job automation, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, knowledge worker, Les Trente Glorieuses, libertarian paternalism, linear programming, lockdown, Long Term Capital Management, loss aversion, low earth orbit, lump of labour, machine readable, market bubble, market design, Menlo Park, millennium bug, Modern Monetary Theory, Mont Pelerin Society, multi-sided market, Myron Scholes, Nash equilibrium, Nate Silver, Network effects, Occupy movement, Pareto efficiency, payday loans, payment for order flow, Phillips curve, post-industrial society, price mechanism, Productivity paradox, quantitative easing, randomized controlled trial, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Robinhood: mobile stock trading app, Ronald Coase, Ronald Reagan, San Francisco homelessness, savings glut, school vouchers, sharing economy, Silicon Valley, software is eating the world, spectrum auction, statistical model, Steven Pinker, tacit knowledge, The Chicago School, The Future of Employment, The Great Moderation, the map is not the territory, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, the strength of weak ties, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Uber for X, urban planning, winner-take-all economy, Winter of Discontent, women in the workforce, Y2K

Even with today’s far more powerful computers, ‘big’ data and AI, there are good reasons to believe planning would fail, as Chapter Six will discuss. Competitive markets also provide an unrivalled way of changing the allocation of resources over time. John Kay has described this function as a ‘discovery process’. Joseph Schumpeter (1994 [1942]) famously referred to it as ‘creative destruction’. The competitive process is the source of dynamism in the economy—innovation, the invention and production of new goods and services, growth. Other types of economic organisation, including central planners, can sustain growth for a period, perhaps quite a long period (see Acemoglu and Robinson 2012).

., 90 Boskin Commission, 146–47 Boston Dynamics, 137 Bowles, Sam, 85, 117, 119 Bretton Woods, 192 Brexit, 1, 37, 53, 56, 70, 110, 131, 155, 213 Brown, Dan, 108 Brynjolfsson, Eric, 176 bubbles, 20, 22, 29 Buchanan, James, 33 budget constraints, 177 Bundeskartellamt, 205 Bureau of Economic Policy Analysis, 66 business cycles, 71, 81, 102, 124 calculus, 16, 33, 90, 145 Calculus of Consent, The: Logical Foundations of Constitutional Democracy (Buchanan and Tullock), 33 Camus, Albert, 87, 108, 111 capitalism: criticism of, 19–20; free market and, 19, 41, 186; globalisation and, 110, 132, 139, 154, 164, 193–94, 196, 213; inequality from, 19; progress and, 143, 149; Schumpeter on, 143; twenty-first-century policy and, 186, 190, 195 Capital (Piketty), 131 carbon emissions, 38–40, 180, 187 Carlin, Wendy, 85 Cartlidge, John, 27 Case, Anne, 131 cash for clunkers, 55, 63 causality: bias and, 13, 105; correlation and, 94; deductive approach and, 103; economically establishing, 100; empirical work and, 2, 61, 94–96, 99; feedback and, 11, 94, 96; Leamer on, 102; methodological debate over, 2; models and, 2, 94–95, 102; moral issues and, 96; outsider context and, 94–96, 99–105; progress and, 137; public responsibilities and, 61, 74; randomised control trials (RCTs) and, 93–95, 105, 109–10; reflexivity and, 11, 81; societal statistics and, 61; statistics and, 61, 95, 99, 102; two-way, 94, 96 central banks: independence of, 16; progress and, 149; public responsibilities and, 16, 32, 62, 64, 66–67, 76, 81 central planning: artificial intelligence (AI) and, 184, 186–87; competition and, 38, 41, 124, 182; failure of communist, 40, 182–88, 190; socialist calculation debate and, 182–88, 190, 209 Central Planning Bureau, 66 Chetty, Raj, 86 Chicago School, 24–25, 73, 75, 190, 193–94 Chile, 184 China, 173, 195, 206 Citadel, 27 City of London, 16, 19 climate change, 85, 148, 154 Close the Door campaign, 155–56 cloud computing, 150, 170–72, 184, 197 Coase, Ronald, 57–58, 62, 98–99 codes of conduct, 9, 206 cognitive science, 35–36, 48, 51, 91–92, 118–19, 186 Colander, David, 100 Cold War, 190 Coming of Post-Industrial Society, The (Bell), 67 common sense, 78, 127 communication, 53, 127, 168; bandwidth and, 171; compression and, 171; cost of, 196; 4G platforms and, 195; instant messaging, 171; latency and, 171; price of, 150, 171, 177; servers and, 25–26, 141, 170; smartphones and, 46, 138–39, 164, 171, 173, 177, 195, 198; SMS, 171; social media and, 52, 73, 82, 140–41, 149, 157, 163, 173, 176–77, 195; telephony and, 4, 31, 46, 98, 123, 138–39, 144, 156, 164, 171, 173–74, 177, 184, 195, 198; 3G platforms, 60, 139, 173, 195; transmission speeds and, 171 comparative advantage, 78, 97 competition: behavioural fix and, 45–51; central planning and, 38, 41, 124, 182; Chinese, 173, 195, 206; creative destruction and, 41; digital economy and, 42, 85, 165, 181, 201–6; directory numbers and, 60; empirical work and, 181, 209; envelopment and, 203–4; incumbents and, 41–42; innovation and, 28, 41, 46, 68, 85, 209; monopolies and, 20, 42; network effects and, 202, 205; opportunity cost and, 56, 58, 80, 156; outsider context and, 98, 105; Pareto criterion and, 122–23, 126–27, 129; production and, 12, 41; profit and, 33, 41–42, 105, 204; progress and, 135, 158, 165; public responsibilities and, 28, 33, 38, 41–42, 45–48, 57–69, 74, 77, 79, 85; rationality and, 117; resource, 41, 45, 117, 123, 125; separation protocol and, 120, 123–25; socialist calculation debate and, 182–83; special interest groups and, 64–66; specific studies in, 12; spectrum auctions and, 60–61; SSNIP test and, 204; twenty-first-century policy and, 182, 201–9 Competition and Markets Authority (CMA), 205 computers: AI and, 116 (see also artificial intelligence [AI]); Black-Scholes-Merton model and, 24–25; changing technology and, 169; cloud computing and, 150, 170–72, 184, 197; data sets and, 2, 13, 51–52, 60, 101, 161, 177, 201, 209; David on, 169; declining price of, 170; empirical work and, 2, 17, 52; exchange locations and, 25; feedback and, 179; Millennium Bug and, 155; Moore’s Law and, 170, 184; power of, 2, 17, 40, 58, 170, 183–84, 188; progress and, 138, 144, 155; rationality and, 116–17; servers and, 25–26, 141, 170; software and, 25, 140, 155, 171, 177–78, 186, 197, 200–201, 203; Solow on, 169; speed and, 25, 184; statistics and, 17, 52, 58, 144, 169; supercomputers, 170; twenty-first-century policy and, 183–84, 186, 188, 214; ultra-high frequency trading (HFT) and, 25–27 conservatism, 30 Consumer Price Index (CPI), 146–47, 172 consumers: bad choices and, 3; behavioural economics and, 22, 59–60, 92, 109; conspicuous consumption and, 42; digital economy and, 42, 137, 172–76, 181, 198, 200–206, 213; empirical work and, 3, 181; income and, 93 (see also income); innovation and, 28, 102, 200; Keynes and, 22; online shopping and, 173, 198; outsider context and, 92, 96, 98, 100–102, 105, 108–9; progress and, 137, 141, 144, 146–47, 151; public responsibilities and, 22, 28, 42, 59–60, 65; rationality and, 116; technology and, 28, 102, 171–76, 181, 200, 213; time spent online, 176–78; twenty-first-century policy and, 184, 198–206; welfare and, 105, 206 Cook, Eli, 150 copyright, 140 CORE’s The Economy, 85–86, 212–13 cost-benefit analysis (CBA), 56–57, 58n12, 125–26, 207 cost of living, 143–47, 172 counterfactuals, 97–98, 158, 161, 198, 208 Covid19 pandemic: body politics and, 163; financial recovery from, 88, 114; GDP growth and, 88, 165; impact of, 3, 10–11, 14, 20, 38, 43, 45, 68, 75, 88, 110, 114, 132–33, 149, 153, 155, 163–66, 181, 194, 213–15; lockdowns and, 3, 43, 45, 88, 114, 163, 198; public opinion and, 165–66 “Creating Humble Economists” (Colander), 100 creative destruction, 41 curriculum issues, 2, 4–5, 83, 85, 88 Daily Telegraph, 159 Darwin, Charles, 48 data centres, 26 data sets, 2, 13, 51–52, 60, 101, 161, 177, 201, 209 David, Paul, 169 Deaths of Despair (Case and Deaton), 131 Deaton, Angus, 128–29, 131 debt, 76, 101, 153 decision making: artificial intelligence (AI) and, 116, 186–87; bias and, 13, 109, 187, 209; Green Book and, 56, 126; normative economics and, 110, 114, 120; opportunity cost and, 56; outsider context and, 93; production and, 12, 123, 140, 196; progress and, 160, 162; rationality and, 116 (see also rationality); rules of thumb and, 47–48, 90, 117, 212; self knowledge and, 81; separation protocol and, 120 DeepMind, 115–16 Deliveroo, 173 demand management, 31, 191–92 democracy, 33, 67, 69, 79, 193 deregulation, 16, 31, 60, 68, 71, 193–94 derivative markets, 16, 18, 23–25, 28 Desrosières, Alain, 146 Dickens, Charles, 150 digital economy: AI and, 115 (see also artificial intelligence (AI)); changing nature of, 168–81; cloud computing and, 150, 170–72, 184, 197; cogs and, 6, 129, 154, 165, 179; competition and, 42, 85, 165, 181, 201–6; consumers and, 42, 137, 172–76, 181, 198, 200–206, 213; difference of, 168–76; dominance of by giant companies, 133; envelopment and, 203–4; 4G platforms, 195; GAFAM and, 173; globalisation and, 110, 132, 139, 154, 164, 193–96, 213; GPTs and, 169; Great Financial Crisis (GFC) and, 113–14; growth and, 129, 132, 140, 143, 194, 202; implications of, 176–78, 211–14; individual and, 6, 13–14, 128–29, 141, 175, 179, 181, 201; innovation and, 169–70; market changes and, 173–76; measuring online value and, 176; monsters and, 6, 154; network effects and, 127, 141, 174, 177, 185, 199–202, 205, 209; new agenda for, 179–81; online shopping and, 173, 198; Phillips machine and, 135–37, 151, 192; populism and, 211; production and, 132, 140, 142, 176, 195–97, 202, 213; progress and, 14, 137–43, 150, 153–54, 164–67; Project CyberSyn and, 184; services and, 176; software and, 25, 140, 155, 171, 177–78, 186, 197, 200–201, 203; statistics and, 113, 150, 164, 170, 172, 212; superstar features and, 173–74; 3G platforms, 60, 139, 173, 195; twenty-first-century policy and, 13, 185–88, 194–210; wealth creation and, 132–33; welfare and, 128, 134, 143, 206, 208, 212 Director, Aaron, 190 directory numbers, 60 discount rates, 147–48 diversity, 6–9, 213–14 Dow Jones, 26 Duflo, Esther, 20–21, 52, 109, 137 eBay, 175 ECO, 11 Economics Job Market Rumors, 8 Economics Observatory (ECO), 214 economies of scale: changing technology and, 174; network effects and, 127, 174, 177, 185, 199–201, 209; progress and, 142 education: derivatives and, 16; growth and, 16–17, 132; interventions and, 12; online, 177; policy on, 60; provision of basic, 30; real-world context and, 88; skills and, 88, 128, 132, 169–70; spread of higher, 151, 153 Efficient Markets Hypothesis, 17, 29 Eichengreen, Barry, 16 electricity: changing economies and, 127, 169, 191–92; progress and, 139, 142, 156, 165, 169, 191–92; regulation and, 65; supply of, 32; twenty-first-century policy and, 191–92, 200–201; warranties on goods and, 105 empirical work: behavioural economics and, 117, 159; causality and, 2, 61, 94–96, 99; competition and, 181, 209; computers and, 2, 17, 52; consumers and, 3, 181; context and, 17, 35, 61, 78, 92; correlation and, 70, 94; counterfactuals and, 97–98, 158, 161, 198, 208; data sets and, 2, 13, 51–52, 60, 101, 161, 177, 201, 209; feedback and, 11, 94–95, 155, 179, 188–89, 203, 205; growth and, 17, 61, 78, 209; macroeconomics and, 74, 100; market structures and, 35; physics envy and, 50; politics and, 3, 76, 78–79, 124, 213; populism and, 77; public responsibilities and, 17, 35, 40, 52, 61, 70, 74–81, 90, 92, 94–102, 110–11; randomised control trials (RCTs) and, 93–95, 105, 109–10; rationality and, 17; separation protocol and, 119, 124, 128; social constructs and, 13; statistics and, 17, 52, 61, 90, 95, 99; taxes and, 3; theory and, 2, 17, 52, 74, 90, 96, 99, 124, 181 endogenous growth theory, 17, 202 Enlightenment, 20 envelopment, 203–4 environmentalists, 126 equilibrium, 31, 38–39, 90–91, 123, 182 ethics, 4, 34, 39, 100, 105, 115, 119–24 Ethics and Society group, 115 ethnicity, 6–7, 9 European Commission, 67, 130, 205 European Steel and Coal Community, 190 European Union (EU), 37, 67, 195, 204 Eurozone, 67, 74 exchange rates, 118, 192 Facebook, 133, 173, 204–5 facial recognition, 165 fairness, 43, 45–46, 166 fake items, 98 Fear Index, The (Harris), 27 feedback: causality and, 11, 94–96; changing technology and, 179; political economy and, 188–89; progress and, 155; twenty-first-century policy and, 203, 205 financial intermediation services indirectly measured (FISIM), 28 Financial Times, 68–69, 97–98 Fisher Ideal index, 144n3 fixed costs, 174, 177, 179, 185–86, 200 forecasting: agent-based modeling and, 102; conditional projections and, 76; financial crises and, 17, 30, 100–101, 112–13; growth and, 37, 61; inflation and, 36; macroeconomics and, 3, 12, 36–37, 76, 101–2, 112; models and, 17, 74, 101–2, 113; self-fulfilling prophecies and, 5, 22–23, 154–55, 157; twenty-first-century policy and, 205; weather, 76 Fourastié, J., 191 4G platforms, 195 framing, 47, 130, 208 Frankenfinance, 18, 21, 25, 51–52, 165 Freakonomics, 108 free market: Brexit and, 213; capitalism and, 19, 41, 186; criticism of, 19; globalisation and, 110, 132, 139, 154, 164, 193–94, 196, 213; politics and, 30, 36, 130, 206; public responsibilities and, 19, 30–32, 35–36, 45, 54; separation protocol and, 123–24; twenty-first-century policy and, 182, 186, 191, 193, 195, 207 frictions, 22, 113, 136, 154, 182 Friedman, Ben, 16 Friedman, Milton, 16, 31, 93, 104, 121, 190 Furman, Jason, 86 GAFAM, 173 GameStop, 27 game theory, 48, 90–91, 129, 159–60, 179–80 Gelman, Andrew, 108 gender, 6–9, 93 GenZ, 166 Giavazzi, Francesco, 68 Gigerenzer, Gerd, 48 Gilded Age, 133 Giudici, Claudio, 69 Glaeser, Ed, 92 globalisation, 110, 132, 139, 154, 164, 193–96, 213 Goldman Sachs, 19 Good Economics for Hard Times (Banerjee and Duflo), 109 Goodhart’s Law, 72, 103 Google, 133, 141, 173, 201, 204–5 Gordon, Robert, 142 Gould, Stephen Jay, 49–50 Gove, Michael, 110, 149 Government Economic Service (GES), 53, 83–85 GPT, 169 Great Depression, 3, 10, 17, 20, 74, 191, 213 Great Financial Crisis (GFC): behavioural economics and, 51; consequences of, 1, 3, 11, 213; digital economy and, 113–14; dynamic stochastic general equilibrium models and, 31; forecasting, 30, 101, 112–13; Greece and, 56–58, 67; Italy and, 56–58, 67–69; models and, 31, 101, 113; outsider context and, 87–88, 101, 110, 112–14; progress and, 149, 153, 159; public responsibilities and, 16–19, 21, 29–31, 37–38, 50–51, 56, 67–68, 73–74, 79, 84; technology and, 56, 181; twenty-first-century policy and, 194 Great Moderation, 17, 73 Greece, 56, 67–68 greed, 11, 16, 29, 164 Green, Duncan, 95–96 Green Book, 56, 126 Greenspan, Alan, 101 Griliches, Zvi, 198 Gross Domestic Product (GDP), 60; Covid19 pandemic and, 88, 165; Fisher Ideal index and, 144n3; FISIM and, 28; flatlining of, 142; free market and, 130; Gross Domestic Product (GDP) and, 172–73; Gross National Product (GNP) and, 151; growth and, 28, 46, 88, 97, 138, 143–44, 159, 165, 169, 171–72; inflation and, 13, 113, 148; internet and, 97; Laspeyres index and, 144n3; macroeconomics and, 13, 101, 113, 151; progress and, 138, 142–44, 148, 151, 158–59, 165, 172–73; real, 101, 142–44, 169, 173; Sen-Stiglitz-Fitoussi Commission on the Measurement of Economic Performance and, 151; social welfare and, 134; twenty-first-century policy and, 187; Winter of Discontent and, 158, 192 Gross National Product (GNP), 151 Grove, Andy, 41 growth: changing economies and, 171–72, 212; Covid19 pandemic and, 88, 165; derivatives market and, 16, 23, 28; digital technology and, 129, 132, 140, 143, 194–210; education and, 16–17, 132; empirical work and, 17, 61, 78, 209; endogenous growth theory and, 17, 202; faster, 66, 71, 144, 159; forecasting, 37, 61; Goodhart’s Law and, 72; Gross Domestic Product (GDP) and, 28, 46, 88, 97, 138, 143–44, 159, 165, 169, 171–72; income, 70, 131, 138, 143, 164–65, 194, 207; inflation and, 12, 66, 73, 178; innovation and, 37, 41, 46, 68, 71, 194, 209; internet and, 97; living standards and, 143–47, 172, 194; outsider context and, 12, 97, 101n1, 111; political economy and, 167, 181, 188–95; progress and, 138, 140, 143–45, 152, 159, 165; public responsibilities and, 16–17, 23, 28, 37, 41, 46, 61, 66, 68–73, 76, 78; recession and, 17, 51, 73, 111, 154, 158–59; slow, 11, 72; spillovers and, 129–30; sustainability and, 11, 20, 111, 148, 152, 166; technology and, 71, 132, 140, 202; twenty-first-century policy and, 187, 191–92, 194, 202, 207, 209; velocity of money and, 71 Guardian, 159 happiness, 70–71, 153 Harberger, A.

., 90 Boskin Commission, 146–47 Boston Dynamics, 137 Bowles, Sam, 85, 117, 119 Bretton Woods, 192 Brexit, 1, 37, 53, 56, 70, 110, 131, 155, 213 Brown, Dan, 108 Brynjolfsson, Eric, 176 bubbles, 20, 22, 29 Buchanan, James, 33 budget constraints, 177 Bundeskartellamt, 205 Bureau of Economic Policy Analysis, 66 business cycles, 71, 81, 102, 124 calculus, 16, 33, 90, 145 Calculus of Consent, The: Logical Foundations of Constitutional Democracy (Buchanan and Tullock), 33 Camus, Albert, 87, 108, 111 capitalism: criticism of, 19–20; free market and, 19, 41, 186; globalisation and, 110, 132, 139, 154, 164, 193–94, 196, 213; inequality from, 19; progress and, 143, 149; Schumpeter on, 143; twenty-first-century policy and, 186, 190, 195 Capital (Piketty), 131 carbon emissions, 38–40, 180, 187 Carlin, Wendy, 85 Cartlidge, John, 27 Case, Anne, 131 cash for clunkers, 55, 63 causality: bias and, 13, 105; correlation and, 94; deductive approach and, 103; economically establishing, 100; empirical work and, 2, 61, 94–96, 99; feedback and, 11, 94, 96; Leamer on, 102; methodological debate over, 2; models and, 2, 94–95, 102; moral issues and, 96; outsider context and, 94–96, 99–105; progress and, 137; public responsibilities and, 61, 74; randomised control trials (RCTs) and, 93–95, 105, 109–10; reflexivity and, 11, 81; societal statistics and, 61; statistics and, 61, 95, 99, 102; two-way, 94, 96 central banks: independence of, 16; progress and, 149; public responsibilities and, 16, 32, 62, 64, 66–67, 76, 81 central planning: artificial intelligence (AI) and, 184, 186–87; competition and, 38, 41, 124, 182; failure of communist, 40, 182–88, 190; socialist calculation debate and, 182–88, 190, 209 Central Planning Bureau, 66 Chetty, Raj, 86 Chicago School, 24–25, 73, 75, 190, 193–94 Chile, 184 China, 173, 195, 206 Citadel, 27 City of London, 16, 19 climate change, 85, 148, 154 Close the Door campaign, 155–56 cloud computing, 150, 170–72, 184, 197 Coase, Ronald, 57–58, 62, 98–99 codes of conduct, 9, 206 cognitive science, 35–36, 48, 51, 91–92, 118–19, 186 Colander, David, 100 Cold War, 190 Coming of Post-Industrial Society, The (Bell), 67 common sense, 78, 127 communication, 53, 127, 168; bandwidth and, 171; compression and, 171; cost of, 196; 4G platforms and, 195; instant messaging, 171; latency and, 171; price of, 150, 171, 177; servers and, 25–26, 141, 170; smartphones and, 46, 138–39, 164, 171, 173, 177, 195, 198; SMS, 171; social media and, 52, 73, 82, 140–41, 149, 157, 163, 173, 176–77, 195; telephony and, 4, 31, 46, 98, 123, 138–39, 144, 156, 164, 171, 173–74, 177, 184, 195, 198; 3G platforms, 60, 139, 173, 195; transmission speeds and, 171 comparative advantage, 78, 97 competition: behavioural fix and, 45–51; central planning and, 38, 41, 124, 182; Chinese, 173, 195, 206; creative destruction and, 41; digital economy and, 42, 85, 165, 181, 201–6; directory numbers and, 60; empirical work and, 181, 209; envelopment and, 203–4; incumbents and, 41–42; innovation and, 28, 41, 46, 68, 85, 209; monopolies and, 20, 42; network effects and, 202, 205; opportunity cost and, 56, 58, 80, 156; outsider context and, 98, 105; Pareto criterion and, 122–23, 126–27, 129; production and, 12, 41; profit and, 33, 41–42, 105, 204; progress and, 135, 158, 165; public responsibilities and, 28, 33, 38, 41–42, 45–48, 57–69, 74, 77, 79, 85; rationality and, 117; resource, 41, 45, 117, 123, 125; separation protocol and, 120, 123–25; socialist calculation debate and, 182–83; special interest groups and, 64–66; specific studies in, 12; spectrum auctions and, 60–61; SSNIP test and, 204; twenty-first-century policy and, 182, 201–9 Competition and Markets Authority (CMA), 205 computers: AI and, 116 (see also artificial intelligence [AI]); Black-Scholes-Merton model and, 24–25; changing technology and, 169; cloud computing and, 150, 170–72, 184, 197; data sets and, 2, 13, 51–52, 60, 101, 161, 177, 201, 209; David on, 169; declining price of, 170; empirical work and, 2, 17, 52; exchange locations and, 25; feedback and, 179; Millennium Bug and, 155; Moore’s Law and, 170, 184; power of, 2, 17, 40, 58, 170, 183–84, 188; progress and, 138, 144, 155; rationality and, 116–17; servers and, 25–26, 141, 170; software and, 25, 140, 155, 171, 177–78, 186, 197, 200–201, 203; Solow on, 169; speed and, 25, 184; statistics and, 17, 52, 58, 144, 169; supercomputers, 170; twenty-first-century policy and, 183–84, 186, 188, 214; ultra-high frequency trading (HFT) and, 25–27 conservatism, 30 Consumer Price Index (CPI), 146–47, 172 consumers: bad choices and, 3; behavioural economics and, 22, 59–60, 92, 109; conspicuous consumption and, 42; digital economy and, 42, 137, 172–76, 181, 198, 200–206, 213; empirical work and, 3, 181; income and, 93 (see also income); innovation and, 28, 102, 200; Keynes and, 22; online shopping and, 173, 198; outsider context and, 92, 96, 98, 100–102, 105, 108–9; progress and, 137, 141, 144, 146–47, 151; public responsibilities and, 22, 28, 42, 59–60, 65; rationality and, 116; technology and, 28, 102, 171–76, 181, 200, 213; time spent online, 176–78; twenty-first-century policy and, 184, 198–206; welfare and, 105, 206 Cook, Eli, 150 copyright, 140 CORE’s The Economy, 85–86, 212–13 cost-benefit analysis (CBA), 56–57, 58n12, 125–26, 207 cost of living, 143–47, 172 counterfactuals, 97–98, 158, 161, 198, 208 Covid19 pandemic: body politics and, 163; financial recovery from, 88, 114; GDP growth and, 88, 165; impact of, 3, 10–11, 14, 20, 38, 43, 45, 68, 75, 88, 110, 114, 132–33, 149, 153, 155, 163–66, 181, 194, 213–15; lockdowns and, 3, 43, 45, 88, 114, 163, 198; public opinion and, 165–66 “Creating Humble Economists” (Colander), 100 creative destruction, 41 curriculum issues, 2, 4–5, 83, 85, 88 Daily Telegraph, 159 Darwin, Charles, 48 data centres, 26 data sets, 2, 13, 51–52, 60, 101, 161, 177, 201, 209 David, Paul, 169 Deaths of Despair (Case and Deaton), 131 Deaton, Angus, 128–29, 131 debt, 76, 101, 153 decision making: artificial intelligence (AI) and, 116, 186–87; bias and, 13, 109, 187, 209; Green Book and, 56, 126; normative economics and, 110, 114, 120; opportunity cost and, 56; outsider context and, 93; production and, 12, 123, 140, 196; progress and, 160, 162; rationality and, 116 (see also rationality); rules of thumb and, 47–48, 90, 117, 212; self knowledge and, 81; separation protocol and, 120 DeepMind, 115–16 Deliveroo, 173 demand management, 31, 191–92 democracy, 33, 67, 69, 79, 193 deregulation, 16, 31, 60, 68, 71, 193–94 derivative markets, 16, 18, 23–25, 28 Desrosières, Alain, 146 Dickens, Charles, 150 digital economy: AI and, 115 (see also artificial intelligence (AI)); changing nature of, 168–81; cloud computing and, 150, 170–72, 184, 197; cogs and, 6, 129, 154, 165, 179; competition and, 42, 85, 165, 181, 201–6; consumers and, 42, 137, 172–76, 181, 198, 200–206, 213; difference of, 168–76; dominance of by giant companies, 133; envelopment and, 203–4; 4G platforms, 195; GAFAM and, 173; globalisation and, 110, 132, 139, 154, 164, 193–96, 213; GPTs and, 169; Great Financial Crisis (GFC) and, 113–14; growth and, 129, 132, 140, 143, 194, 202; implications of, 176–78, 211–14; individual and, 6, 13–14, 128–29, 141, 175, 179, 181, 201; innovation and, 169–70; market changes and, 173–76; measuring online value and, 176; monsters and, 6, 154; network effects and, 127, 141, 174, 177, 185, 199–202, 205, 209; new agenda for, 179–81; online shopping and, 173, 198; Phillips machine and, 135–37, 151, 192; populism and, 211; production and, 132, 140, 142, 176, 195–97, 202, 213; progress and, 14, 137–43, 150, 153–54, 164–67; Project CyberSyn and, 184; services and, 176; software and, 25, 140, 155, 171, 177–78, 186, 197, 200–201, 203; statistics and, 113, 150, 164, 170, 172, 212; superstar features and, 173–74; 3G platforms, 60, 139, 173, 195; twenty-first-century policy and, 13, 185–88, 194–210; wealth creation and, 132–33; welfare and, 128, 134, 143, 206, 208, 212 Director, Aaron, 190 directory numbers, 60 discount rates, 147–48 diversity, 6–9, 213–14 Dow Jones, 26 Duflo, Esther, 20–21, 52, 109, 137 eBay, 175 ECO, 11 Economics Job Market Rumors, 8 Economics Observatory (ECO), 214 economies of scale: changing technology and, 174; network effects and, 127, 174, 177, 185, 199–201, 209; progress and, 142 education: derivatives and, 16; growth and, 16–17, 132; interventions and, 12; online, 177; policy on, 60; provision of basic, 30; real-world context and, 88; skills and, 88, 128, 132, 169–70; spread of higher, 151, 153 Efficient Markets Hypothesis, 17, 29 Eichengreen, Barry, 16 electricity: changing economies and, 127, 169, 191–92; progress and, 139, 142, 156, 165, 169, 191–92; regulation and, 65; supply of, 32; twenty-first-century policy and, 191–92, 200–201; warranties on goods and, 105 empirical work: behavioural economics and, 117, 159; causality and, 2, 61, 94–96, 99; competition and, 181, 209; computers and, 2, 17, 52; consumers and, 3, 181; context and, 17, 35, 61, 78, 92; correlation and, 70, 94; counterfactuals and, 97–98, 158, 161, 198, 208; data sets and, 2, 13, 51–52, 60, 101, 161, 177, 201, 209; feedback and, 11, 94–95, 155, 179, 188–89, 203, 205; growth and, 17, 61, 78, 209; macroeconomics and, 74, 100; market structures and, 35; physics envy and, 50; politics and, 3, 76, 78–79, 124, 213; populism and, 77; public responsibilities and, 17, 35, 40, 52, 61, 70, 74–81, 90, 92, 94–102, 110–11; randomised control trials (RCTs) and, 93–95, 105, 109–10; rationality and, 17; separation protocol and, 119, 124, 128; social constructs and, 13; statistics and, 17, 52, 61, 90, 95, 99; taxes and, 3; theory and, 2, 17, 52, 74, 90, 96, 99, 124, 181 endogenous growth theory, 17, 202 Enlightenment, 20 envelopment, 203–4 environmentalists, 126 equilibrium, 31, 38–39, 90–91, 123, 182 ethics, 4, 34, 39, 100, 105, 115, 119–24 Ethics and Society group, 115 ethnicity, 6–7, 9 European Commission, 67, 130, 205 European Steel and Coal Community, 190 European Union (EU), 37, 67, 195, 204 Eurozone, 67, 74 exchange rates, 118, 192 Facebook, 133, 173, 204–5 facial recognition, 165 fairness, 43, 45–46, 166 fake items, 98 Fear Index, The (Harris), 27 feedback: causality and, 11, 94–96; changing technology and, 179; political economy and, 188–89; progress and, 155; twenty-first-century policy and, 203, 205 financial intermediation services indirectly measured (FISIM), 28 Financial Times, 68–69, 97–98 Fisher Ideal index, 144n3 fixed costs, 174, 177, 179, 185–86, 200 forecasting: agent-based modeling and, 102; conditional projections and, 76; financial crises and, 17, 30, 100–101, 112–13; growth and, 37, 61; inflation and, 36; macroeconomics and, 3, 12, 36–37, 76, 101–2, 112; models and, 17, 74, 101–2, 113; self-fulfilling prophecies and, 5, 22–23, 154–55, 157; twenty-first-century policy and, 205; weather, 76 Fourastié, J., 191 4G platforms, 195 framing, 47, 130, 208 Frankenfinance, 18, 21, 25, 51–52, 165 Freakonomics, 108 free market: Brexit and, 213; capitalism and, 19, 41, 186; criticism of, 19; globalisation and, 110, 132, 139, 154, 164, 193–94, 196, 213; politics and, 30, 36, 130, 206; public responsibilities and, 19, 30–32, 35–36, 45, 54; separation protocol and, 123–24; twenty-first-century policy and, 182, 186, 191, 193, 195, 207 frictions, 22, 113, 136, 154, 182 Friedman, Ben, 16 Friedman, Milton, 16, 31, 93, 104, 121, 190 Furman, Jason, 86 GAFAM, 173 GameStop, 27 game theory, 48, 90–91, 129, 159–60, 179–80 Gelman, Andrew, 108 gender, 6–9, 93 GenZ, 166 Giavazzi, Francesco, 68 Gigerenzer, Gerd, 48 Gilded Age, 133 Giudici, Claudio, 69 Glaeser, Ed, 92 globalisation, 110, 132, 139, 154, 164, 193–96, 213 Goldman Sachs, 19 Good Economics for Hard Times (Banerjee and Duflo), 109 Goodhart’s Law, 72, 103 Google, 133, 141, 173, 201, 204–5 Gordon, Robert, 142 Gould, Stephen Jay, 49–50 Gove, Michael, 110, 149 Government Economic Service (GES), 53, 83–85 GPT, 169 Great Depression, 3, 10, 17, 20, 74, 191, 213 Great Financial Crisis (GFC): behavioural economics and, 51; consequences of, 1, 3, 11, 213; digital economy and, 113–14; dynamic stochastic general equilibrium models and, 31; forecasting, 30, 101, 112–13; Greece and, 56–58, 67; Italy and, 56–58, 67–69; models and, 31, 101, 113; outsider context and, 87–88, 101, 110, 112–14; progress and, 149, 153, 159; public responsibilities and, 16–19, 21, 29–31, 37–38, 50–51, 56, 67–68, 73–74, 79, 84; technology and, 56, 181; twenty-first-century policy and, 194 Great Moderation, 17, 73 Greece, 56, 67–68 greed, 11, 16, 29, 164 Green, Duncan, 95–96 Green Book, 56, 126 Greenspan, Alan, 101 Griliches, Zvi, 198 Gross Domestic Product (GDP), 60; Covid19 pandemic and, 88, 165; Fisher Ideal index and, 144n3; FISIM and, 28; flatlining of, 142; free market and, 130; Gross Domestic Product (GDP) and, 172–73; Gross National Product (GNP) and, 151; growth and, 28, 46, 88, 97, 138, 143–44, 159, 165, 169, 171–72; inflation and, 13, 113, 148; internet and, 97; Laspeyres index and, 144n3; macroeconomics and, 13, 101, 113, 151; progress and, 138, 142–44, 148, 151, 158–59, 165, 172–73; real, 101, 142–44, 169, 173; Sen-Stiglitz-Fitoussi Commission on the Measurement of Economic Performance and, 151; social welfare and, 134; twenty-first-century policy and, 187; Winter of Discontent and, 158, 192 Gross National Product (GNP), 151 Grove, Andy, 41 growth: changing economies and, 171–72, 212; Covid19 pandemic and, 88, 165; derivatives market and, 16, 23, 28; digital technology and, 129, 132, 140, 143, 194–210; education and, 16–17, 132; empirical work and, 17, 61, 78, 209; endogenous growth theory and, 17, 202; faster, 66, 71, 144, 159; forecasting, 37, 61; Goodhart’s Law and, 72; Gross Domestic Product (GDP) and, 28, 46, 88, 97, 138, 143–44, 159, 165, 169, 171–72; income, 70, 131, 138, 143, 164–65, 194, 207; inflation and, 12, 66, 73, 178; innovation and, 37, 41, 46, 68, 71, 194, 209; internet and, 97; living standards and, 143–47, 172, 194; outsider context and, 12, 97, 101n1, 111; political economy and, 167, 181, 188–95; progress and, 138, 140, 143–45, 152, 159, 165; public responsibilities and, 16–17, 23, 28, 37, 41, 46, 61, 66, 68–73, 76, 78; recession and, 17, 51, 73, 111, 154, 158–59; slow, 11, 72; spillovers and, 129–30; sustainability and, 11, 20, 111, 148, 152, 166; technology and, 71, 132, 140, 202; twenty-first-century policy and, 187, 191–92, 194, 202, 207, 209; velocity of money and, 71 Guardian, 159 happiness, 70–71, 153 Harberger, A.


pages: 607 words: 133,452

Against Intellectual Monopoly by Michele Boldrin, David K. Levine

accounting loophole / creative accounting, agricultural Revolution, barriers to entry, business cycle, classic study, cognitive bias, cotton gin, creative destruction, David Ricardo: comparative advantage, Dean Kamen, Donald Trump, double entry bookkeeping, en.wikipedia.org, endogenous growth, Ernest Rutherford, experimental economics, financial innovation, Great Leap Forward, Gregor Mendel, Helicobacter pylori, independent contractor, informal economy, interchangeable parts, invention of radio, invention of the printing press, invisible hand, James Watt: steam engine, Jean Tirole, John Harrison: Longitude, Joseph Schumpeter, Kenneth Arrow, linear programming, market bubble, market design, mutually assured destruction, Nash equilibrium, new economy, open economy, PalmPilot, peer-to-peer, pirate software, placebo effect, price discrimination, profit maximization, rent-seeking, Richard Stallman, Robert Solow, seminal paper, Silicon Valley, Skype, slashdot, software patent, the market place, total factor productivity, trade liberalization, Tragedy of the Commons, transaction costs, Y2K

The theory of why IP-efficiency comes about is rather simple: like every profit maximizing entrepreneur, monopolists are willing and able to do anything legally and technically feasible to retain their monopoly profits. Later in the book, we talk about the Schumpeterian model of dynamic efficiency via creative destruction. This model dreams of a continuous flow of innovation due to new entrants overtaking incumbents and becoming monopolists until new innovators quickly take their place. In this theory, new entrants work like mad to innovate, drawn by the enormous monopoly profits they will make. Our simple observation is that, by the same token, monopolists will also work like mad to retain their enormous monopoly profits.

The authors call the cross-licensing between innovators and incumbents aimed at maintaining monopoly pricing for the cooper-ators “cooperative commercialization strategy,” and conclude the following: “While a cooperative commercialization strategy forestalls the costs of competition in the product market and avoids duplicative investments in sunk assets, imperfections in the “market for ideas” may lead innovators to instead pursue a competitive strategy in the product market. . . . [F]irms who control intellectual property or are associated with venture capital financing are more likely to pursue a cooperative strategy” (p. 30). Notice what this says: IP facilitates collusive behavior and the persistence of monopoly. Competition and “creative destruction” come along only when IP rights are weak or nonexistent. To which we say, “Exactly, Sherlock.” 14. Online at http://www.freepatentsonline.com/20050160457.html (accessed February 24, 2008). 15. The Federal Circuit Court Opinion in this case can be found at http://www.ll. georgetown.edu/federal/judicial/fed/opinions/00opinions/00-1464.html (accessed February 24, 2008). 16.

Schumpeterian Good Monopoly Although originally not a mainstream view in economics, the Schumpeterian view is now close to becoming orthodoxy in most circles.30 Schumpeter celebrates monopoly as the ultimate accomplishment of capitalism. He argues that, in a world in which intellectual property holders are monopolists, competition is a dynamic process that is implemented via the method of creative destruction. This idea remains widespread today; for example, Aghion and Howitt in 1992 developed a formal model based on Schumpeterian ideas. The critical principle is that competition is not in the market P1: KNP head margin: 1/2 gutter margin: 7/8 CUUS245-07 cuus245 978 0 521 87928 6 May 21, 2008 16:55 170 Against Intellectual Monopoly but for the market; while competition may be good at a given point in time, as it induces static efficiency, monopoly is good in the long run, these theorists argue, because it brings about dynamic efficiency, that is, innovation.


pages: 166 words: 49,639

Start It Up: Why Running Your Own Business Is Easier Than You Think by Luke Johnson

Albert Einstein, barriers to entry, Bear Stearns, Bernie Madoff, business cycle, collapse of Lehman Brothers, compensation consultant, Cornelius Vanderbilt, corporate governance, corporate social responsibility, creative destruction, credit crunch, false flag, financial engineering, Ford Model T, Grace Hopper, happiness index / gross national happiness, high net worth, James Dyson, Jarndyce and Jarndyce, Jarndyce and Jarndyce, Kickstarter, mass immigration, mittelstand, Network effects, North Sea oil, Northern Rock, patent troll, plutocrats, Ponzi scheme, profit motive, Ralph Waldo Emerson, Silicon Valley, software patent, stealth mode startup, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, traveling salesman, tulip mania, Vilfredo Pareto, wealth creators

To the recent graduate Part 2 PEOPLE Age and the founder Time, energy and ideas Poor children of the rich and successful Joys and perils of a partnership Networking Cliques and clubs – the ties that bind Mentoring The founder’s passion Bottom-up management An end to pygmy bosses and grey leaders Coping with talent Trouble within Private-life drama The necessary evil of HR Part 3 POINTS OF STYLE Bring back the Renaissance men There always will be blood Fatherhood and the entrepreneur Some day my prince will come (home early) The delights of the portfolio career The mythical entrepreneur Ritualism in business Made not born The brogue element Part 4 THE CAPITAL PURSUIT Tales of the Money Riverbank Moonlighting: the best launch for a start-up Summoning an angel Venture capitalists: on another wavelength Banks Secondary sources of money A word about dumb money Part 5 FORMULAS The trouble with trying to spot a winner Five questions I ask myself before investing Business plans A list of don’ts A spell in service By the staff, for the staff Independents will always have their day Franchises – the worst of all worlds Part 6 THE CYCLE Turnaround and creative destruction The cycle as told by restaurants Managing in a downturn Faustian pact of a guarantee A sense of dread ails the opinion-makers The consumer’s new mantra is value X & Y in a downturn Dishonest dealings Watch out for an epidemic of petty fraud Time to go on the offensive Hard times reveal the true opportunists Losing your reputation Getting fired Part 7 THE ENTREPRENEUR AT LARGE Inventors are heroes Women inventors Innovation and reality All part of a good education The reputation of business What’s so terrible about making money?

The vendor has probably discovered that the system doesn’t work, and you are likely to have the same difficulties if you proceed. Better to start with a clean sheet, and either put your own name above the door or buy someone else’s good name outright. PART 6 The Cycle Turnaround and creative destruction All businesses and industries are cyclical, and that boom and bust comes to virtually every company. It is human nature to become exuberant at the top and depressed at the bottom – such a roller coaster is the essence of life. I would go so far as to say in general I prefer the company of those who have highs and lows, rather than someone whose mood is flat and unchanging.

Markets and exchanges are merely mechanisms that reflect the temperament of man. Witnessing and participating in such upheaval can be traumatic. Take the collapse of Lehman Brothers and the forced sell-offs of Merrill Lynch and HBoS. For the staff, their families, and other stakeholders, this classic example of Schumpeter’s ‘creative destruction’ is hardly something to be celebrated. Here is a sudden and jolting reallocation of resources. Overnight, venerable institutions are destroyed, and new ones spring up, phoenix-like, to fill the gap. But this process of renewal is at the heart of capitalism. Inefficient and misguided organizations disappear and ultimately more productive ones arise.


pages: 356 words: 51,419

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle

asset allocation, backtesting, buy and hold, creative destruction, currency risk, diversification, diversified portfolio, financial intermediation, fixed income, index fund, invention of the wheel, Isaac Newton, John Bogle, junk bonds, low interest rates, new economy, passive investing, Paul Samuelson, random walk, risk tolerance, risk-adjusted returns, Sharpe ratio, stocks for the long run, survivorship bias, transaction costs, Upton Sinclair, Vanguard fund, William of Occam, yield management, zero-sum game

Simply because they own shares of businesses, and businesses as a group earn substantial returns on their capital, pay out dividends to their owners, and reinvest what’s left for their future growth. Yes, many individual companies fail. Firms with flawed ideas and rigid strategies and weak managements ultimately fall victim to the creative destruction that is the hallmark of competitive capitalism, only to be succeeded by other firms.3 But in the aggregate, businesses have grown with the long-term growth of our vibrant economy. Since 1929, for example, our nation’s gross domestic product (GDP) has grown at a nominal annual rate of 6.2 percent; annual pretax profits of our nation’s corporations have grown at a rate of 6.3 percent.

In retrospect, it seems clear that my pioneering creation of the first index mutual fund in 1975 provided the spark that ignited the index revolution. And it also seems reasonable to conclude that my books, read by an estimated 1.5 million readers, played a major role in fueling the extraordinary power of the revolution that followed. The creative destruction reaped by index funds has, by and large, served investors well. As you read this 10th Anniversary Edition of The Little Book of Common Sense Investing, you’ll see that it stands firmly behind the sound principles of its predecessors, with new chapters on dividends, asset allocation, and retirement planning focused on the implementation of those principles.  

Today, if you wish, you could literally hold all your wealth in a diversified portfolio of low-cost traditional index funds representing every asset class and every market sector within the United States or around the globe. 2 Over the past century, the average nominal return on U.S. stocks was 10.1 percent per year. In real terms (after 3.4 percent inflation) the real annual return was 6.7 percent. During the next decade, both returns are likely to be significantly lower. (See Chapter 9.) 3 “Creative destruction” is the formulation of Joseph E. Schumpeter in his 1942 book Capitalism, Socialism, and Democracy. 4 “Economical,” “efficient,” and “honest” are the words I used in my 1951 Princeton University thesis, “The Economic Role of the Investment Company.” Some principles are eternal. Chapter One A Parable The Gotrocks Family EVEN BEFORE YOU THINK about “index funds”—in their most basic form, mutual funds that simply buy shares of substantially all of the stocks in the U.S. stock market and hold them forever—you must understand how the stock market actually works.


pages: 272 words: 83,798

A Little History of Economics by Niall Kishtainy

Alvin Roth, behavioural economics, British Empire, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon tax, central bank independence, clean water, Corn Laws, Cornelius Vanderbilt, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Dr. Strangelove, Eugene Fama: efficient market hypothesis, first-price auction, floating exchange rates, follow your passion, full employment, George Akerlof, Great Leap Forward, greed is good, Hyman Minsky, inflation targeting, invisible hand, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, loss aversion, low interest rates, market clearing, market design, means of production, Minsky moment, moral hazard, Nash equilibrium, new economy, Occupy movement, Pareto efficiency, Paul Samuelson, Phillips curve, prisoner's dilemma, RAND corporation, rent-seeking, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Solow, Ronald Reagan, sealed-bid auction, second-price auction, The Chicago School, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, Vickrey auction, Vilfredo Pareto, washing machines reduced drudgery, wealth creators, Winter of Discontent

The gist of it was that because the economy couldn’t right itself, the government had to. It had to take on a larger role in the economy than ever before, in the hope that a disaster like the Great Depression would never happen again. Capitalism survived the storm, but it was changed forever. CHAPTER 19 Creative Destruction The Austrian economist Joseph Schumpeter (1883–1950) loved to show off his brilliant intellect and keen wit. He once said that he had three ambitions: to be the greatest economist in the world, the finest horseman in Austria and the best lover in Vienna. He regretted, he said, that he’d only succeeded in two of them, adding that, unfortunately, things hadn’t been going so well with the horses lately.

Boom and bust, the up-and-down cycles of the capitalist economy, come from successive waves of innovation, the ebb and flow of entrepreneurship and imitation. New technologies kill off old ones – the horse-drawn cart gives way to the car, the candle to the light bulb. Companies like the camera film manufacturer Kodak rise, then decline, and new leaders appear, like Samsung, who put digital cameras into mobile phones. Schumpeter called it ‘creative destruction’. In Schumpeter’s view, capitalism is nothing but the constant change caused by restless entrepreneurs. Unlike most economists, Schumpeter thought that monopolies helped the economy to advance. Economists usually view monopolies as inefficient because they charge too much and produce too little.

‘What a pathetic figure is the economic actor who is always searching anxiously for an equilibrium,’ says Schumpeter. ‘He has no ambition and no entrepreneurial spirit. He is, in short, without force and life.’ To Schumpeter the most important thing about capitalism was that entrepreneurs are constantly throwing rocks into the pond. The waves of creative destruction never die down. In Marshall’s economy, firms compete on the price of oil lamps. In Schumpeter’s, successful entrepreneurs blow away their competitors by inventing light bulbs. In fact, capitalism is a bit like Schumpeter himself: bold and vital, fizzing with new ideas, never at rest. Underneath Schumpeter’s surface of sparkle and wit, however, was a troubled mind, and in the capitalism that he tried to understand he perceived a dark side.


pages: 252 words: 78,780

Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us by Dan Lyons

"Friedman doctrine" OR "shareholder theory", "Susan Fowler" uber, "World Economic Forum" Davos, Airbnb, Amazon Robotics, Amazon Web Services, antiwork, Apple II, augmented reality, autonomous vehicles, basic income, Big Tech, bitcoin, blockchain, Blue Ocean Strategy, business process, call centre, Cambridge Analytica, Clayton Christensen, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, cryptocurrency, data science, David Heinemeier Hansson, digital rights, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, fake news, full employment, future of work, gig economy, Gordon Gekko, greed is good, Hacker News, hiring and firing, holacracy, housing crisis, impact investing, income inequality, informal economy, initial coin offering, Jeff Bezos, job automation, job satisfaction, job-hopping, John Gruber, John Perry Barlow, Joseph Schumpeter, junk bonds, Kanban, Kevin Kelly, knowledge worker, Larry Ellison, Lean Startup, loose coupling, Lyft, Marc Andreessen, Mark Zuckerberg, McMansion, Menlo Park, Milgram experiment, minimum viable product, Mitch Kapor, move fast and break things, new economy, Panopticon Jeremy Bentham, Parker Conrad, Paul Graham, paypal mafia, Peter Thiel, plutocrats, precariat, prosperity theology / prosperity gospel / gospel of success, public intellectual, RAND corporation, remote working, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, Ruby on Rails, Sam Altman, San Francisco homelessness, Sand Hill Road, scientific management, self-driving car, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, six sigma, Skinner box, Skype, Social Responsibility of Business Is to Increase Its Profits, SoftBank, software is eating the world, Stanford prison experiment, stem cell, Steve Jobs, Steve Wozniak, Stewart Brand, stock buybacks, super pumped, TaskRabbit, tech bro, tech worker, TechCrunch disrupt, TED Talk, telemarketer, Tesla Model S, Thomas Davenport, Tony Hsieh, Toyota Production System, traveling salesman, Travis Kalanick, tulip mania, Uber and Lyft, Uber for X, uber lyft, universal basic income, web application, WeWork, Whole Earth Catalog, work culture , workplace surveillance , Y Combinator, young professional, Zenefits

Bloomberg, August 9, 2017. https://www.bloomberg.com/news/articles/2017-08-09/in-age-of-uber-a-101-year-old-business-approaches-its-twilight. Werber, Cassie. “Machines Are Destroying Some Jobs, but Also Creating Better Ones Through ‘Creative Destruction.’” Quartz, August 19, 2015. https://qz.com/483006/machines-are-destroying-some-jobs-but-also-creating-better-ones-through-creative-destruction. Chapter 7: Insecurity: “We’re a Team, Not a Family” All Things Considered. “How the Architect of Netflix’s Innovative Culture Lost Her Job to the System.” National Public Radio, Planet Money Special Series, September 3, 2015. https://www.npr.org/2015/09/03/437291792/how-the-architect-of-netflixs-innovative-culture-lost-her-job-to-the-system.

But the jobs being created are mostly bad ones. Meanwhile, gig-economy companies threaten established industries. Airbnb steals business from hotels. Uber and Lyft have hurt business at car-rental companies like Hertz and Avis, and have utterly decimated the taxi and livery business. Pundits like to talk about “creative destruction” as if it were an abstract concept, but the sight of a driver parked in front of City Hall with his head blown off served as a reminder that all this change and so-called progress is coming at a very high cost to actual human beings. As the New York Times reported, Schifter “was not a participant in the gig economy; he was a casualty of it.”

“If today is considered a retail apocalypse, then what’s coming next could truly be scary,” Bloomberg reported in November 2017, predicting that by the time the storm ends as many as eight million people, most of them low-income workers, could be put out of work. Where are those eight million laid-off retail workers going to go? People in Silicon Valley like to talk about “creative destruction,” a term popularized by economist Joseph Schumpeter. In the happy-face version of how this works, technology kills old jobs, but it also creates new and better ones. Factory workers lose their jobs to robots, but then go to work at the company that makes the robots. But eight million displaced retail workers are not going to get absorbed into Amazon.


pages: 297 words: 84,009

Big Business: A Love Letter to an American Anti-Hero by Tyler Cowen

"Friedman doctrine" OR "shareholder theory", 23andMe, Affordable Care Act / Obamacare, augmented reality, barriers to entry, Bernie Sanders, Big Tech, bitcoin, blockchain, Bretton Woods, cloud computing, cognitive dissonance, company town, compensation consultant, corporate governance, corporate social responsibility, correlation coefficient, creative destruction, crony capitalism, cryptocurrency, dark matter, David Brooks, David Graeber, don't be evil, Donald Trump, driverless car, Elon Musk, employer provided health coverage, experimental economics, Fairchild Semiconductor, fake news, Filter Bubble, financial innovation, financial intermediation, gentrification, Glass-Steagall Act, global reserve currency, global supply chain, Google Glasses, income inequality, Internet of things, invisible hand, Jeff Bezos, junk bonds, late fees, Mark Zuckerberg, mobile money, money market fund, mortgage debt, Network effects, new economy, Nicholas Carr, obamacare, offshore financial centre, passive investing, payday loans, peer-to-peer lending, Peter Thiel, pre–internet, price discrimination, profit maximization, profit motive, RAND corporation, rent-seeking, reserve currency, ride hailing / ride sharing, risk tolerance, Ronald Coase, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, The Nature of the Firm, Tim Cook: Apple, too big to fail, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, ultimatum game, WikiLeaks, women in the workforce, World Values Survey, Y Combinator

So often we see that business virtues correlate with social virtues.4 There is another reason American business has done well: the American economy is relatively effective, compared with other countries, in weeding out the worst firms through competitive pressures. The very worst firms in the United States just aren’t that bad compared with the best firms, whereas for other countries the gap is typically much larger. This is another way of saying that Americans do the “creative destruction” part of capitalism—that is, the process by which people vote with their wallets as to which is the best restaurant, car, or suitcase, and the losers go out of business—better than the rest of the world. The problem with protectionism, which at first glance looks appealing because it claims to protect our workers, is that it becomes much harder for more productive businesses to displace the less productive ones, a fundamental source of economic progress.

The goal behind those policies was to limit economic disruption, but long-term dynamism has suffered. By keeping older, possibly insolvent banks and companies up and running, previous decisions and decision-makers are more likely to stay locked in place, which slows down the marketplace process of creative destruction and the replacement of old economic sectors with new ones, including tech. In sectoral terms, the American economy has adjusted better to a changing world, and part of the credit goes to its relatively dynamic institutions of corporate finance. AMERICAN STOCKS HAVE PERFORMED WELL, ENRICHING AMERICANS One way of boosting returns is to distribute the benefits of equity to a greater and more diverse set of individuals.

Bernstein, Elizabeth best sellers See also publishing Bezos, Jeff See also Amazon Big Brother See privacy Big Data Big Pharma Big Tech disappearance of competition impact on intelligence innovation and loss of privacy and overview Bing Bird, Larry Bitcoin Black, Leon BlackBerry Blackstone blockchain Bloxham, Eleanor Blue Cross/Blue Shield brand loyalty Brexit Brin, David Brooks, Nathan bubbles, financial sector Bullshit Jobs: A Theory (Graeber) Burger King cable TV cable companies cable news Capital One capitalism “creative destruction” and Friedman on logic of market churn and media and public’s view of short-termism venture capitalists workers and young people and See also crony capitalism Capitalism for the People, A (Zingales) Carr, Nicholas Carrier CEOs deaths of increases in salary overview pay for creating value short-termism and skill set China American manufacturing and Apple and facial recognition technology financial innovations financial institutions multinational corporations and productivity retail and tech companies and See also Alibaba Cialdini, Robert Cisco Citibank Citizens United decision See also Supreme Court Civil War Clark, Andrew E.


pages: 309 words: 81,975

Brave New Work: Are You Ready to Reinvent Your Organization? by Aaron Dignan

"Friedman doctrine" OR "shareholder theory", Abraham Maslow, activist fund / activist shareholder / activist investor, adjacent possible, Airbnb, Albert Einstein, autonomous vehicles, basic income, benefit corporation, Bertrand Russell: In Praise of Idleness, bitcoin, Black Lives Matter, Black Swan, blockchain, Buckminster Fuller, Burning Man, butterfly effect, cashless society, Clayton Christensen, clean water, cognitive bias, cognitive dissonance, content marketing, corporate governance, corporate social responsibility, correlation does not imply causation, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, David Heinemeier Hansson, deliberate practice, DevOps, disruptive innovation, don't be evil, Elon Musk, endowment effect, Ethereum, ethereum blockchain, financial engineering, Frederick Winslow Taylor, fulfillment center, future of work, gender pay gap, Geoffrey West, Santa Fe Institute, gig economy, Goodhart's law, Google X / Alphabet X, hiring and firing, hive mind, holacracy, impact investing, income inequality, information asymmetry, Internet of things, Jeff Bezos, job satisfaction, Kanban, Kevin Kelly, Kickstarter, Lean Startup, loose coupling, loss aversion, Lyft, Marc Andreessen, Mark Zuckerberg, minimum viable product, mirror neurons, new economy, Paul Graham, Quicken Loans, race to the bottom, reality distortion field, remote working, Richard Thaler, Rochdale Principles, Salesforce, scientific management, shareholder value, side hustle, Silicon Valley, single source of truth, six sigma, smart contracts, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, source of truth, Stanford marshmallow experiment, Steve Jobs, subprime mortgage crisis, systems thinking, TaskRabbit, TED Talk, The future is already here, the High Line, too big to fail, Toyota Production System, Tragedy of the Commons, uber lyft, universal basic income, WeWork, Y Combinator, zero-sum game

by 2027 the average tenure: Innosight, “Creative Destruction Whips Through Corporate America” (executive briefing), Winter 2012, www.innosight.com/wp-content/uploads/2016/08/creative-destruction-whips-through-corporate-america_final2015.pdf. will shrink to just twelve years: Scott D. Anthony, S. Patrick Viguerie, and Andrew Waldeck, “Corporate Longevity: Turbulence Ahead for Large Organizations,” Innosight, Spring 2016, www.innosight.com/wp-content/uploads/2016/08/Corporate-Longevity-2016-Final.pdf; Scott D. Anthony et al., “2018 Corporate Longevity Forecast: Creative Destruction Is Accelerating” (executive briefing), Innosight, February 2018, www.innosight.com/wp-content/uploads/2017/11/Innosight-Corporate-Longevity-2018.pdf.

One thing is for sure: the unprecedented scale of human activity makes things harder than they need to be. While it is undeniably easier to encode the principles and practices of self-management before an organization achieves scale, it can be done long after. What’s more, we must learn how to change at scale or we risk an unnecessary amount of creative destruction in the years ahead. Refreshing large dysfunctional systems without total system failure is actually one of the great challenges of our time. Because while you can found another startup in a weekend, creating another school system or healthcare system or government is another matter entirely.


pages: 395 words: 116,675

The Evolution of Everything: How New Ideas Emerge by Matt Ridley

"World Economic Forum" Davos, adjacent possible, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, Alfred Russel Wallace, AltaVista, altcoin, An Inconvenient Truth, anthropic principle, anti-communist, bank run, banking crisis, barriers to entry, bitcoin, blockchain, Boeing 747, Boris Johnson, British Empire, Broken windows theory, carbon tax, Columbian Exchange, computer age, Corn Laws, cosmological constant, cotton gin, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, cryptocurrency, David Ricardo: comparative advantage, demographic transition, Deng Xiaoping, discovery of DNA, Donald Davies, double helix, Downton Abbey, driverless car, Eben Moglen, Edward Glaeser, Edward Lorenz: Chaos theory, Edward Snowden, endogenous growth, epigenetics, Ethereum, ethereum blockchain, facts on the ground, fail fast, falling living standards, Ferguson, Missouri, financial deregulation, financial innovation, flying shuttle, Frederick Winslow Taylor, Geoffrey West, Santa Fe Institute, George Gilder, George Santayana, Glass-Steagall Act, Great Leap Forward, Greenspan put, Gregor Mendel, Gunnar Myrdal, Henri Poincaré, Higgs boson, hydraulic fracturing, imperial preference, income per capita, indoor plumbing, information security, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jane Jacobs, Japanese asset price bubble, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Khan Academy, knowledge economy, land reform, Lao Tzu, long peace, low interest rates, Lyft, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, meta-analysis, military-industrial complex, mobile money, Money creation, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, Necker cube, obamacare, out of africa, packet switching, peer-to-peer, phenotype, Pierre-Simon Laplace, precautionary principle, price mechanism, profit motive, RAND corporation, random walk, Ray Kurzweil, rent-seeking, reserve currency, Richard Feynman, rising living standards, road to serfdom, Robert Solow, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, scientific management, Second Machine Age, sharing economy, smart contracts, South Sea Bubble, Steve Jobs, Steven Pinker, Stuart Kauffman, tacit knowledge, TED Talk, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, twin studies, uber lyft, women in the workforce

Innovation was the key consequence of free enterprise, dwarfing gains from trade, efficiencies of specialisation and improvements by practice. In a famous phrase introduced in his book Capitalism, Socialism and Democracy in 1942, Schumpeter saw ‘creative destruction’ as the key to economic progress, and the ‘essential fact about capitalism’. For new firms and technologies to emerge, old ones had to die. There is a ‘perennial gale of creative destruction’. Or, as Nassim Taleb puts it, for the economy to be antifragile (strengthened by running risks), individual firms must be fragile. The restaurant business is robust and successful precisely because individual restaurants are vulnerable and short-lived.

But in the end he wanted an agrarian, protected, hierarchical, stable Virginian society. He hated the way people lived ‘piled upon one another in large cities’, and he suggested that America ‘let our workshops remain in Europe’. It was Hamilton, the immigrant, living in chaotic Manhattan, who embraced the future – the creative destruction that commerce and abundant capital would bring, the dissolving of social strata, the upending of power (although he did argue for a small tariff to protect infant industries). In Britain, the founders of the anti-slavery society were free traders. Read, for example, the writings of Harriet Martineau, who shot to fame in the 1830s because of her series of short fictional books called Illustrations of Political Economy.

Even today the internet revolution is undermining Leviathan at every turn. The internet turns everybody into a journalist and a politician; puts the customer in ultimate charge; and lowers the cost for ordinary people to do extraordinary things, whether in charity, business or politics. Big companies are tumbling before its creative-destructive onslaught; big state bureaucracies cannot long resist. As the maverick MP Douglas Carswell puts it, ‘Everything that the internet touches it transforms. The barriers to entry come crashing down. Established operators face competition from nimble upstarts. So, too, in politics.’ Carswell argues that i-democracy is rapidly and inexorably transforming the old ways of doing politics, replacing party-controlled, bureaucracy-enabled traditions with radical emergent possibilities, from open primaries to instant plebiscites, from participatory budgeting in local government to online recall.


pages: 397 words: 112,034

What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Black Swan, Bretton Woods, business cycle, capital controls, carbon credits, carbon tax, Cass Sunstein, central bank independence, classic study, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial engineering, financial innovation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global macro, global reserve currency, global village, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inverted yield curve, invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, precautionary principle, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Ronald Reagan, Savings and loan crisis, sovereign wealth fund, special drawing rights, subprime mortgage crisis, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, Washington Consensus, Westphalian system, WikiLeaks, women in the workforce, yield curve

In the early 1990s, the Scandinavians went through the same sort of structural crisis as Japan, but they have come out the other side in much better shape.1 Growth requires creative destruction. But if the destruction is too destructive, it will be politically intolerable. The Scandinavian use of a well-designed, pro-growth social safety net has made those countries politically safe for creative destruction. Rather than suffering a trade-off between its social safety net and growth, the Scandinavians enjoy a synergy: good growth finances the social safety net, while the safety net makes workers tolerate the creative destruction that generates good growth. Some reformers in Japan want the creative destruction without a proper social safety net.

Some reformers in Japan want the creative destruction without a proper social safety net. Others want to preserve Japan’s traditional, antigrowth social safety net and avoid creative destruction. That is why Japan has so far failed to come up with the needed solution. The DPJ’s handling of the financial crisis at Japan Air Lines (JAL), which involved major concessions from labor as well as loss to stock- and bondholders, is a test case of whether the DPJ can handle the problem of moribund firms better than the LDP. As of this writing, there are some encouraging signs on this front. JAL has been put through formal bankruptcy so that it can be reorganized; it is downsizing its staff and cutting out unprofitable routes.


pages: 424 words: 114,905

Deep Medicine: How Artificial Intelligence Can Make Healthcare Human Again by Eric Topol

"World Economic Forum" Davos, 23andMe, Affordable Care Act / Obamacare, AI winter, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic bias, AlphaGo, Apollo 11, artificial general intelligence, augmented reality, autism spectrum disorder, autonomous vehicles, backpropagation, Big Tech, bioinformatics, blockchain, Cambridge Analytica, cloud computing, cognitive bias, Colonization of Mars, computer age, computer vision, Computing Machinery and Intelligence, conceptual framework, creative destruction, CRISPR, crowdsourcing, Daniel Kahneman / Amos Tversky, dark matter, data science, David Brooks, deep learning, DeepMind, Demis Hassabis, digital twin, driverless car, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, fake news, fault tolerance, gamification, general purpose technology, Geoffrey Hinton, George Santayana, Google Glasses, ImageNet competition, Jeff Bezos, job automation, job satisfaction, Joi Ito, machine translation, Mark Zuckerberg, medical residency, meta-analysis, microbiome, move 37, natural language processing, new economy, Nicholas Carr, Nick Bostrom, nudge unit, OpenAI, opioid epidemic / opioid crisis, pattern recognition, performance metric, personalized medicine, phenotype, placebo effect, post-truth, randomized controlled trial, recommendation engine, Rubik’s Cube, Sam Altman, self-driving car, Silicon Valley, Skinner box, speech recognition, Stephen Hawking, techlash, TED Talk, text mining, the scientific method, Tim Cook: Apple, traumatic brain injury, trolley problem, War on Poverty, Watson beat the top human players on Jeopardy!, working-age population

ERIC TOPOL is a world-renowned cardiologist, executive vice president of Scripps Research, founder of a new medical school, and one of the top ten most-cited medical researchers. The author of The Patient Will See You Now and The Creative Destruction of Medicine, he lives in La Jolla, California. ALSO BY ERIC TOPOL The Patient Will See You Now The Creative Destruction of Medicine NOTES FOREWORD 1. Broyard, A., Intoxicated by My Illness. 2010. New York: Ballantine Books, emphasis mine. 2. Califf, R. M., and R. A. Rosati, “The Doctor and the Computer.” West J Med, 1981 October. 135(4): pp. 321–323. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1273186/.

FIGURE 1.5: The three principal components of the deep medicine model. Source (left panel): Adapted from E. Topol, “Individualized Medicine from Prewomb to Tomb,” Cell (2014): 157(1), 241–253. This isn’t the first time I’ve noted medicine’s reluctance to adopt new technologies. This is the third book that I’ve written on the future of medicine. In the Creative Destruction of Medicine, I mapped out how sensors, sequencing, imaging, telemedicine, and many other technological opportunities enabled us to digitize human beings and achieve the digital transformation of medicine. In The Patient Will See You Now, I made the case for how medicine could be democratized—that medical paternalism would fade as consumers didn’t simply generate their information but owned it, had far greater access to their medical data, and ultimately could (if they chose to) take considerably more charge of their care.

Lewis understood this bias, too: “The entire profession had arranged itself as if to confirm the wisdom of its decisions.”16 Tversky and Kahneman discussed a bias toward certainty in a classic 1974 paper in Science that enumerated the many types of heuristics that humans rely on when dealing with uncertainty.17 Unfortunately, there has never been a lack of uncertainty in medicine, given the relative dearth of evidence in almost every case. Unfortunately, dealing with that uncertainty often leads to a dependence on expert opinions, what I call eminence-based medicine (reviewed in depth in The Creative Destruction of Medicine).18 FIGURE 3.1: Heuristic thinking leads to misdiagnosis of heart attack in the emergency room. Source: Adapted from S. Coussens, “Behaving Discretely: Heuristic Thinking in the Emergency Department,” Harvard Scholar (2017): http://scholar.harvard.edu/files/coussens/files/stephen_coussens_JMP.pdf.


pages: 479 words: 113,510

Fed Up: An Insider's Take on Why the Federal Reserve Is Bad for America by Danielle Dimartino Booth

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, Bernie Sanders, Black Monday: stock market crash in 1987, break the buck, Bretton Woods, business cycle, central bank independence, collateralized debt obligation, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, financial deregulation, financial engineering, financial innovation, fixed income, Flash crash, forward guidance, full employment, George Akerlof, Glass-Steagall Act, greed is good, Greenspan put, high net worth, housing crisis, income inequality, index fund, inflation targeting, interest rate swap, invisible hand, John Meriwether, Joseph Schumpeter, junk bonds, liquidity trap, London Whale, Long Term Capital Management, low interest rates, margin call, market bubble, Mexican peso crisis / tequila crisis, money market fund, moral hazard, Myron Scholes, natural language processing, Navinder Sarao, negative equity, new economy, Northern Rock, obamacare, Phillips curve, price stability, proprietary trading, pushing on a string, quantitative easing, regulatory arbitrage, Robert Shiller, Ronald Reagan, selection bias, short selling, side project, Silicon Valley, stock buybacks, tail risk, The Great Moderation, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, yield curve

When Rosenblum arrived in the mid-1980s, the Dallas Fed’s reputation probably would have been ranked eleventh out of twelve regional banks, or the “Sleepy Fed,” in the view of economist Michael Cox, who spent over thirty years at the bank. (He’s now a professor at Southern Methodist University.) Under the leadership of Rosenblum, the Dallas bank improved dramatically and became known as the Free-Market Fed. Rosenblum encouraged Cox and his new hires to think outside the box. As a champion of “creative destruction,” a seemingly paradoxical concept developed by renowned economist Joseph Schumpeter, Cox published frequently and about issues the public cared about, an anomaly in the Fed system. But the field of economics was undergoing a sea change, literally. The “saltwater” economists (East and West coasts, Harvard, Keynes, pro-government regulation and intervention) were challenging the “freshwater” economists (Midwest, University of Chicago, Friedman, free-market philosophy).

Effectively, it gives Congress an open checkbook and allows policymakers to put off making hard choices that budgetary constraints would otherwise force. The idea always made Fisher’s blood boil. And with good reason. Unconstrained politicians? Need I say more? His fellow hawk Lacker fretted that the Fed’s interventions would interfere with the creative destruction needed to clear out deadwood, uncompetitive industry players who would gain access to the bond market and, by doing so, keep the lights on. Did someone mention zombie banks in Japan? “People make choices on their way to making adjustments,” Lacker said. “Would these leveraged borrowers like there to be a greater demand for their liabilities?

The banks with the most toxic balance sheets restricted their lending activity to shore up their own margins. “Japan paid dearly for propping up its troubled banks in the 1990s,” wrote Fisher and Rosenblum. “We need to develop supervision and resolution mechanisms that make it possible for even the biggest boys to fail—in an orderly way, of course. We want creative destruction to work its wonders in the financial sector, just as it does elsewhere in the economy, so we never again have a system held hostage to poor risk management.” The conflict on the FOMC was being played out in public. In October 2009 alone, FOMC members fanned out and gave thirty speeches.


The Corporation: The Pathological Pursuit of Profit and Power by Joel Bakan

"World Economic Forum" Davos, Alan Greenspan, benefit corporation, Berlin Wall, business logic, Cass Sunstein, corporate governance, corporate personhood, corporate social responsibility, creative destruction, electricity market, energy security, Exxon Valdez, Ford Model T, IBM and the Holocaust, joint-stock company, laissez-faire capitalism, market fundamentalism, Naomi Klein, new economy, precautionary principle, race to the bottom, Ralph Nader, Ronald Reagan, shareholder value, South Sea Bubble, The Wealth of Nations by Adam Smith, Triangle Shirtwaist Factory, urban sprawl

What children really need, says Kline, are toys that encourage "creative destruction," the process of imagining, creating, destroying, and re-creating something, and that "give them a sense of mastery [and] help them explore the physical laws of the world." Corporations are unlikely to make such toys, however, when the profits from synergistic Page 127 marketing are so high. The toy companies are "clearly selling more toys" now, says Kline. "Toy sales boomed after the initial launch of those tie-in programs." Even LEGO, the quintessential "creative destruction" toy company, adopted the tie-in strategy, driven to it by bottom-line concerns (and despite Kline's protests when he worked as a consultant for the company), and began to and working and playing with other people.""

., 35-39, 41, 46,57 see also regulatory laws corporate mascots, 26 corporations: amorality of, 53-59, 69, 79, 88-89, 110,134 backlash against, 25-27, 140-43 benevolent, 18-19, 151 church replaced by, 134 definition of, 3 democracy corrupted by, 101-2 devastation as opportunity for, 111, 124-25 dominance of, 5, 21-27, 134, 139-40,153,159 elimination of, 159-60 English banning of, 6-8, 9 exploitation by, 74, 112, 118, 122, 123, 138, 139, 140, 148, 149, 163 as "Frankenstein monsters," 19, 149 as government creations, 153-58, 164 grant theory of, 16 historical development of, 5-21, 153,156 as institutions, 1-3, 28, 50, 56-57, 59,64 as instruments of destruction, 71-73,110 natural entity theory of, 16, 154-55 Nazis assisted by, 87-89 no accountability of, 152 nonprofit, 166 philanthropy of, 30, 31, 45, 47-49 political systems as viewed by, 88-89 profits and, 31, 34, 36, 41, 45, 48, 49, 50,51,52,53,55,57,58,62,69, 88-89 profits and, 31, 34, 36, 41, 45, 48, 49, 50,51,52,53,55,57,58,62,69, 73,82,88-89,101,103,105, 113,117,122,126-27,138,154, 165 psychopathy of, 28, 56-59, 60, 69, 79, 85, 110, 122, 134, 158, 161 public good and, 156, 158 public-purpose, 160-61 "rising tide lifts all boats" principle of, 142-43 and self-interest as human nature, 116-17,134-35,138 self-interest of, 1-2, 28, 37-39, 44-50,58-59,60,61,80,101-2, 105,109-10,117-18,134,142, 149, 156, 160, 161, 167 cost-benefit analysis, 62-65, 79-80, 149-50,152 in oil industry, 82-83 costs: externalized, 61, 62-65, 71-73, 149-50 of social responsibility, 45, 47-48, 49 'creative destruction" toys, 126-27 Croix de Feu, 91 Back Matter Page 1 70 2 NOTES 6. Carswell, The South Sea Bubble, 210. 7. Especially in high-technology companies, where stock options are widely used to compensate employees, failure to account for them unduly inflates reported earnings, sometimes by hundreds of millions of dollars.


pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

Abraham Maslow, Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, bread and circuses, Bretton Woods, business cycle, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, disinformation, diversification, double helix, Edward Glaeser, financial deregulation, financial engineering, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, general purpose technology, George Akerlof, Gini coefficient, Glass-Steagall Act, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, language acquisition, Large Hadron Collider, liberal capitalism, light touch regulation, Long Term Capital Management, long term incentive plan, Louis Pasteur, low cost airline, low interest rates, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, meritocracy, Mikhail Gorbachev, millennium bug, Money creation, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, plutocrats, power law, price discrimination, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, Savings and loan crisis, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, systems thinking, tail risk, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, three-masted sailing ship, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, work culture , working poor, world market for maybe five computers, zero-sum game, éminence grise

Innovation may create new wealth, but it challenges old and redundant sources of wealth – a process that Schumpeter famously called ‘creative destruction’. Existing elites – the incumbents whose power, privilege and cash result from the prevailing technology – stand to lose a lot, possibly everything, from creative destruction. So they will resist change to the last. Schumpeter did not make Baumol’s distinction between productive and unproductive enterprise. To his mind, all innovations were productive, whether they entailed opening up a new market, developing a new product or discovering a new process or form of corporate organisation. For Schumpeter, creative destruction had an inherent bias to productive entrepreneurship.

But he was right to stress that successful innovation requires that existing elites and power-holders are at least unable to obstruct new sources of wealth generation, and at best actively welcome it. Put another way, if those who have manoeuvred themselves into owning economic rent are sufficiently powerful to obstruct new technologies and innovation that threaten their position, they will surely do so and thus wreck the growth process. The capacity to unleash creative destruction therefore relies on society’s capacity to allow due desert to triumph over undue desert. The open society as the handmaiden for innovation This is why an increasing number of economic historians are interested in the relationship between the Industrial Revolution and the European Enlightenment, after which the pace of GPT introduction accelerated.

In Russia the communist revolution smothered any chance of progress towards an open-access society and bureaucratised the economy around the Communist Party’s priorities. The reward system that underpins productive entrepreneurship – due desert for discretionary effort – was simply abolished. The chaotic process of ‘creative destruction’ (discussed in more detail in Chapter 10), through which capitalism destroys outmoded production processes to replace them with new ones, ceased. Instead, all effort was devoted to mobilising production around existing technologies to alleviate poverty, to match the capitalist powers and to win the war against Hitler.


Animal Spirits by Jackson Lears

1960s counterculture, Alan Greenspan, bank run, banking crisis, behavioural economics, business cycle, buy and hold, California gold rush, clockwork universe, conceptual framework, Cornelius Vanderbilt, creative destruction, cuban missile crisis, dark matter, Doomsday Clock, double entry bookkeeping, epigenetics, escalation ladder, feminist movement, financial innovation, Frederick Winslow Taylor, George Akerlof, George Santayana, heat death of the universe, Herbert Marcuse, Herman Kahn, Ida Tarbell, invisible hand, Isaac Newton, joint-stock company, Joseph Schumpeter, Lewis Mumford, lifelogging, market bubble, market fundamentalism, Mikhail Gorbachev, moral hazard, Norman Mailer, plutocrats, prosperity theology / prosperity gospel / gospel of success, Ralph Waldo Emerson, RAND corporation, Robert Shiller, Ronald Reagan, scientific management, Scientific racism, short selling, Shoshana Zuboff, Silicon Valley, source of truth, South Sea Bubble, Stanislav Petrov, Steven Pinker, Stewart Brand, Strategic Defense Initiative, surveillance capitalism, the market place, the scientific method, The Soul of a New Machine, The Wealth of Nations by Adam Smith, transcontinental railway, W. E. B. Du Bois, Whole Earth Catalog, zero-sum game

This was the future he imagined in “Economic Prospects for Our Grandchildren” (1930). Keynes’s rosy scenario overlooked its prerequisite: a broad redistribution of wealth. But his vision of a steady-state economy constituted one of the few enduring intellectual alternatives to the repeated catastrophes created by creative destruction. The concept of creative destruction has in fact become a capitalist version of Providence, assuring us that the most apparently calamitous developments will somehow all work out for the best. Keynes knew better. Keynes’s General Theory was an especially sophisticated example of a characteristic Modernist project—uncovering the role of subjective, even irrational experience in the apparently rational realm of human will and choice.

The “Bergsonian faith” reflected the characteristic progressive belief that breakage and difficulty are mere products of the transition to Something Better. Technophiles and plutocrats would one day appropriate this strategy for their own purposes, and the economist Joseph Schumpeter would summarize it in his own influential phrase, “creative destruction.” Meanwhile Luhan summed up the Armory Show with characteristic self-dramatization, striking a revolutionary pose that was sharply at odds with her motto “Let it happen”: I felt as though the exhibition were mine. I really did. It became, overnight, my own little revolution. I would upset America; I would, with fatal, irrevocable disaster to the old order of things.

Keynes’s discussion of animal spirits and long-term investment reveals him to be far more philosophically and psychologically interesting than Joseph Schumpeter, the economist who in recent years has been credited with displacing him as the presiding spirit of our entrepreneurial age. Schumpeter’s ideal entrepreneur turns out to be little more than a capitalist embodiment of conventional male will, spearheading the relentless forward march of technological innovation, leaving a trail of “creative destruction” in his wake. Keynes’s ideas led in far more humane directions, toward a utopian future, created by “science and compound interest,” when people no longer need to work more than five hours a day, with the rest of the time left open to creative leisure. This was the future he imagined in “Economic Prospects for Our Grandchildren” (1930).


pages: 733 words: 184,118

Tesla: Inventor of the Electrical Age by W. Bernard Carlson

1960s counterculture, air gap, Albert Einstein, Charles Babbage, Clayton Christensen, creative destruction, disruptive innovation, en.wikipedia.org, Ford Model T, Henri Poincaré, invention of radio, Isaac Newton, James Watt: steam engine, Joseph Schumpeter, Menlo Park, packet switching, Plato's cave, popular electronics, Robert Gordon, Ronald Reagan, Steve Jobs, Steve Wozniak, Strategic Defense Initiative, undersea cable, yellow journalism

I [had] admired the works of artists, but to my mind, they were only shadows and semblances. The inventor, I thought, gives to the world creations which are palpable, which live and work.”49 CREATIVE DESTRUCTION AND SUBJECTIVE RATIONALITY Before we leave Tesla and Szigeti in the park, we should take a moment to reflect on the nature of Tesla’s insight that afternoon, not just from a technical viewpoint but from a cognitive perspective as well. To do so we need to connect Tesla with the economist Joseph Schumpeter’s ideas about innovation and the creative destruction of capitalism. Schumpeter was fascinated by the role that innovation played in the modern economy, and he emphasized in his writings that there were two kinds of innovative activity.

Schumpeter was fascinated by the role that innovation played in the modern economy, and he emphasized in his writings that there were two kinds of innovative activity. On the one hand, there are the creative responses of entrepreneurs and inventors who introduce radically new products, processes, and services and in so doing wreak the creative destruction that Schumpeter regarded as a central characteristic of capitalism. More recently, Clayton Christensen has characterized Schumpeter’s creative responses as “disruptive innovations” in the sense that selected firms sometimes pursue technologies that disrupt the pattern of established industries and alter the everyday life of consumers.50 On the other hand, there are the adaptive responses of managers and engineers who undertake the steady and incremental work of establishing the corporate structures, manufacturing procedures, and marketing plans that allow products and services to be produced and consumed.51 Clearly the success of any economy—especially the United States in Tesla’s time, from 1870 to 1920—has depended on getting the right mix of creative and adaptive innovations.

But even more important, as we go forward with the story, we will see that what counts with subjective rationality is that inventors like Tesla come to believe in their ideas so strongly that they are willing to rearrange the external world in order to make their ideals into reality. In imposing their ideas on the world, inventors create the revolutionary technology that unleashes the creative destruction of capitalism. But before that can happen in Tesla’s case, he had to learn much more about the business of electrical technology. CHAPTER THREE LEARNING BY DOING (1882–1886) ALTERNATING CURRENT AT GANZ AND COMPANY Armed with his insight about using a rotating magnetic field in his motor, Tesla resumed his mental engineering.


pages: 336 words: 90,749

How to Fix Copyright by William Patry

A Declaration of the Independence of Cyberspace, barriers to entry, big-box store, borderless world, bread and circuses, business cycle, business intelligence, citizen journalism, cloud computing, commoditize, content marketing, creative destruction, crowdsourcing, death of newspapers, digital divide, en.wikipedia.org, facts on the ground, Frederick Winslow Taylor, George Akerlof, Glass-Steagall Act, Gordon Gekko, haute cuisine, informal economy, invisible hand, John Perry Barlow, Joseph Schumpeter, Kickstarter, knowledge economy, lone genius, means of production, moral panic, new economy, road to serfdom, Ronald Coase, Ronald Reagan, search costs, semantic web, shareholder value, Silicon Valley, The Chicago School, The Wealth of Nations by Adam Smith, trade route, transaction costs, trickle-down economics, Twitter Arab Spring, Tyler Cowen, vertical integration, winner-take-all economy, zero-sum game

Some opulence. See Tyler Cowen, Creative Destruction: How Globalization is Changing the World’s Cultures 14–16 (Princeton University Press, 2002), for a discussion of the different ways the term diversity is used. http://famouspoetsandpoems.com/poets/walt_whitman/quotes. “If I had gone directly to the people, read my poems, faced the crowds, got into immediate touch with Tom, Dick, and Harry instead of waiting to be interpreted, I’d have had my audience at once,” quoted in David Reynolds, Walt Whitman’s America: A Cultural Biography 339 (1995,Vintage Books). Tyler Cowen, Creative Destruction: How Globalization Is Changing the World’s Cultures 3 (Princeton University Press, 2002).

Francis Gurry, the Director General of the World Intellectual Property Organization cautioned, “Copyright should be about promoting cultural dynamism, not preserving or promoting vested business interests.”26 Innovation Requires a Dynamic Legal System Innovation is by its nature dynamic. Innovation’s power lies in what economist Joseph Schumpeter termed “creative destruction”: the introduction of innovative products and business models that displace old ones.27 If an innovative product or service does not provide competition to existing products or services, it is not innovative. Competition is inextricably linked to innovation. Laws are not. The Internet and information technologies are key drivers of the twenty-first-century economy and cultural development, but such development is possible only if copyright laws do not inhibit their growth.

Tyler Cowen, Creative Destruction: How Globalization Is Changing the World’s Cultures 3 (Princeton University Press, 2002). Professor Cowen’s book is devoted to refuting de Tocqueville’s and similar theories. See also his In Praise of Commercial Culture (2000, Harvard University Press). Tyler Cowen, Creative Destruction: How Globalization Is Changing the World’s Culture 103 (2002, Princeton University). Id. at 129. Peter Manuel, Cassette Culture: Popular Music and Technology in North India 64 (1993, University of Chicago Press). See http://en.wikipedia.org/wiki/Jab_We_Met. Media Piracy in Emerging Economies, India Chapter. See Larry Rohter, Gilberto Gil and the politics of music.


pages: 318 words: 92,257

Floating City: A Rogue Sociologist Lost and Found in New York's Underground Economy by Sudhir Venkatesh

creative destruction, East Village, gentrification, illegal immigration, public intellectual, side project, Silicon Valley, the scientific method, urban renewal, working poor

Though their personal income levels and the socioeconomic status of their neighborhoods might not be shifting greatly, they were not the passive subjects so many sociologists used to fuel their paternalistic claim as all-knowing fathers for societal orphans. In fact, they were quite dynamic in both thought and action, and they also scrambled to keep up with a world that was transforming blindingly fast, even if the benefits of all that creative destruction did not accrue to them quite as rapidly as to wealthier strivers. As my tone may hint, this is a pet peeve. For the last decade, I’ve been fighting the stereotypes of the poor that began to pervade American society after the publication of the infamous Moynihan Report in 1965, which argued that the history of slavery and generations of single-parent matriarchal families had created a “tangle of pathology” that made it difficult for many inner-city blacks to enter the social mainstream.

They can’t risk a chink in the armor. He knew he could trust me, but still—dealing in bars outside Harlem had clearly put him outside his comfort zone. A small shift in the cocaine market and all that was solid in Shine’s life was melting into air. Marx would have been fascinated, Milton Friedman amused. The creative destruction of capitalism—change or die—was sending this resourceful and determined man into bars where he didn’t know the manager, to hotels filled with security he’d never met, to white customers he didn’t trust. And “die” wasn’t a metaphor. The frustration I’d seen on his face at the bar that day spoke volumes.

As much as I didn’t really want to see this play out, it made complete sense. The question was, how long would it last? Could they survive the inherent tensions that had sunk Angela? The truth was, the change in Analise depressed me. When I was a kid in college, the idea of entropy struck me hard: all that is solid melts into air, creative destruction, and so on. A factory is always one innovation away from becoming obsolete. Everything is always in the process of falling apart. The bourgeois succeeded because they didn’t cling to tradition. Instinctively, despite all their protestations to the contrary, they embraced entropy. Entropy rang true to me because I was going through so many personal changes.


pages: 261 words: 10,785

The Lights in the Tunnel by Martin Ford

Alan Greenspan, Albert Einstein, Bear Stearns, Bill Joy: nanobots, Black-Scholes formula, business cycle, call centre, carbon tax, cloud computing, collateralized debt obligation, commoditize, Computing Machinery and Intelligence, creative destruction, credit crunch, double helix, en.wikipedia.org, factory automation, full employment, income inequality, index card, industrial robot, inventory management, invisible hand, Isaac Newton, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, knowledge worker, low skilled workers, mass immigration, Mitch Kapor, moral hazard, pattern recognition, prediction markets, Productivity paradox, Ray Kurzweil, Robert Solow, Search for Extraterrestrial Intelligence, Silicon Valley, Stephen Hawking, strong AI, technological singularity, the long tail, Thomas L Friedman, Turing test, Vernor Vinge, War on Poverty, warehouse automation, warehouse robotics

In some cases, they may reverse their decline and become strong again. But in many other cases, they weaken and grow dark. Even as this happens, however, elsewhere on the tunnel walls, we see that new panels are appearing and growing stronger. A few seem to grow rapidly in size before our eyes. This is the process of creative destruction. In the mass market, the collective purchasing decisions of the lights determine which businesses succeed and thrive, and which ones ultimately decline and fail. This is a natural and cyclical process. When an inefficient business fails, its capital, resources and employees will eventually be transferred to a new, stronger business.

While the color rotation among the lights captures our interest for a time, the most striking realization is that nothing else has changed in the tunnel. As we watch, we see that the lights continue to softly impact the panels on the walls of the tunnel as consumers purchase products and services. The businesses in the tunnel make no distinctions based on the color of the lights. Over time, the process of creative destruction continues just as it always has. Inefficient businesses fail and new ones rise up to take their place. Among the multitude of lights in the tunnel, we can see that there are still a significant minority which shine with intense white light. The wealthiest people in the tunnel may be subject to somewhat higher tax rates, but the businesses and assets they own are retaining their value as the mass market continues to thrive.

Some of those industries are relatively labor intensive, so they have to hire more workers to meet this demand—and so overall employment remains stable or increases. This is the reason that, historically, technology has not led to sustained, widespread unemployment. My argument is that accelerating automation technology will ultimately invade many of the industries that have traditionally been labor intensive. Additionally, the process of creative destruction will destroy old industries and create new ones, and very few of these new industries are likely to be labor intensive. As a result, the overall economy will become less labor intensive and ultimately reach a “tipping point.” Beyond this point, the economy will no longer be able to absorb the workers who lose jobs due to automation: businesses will instead invest primarily in more machines.


pages: 379 words: 99,340

The Revolt of the Public and the Crisis of Authority in the New Millennium by Martin Gurri

Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, anti-communist, Arthur Eddington, Ayatollah Khomeini, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Burning Man, business cycle, citizen journalism, Climategate, Climatic Research Unit, collective bargaining, creative destruction, crowdsourcing, currency manipulation / currency intervention, dark matter, David Graeber, death of newspapers, disinformation, Eddington experiment, en.wikipedia.org, Erik Brynjolfsson, facts on the ground, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, Great Leap Forward, housing crisis, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, job-hopping, military-industrial complex, Mohammed Bouazizi, Nate Silver, Occupy movement, Port of Oakland, Republic of Letters, Ronald Reagan, scientific management, Skype, Steve Jobs, the scientific method, The Signal and the Noise by Nate Silver, too big to fail, traveling salesman, University of East Anglia, urban renewal, War on Poverty, We are the 99%, WikiLeaks, Yochai Benkler, young professional

“The Obama online campaign, by the numbers: quantifying the impact of social media in 2008.” Social Signal, November 22, 2008. http://www.socialsignal.com/blog/rob-cottingham/the-obama-online-campaign-by-the-numbers. “Creative Destruction Whips Through Corporate America.” Innosight Executive Briefing, Winter 2012. http://www.innosight.com/innovation-resources/strategy-innovation/upload/creative-destruction-whips-through-corporate-america_final2012.pdf. “Declaration of the Occupation of New York City.” r/Politics, no date. http://www.reddit.com/r/politics/comments/kv84b/this_is_the_declaration_of_the_occupation_of_new/.

[147] Erik Brynjolfsson and Andrew McAfee, Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, (Digital Frontier Press, 2011), 9, 40. [148] Tony Elwin, “The Cost of Culture, a 50% turnover of the Fortune 500,” http://www.tobyelwin.com/ the-cost-of-culture-a-50-turnover-of-the-fortune-500/. [149] “Creative Destruction Whips Through Corporate America,” Innosight, Winter 2012, http://www.innosight.com/innovation-resources/strategy-innovation/upload/creative-destruction-whips-through-corporate-america_final2012.pdf. [150] Courtesy of Richard Foster. [151] My combined chart. [152] Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics (Pantheon Books, 2005), Kindle location 66


pages: 349 words: 98,309

Hustle and Gig: Struggling and Surviving in the Sharing Economy by Alexandrea J. Ravenelle

active transport: walking or cycling, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, Amazon Mechanical Turk, barriers to entry, basic income, Broken windows theory, call centre, Capital in the Twenty-First Century by Thomas Piketty, cashless society, Clayton Christensen, clean water, collaborative consumption, collective bargaining, company town, creative destruction, crowdsourcing, digital divide, disruptive innovation, Downton Abbey, East Village, Erik Brynjolfsson, full employment, future of work, gentrification, gig economy, Howard Zinn, income inequality, independent contractor, informal economy, job automation, John Zimmer (Lyft cofounder), low skilled workers, Lyft, minimum wage unemployment, Mitch Kapor, Network effects, new economy, New Urbanism, obamacare, Panopticon Jeremy Bentham, passive income, peer-to-peer, peer-to-peer model, performance metric, precariat, rent control, rent stabilization, ride hailing / ride sharing, Ronald Reagan, scientific management, sharing economy, side hustle, Silicon Valley, strikebreaker, TaskRabbit, TED Talk, telemarketer, the payments system, The Theory of the Leisure Class by Thorstein Veblen, Tim Cook: Apple, transaction costs, Travis Kalanick, Triangle Shirtwaist Factory, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, Upton Sinclair, urban planning, vertical integration, very high income, white flight, working poor, Zipcar

In Silicon Valley, to hack is based on the arrogant view that perceived value is “only in that which you contribute, fundamentally eviscerating the person or process that preceded your intervention. In this view—and it is not insignificant—the idea of hacking comes from a position of arrogance.”99 Likewise, Silicon Valley’s favorite phrase, “let’s break shit,” is part of Schumpeter’s “creative destruction,” a theory of economic progress in which new business rises like a phoenix from the ashes of old business.100 Creative destruction has also been described as an early version of Clayton Christensen’s hypothesis of “disruptive innovation,” in which economies flourish when start-ups replace established firms.101 And of course, to disrupt the status quo of established industries is part of the goal of the sharing economy.

If broken-windows theory suggests that small-scale disorder can lead to wide-scale deviance, then perhaps this is best described as the theory of “dead fish rotting”: large-scale illegal efforts, carried out in full public view—such as starting an illegal hotel business by calling it an “accommodations marketplace” or opening an unregulated taxi company by calling it a “technology company”—lead to small-scale deviance by individuals. And when “disruption” and “creative destruction” are sold as ideals to strive for, we see the “breakdown of community controls” so that casual criminality is widely tolerated, hailed, and even laughed about by “primarily respectable whites.”22 In addition, a major theme of the gig economy is the focus on outsourcing. The companies outsource risk to the workers, letting them assume the costs of insurance and the financial risk of slow periods.

See also collaborative consumption consignment shop fees, 27 consumer-to-consumer (C2C) sales, 27, 42. See also on-demand services contactless payment systems, 6 Contexts (journal), 27 contributory negligence, 92, 93 Corporation for Economic Development, 195 cottage industry. See piecemeal system Couchsurfing, 9, 26, 27 Craigslist, 9, 26, 175, 194 creative destruction theory, 207–8 credit card debt, 4, 9, 35, 220n16, 226n36 criminal activity: overview, 2, 23, 134–39; enabling, 140–42; illegal rentals, 149–54; online scamming, 147–49; race/class issues and, 193; safer to participate, 143–47; vulnerability and, 195; workplace protections from, 154–57 criminal-offense screenings, 30 CrowdFlowers, Inc., 38, 73, 226n35.


pages: 417 words: 97,577

The Myth of Capitalism: Monopolies and the Death of Competition by Jonathan Tepper

"Friedman doctrine" OR "shareholder theory", Affordable Care Act / Obamacare, air freight, Airbnb, airline deregulation, Alan Greenspan, bank run, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, big-box store, Bob Noyce, Boston Dynamics, business cycle, Capital in the Twenty-First Century by Thomas Piketty, citizen journalism, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, compensation consultant, computer age, Cornelius Vanderbilt, corporate raider, creative destruction, Credit Default Swap, crony capitalism, diversification, don't be evil, Donald Trump, Double Irish / Dutch Sandwich, Dunbar number, Edward Snowden, Elon Musk, en.wikipedia.org, eurozone crisis, Fairchild Semiconductor, Fall of the Berlin Wall, family office, financial innovation, full employment, gentrification, German hyperinflation, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, Google bus, Google Chrome, Gordon Gekko, Herbert Marcuse, income inequality, independent contractor, index fund, Innovator's Dilemma, intangible asset, invisible hand, Jeff Bezos, Jeremy Corbyn, Jevons paradox, John Nash: game theory, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, late capitalism, London Interbank Offered Rate, low skilled workers, Mark Zuckerberg, Martin Wolf, Maslow's hierarchy, means of production, merger arbitrage, Metcalfe's law, multi-sided market, mutually assured destruction, Nash equilibrium, Network effects, new economy, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, passive investing, patent troll, Peter Thiel, plutocrats, prediction markets, prisoner's dilemma, proprietary trading, race to the bottom, rent-seeking, road to serfdom, Robert Bork, Ronald Reagan, Sam Peltzman, secular stagnation, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, SoftBank, Steve Jobs, stock buybacks, tech billionaire, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, undersea cable, Vanguard fund, vertical integration, very high income, wikimedia commons, William Shockley: the traitorous eight, you are the product, zero-sum game

New restaurants like Chipotle open, while older ones like Chevys Fresh Mex go bankrupt. Startups like Netflix launch new media offerings, and older businesses like Blockbuster go bust. This process of creative destruction is how the economy moves forward as consumer wants and needs change. Much like children are born every day and grandparents die, this is a natural, vital part of economic life. Over time, as the economy grows, the overall population of businesses should grow too, creating more new jobs. Unfortunately, this process of creative destruction has been steadily slowing over the past 30 years, and has worsened in the past few years. If America were a movie, it would be Children of Men, a dark, futuristic movie where children are not born and only the old remain.

He wrote an entire book, titled Zero to One, praising creating businesses that are monopolies and defiantly declared that competition “is a relic of history.”9 Competition is a dirty word, whether you're in Omaha or Silicon Valley. Praising monopolies has a long tradition in the United States. Joseph Schumpeter, an Austrian-born economics professor at Harvard, is generally remembered for coining the phrase “gale of creative destruction,” in praise of competition. It is ironic that economists and consultants see him today as the champion of disruptive startups, when in Schumpeter's view, if you wanted to search for progress, it would lead you to the doors of monopolies. Much like Peter Thiel, Schumpeter thought that perfectly competitive firms were inferior in technological efficiency and were a waste.

., 83 Cartels Chicago School perspective, 23 promotion, central bank rates (impact), 26f study, 25 Cartels: A Challenge to a Free World (Berge), 150 Castellammarese War, 21 CBS Corporation, market dominance, 133 CelebrityNetWorth, Google data theft, 89–90 Central Selling Organization, 24 CEO-to-worker compensation ratio, increase, 221f Chamberlin, Edward, 7 Chambers, Dustin, 179 Chemotherapy regulation, 167 usage, 178 Chicago School, 155–156 China, Big Data/Big Brother (relationship), 112 Chipotle, McDonald's release, 56 Christensen, Clayton, 55 Citigroup, market dominance, 127 Civil government, instituting, 191 Clayton Act of 1914, 7 Clayton Antitrust Act (1914), 144, 160, 209 Clemenceau, George, 233 Clifton, Daniel, 187 Clinton, Bill (reverse revolvers), 191 Clinton, Hillary, 189, 212 Coal Question, The, ( Jevons), 18 Cohn, Gary, 189 Collusion, impact, 32 Community Standards (Facebook), 92 Commuting zones, labor concentration (increase), 73f Companies growth phases, 52f lobbying, returns (comparison), 187f long-term returns, 204 platform companies, 97–98 self-disruption, failure, 55 synergies, 41 technology purchases, 106 Competition absence, 241 encouragement, patents (expiration), 246 Google, impact, 95 patents, impact, 175 promotion, patents/copyrights (impact), 246 reduction, mergers and acquisitions (impact), 12 restoration, Representative/Senator encouragement, 248 Competitors conflict, 31 reduction, mergers (prevention), 242 Composition, fallacy, 18 Computer operating systems, monopolies/local monopolies, 117 Concentrated industries, ranking, 33t Concrete, mergers (impact), 43 Confessions of the Pricing Man (Simon), 29 Conglomerates, purchase, 154 Connor, John, 23 Conrad, Jeremy, 54 Consumers, desires, 115 Consumer welfare, 158–159 Contract workers, hiring (fervor), 75–76 Copyrights, 246 Copyright Term Extension Act, 174 Corbyn, Jeremy (selection), 212 Corporate profits employee compensation, contrast, 223f increase, 65 Corporate trusts, control, 234 Costco workers, needs (understanding), 77 Counterfeits, impact, 102–103 Cox, Archibald, 157 CR4, 33 Creating and Restoring Equal Access to Equivalent Samples Act (CREATES), 176 Creative destruction, process, 45 Credit reporting bureaus, oligopolies, 125 Credit Suisse, Global Wealth Report issuance, 218 study, 10 Crisis of Capitalism, A, (Posner), 156 Curry, Steph, 3 Curse of Bigness, The, (Brandeis), 237 Customer lock-in (reduction), rules (creation), 246 CVS Caremark, market dominance, 130 D Dairy Farmers of America, price fixing, 119 Dalio, Ray, 229 David, Larry, 89 DaVita, Fresenius (merger), 124 Dayen, David, 96 Dean Foods, price fixing, 118–119 De Beers Consolidated Mines (cartel), 24 Decartelization Branch, 151–152 Decartelization/deconcentration policy, 150–151 Decker, Ryan, 47 Decline of Competition, The, (Burns), 145 de Loecker, Jan, 41, 226 Dent, Robert, 52 Diapers.com, Amazon predation, 106 Dickens, Charles, 18 Digital Millennium Copyright Act, 103 Digital platforms, scale, 91 Dimon, Jamie, 182 Dirlam, Jeff, 167 Disraeli, Benjamin, 240 Diversity, impact, 58–61 DNA damage, 178 Dodd-Frank Act 2010 Full Employment Act for Lawyers, Accountants, and Consultants, 182 impact, 181 passage, 184 Döttling, Robin, 56 Doubleclick, Google acquisition, 91, 118 “Double Irish” arrangement, 92–93 Dow Chemicals, DuPont (merger), 121 Dreyfus, market dominance, 133 Drugs prices, high level, 174 reformulation, 175 wholesalers, oligopolies, 131–132 Duisberg, Carl, 146–147 Duke, James Buchanan, 142 Duke, Mike, 16 Dunbar's Number, creation, 51 Duopolies, 15, 115–116, 122–125 Durant, Will, 231 Düsseldorf Agreement, 148 “Dutch Sandwich” arrangement, 92–93 E Echo Show (Amazon), 107 Economic dynamism, reduction, 37 Economic freedom, 143–144, 233, 238–239 Economic inequality, increase, 227–228 Economic model, adjustment, 41–42 Economies of scale, increase, 51 Economy advanced economies, markups (increase), 228f firms, role (decrease), 48f problems, Trump perspective, 213 Edison, Thomas, 67, 195 Eeckhout, Jan, 41, 226 Eisenhower, Dwight, 146, 148, 151 Ellenberg, Jordan, 214 Employees compensation, corporate profits (contrast), 223f perks, 75 Employers and Workmen Act, 240 Employment clauses, usage, 69 Ennis, Sean, 226 Entrepreneurship, decline, 46 Equifax, security breach, 81–82 Erhard, Ludwig, 153 Europe rebuilding, 153–154 ordoliberlism, 153 Evans, Benedict, 108 Evans, David, 106 Exchange-traded funds (ETFs), inexpensiveness, 203 Express Scripts, market dominance, 130 F Facebook church, Zuckerberg comparison, 113 Community Standards project, 92 creation, 117 Instant Articles, 102 lobbying efforts/expenses, 95–96 market dominance, 123–124 News Feed, impact, 99–100 news/information source, problems, 112–113 profitability/power, 99 Factory Act, 240 Fair Isaac's Corporations (FICO), credit-scoring formula, 125 Fast-food chains, employment clauses, 69 Federal Arbitration Act, 80, 82 Federal Express, duopoly, 3 Federal government Goldman Sachs, revolving door, 190f Monsanto, revolving door, 193f Federal Register, pages (number, increase), 181f Federal Reserve Act (1913), 209 Federal Trade Commission, 159, 163 creation, 144 Federation of British Industry, Düsseldorf Agreement, 148 Fidelity, market dominance, 135 Financial crisis (2007-2008), 25 Firms entry, reduction, 53f predatory pricing, punishment (laws), 244 role, decrease, 48f First American, market dominance, 135 Five Families, 22 Five Forces (Porter), 14–15 Fleming, Lee, 70–71 Forced arbitration, 79–81 Ford, Henry, 16 Foreign exchange traders, currency price fixing, 24 Foundem, 97 search problems, 87–88 Frankel, Jonathan, 107 Freight railroad, concentration, 119 Freireich, Emil, 176–177, 181 Friedman, Milton, 155, 179, 204, 233, 238 Funeral homes, monopolies/local monopolies, 121–122 Furman, Jason, 39 G Game theory, 26 Gates, Bill, 78 Geithner, Timothy, 190, 211 General Theory, The, (Keynes), 17 Germany German Decartelizing law (1947), 152 nationalist party, impact, 213 reconstruction, 151, 238 surrender, 151 Gerstner, Jr., Louis V., 50 Gibbons, Thomas, 137–138 Gibbons v.


The Techno-Human Condition by Braden R. Allenby, Daniel R. Sarewitz

"World Economic Forum" Davos, Abraham Maslow, airport security, Anthropocene, augmented reality, carbon credits, carbon footprint, clean water, cognitive dissonance, cognitive load, coherent worldview, conceptual framework, creative destruction, Credit Default Swap, decarbonisation, different worldview, Edward Jenner, facts on the ground, friendly fire, Hans Moravec, industrial cluster, information security, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jane Jacobs, land tenure, Lewis Mumford, life extension, Long Term Capital Management, market fundamentalism, mutually assured destruction, Nick Bostrom, nuclear winter, Peter Singer: altruism, planetary scale, precautionary principle, prediction markets, radical life extension, Ralph Waldo Emerson, Ray Kurzweil, Silicon Valley, smart grid, source of truth, stem cell, Stewart Brand, synthetic biology, technoutopianism, the built environment, The Wealth of Nations by Adam Smith, transcontinental railway, We are as Gods, Whole Earth Catalog

(Less metaphorically, it is to grossly overestimate how much we can know and understand about the world we live in, and how it is reconstructing us, when, frankly, most of us don't have a clue about what is going on.) Railroads simultaneously destroyed and made worlds, and they are but one example of the ongoing human project of "creative destruction.,,18 Technological change, as the example of the railroads suggests, is always potent; today, however, we have not just one or two enabling technologies undergoing rapid evolution, but five: nanotechnology, biotechnology, robotics, information and communication technology (leT), and applied cognitive science.

And often, as with war or other catastrophe, at huge human cost. See, for example, Polanyi's (1943) portrayal of the remaking of social fabric in industrialized England, or Dickens' portrayals of industrial London. 18. The reference is to the famous characterization of capitalism as "gales of creative destruction" in Schumpeter 1942. 19. McNeill 2000, pp. 193-194. 20. "Engineering and aging," IEEE Spectrum 41 (2004), no. 9: 10, 31-35. For much more on this controversial possibility, see de Grey 204 Notes to Chapters 4 and 5 2004. Aubrey D. N. J. de Grey is a well-known and controversial advocate of what might be called the "radical human life extension" school.

.,9 Climate change, 31, 40, 67, 109££,161,164,170, 193ff Cochlear implants, 54££ Cod fishing, 41, 42 Cognition in the Wild, 95, 96 Cognitive science, 8, 80, 179 Complexity Level III, 162££ "wicked," 109££, 168 Computer-brain interfaces (CBI), 35,88,89,146££ Confucian bureaucracy, 132 Congress of Vienna, 75 Conquest, R., 120 Consumption, mass, 40 Control, hierarchy of, 52 Copernicus, N., 101, 173 Counterinsurgency, 139 Counter Rocket Artillery Mortar (CRAM),150 Cowpox, 16 Creative destruction, 80 Credit, 39, 40 Cronon, W, 115 Darwin, c., 7, 172 Defense Advanced Research Projects Agency (DARPA), 152 Democracy, 93-105 Diamond, J., 121 Dickens, c., 97 Dignity,10 Division of labor, 73, 155 Doping, in sports, 4 Dreiser, T., 97 Dumbledore, A., 91, 110 Earth systems, 63££ Einstein, A., 173 Ellul, J., 44, 45 Emerson, R.


pages: 249 words: 66,383

House of Debt: How They (And You) Caused the Great Recession, and How We Can Prevent It From Happening Again by Atif Mian, Amir Sufi

Andrei Shleifer, asset-backed security, balance sheet recession, bank run, banking crisis, behavioural economics, Ben Bernanke: helicopter money, break the buck, business cycle, Carmen Reinhart, collapse of Lehman Brothers, creative destruction, debt deflation, Edward Glaeser, en.wikipedia.org, financial innovation, full employment, high net worth, Home mortgage interest deduction, housing crisis, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, liquidity trap, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, money market fund, moral hazard, mortgage debt, negative equity, paradox of thrift, quantitative easing, Robert Shiller, Robert Solow, school choice, seminal paper, shareholder value, subprime mortgage crisis, the payments system, the scientific method, tulip mania, young professional, zero-sum game

When a city or country has a collapse in spending, a flexible economy should be able to adjust by lowering wages and making exporting industries more competitive. Another adjustment mechanism should have been migration. Perhaps it was time for workers to pack up and move to other parts of the country with a stronger job market. Economists going back to Joseph Schumpeter have argued that this “creative destruction” process is natural and even healthy. When the economy needs to reallocate its production to new activities, workers move in order to take advantage of new opportunities. But unfortunately, the U.S. economy during the Great Recession didn’t work that way, and unemployment persisted. John Maynard Keynes had it exactly when he wrote: “It may well be that the classical theory represents the way in which we should like our economy to behave.

Nakamura and Steinsson, “Fiscal Stimulus in a Monetary Union.” 17. Frank Fabozzi and Franco Modigliani, Mortgage and Mortgage-Backed Securities Markets (Boston: Harvard Business School Press, 1992). 18. Miles, “Housing, Leverage, and Stability in the Wider Economy.” 19. See Gregor Matvos and Zhiguo He, “Debt and Creative Destruction: Why Could Subsidizing Corporate Debt Be Optimal?” (working paper, University of Chicago Booth School of Business, March 2013). 20. See Pierre-Olivier Gourinchas and Olivier Jeanne, “Global Safe Assets” (Bank for International Settlements working paper 399, December 2012). As they note, “Privately produced stores of value cannot provide sufficient insurance against global shocks.

See also Federal Reserve Central Valley, CA: net-worth destruction in, 25–26; population growth in, 68; spending declines in, 38; unemployment in, 66–68 Chapter 13 bankruptcy, 146–48, 202n37, 203n44 Chomsisengphet, Souphala, 139 Cobb-Douglas preferences, 195n3 collapse in housing prices, 12–13, 17–30, 44–45, 132–33, 170; borrowers’ junior claims and, 18; debt and spending during, 39–44, 194n5; foreclosures and, 26–29, 39, 50–52, 170, 202n21; forgiveness practices and, 135–51, 205n19; government programs on, 135–42; lenders’ senior claims and, 18–19, 23–25, 50; leverage multipliers of, 22–23, 192n2; renegotiation of mortgages and, 137–42, 145–47, 202n37, 203n44; shared-responsibility mortgages and, 176; Troubled Asset Relief Program (TARP) and, 136; underwater mortgages and, 26, 51–52, 60, 150 Commercial Paper Funding Facility (CPFF), 125 consumer spending, 5–7, 31–45; borrowing constraints on, 89–90, 197n18; declines in, 6–7, 31–35, 128, 130; geographic distribution of, 35–38, 45; government stimulus of, 21; home equity loans and, 88, 159; household debt and, 3–7, 131–34; housing-wealth effect on, 38–42, 88–89; inflation and, 153, 160–62; in the levered-losses framework, 50–51, 71, 194n5; lowered prices and, 53, 55; marginal propensity to consume levels and, 38–45, 140–42, 176, 178, 194n5, 202nn20–21; multiplier effects of, 179; precautionary savings and, 194n5; on residential investment, 32–35; of savers vs. borrowers, 55, 140–42; shared-responsibility mortgages and, 176–79; unemployment and, 62, 178–79 Corker, Bob, 60–62 Coval, Josh, 98, 101 cram-down practices, 146–48 crash. See collapse in housing prices; Great Recession Crawford, William H., 144 creative destruction, 67 credit, 5, 143; in bank bailout arguments, 126–27; borrowing constraints on, 89–90, 197n18; myopic consumers of, 90–91, 197n18; tight availability of, 11, 31–35, 59. See also debt; lending boom; mortgage credit expansion creditors. See mortgage lenders; savers credit-rating agencies, 103–4 currency in circulation, 154–57 Daley, Suzanne, 119–21 Davidson, Adam, 131–32, 200n21 Davis, Steven, 70 debt, 12–13, 17–30, 39–45, 166; animal spirits view of, 80–81, 196n8; as anti-insurance, 29–30; bubbles and, 110–16, 149, 169–70; equity-like financing of, 168–70, 180–87, 206n13; forgiveness programs for, 60, 135–51, 205n19; government subsidy of, 181–82; in the levered-losses framework, 50–52, 70–71, 134, 170; marginal propensity to consume levels and, 39–44, 194n5; in neglected risks frameworks, 114–15; optimists’ use of, 111–13; risk-sharing principle of, 168–87; risks of home ownership and, 2, 12–13, 17–30, 39, 168–69; spending declines and, 38–41; for student loans, 167–69, 182–83, 206n9; wealth inequality and, 18–21, 23–25, 71.


pages: 247 words: 68,918

The End of the Free Market: Who Wins the War Between States and Corporations? by Ian Bremmer

"World Economic Forum" Davos, affirmative action, Asian financial crisis, banking crisis, Berlin Wall, BRICs, British Empire, centre right, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, cuban missile crisis, Deng Xiaoping, diversified portfolio, Doha Development Round, Exxon Valdez, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Glass-Steagall Act, global reserve currency, global supply chain, household responsibility system, invisible hand, joint-stock company, Joseph Schumpeter, Kickstarter, laissez-faire capitalism, low skilled workers, mass immigration, means of production, megacity, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Naomi Klein, Nelson Mandela, new economy, offshore financial centre, open economy, race to the bottom, reserve currency, risk tolerance, Savings and loan crisis, shareholder value, Shenzhen special economic zone , South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, trade route, tulip mania, uranium enrichment, Washington Consensus, Yom Kippur War, zero-sum game

As industries become obsolete and die, the workers, assets, and ideas that once sustained them are freed to recombine in new forms to produce goods, services, and ideas that meet the evolving wants and needs of consumers. This process sustains an ever-expanding economic ecosystem. It’s not the product of political whim. It’s as organic as human evolution. Those who administer state capitalism fear creative destruction—for the same reason they fear all other forms of destruction: They can’t control it. Creative destruction ensures that industries that produce things that no one wants will eventually collapse. That means lost jobs and lost wages, the kind of problem that can drive desperate people into the streets to challenge authority. In a state-capitalist society, lost jobs can be pinned directly on state officials.

This lowers the trajectory of long-term growth. Western governments sometimes allow security concerns to trump growth potential. But governments that practice state capitalism have many more levers to pull and buttons to push when it comes to shutting down the free exchange of just about anything. Second, there is the concept of “creative destruction.” Economist Joseph Schumpeter coined this phrase in his 1942 book, Capitalism, Socialism, and Democracy, to describe a process by which dying ideas and materials fertilize new ones, endowing capitalism with a self-regenerating dynamism. As industries become obsolete and die, the workers, assets, and ideas that once sustained them are freed to recombine in new forms to produce goods, services, and ideas that meet the evolving wants and needs of consumers.


pages: 421 words: 110,272

Deaths of Despair and the Future of Capitalism by Anne Case, Angus Deaton

Affordable Care Act / Obamacare, basic income, Bertrand Russell: In Praise of Idleness, Boeing 737 MAX, business cycle, call centre, collapse of Lehman Brothers, collective bargaining, company town, Corn Laws, corporate governance, correlation coefficient, crack epidemic, creative destruction, crony capitalism, declining real wages, deindustrialization, demographic transition, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Elon Musk, falling living standards, Fellow of the Royal Society, financial engineering, fulfillment center, germ theory of disease, income inequality, Jeff Bezos, Joseph Schumpeter, Ken Thompson, Kenneth Arrow, labor-force participation, Les Trente Glorieuses, low skilled workers, Martin Wolf, meritocracy, Mikhail Gorbachev, obamacare, opioid epidemic / opioid crisis, pensions crisis, pill mill, randomized controlled trial, refrigerator car, rent-seeking, risk tolerance, shareholder value, Silicon Valley, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Tyler Cowen, universal basic income, working-age population, zero-sum game

All of which tells in favor of the superstar story of rising profits, and against an account that depends exclusively on American institutions like lobbying, its political system, or a peculiarly American unwillingness to apply antitrust law.21 European countries have also seen some recent increases in income inequality, though less than in the United States, which is consistent with trade and IT pushing up inequality, but with additional, specifically American forces ramping it up. Innovation often happens through a process of creative destruction, or Schumpeterian competition, named after the Austrian economist Joseph Schumpeter. (He is famous for having declared his wish to be the greatest economist in the world, the greatest horseman in Austria, and the best lover in Vienna. He later claimed that only the decline in the cavalry had thwarted his triple ambition, though not all economists would agree.

But we do not believe that it has yet been established that there is any general case that American industry has become less competitive and is raising prices to the detriment of consumer welfare.24 Indeed, the spate of innovation has, for many goods and services, brought ever-lower prices, including much that comes for free. The problem with all the innovation is not that prices are too high; it is that Schumpeterian creative destruction is not only creative but destructive. It eliminates jobs that used to exist, accelerated by the cost of health insurance, throwing workers into an increasingly hostile labor market, and with an inadequate safety net; the lives and communities that were supported by those jobs are put at risk, at the worst leading to despair and death.

., 284n41, 284n43 Comcast, 242 Coming Apart (Murray), 70 Commonwealth Fund, 197 communication, 229 communications technology, 233 community, 173, 179; destruction of, 189; white working-class losing, 178 competition: capitalism and, 230; elimination of, 232; foreign, 68; free markets and, 212; globalization and, 225; labor markets and, 236, 237; permanent advantage in, 235; Robinson and, 236; stifling of, 227 Congress, 13, 100, 120, 124–26, 197, 210, 211, 225, 242, 261 Conner, Marcy, 37, 49 consumer price index (CPI), 158 consumers, 208, 221, 230; benefits to, 227; immiseration of, 188; market power used against, 187; technological change socially beneficial for, 233 contraceptive pills, 160, 169 Cook, Tim, 12 Cooper, Zack, 283n27, 283n28, 284n56 copayments, 192 copyright laws, 256 Corn Laws, 14, 15 corporate choices, 227 corporate lobbies, 228, 232, 239, 241–43, 256–57; healthcare and, 209–11, 250 Corwin, Steven, 201 Cotton, Tom, 285n5 Courtwright, David, 115, 118, 274n11, 274n12 Cowen, Tyler, 286n6 Cox, Daniel, 265n8, 279n28 crack cocaine epidemic, 5, 62, 64; opioid epidemic and, 68–69 Craig, Stuart V., 283n27 creative destruction, 235 Crestor, 197 crime, 68, 179 crime rates, 5, 69 crony capitalism, 245. See also rent-seeking Culyer, Anthony J., 284n45 Cunningham, Rebecca M., 273n6 Currie, Janet, 263 Cutler, David M., 263, 277n11 Damasio, Antonio R., 271n3 Danziger, Sheldon H., 280n5 Daoguang Emperor, 109 Davis, Karen, 282n14 death certificates, 3, 29, 101, 118, 119, 136, 269n19 Deaton, Angus, 271n5, 271n7, 272n12, 272n15, 273n26, 276n3, 277n16, 291n37 deductibles, 192, 204 De Loecker, Jan, 287n14, 287n18 Delta Airlines, 231 delusional parasitosis, 112 democracy, ix, 14, 241, 246, 262; white working-class and, 13 Democratic Party, x Democrats, 210 Denmark, 163 depression, 27, 37, 92, 95, 96, 98, 99, 212 Desmond, Matthew, 276n3 detox, 122 Devine, Tom, 111, 273n4, 276n42 diabetes, 43 Diamond, Peter, 289n4 disability, 27, 161; insurance, 81, 85, 92, 157, 162, 252, 279n19 discrimination, 5, 31, 62, 65, 166, 189; reverse, 6, 166, 190; women and, 160 dissatisfaction, 181 dividends, 52 divorce, 98, 149 Dobson, Frank, 199 Doctor, Jason, 263, 274n20 doctors, 26, 52, 72, 73, 75, 84, 116 186, 198, 204, 210, 249; germ theory of disease and, 56; opioids and, 10, 113, 114, 117–19, 121–26, 247, 259; rent-seeking and, 10, 11, 12, 193, 196–97, 200–202, 241–42, 256 Doonesbury (cartoon), 62, 63 Dorn, David, 238, 278n21, 285n9, 285n10, 285n15, 287n8, 288n33 Doty, Michelle M., 284n41, 284n43 Dow Jones Index, 240 Dreamland (Quinones), 146 drug dealers, 10, 66, 69, 109–11, 114, 115, 120, 121 Drug Enforcement Agency (DEA), 110, 120, 124–25 drug manufacturers, 10, 40, 85, 112, 120, 124, 126, 127, 192, 193, 201, 202, 242, 259 drug overdoses, 2, 37, 38, 65–66, 111, 137, 185; African Americans and, 119; alcoholism and, 246; bachelor’s degrees and, 114, 121; common features of, 97; mortality rates from, 40, 121; rapid increases in, 45; rise in, 118; suicides and, 246.


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Cities Under Siege: The New Military Urbanism by Stephen Graham

"hyperreality Baudrillard"~20 OR "Baudrillard hyperreality", addicted to oil, airport security, Alan Greenspan, Anthropocene, anti-communist, autonomous vehicles, Berlin Wall, call centre, carbon footprint, clean tech, clean water, congestion charging, creative destruction, credit crunch, DARPA: Urban Challenge, defense in depth, deindustrialization, digital map, disinformation, Dr. Strangelove, driverless car, edge city, energy security, European colonialism, export processing zone, failed state, Food sovereignty, gentrification, Gini coefficient, global supply chain, Global Witness, Google Earth, illegal immigration, income inequality, knowledge economy, late capitalism, Lewis Mumford, loose coupling, machine readable, market fundamentalism, mass incarceration, McMansion, megacity, military-industrial complex, moral panic, mutually assured destruction, Naomi Klein, New Urbanism, offshore financial centre, one-state solution, pattern recognition, peak oil, planetary scale, post-Fordism, private military company, Project for a New American Century, RAND corporation, RFID, Richard Florida, Scramble for Africa, Seymour Hersh, Silicon Valley, SimCity, smart transportation, surplus humans, The Bell Curve by Richard Herrnstein and Charles Murray, urban decay, urban planning, urban renewal, urban sprawl, Washington Consensus, white flight, white picket fence

Many of these, in turn, have stimulated not only vast migrations but also the construction of city-scale refugee camps to accommodate the displaced populations, who already numbered some fifty million by 2002.72 The permiation of organized, political violence within and through cities and systems of cities is complicated by the fact that much ‘planned’ urban change, even in times of relative peace, itself involves warlike levels of violence, destabilization, rupture, forced expulsion and place annihilation.73 Particularly within the dizzying peaks and troughs of capitalist and neoliberal urbanism or the implementation of programmes for large-scale urban ‘renewal’, ‘regeneration’ or ‘renaissance’, state-led planning often amounts to the legitimized clearance of vast tracts of cities in the name of the removal of decay, of modernization, improvement, or ordering, of economic competition, or of facilitating technological change and capital accumulation and speculation.74 While tracts of booming cities are often erased through state-engineered speculation, the many cities that are shrinking because of de-industrialization, global industrial relocation, and demographic emptying are also vulnerable to clean-sweep planning. ‘The economically, politically and socially driven processes of creative-destruction through abandonment and redevelopment’, suggests David Harvey, ‘are often every bit as destructive as arbitrary acts of war. Much of contemporary Baltimore, with its 40,000 abandoned houses, looks like a war zone to rival Sarajevo.’75 WAR UNBOUND In such a context, and given the increasingly extreme social inequalities, it is no surprise that Western military theorists and researchers are now particularly preoccupied with how the geographies of cities, especially the cities of the global South, are beginning to influence both the geopolitics and the technoscience of post–Cold War political violence.

This is especially so as both the War on Terror and radical Islamism tend to demonize the messy cosmopolitanism of cities, construing them as intrinsically amoral, sinful and unnatural places. It is no wonder that both barbarisms murderously target cities and their inhabitants. Or that both the neocon/ Christian and the Islamist fundamentalism share what Zillah Eisenstein terms a ‘masculinist-militarist’ mentality, in which violence is the path to the creative destruction of cities, nations or civilizations.19 The Manichaean mirrors of the two polarized fundamentalisms inevitably produce a duplication and reduplication of violence.20 What results is a convergence between state terror and non-state terror. The ‘ultimate catastrophe’ of the War on Terror, as Joseba Zulaika points out, ‘is that such a categorically ill-defined, perpetually deferred, simple-minded Good-versus-Evil war echoes and re-creates the very absolutist mentality and exceptionalist tactics of the insurgent terrorists.’

Militarization also involve the normalization of military paradigms of thought, action and policy; efforts at the aggressive disciplining of bodies, places and identities deemed not to befit masculinized (and interconnected) notions of nation, citizenship or body; and the deployment of a wide range of propaganda which romanticizes or sanitizes violence as a means of righteous revenge or the achievement of some God-given purpose. Above all, militarization and war organizes the ‘creative destruction’ of inherited geographies, political economies, technologies and cultures. So, what exactly is new about the ‘new military urbanism’? How is it different from the intense militarization experienced by the cities of, say, the Cold War or total war? I shall point to seven related trends which, I argue, introduce palpably new dimensions to the contemporary militarization of urban life.


pages: 470 words: 148,730

Good Economics for Hard Times: Better Answers to Our Biggest Problems by Abhijit V. Banerjee, Esther Duflo

3D printing, accelerated depreciation, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, basic income, behavioural economics, Bernie Sanders, Big Tech, business cycle, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon tax, Cass Sunstein, charter city, company town, congestion pricing, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, endowment effect, energy transition, Erik Brynjolfsson, experimental economics, experimental subject, facts on the ground, fake news, fear of failure, financial innovation, flying shuttle, gentrification, George Akerlof, Great Leap Forward, green new deal, high net worth, immigration reform, income inequality, Indoor air pollution, industrial cluster, industrial robot, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jean Tirole, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kevin Roose, labor-force participation, land reform, Les Trente Glorieuses, loss aversion, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, middle-income trap, Network effects, new economy, New Urbanism, no-fly zone, non-tariff barriers, obamacare, off-the-grid, offshore financial centre, One Laptop per Child (OLPC), open economy, Paul Samuelson, place-making, post-truth, price stability, profit maximization, purchasing power parity, race to the bottom, RAND corporation, randomized controlled trial, restrictive zoning, Richard Thaler, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Reagan, Savings and loan crisis, school choice, Second Machine Age, secular stagnation, self-driving car, shareholder value, short selling, Silicon Valley, smart meter, social graph, spinning jenny, Steve Jobs, systematic bias, Tax Reform Act of 1986, tech worker, technology bubble, The Chicago School, The Future of Employment, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, trickle-down economics, Twitter Arab Spring, universal basic income, urban sprawl, very high income, War on Poverty, women in the workforce, working-age population, Y2K

Many firms in India produce more than one product, so one would expect firms to close down product lines competing with cheaper imports and reorient production toward products facing less of a disadvantage. There is nothing to stop this even where labor laws make it hard to fire people, but Topalova’s research found very little “creative destruction.” Firms never seem to discontinue a product line that has become obsolete. Perhaps it is because the managers find the transition process costly: workers need to be retrained, new machines need to be purchased and installed.29 PROTECTION FOR WHOM? These internal barriers notwithstanding, resources did eventually move (at least in some countries) and exports are a big part of the remarkable success stories of East Asia in particular.

It eventually turned out that the Honduran government was more interested in Romer’s name and fame than his counsel, and when it signed a deal with an American entrepreneur with a strong taste for totally unregulated capitalism to develop the ZEDEs, Romer walked out. This story suggests charter cities are unlikely to hold the key to sustained growth in developing countries for the very good reason that the internal political compulsions the charter is intended to hold at bay often have a way of biting back. CREATIVE DESTRUCTION To summarize the previous sections, regional spillovers seem real, but based on the limited evidence we have, probably not powerful enough for the task of keeping growth going at the national level. Perhaps anticipating this, Romer had a second story up his sleeve; in that story, growth is driven by firms developing new ideas, which turn into more productive technologies.48 Romer was describing a force that ensured technologies would constantly keep improving, and more so in countries pursuing pro-innovation policies.

His mother, who was from a French-speaking Jewish family, founded the well-known designer brand Chloé when she moved to France, after being forced to leave her home in Egypt in the early 1950s. The years when Chloé went from being a dressmaker to a global brand were exactly the years of Philippe’s growing up. Nevertheless, inspired by Joseph Schumpeter (the Harvard economist of the mid–twentieth century and braggart extraordinaire50), Aghion sees innovation as a process of creative destruction, in which each innovation involves both creation of the new and destruction of the old.51 In his world, sometimes the creative dominates, but at other times the destructive holds sway; novelties get created not because they are useful but because they defeat someone’s existing patent. Making it more rewarding to innovate might backfire as a result.


pages: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

anti-globalists, Asian financial crisis, capital controls, clean water, correlation does not imply causation, creative destruction, Deng Xiaoping, Edward Glaeser, export processing zone, Gini coefficient, Great Leap Forward, half of the world's population has never made a phone call, Hernando de Soto, illegal immigration, income inequality, income per capita, informal economy, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, liberal capitalism, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, prediction markets, profit motive, race to the bottom, rising living standards, Silicon Valley, Simon Kuznets, structural adjustment programs, The Wealth of Nations by Adam Smith, Tobin tax, trade liberalization, trade route, transaction costs, trickle-down economics, Tyler Cowen, union organizing, zero-sum game

If you and I and everyone else can think of things that we would like two people to do, we have a permanent manpower deficit, with 6 billion people wanting at least 12 billion employees. This is why we will never have too much manpower, no matter how prosperous we become or how efficient our production gets. Efficiency does, of course, have a flip side. Economist Joseph Schumpeter famously described a dynamic market as a process of ‘‘creative destruction,’’ because it is concerned with ‘‘destroying’’ old solutions and industries, but with a creative end in view, namely the transfer of manpower and capital to more productive occupations. This gives us a higher standard of living, but as the word ‘‘destruction’’ suggests, not everyone benefits from every market transformation in the short term.

It cannot be compared with the anxiety of the present-day Ethiopian farmer, whose life may depend on the coming of rain and on the health of his livestock. The most foolish possible way to counter the problems that such economic adjustments entail is to try to prevent the adjustments. Without ‘‘creative destruction,’’ we would all be stuck with a lower standard of living. The whole point of trade and development is to direct resources to the point where they can be used most efficiently. A Chinese proverb has it, ‘‘When the wind of change begins to blow, some people build windbreaks while others build windmills.’’

Jonah Goldberg, ‘‘The Specter of McDonald’s: An Object of Bottomless Hatred,’’National Review, June 5, 2000. 5. Thomas Hylland Eriksen, Kulturterrorismen: en uppgo¨relse med tanken om kulturell renhet (Nora, Sweden: Nya Doxa, 1999), p. 46. 6. For numerous examples of ‘‘indigenous’’ cultural products made possible by cultural contact and trade, see Tyler Cowen, Creative Destruction: How Globalization Is Changing the World’s Cultures (Princeton, N.J.: Princeton University Press, 2002). 7. Mario Vargas Llosa, ‘‘Can Culture Be Exempt from Free Trade Agreement?’’ Daily Yomiuri, April 25, 1994. 8. Giddens, p. 66. 9. Berg and Karlsson, p. 51. 10. Berg and Karlsson, pp. 162–171.


pages: 297 words: 77,362

The Nature of Technology by W. Brian Arthur

Andrew Wiles, Boeing 747, business process, Charles Babbage, cognitive dissonance, computer age, creative destruction, double helix, endogenous growth, financial engineering, Geoffrey West, Santa Fe Institute, haute cuisine, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, knowledge economy, locking in a profit, Mars Rover, means of production, Myron Scholes, power law, punch-card reader, railway mania, Recombinant DNA, Silicon Valley, Simon Singh, sorting algorithm, speech recognition, Stuart Kauffman, technological determinism, technological singularity, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions

The arrival of the automobile in the early 1900s caused the replacement of horse transportation. The death of horse transportation eliminated the needs for blacksmithing and carriage making. The collapse of blacksmithing in turn eliminated the need for anvil making. Collapses caused further collapses in a backward succession. This is not quite the same as Schumpeter’s “gales of creative destruction,” where novel technologies wipe out particular businesses and industries broadly across the economy. Rather, it is a chain of domino-like collapses—avalanches of destruction, if you prefer to call them that. The creative side to this is, as Schumpeter pointed out, that new technologies and industries take the place of those that collapse.

They examine how development paths are influenced by the knowledge base available to a technology and the science that surrounds it, by incentives that firms face, by how the search process for improvements differs within different bodies of technology, by the patent system and legal environment that surround the technology, by learning effects, and by the structure of the industry the technology fits into. 132 the new technology… specialize: In biology language, we would say the technology radiates. 132 This is where… selection: For Darwinian approaches see Stanley Metcalfe, Evolutionary Economics and Creative Destruction, Routledge, London, 1998; Saviotti and Metcalfe; also Joel Mokyr, “Punctuated Equilibria and Technological Progress,” American Economic Assoc. Papers and Proceedings 80, 2, 350–54, May 1990; Basalla. 133 Such obstacles are exasperating: See Robert Ayres, “Barriers and Breakthroughs: an ‘Expanding Frontiers’ Model of the Technology-Industry Life Cycle,” Technovation 7, 87–115, 1988. 133 a bottleneck that… of: Constant talks of “log-jams and forced inventions” (p. 245), and of “anomaly-induced” technical change (pp. 5, 244). 134 Structural Deepening: For an earlier discussion of this, see Arthur, “On the Evolution of Complexity,” in Complexity, G.

So when I say that technologies are constructed from ones that previously exist, I mean this as shorthand for saying they are constructed from ones that previously exist or ones that can be constructed at one or two removes from those that previously exist. 171 In the beginning,… harnessed: See Ian McNeil, “Basic Tools, Devices, and Mechanisms,” in An Encyclopedia of the History of Technology, McNeil, ed., Routledge, London, 1990. 172 “The more there… curve: Ogburn, p. 104. 180 “gales of creative destruction”: Schumpeter, 1942, pp. 82–85. 181 An Experiment in Evolution: Arthur and Polak. 184 There is a parallel observation in biology: Richard Lenski, et al., “The evolutionary origin of complex features,” Nature, 423, 139–143, 2003. 185 This yielded avalanches: Polak and I found that these “sand-pile” avalanches of collapse followed a power law, which suggests, technically speaking, that our system of technologies exists at self-organized criticality. 187 More familiarly, larger… combinations: another important source of this is gene and genome duplication.


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Plenitude: The New Economics of True Wealth by Juliet B. Schor

Asian financial crisis, behavioural economics, big-box store, business climate, business cycle, carbon footprint, carbon tax, clean tech, Community Supported Agriculture, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, decarbonisation, degrowth, dematerialisation, demographic transition, deskilling, Edward Glaeser, en.wikipedia.org, Gini coefficient, global village, Herman Kahn, IKEA effect, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Jevons paradox, Joseph Schumpeter, Kenneth Arrow, knowledge economy, life extension, McMansion, new economy, ocean acidification, off-the-grid, peak oil, pink-collar, post-industrial society, prediction markets, purchasing power parity, radical decentralization, ride hailing / ride sharing, Robert Shiller, sharing economy, Simon Kuznets, single-payer health, smart grid, systematic bias, systems thinking, The Chicago School, Thomas L Friedman, Thomas Malthus, too big to fail, transaction costs, Yochai Benkler, Zipcar

Even when growth picks up again, there will be large sectors in permanent decline—automobiles, industrial farming, and perhaps even fossil fuels will be smaller and less profitable industries, if they’re profitable at all. With a downturn this severe, there will be a protracted and difficult process of weeding out low-performing industries, companies, and products, or what the Austrian economist Joseph Schumpeter called creative destruction. It will take time to re-create the classic conditions for prosperity, such as confidence, financial regulation, monetary stability, consumer demand, and a steady policy hand. Due to the complexity of the global economy, the challenges are far greater than we’ve ever faced. As we move forward, the fatal flaw of the current growth regime—climate change and other ecological limits—will rear its ugly head.

The Business Alliance for Local Living Economies: 20,000 entrepreneurs building the new economy. Available from http://www.livingeconomies.org (accessed September 7, 2009). Caballero, Ricardo J., and Adam B. Jaffe. 1993. How high are the giants’ shoulders: An empirical assessment of knowledge spillovers and creative destruction in a model of economic growth. NBER Macroeconomics Annual 8: 15-74. Cavanagh, John, and Jerry Mander. 2004. Alternatives to economic globalization: A better world is possible. San Francisco: Berrett-Koehler. Caviglia-Harris, Jill L., Dustin Chambers, and James R. Kahn. 2009. Taking the “U” out of Kuznets: A comprehensive analysis of the EKC and environmental degradation.

.: BEA environmental studies and climate change and consumption, consumerism carbon and product scores and clothing and, see clothing end of life (EOL) and environmental impact of expansion of fashion and material flows and population and storage and disposal issues in symbolic value and well-being and Container Store cooperatives copyrights coral reefs Costa Rica cost-benefit analysis cotton Craigslist Creative Commons creative destruction credit credit unions currency Daily, Gretchen Daly, Herman dams Dasgupta, Partha debt deforestation de Graaf, John Denmark, ecological footprint in Depression, Great desertification DICE (Dynamic Integrated Climate-Economy) digital fabricators discount rate-5n diseases droughts Dudley Street Neighborhood Initiative durable goods: department store index for prices of weight of dynamic efficiency Earth Institute Earth Restoration Corps Easterlin, Richard eBay ecocide eco-efficiency ecological commons ecological footprint hours worked and ecological modernization ecological optimism economy: aggregate growth and business-as-usual form of, see business-as-usual (BAU) economy climate change and community and energy efficiency and extra-market diversification and financialization and flexible production and human behavior and information exchange and Keynes and materials use and extraction and need for alternative form of physical capital and rebound effect and scale of production and efficiency of self-provisioning and service sector of shifting the conversation on time wealth and “too big to fail” dilemma and U.S., historical profitability of value as measure in world, growth of see also environmental economics ecovillages education efficiency Egypt Ehrlich, Paul electric industry electric vehicles electronics, consumer imports of material flow and multifunctionality and storage and disposal of see also specific products Elpel, Renee Elpel, Tom Empire of Fashion (Lipovetsky) employee-owned companies employment, see labor; unemployment end of life (EOL) energy: housing and price of rebound effect from efficient use of systems dynamics and taxes and use of see also specific energy sources energy economics environment ecological footprint in, see ecological footprint ecological optimism and economic activity and feedback loops and full-cost pricing and integrated assessment models and mainstream economics and planetary boundaries and restoration of UN assessment of (2005) water footprint and see also climate change environmental economics cost-benefit analysis and customization and household production and production possibilities curve and reciprocity and resale and reuse and sharing and trade-off view of -4n working less and see also economy Environmental Kuznets Curve (EKC) -3n Europe: cohousing in ecological footprint in health care in historical carbon emissions of materials consumption in passive solar building in population decline in product life extension policies in European Society for Ecological Economics EV1 electric car extensive growth extinctions extra-market diversification ExxonMobil fabrication laboratories (fab labs) cost of Factor e Farm Farm, The (Tenn.)


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Dead Companies Walking by Scott Fearon

Alan Greenspan, bank run, Bear Stearns, Bernie Madoff, Black Monday: stock market crash in 1987, book value, business cycle, Carl Icahn, corporate raider, cost per available seat-mile, creative destruction, crony capitalism, Donald Trump, Eugene Fama: efficient market hypothesis, fear of failure, Golden Gate Park, hiring and firing, housing crisis, index fund, it's over 9,000, Jeff Bezos, John Bogle, Joseph Schumpeter, Larry Ellison, late fees, legacy carrier, McMansion, moral hazard, multilevel marketing, new economy, pets.com, Ponzi scheme, Ronald Reagan, short selling, short squeeze, Silicon Valley, Snapchat, South of Market, San Francisco, Steve Jobs, survivorship bias, Upton Sinclair, Vanguard fund, young professional

Sure, they might get some buzz and even some big initial funding. But if they don’t have what it takes, they die a quick death. Even when the region is doing well, dozens of unheralded companies come on the scene every year, only to fade away. The Austrian economist Joseph Schumpeter called this process “creative destruction.” It’s a harsh but vital process. It weeds out subpar ideas and gives good ones like Google the nourishment they need to grow. Short-sellers help make this happen. We identify the duds, which is good not only for the larger economy but also for the people involved in those ventures. Even the smartest people can get caught up in bad ideas or bad ways of doing business.

Several executives there warned me, with Lorenzo-like frankness, that if I ever spoke to the press again, I would be riding the elevator to the ground floor one last time. Even though it was stupid of me to talk to a reporter about my concerns, what I said was from the heart. Lorenzo did worry me. I knew he was a brilliant businessman, and his use of bankruptcy as a tool to remake Continental was unprecedented. It was creative destruction in its rawest, most potent form. But in the end, everything just seemed like a game of numbers to him. In fact, the second time I came to see him a few months after our first meeting, he offered me a job analyzing potential takeover targets for Jet Capital and Texas Air. That was plainly where his focus was—making deals and growing his assets, not managing the companies he already owned.

For your reference, the terms that appear in the print index are listed below. 50-Off Stores, 154–55 401(k) accounts, 203 Ackman, Bill, 107, 149 Advanced Marketing Services (ADMS), 47–49, 51–53, 59, 73 airline industry, 20, 36, 46, 57, 64, 128, 132, 134–35, 138–40, 163 Alex Brown & Sons, 165 alienating customers, 5, 67–68, 174, 182 Amazon, 78–79, 83, 102, 122, 212 America’s Cup, 90–94 American Electronics Association (AEA) Conference, 50–51, 156, 225 Android, 164 Apple, 24, 33, 67, 84, 98, 147, 179–80 area developers, 46 Arthur Anderson, 84 averaging down, 100, 157, 195, 206, 208 Babson, 58 Bally Technologies (BYI), 192–93 Bank of America, 165 Bank of Lichtenstein, 54 bankruptcy alienating customers and, 149, 182 attempting to avoid, 185, 188–89 BMHC and, 141, 146 Cal Coastal and, 19–20, 23–24 credit and, 178 debt and, 158, 163 energy companies and, 2 excuses and, 152, 154–55 fads and, 72 failure and, 5, 46–47, 91, 112, 114 flexibility and, 170–71 formula and, 128–33 fraud and 151–52 Global Marine and, 11–12 investing and, 3, 19–20, 42, 53, 97, 118–21, 134–37, 202 mergers and, 59 reorganization and, 57 Shaman and, 102–3 shock therapy and, 138–40 short-selling and, 158–59 trends and, 126, 128 TXU and, 17 Bennigan’s, 17 Bensinger, Greg, 123 Bezos, Jeff, 83 Big Short, The (Lewis), 25 Bing, 129 biotech industry, 97 Black Monday, 55, 114, 204 Blair, William, 43 Blockbuster (BBI), 115–24, 131–32, 166, 180, 193, 228 Bogle, John, 206–8, 212 Boise Cascade lumber company, 141, 144 Bolsa Chica Mesa, 20–22, 25, 56 Borders Books, 84 Brightwater community, 20–23, 56, 143 Buffett, Warren, 14, 16–17, 111, 131, 139 Building Materials Holding Corporation (BMHC), 141–49, 151, 157, 162–63 cable television, 118 Cadillac, 68–69 California Coastal Communities, 19–21, 23–24, 32 capitalism, 4, 57, 78, 92, 128, 130, 138–39, 197, 229, 234 Carano, Bandel, 87–89 Carnegie, Andrew, 165 casinos, 188–92 cellular technology, 124–25, 180 Chapman, Robert, 145 Chase Manhattan Bank, 27 Chemical Bank, 27 Chemtrak, 74–77, 81, 100, 228 Circuit City, 120–21 Cisco, 154 Citibank, 7, 187, 232 CML Group, 72 Consilium (CSIM), 152–57, 159, 176 Continental Airlines, 20, 132, 134–38, 140 Cost Plus World Market (CPWM), 172–80, 182–83, 188, 193–94 Costco, 33, 36, 38–42, 47–48, 88, 126–28, 173, 179 coupons, 66–68 creative destruction, 4, 138 Credit Suisse First Boston, 88 Cuban, Mark, 61 CVS, 76 cycles, 10, 13–14, 25, 145, 170, 182, 221 Cygnus Therapeutics (CYGN), 97–101, 104, 119, 172 Daily Beast, 121 Dell, 180 Dendreon (DNDN), 157–58 Dex Media (DXM), 59 Diller, Barry, 121 DiMaggio, Joe, 26–28 dotcoms, 78–80, 84–89, 91–92, 104, 155, 173, 205, 217, 228 Dubai, 12 EBITDA (earnings before interest, taxes, depreciation, and amortization), 56–58, 131 elite infallibility, 29–33 elitism, 31, 148 Ellison, Larry, 93 emotion, 6, 69, 74, 77, 100 energy industry, 2, 8, 12–13, 15–17, 26–27, 94, 132, 199, 201, 213, 223 Energy Future Holdings Company, 16–17 Enron, 5, 15, 29–30, 32, 51, 160 Enron: The Smartest Guys in the Room, 160 Everything’s a Dollar stores, 43, 45 Extraordinary Popular Delusions and the Madness of Crowds (MacKay), 85 Facebook, 94 fads, 5, 18, 58, 69–74 faith, 27–29, 31, 35, 45, 48, 57, 74, 92, 101, 104, 131, 203, 230, 236 falling stocks, 110 Fama, Eugene, 208–9 FDA (Food and Drug Administration), 74, 99, 102–3, 157 Fidelity, 50, 58 First Data Management Company (FDMC), 198, 200–2 First National Bank and Trust Company of Oklahoma City, 198–200 First Team Sports Inc.


pages: 555 words: 80,635

Open: The Progressive Case for Free Trade, Immigration, and Global Capital by Kimberly Clausing

"World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active measures, Affordable Care Act / Obamacare, agricultural Revolution, battle of ideas, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, climate change refugee, corporate social responsibility, creative destruction, currency manipulation / currency intervention, David Ricardo: comparative advantage, Donald Trump, fake news, floating exchange rates, full employment, gig economy, global supply chain, global value chain, guest worker program, illegal immigration, immigration reform, income inequality, index fund, investor state dispute settlement, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, meta-analysis, offshore financial centre, open economy, Paul Samuelson, precautionary principle, profit motive, purchasing power parity, race to the bottom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Tax Reform Act of 1986, tech worker, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transfer pricing, uber lyft, winner-take-all economy, working-age population, zero-sum game

Four Winners and Losers from International Trade While the basic logic of the overall gains from trade is undeniable, there are important features of the world that these arguments ignore. As countries open up to trade, their export sectors expand and their import sectors shrink. This Schumpeterian “creative destruction” entails serious transition costs, and may generate lasting changes in the distribution of income. In the United States, international trade enlarges the sectors of our economy that make commercial aircraft, soybeans, medical instruments, integrated circuits, and software, while shrinking the sectors that make textiles, shoes, steel, and tires.

Large, big-box retail chains displace mom-and-pop stores, as customers appear to opt for lower prices over neighborly interactions. People stream their entertainment instead of hooking up cable TV boxes. Fancy coffee shops get sprinkled all over the country, while old-fashioned diners fade away. This creative destruction always generates a lot of job loss and job creation. In fact, in the American economy, a single quarter typically sees over six million jobs created and six million destroyed. Figure 4.2: Job Creation and Destruction, 2006–2016 Note: The figure shows the US total nonfarm employment series.

See Google American Airlines, 283 American dream, 4, 178, 304n1 Antidumping, 315n2 Antitrust laws, 153–154, 162–164, 283–286; and European Union, 153–154 Apple, 61–62, 145, 147, 167–168 AT&T, 284, 286 Autor, David, 77 Bargaining, 42–44 Bartlett, Bruce, 334n2 Base Erosion and Profit Shifting (BEPS), 159, 226–227, 279 Bell Laboratories, 284 Bernanke, Ben, 151 Bilateral trade balances, 135 Birnbaum, Jeffrey, 332n20 Boeing, 60–61, 144, 153 Borjas, George, 194 Bracero Program, 193, 196 Brain drain, 206–207 Brexit, 160, 298 British Columbia carbon tax, 275 Budget deficits, 241–242 Buffett, Warren, 246, 249 Burman, Leonard, 247 Bush Administration, 274 Business tax reform, 168–174, 250–252, 275–278 CAFE standards, 255–256 Campaign finance reform, 292 Canada: free trade area, 96; immigration policy, 185–188 Capital markets, 120 Capital taxation: rationale for, 250; tax rates, 248; trends, 46 Carbon tax, 162, 254–257; in British Columbia, 275 Card, David, 194 Center for Automotive Research, 84 CEO pay, 43–44, 152 Chetty, Raj, equality of opportunity project, 303n1 Child labor, 162 China: accession to WTO, 102; currency value, 127; economic growth, 63–68; infrastructure spending, 237; One Belt, One Road initiative, 100, 237, 298; relations with United States, 104; trade surplus, 12, 123, 144 China shock: and 2016 election, 76–79; size of, 76–78 Clemens, Michael, 191, 194, 196–197 Clinton, Hillary, 78 Clinton Administration, 78, 103, 274 Columbia Sportswear, 272 Comcast, 285 Community adjustment, 232 Community college, 230–231, 235 Comparative advantage, 68–72 Competitiveness, 68–72, 164, 166–168, 269 Comprehensive Economic and Trade Agreement (CETA) between EU and Canada, 161 Consumer Financial Protection Bureau (CFPB), 230–231 Corporate inversions, 165–166 Corporate profits, 39–42, 90–91, 168 Corporate savings, 40–41, 151 Corporate social responsibility, 277–278 Corporate tax rates, 155–156 Costco, 281 Country by country reporting, 278–279 Creative destruction, 73 Currency Movements, 124–127, 133 Current account deficit. See Trade deficit Debt, 241–242 Demographic change, 241 Dollar, David, 63 Dorn, David, 77 DREAM act, 214 Drucker, Jesse, 319n27 Earned Income Tax Credit, 112, 228, 243–246 East India Company, 138 Economic inequality: and economic growth, 16–18; and tax system, 26, 44–46, 243–246; trends, 16–19 Economic insecurity, 23–25 Economic sanctions, 55–56 Education funding, 234–235 Estate tax, 253–254 Euro, 314n11 European Union, 102, 104, 298 Excess Profits.


pages: 113 words: 37,885

Why Wall Street Matters by William D. Cohan

Alan Greenspan, Apple II, asset-backed security, bank run, Bear Stearns, Bernie Sanders, Blythe Masters, bonus culture, break the buck, buttonwood tree, Carl Icahn, corporate governance, corporate raider, creative destruction, Credit Default Swap, Donald Trump, Exxon Valdez, financial innovation, financial repression, Fractional reserve banking, Glass-Steagall Act, Gordon Gekko, greed is good, income inequality, Joseph Schumpeter, junk bonds, London Interbank Offered Rate, margin call, Michael Milken, money market fund, moral hazard, Potemkin village, quantitative easing, secular stagnation, Snapchat, South Sea Bubble, Steve Jobs, Steve Wozniak, tontine, too big to fail, WikiLeaks

He imagines that the Fed governors are sitting around their big oval table in Washington, scratching their heads, wondering why there’s less job creation than there should be, why there are fewer small businesses being started, why there is a decrease in entrepreneurial behavior, why the economy’s growth remains so sluggish. “The answer is because without creative destruction you don’t have new business formation, and they have decided creative destruction is not what they like,” he said. “They don’t like anything that has the word ‘destruction.’ So they stopped the destruction, and therefore there was no creative creation that followed it.” He can’t do anything to influence Tarullo or the Fed, of course, so he is doing the only thing he can do given his view that Tarullo’s strategy will end badly, very badly: He has made a big bet against the American economy so that he and his investors can benefit if he’s right.


pages: 128 words: 38,847

The Curse of Bigness: Antitrust in the New Gilded Age by Tim Wu

AltaVista, AOL-Time Warner, barriers to entry, Big Tech, collective bargaining, corporate personhood, corporate raider, creative destruction, Donald Trump, Ida Tarbell, income inequality, Johann Wolfgang von Goethe, John Perry Barlow, Joseph Schumpeter, Kickstarter, move fast and break things, new economy, open economy, Peter Thiel, Plato's cave, price discrimination, road to serfdom, Robert Bork, Silicon Valley, Snapchat, The Chicago School

*One prominent exception was the iconoclastic economist Joseph Schumpeter, who had championed the entrepreneur in his earlier years, but in his later years grew to admire the large monopolistic corporation and begun to see the lure of monopoly as a principal driver of innovation and “creative destruction.” Schumpeter, however, did not take seriously the problem of investment in barriers to entry, and particularly the power of government to insulate monopolies from creative destruction. See Tim Wu, The Master Switch (2010). *In Bork’s words: “A value will be announced as pertinent with a confidence that is matched only by the mystery that shrouds its derivation. A very specific decision is then whelped from the value premise without benefit of midwifery by any visible minor premise.”


pages: 474 words: 120,801

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used to Be by Moises Naim

"World Economic Forum" Davos, additive manufacturing, AOL-Time Warner, barriers to entry, Berlin Wall, bilateral investment treaty, business cycle, business process, business process outsourcing, call centre, citizen journalism, Clayton Christensen, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, conceptual framework, corporate governance, creative destruction, crony capitalism, deskilling, disinformation, disintermediation, disruptive innovation, don't be evil, Evgeny Morozov, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, illegal immigration, immigration reform, income inequality, income per capita, intangible asset, intermodal, invisible hand, job-hopping, Joseph Schumpeter, Julian Assange, Kickstarter, Lewis Mumford, liberation theology, Martin Wolf, mega-rich, megacity, military-industrial complex, Naomi Klein, Nate Silver, new economy, Northern Rock, Occupy movement, open borders, open economy, Peace of Westphalia, plutocrats, price mechanism, price stability, private military company, profit maximization, prosperity theology / prosperity gospel / gospel of success, radical decentralization, Ronald Coase, Ronald Reagan, seminal paper, Silicon Valley, Skype, Steve Jobs, The Nature of the Firm, Thomas Malthus, too big to fail, trade route, transaction costs, Twitter Arab Spring, vertical integration, Washington Consensus, WikiLeaks, World Values Survey, zero-sum game

The trends we are currently observing can be interpreted—or simply dismissed—as the manifestation of what economist Joseph Schumpeter (and before him Karl Marx) dubbed “creative destruction.” In Schumpeter’s words: “The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation . . . that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.”42 The shifts in power that we see all around us—which include and transcend the ascent and demise of business enterprises—are certainly consistent with Schumpeter’s expectations.

And new multinationals have emerged from countries that until recently no world-class company viewed as breeding grounds of potential competitors. We know that shifts in the pecking order of companies are as old as the modern market economy, and that a profound link between innovation and “creative destruction” is at the heart of capitalism’s vitality. Yet, the massive global changes we now see go further.4 They could not have happened without the decay of power. At the core here is something that is hard not to like: just as the decay of power in politics has undermined authoritarian regimes, in business it has curtailed monopolies and oligopolies while giving consumers more choices, lower prices, and better quality.

., 98, 131, 147 Business, 12, 13, 16, 26, 29, 31, 35, 37, 41, 60, 68, 71, 221, 243 M-structure (M-form) of, 37–38, 46 state-owned, 160, 178, 183 structural revolution in, 162–163 See also Corporations Cairns Group, 155 Cairo, 85, 199 California, 94, 207 Call Centers, 70, 177 Cambodia, 89, 209 Cameron, David, 89 Canada, 79, 86, 97, 99, 145, 149 Capital, 32, 38, 39, 47, 101, 160, 167, 171–172, 173, 174, 183, 186, 208, 220 access to, 180–181, 187 venture capital, 180, 220 Capitalism, 35, 39, 40, 41, 45, 47, 49, 71, 132, 158, 168, 174, 211 and creative destruction, 71, 220 models of, 37–38 Caracas, 85 Cardoso, Fernando Henrique, 106 Carey, John M., 94 Caribbean nations, 155 Carlsen, Magnus, 4 Carnation Revolution, 82, 83 Carnegie, Andrew, 42, 206–207 Carnegie Corporation, 206 Carnegie Endowment for International Peace, 67, 130, 238 Cartels, 29, 46, 221, 222, 226 Caryl, Christian, 120 Castañeda, Jorge G., 60 Castells, Manuel, 212, 213 Casualties, 5, 56, 110, 111, 113, 117, 120, 231 Catholic Church, 18, 70, 73, 84, 194, 197, 198, 199 CBS, 212 Cedar Revolution, 103 Cellphones, 5, 56, 62, 63, 66, 71, 102, 111, 178, 206, 214 CEMEX company, 175, 186 Central America, 66, 185 Centralization, 35, 36, 38, 41, 43, 44, 52, 71, 75, 198, 199, 203, 211, 228 decentralization, 77, 96–97, 209, 229 in militaries, 112, 115, 116, 117 CEO turnover, 163–164.


pages: 422 words: 113,830

Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips

"World Economic Forum" Davos, Alan Greenspan, algorithmic trading, asset-backed security, bank run, banking crisis, Bear Stearns, Bernie Madoff, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, collateralized debt obligation, computer age, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency peg, diversification, Doha Development Round, energy security, financial deregulation, financial engineering, financial innovation, fixed income, Francis Fukuyama: the end of history, George Gilder, Glass-Steagall Act, housing crisis, Hyman Minsky, imperial preference, income inequality, index arbitrage, index fund, interest rate derivative, interest rate swap, Joseph Schumpeter, junk bonds, Kenneth Rogoff, large denomination, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, Menlo Park, Michael Milken, military-industrial complex, Minsky moment, mobile money, money market fund, Monroe Doctrine, moral hazard, mortgage debt, Myron Scholes, new economy, oil shale / tar sands, oil shock, old-boy network, peak oil, plutocrats, Ponzi scheme, profit maximization, prosperity theology / prosperity gospel / gospel of success, Renaissance Technologies, reserve currency, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, shareholder value, short selling, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Chicago School, Thomas Malthus, too big to fail, trade route

And by giving transfusions to otherwise insolvent banks, she said, Paulson and Bernanke had prolonged the crisis. “They should not be re-capitalizing firms that should be shut down. . . . Firms that made wrong decisions should fail.”32 Letting bad decision makers fail was how things worked in the old days when “creative destruction” kept capitalism on its toes. Now, of course, too many institutions in the United States were perceived as too big to fail, which made creative destruction unacceptable. And that inacceptability, in turn, denied U.S. capitalism some of its capacity for renewal. Had Paulson and Bernanke been willing to take a blowtorch to the Frankenstein firms and their practices and products back in late 2007 or early 2008, some six or eight might well have had to be broken up, taken over, or forced into bankruptcy or receivership—indeed nine more or less were anyway.

Clearly, elements of marketplace globalization are in some retreat, not least in the United States. Over the last fifteen years, I have used the term “financial mercantilism” to describe a collaboration in which Washington and the U.S. financial sector seek to minimize certain unwanted marketplace forces. The purpose is to suppress what economist Joseph Schumpeter called “creative destruction”—for the United States, circa 2008, that would include the failure of a major financial institution or the deflation-cum-downward-revaluation of financial assets. My book Arrogant Capital (1994), following several notable bailouts, used this phraseology: “Financial mercantilism—government-business collaboration calculated to suspend or stymie market forces—has at least partly replaced yesteryear’s vibrant capitalism.”

In the meantime, of course, heads of the giant New York banks enjoyed growing wealth, although of their number only Citigroup’s Sandford Weill appeared on the Forbes 400 list.46 Financiers were now making much the same breakthrough in the wealth sheets that finance had made in the sector comparisons a decade earlier. Part of the reason for sketching some of the realignment of wealth that has flowed from the rise of the financial sector is simply to underscore how yesteryear’s support for the creative destruction of a free and fast-flowing marketplace would logically have evolved into support for an assets “Plunge Protection Team” or a federal assets-maintenance strategy instead. Keep the markets up. Please, gentlemen, especially with all of those crazy people in the Middle East and the dollar coming unglued.


pages: 501 words: 114,888

The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives by Peter H. Diamandis, Steven Kotler

Ada Lovelace, additive manufacturing, Airbnb, Albert Einstein, AlphaGo, Amazon Mechanical Turk, Amazon Robotics, augmented reality, autonomous vehicles, barriers to entry, Big Tech, biodiversity loss, bitcoin, blockchain, blood diamond, Boston Dynamics, Burning Man, call centre, cashless society, Charles Babbage, Charles Lindbergh, Clayton Christensen, clean water, cloud computing, Colonization of Mars, computer vision, creative destruction, CRISPR, crowdsourcing, cryptocurrency, data science, Dean Kamen, deep learning, deepfake, DeepMind, delayed gratification, dematerialisation, digital twin, disruptive innovation, Donald Shoup, driverless car, Easter island, Edward Glaeser, Edward Lloyd's coffeehouse, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental economics, fake news, food miles, Ford Model T, fulfillment center, game design, Geoffrey West, Santa Fe Institute, gig economy, gigafactory, Google X / Alphabet X, gravity well, hive mind, housing crisis, Hyperloop, impact investing, indoor plumbing, industrial robot, informal economy, initial coin offering, intentional community, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the telegraph, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joseph Schumpeter, Kevin Kelly, Kickstarter, Kiva Systems, late fees, Law of Accelerating Returns, life extension, lifelogging, loss aversion, Lyft, M-Pesa, Mary Lou Jepsen, Masayoshi Son, mass immigration, megacity, meta-analysis, microbiome, microdosing, mobile money, multiplanetary species, Narrative Science, natural language processing, Neal Stephenson, Neil Armstrong, Network effects, new economy, New Urbanism, Nick Bostrom, Oculus Rift, One Laptop per Child (OLPC), out of africa, packet switching, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, Peter Thiel, planned obsolescence, QR code, RAND corporation, Ray Kurzweil, RFID, Richard Feynman, Richard Florida, ride hailing / ride sharing, risk tolerance, robo advisor, Satoshi Nakamoto, Second Machine Age, self-driving car, Sidewalk Labs, Silicon Valley, Skype, smart cities, smart contracts, smart grid, Snapchat, SoftBank, sovereign wealth fund, special economic zone, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steve Jurvetson, Steven Pinker, Stewart Brand, supercomputer in your pocket, supply-chain management, tech billionaire, technoutopianism, TED Talk, Tesla Model S, Tim Cook: Apple, transaction costs, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, urban planning, Vision Fund, VTOL, warehouse robotics, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, X Prize

McKinsey Global Research: Matthieu Pelissie due Rausas, “Internet Matters: The Net’s Sweeping Impact on Growth, Jobs, and Prosperity,” McKinsey Global Institute, May 2011. Yale’s Richard Foster: Richard Foster and Sarah Kaplan, Creative Destruction (Crown Business, 2001). As this original research was conducted with Innosight, see their executive summary for a quick overview: https://www.innosight.com/insight/creative-destruction/. In 2018, All Nippon Airways: For the official announcement, see: https://avatar.xprize.org/prizes/avatar. Chapter Two: The Jump to Lightspeed: Exponential Technologies, Part One Quantum Computing The coldest place in the universe: Author interview with Chad Rigetti, 2018.

A 2012 study by the Partnership for a New American Economy, for example, found that three out of four patents issued to America’s top ten patent-producing universities have at least one foreign-born inventor. A different look at this same trend comes via “product reallocation,” which describes the rate at which new goods and services enter the market and force old ones to exit, or what economist Joseph Schumpeter called “creative destruction.” Far more than patents, researchers consider product reallocation the gold standard for innovative impact. A few years ago, researchers from the University of California, San Diego, found a direct link between migration and this gold standard. By tracking the product reallocation rate for every American company that hired a highly skilled foreign-born worker between 2001 and 2014, they found a very clear signal.

“product reallocation”: Gaurav Khanna and Munseob Lee, “Hiring Highly Educated Immigrants Leads to More Innovation and Better Product,” Conversation, September 26, 2018. See: https://theconversation.com/hiring-highly-educated-immigrants-leads-to-more-innovation-and-better-products-100087. Joseph Schumpeter called “creative destruction”: Ibid. By tracking the product reallocation rate: Ibid. In America, immigrants are twice as likely to start a new business: Grace Nasri, “The Shocking Stats About Who’s Really Starting Companies in America,” Fast Company, August 14, 2013. See: https://www.fastcompany.com/3015616/the-shocking-stats-about-whos-really-starting-companies-in-america. 33 percent of venture-backed companies: Mark Boslet, “NVCA Study Finds ⅓ Of Recently Public Venture Companies Have Immigrant Founders,” PE Hub Network, June 20, 2013, See: http://nvcaccess.nvca.org/index.php/topics/public-policy/372-nvca-releases-results-from-american-made-20.html.


pages: 239 words: 45,926

As the Future Catches You: How Genomics & Other Forces Are Changing Your Work, Health & Wealth by Juan Enriquez

Albert Einstein, AOL-Time Warner, Apollo 13, Berlin Wall, bioinformatics, borderless world, British Empire, Buckminster Fuller, business cycle, creative destruction, digital divide, double helix, Ford Model T, global village, Gregor Mendel, half of the world's population has never made a phone call, Helicobacter pylori, Howard Rheingold, Jeff Bezos, Joseph Schumpeter, Kevin Kelly, knowledge economy, more computing power than Apollo, Neal Stephenson, new economy, personalized medicine, purchasing power parity, Ray Kurzweil, Richard Feynman, Robert Metcalfe, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, spice trade, stem cell, the new new thing, yottabyte

Western Europe is not immune to massive changes … And could easily lose its way if it keeps trying to stop … Key technologies … And keeps bleeding brains to areas like Silicon Valley. Technology is not kind … It does not wait … It does not say please … It slams into existing systems … And often destroys them … While creating a new system.12 (Today’s chi-chi economist, Joseph Schumpeter … died half a century ago … trained as a lawyer … coined the term “creative destruction”: new products and discoveries relentlessly destroy the old … By age 30, he had three clear goals in mind: to become “Europe’s greatest lover of beautiful women and Europe’s greatest horseman—and perhaps also the world’s greatest economist.” He claims to have achieved two out of three.)13 COUNTRIES CAN EITHER SURF … EVER LARGER … AND MORE POWERFUL … WAVES OF CHANGE … OR THEY CAN TRY TO STOP THEM … AND GET CRUSHED.

Let’s talk about sex … Gina Bari Kolata, Clone: The Road to Dolly, and the Path Ahead (New York: William Morrow, 1998). Lori B. Andrews, The Clone Age: Adventures in the New World of Reproductive Technology (New York: Henry Holt, 1999). 11. Juan Enriquez, “Green Biotech and European Competitiveness,” Trends in Biotechnology, April 2001. 12. This process of creative destruction was identified over half a century ago by an Austrian economist turned Harvard professor, Joseph Schumpeter. See Joseph Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (New York: McGraw-Hill, 1939). 13. Charles J. Whalen, “Today’s Hottest Economist Died Fifty Years Ago,” Business Week, December 11, 2000.


pages: 310 words: 85,995

The Future of Capitalism: Facing the New Anxieties by Paul Collier

"Friedman doctrine" OR "shareholder theory", accounting loophole / creative accounting, Airbnb, An Inconvenient Truth, assortative mating, bank run, Bear Stearns, behavioural economics, Berlin Wall, Bernie Sanders, bitcoin, Bob Geldof, bonus culture, business cycle, call centre, central bank independence, centre right, commodity super cycle, computerized trading, corporate governance, creative destruction, cuban missile crisis, David Brooks, delayed gratification, deskilling, Donald Trump, eurozone crisis, fake news, financial deregulation, full employment, George Akerlof, Goldman Sachs: Vampire Squid, greed is good, income inequality, industrial cluster, information asymmetry, intangible asset, Jean Tirole, Jeremy Corbyn, job satisfaction, John Perry Barlow, Joseph Schumpeter, knowledge economy, late capitalism, loss aversion, Mark Zuckerberg, minimum wage unemployment, moral hazard, negative equity, New Urbanism, Northern Rock, offshore financial centre, out of africa, Peace of Westphalia, principal–agent problem, race to the bottom, rent control, rent-seeking, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, sovereign wealth fund, The Wealth of Nations by Adam Smith, theory of mind, too big to fail, trade liberalization, urban planning, web of trust, zero-sum game

The state would be active in both the economic and social spheres, but it would not overtly empower itself. Its tax policies would restrain the powerful from appropriating gains that they do not deserve, but not gleefully strip income from the rich to hand to the poor. Its regulations would empower those who suffer from the ‘creative destruction’ by which competition drives economic progress to claim compensation, rather than attempting to frustrate the very process that gives capitalism its astonishing dynamic.* Its patriotism would be a force for binding together, replacing the emphasis on the fragmented identities of grievances.

To locate a specific entry, please use your ebook reader’s search tools. 3G mobile phone network, 88 Abedi, Salman, 212, 213 abortion, 99, 102 AfD (Alternative for Germany), 5 Africa, 8, 110–11, 192, 193 capital flight, 208 HIV sufferers in, 120–21 need for modern firms, 37 and World Bank/IMF, 118† youth’s hope of escape to Europe, 121 African Americans, 13 Akerlof, George, 18, 34, 35, 50–51 Amazon, 87, 91, 146, 147 anger management programmes, 160 Apple, 148 asymmetric information, 88, 90, 185 auction theory, 146–7, 148 Bank of England, 39 Bear Stearns, 71, 75, 86 belief systems and belonging, 34, 40–41, 42, 53–6, 165, 211–15 CEO compensation committees, 77–8 Clark’s ‘family culture’, 107–8 the ethical family, 97–8, 99–105, 108, 109, 210 formation through narratives, 34, 40–41, 42, 53–6, 165, 211–15 GM-Toyota comparisons, 72–4 and ISIS, 42 Johnson & Johnson’s Credo, 39–40, 40*, 41, 72, 74*, 79 and leadership, 41–2, 43, 95 of personal fulfilment, 28, 99, 100–101, 102, 103, 108–9, 213 polarization within polities, 38, 63, 202–5 and schools, 165 Theory of Signalling, 41, 43, 53, 63, 95 and trust, 27, 29*, 48, 53–4, 55–6, 59, 63, 73–4, 79, 94–5, 210 see also belonging, narrative of; reciprocity value-based echo-chambers, 38, 61–2, 64–5, 212, 215 see also nationalism belonging, narrative of absent from Utilitarian discourse, 16, 59, 66–7, 210–11 avoided by politicians, 66–7, 68, 211, 215 as a basic drive, 27, 31, 42–3, 65, 66 and belief systems, 34, 40–41, 42, 53–6, 211–15 in Bhutan, 37† civil society networks/groups, 180–81 and ‘common knowledge’, 32–3, 34, 54, 55, 66, 212 families as natural units for, 32, 97–8, 104 heyday of the ethical state, 49, 68, 114 and home ownership, 68, 181–2, 184 and ISIS, 42, 212, 213 and language, 32, 33, 54, 57 and mutual regard/reciprocity, 25, 40–41, 49, 53–6, 67, 68, 98, 181, 182, 210–11, 212–13 place-based identity, 51–6, 65–8, 211–14, 215 and purposive action, 68, 98, 114, 211, 212, 213 and salient identity, 51–6 Bennett, Alan, The History Boys, 7* Bentham, Jeremy, 9–10, 12, 13 Berlusconi, Silvio, 14 Besley, Tim, 18–19, 35 Betts, Alex, 27 BHS, 80, 172 Bhutan, 37†, 63 Biafra, 58 Bitcoin, 37–8, 193 Blackpool, 4 Bonhoeffer, Dietrich, Letters and Papers from Prison, 108 The Bottom Billion (Collier), 27 Brazil, 58 Brexit vote (June 2016), 5, 125, 131, 196, 215 British Academy, 7 British Motor Corporation, 74 Brooks, David, The Road to Character, 108 Buiter, Willem, 186 Bush, George W., 120–21 business zones, 150 ‘Butskellism’, 49* Cadbury, 77 Cameron, David, 205 Canada, 22 capitalism competition, 21, 25, 56, 85, 86 ‘creative destruction’ concept, 21 current failings of, 4–5, 17, 25, 42, 45–6, 48, 201, 212–13 and decline of social trust, 5, 45–6, 48, 55, 59, 69 as essential for prosperity, 4–5, 18, 20, 25, 201 and families, 37 first mover advantage, 148 and greed, 10, 19, 25–7, 28, 31, 42, 58, 69, 70†, 81, 95 and Marx’s alienation, 17–18 and oppositional identities, 56, 74 vested interests, 85, 86, 135–6, 207 see also firms Catalan secession movement, 58 causality, narrative of, 33, 34 CDC Group, 122, 149* Chaucer, Geoffrey, The Canterbury Tales, 129 Chicago, University of, 166 childhood adoption, 110–11 children in ‘care’, 104, 105, 110, 111, 157 children ‘reared by wolves’, 31–2 cognitive development, 105–6, 170, 175–6 fostering, 104, 105, 111 identity acquisition, 32 impact of parental unemployment, 160–61 learning of norms, 33, 35, 107–8 non-cognitive development, 105, 163, 169–70, 171–3, 174, 175–6 ‘rights of the child’ concept, 103–4 in single-parent families, 101, 102, 104–5, 155, 160 trusted mentors, 169–70 see also family China, 118–19, 149, 203 Chira, Susan, 52–3 Chirac, Jacques, 14, 120–21 Christian Democratic parties, 5, 14 Citigroup, 186 Clark, Gregory, The Son Also Rises, 106–8 Clarke, Ken, 206 class divide assortative mating among new elite, 99–100, 154, 188–9 author’s proposed policies, 19–20, 21, 183–4, 187–8, 190, 207–8 and breadth of social networks, 169 and Brexit vote, 5, 196 and cognitive development, 105–6 divergence dynamic, 7, 18, 48, 98–108, 154–61, 170–71, 172–80, 181–90 ‘elite’ attitudes to less-well educated, 4, 5, 12, 16, 53, 59, 60–61, 63 and family life, 20, 98, 99–106, 157–62 and fracture to skill-based identities, 3–5, 51–6, 78 and home ownership, 68, 181, 182–3 need for socially mixed schools, 164–5 and non-cognitive development, 105, 163, 169–70, 171–3, 174, 175–6 and parental hothousing, 100, 101, 105–6 post-school skills development, 170–76 pre-emptive support for stressed families, 20, 155, 157–60, 161–3, 208 and reading in pre-teens, 167–9 and recent populist insurgencies, 5 retirement insecurities, 179–80 and two-parent families, 155–6, 157 unravelling of shared identity, 15, 50, 51–6, 57*, 58–61, 63, 215 see also white working class climate change, 44, 67, 119 Clinton, Hillary, 5, 9, 203–4 coalition government, UK (2010–15), 206 cognitive behavioral therapy, 160 Cold War, 113, 114, 116 end of, 5–6, 115, 203 Colombia, 120 communism, 32, 36–7, 85–6 communitarian values care, 9, 11, 12, 16, 29, 31, 42, 116 fairness, 11, 12, 14, 16, 29, 31, 34, 43, 116, 132–3 hierarchy, 11, 12, 16, 38–9, 43, 99–100 left’s abandonment of, 16, 214* liberty, 11, 12, 16, 42 loyalty, 11, 12, 16, 29, 31, 34, 42–3, 116 new vanguard’s abandonment of, 9, 11–13, 14–15, 16, 17, 49–50, 113, 116–18, 121, 214 post-war settlement, 8–9, 49, 113–16, 122 and reciprocal obligations, 8–9, 11–12, 13, 14, 19, 33, 34, 40–41, 48–9, 201, 212–15 roots in nineteenth-century co-operatives, 8, 13, 14, 201 sanctity, 11, 16, 42–3 Smith and Hume, 21–2† values and reason, 29–30, 43–4 see also belonging, narrative of; obligation, narrative of; reciprocity; social democracy Companies Act, UK, 82 comparative advantage, 20, 120, 192, 194 Confederation of British Industry (CBI), 79 conservatism, 30, 36 Conservative Party, 14, 49, 205, 206 contraception, 98–9, 102 co-operative movement, 8, 13, 14, 201 Corbyn, Jeremy, 202, 204–5 Crosland, Anthony, The Future of Socialism, 17, 18, 19 Cuban Missile Crisis (1962), 114 debutante balls, 188 Denmark, 63, 178, 214* Descartes, Rene, 31 Detroit, 128, 129, 144 Deutsche Bank, 78, 185 development banks, 149–50 Development Corporations Act (1981), 150 Dickens, Charles, Bleak House, 108 digital networks detachment of narratives from place, 38, 61–2 economies of scale, 86–7 global e-utilities, 37, 38, 86–7, 89–90, 91 social media, 27, 61, 87, 173, 207, 215 value-based echo-chambers, 38, 61–2, 64–5, 212, 215 Draghi, Mario, 153 Dundee Project, 161–2 Dutch Antilles, 193 East Asia, 147, 192 eBay, 87 economic man, 10, 19, 25, 26–7, 31, 34–5, 196, 209, 210, 215 economic rent theory, 19, 91, 133–9, 140–44, 186–8, 192, 195, 207 education and collapse of social democracy, 50, 52, 53, 54, 55, 59, 63 and empathy, 12 and European identity, 57* expansion of universities, 99–100, 127 and growth of the middle class, 100 inequality in spending per pupil, 167 mis-ranking of cognitive and non-cognitive training, 174–6 need for socially mixed schools, 164–5 post-school skills development, 170–76 pre-school, 105–6, 163–4 quality of teaching, 165–6 reading in pre-teens, 167–9 and shocks to norms of ethical family, 98, 99–105 symbols of cognitive privilege, 175 teaching methods, 166–7 vocational education, 171–6 zero-sum aspects of success, 189 electoral systems, 206 Emerging Market economies, 129, 130–31 empires, age of, 113 The Enigma of Reason (Mercier and Sperber), 29 enlightened self-interest, 33, 40*, 97–8, 101, 109, 112, 113, 114, 117, 184, 213 Enron, 80 ethnicity, 3, 20, 56, 62, 64, 65, 211 Europe Christian Democrats in, 5, 14 class divides, 3, 4, 5, 125 decline in social trust, 45 and knowledge industries, 192 metropolitan-provincial divides, 3, 4, 125 and migration, 121, 197 and shared identity, 57–8, 64, 66, 125 social democracy in, 8–9, 49, 50 European Central Bank, 153 European Commission, 57 European Investment Bank, 149 European Union (EU, formerly EEC), 66, 67, 114, 115, 116, 117 Brexit vote (June 2016), 5, 125, 131, 196, 215 Eurozone crisis, 153 public policy as predominantly national, 212 universities in, 170 evolutionary theory, 31, 33†, 35–6, 66 externalities, 145–6 Facebook, 87 Fairbairn, Carolyn, 79 fake news, 33–4 family, 19 African norms, 110–11 benefits for single parents, 160 Clark’s ‘family culture’, 107–8 entitled individual vs family obligation, 99–103, 104–6, 108–9, 210 equality within, 39, 154 erosion of mutual obligations, 101–2, 210 identity acquisition, 32 ideologies hostile to, 36–7 impact of unemployment/poverty, 4, 7, 160–61 importance of, 36, 37 and increased longevity, 110, 161 in-kind support for parenting, 161 nuclear dynastic family, 102, 110, 154 one-parent families, 101, 102, 104–5, 155, 160 parental hothousing, 100, 101, 105–6 post-1945 ethical family, 97–8, 99–105, 108, 210 pressures on young parents, 159–60, 161–3 and public policy, 21, 154–5, 157–70, 171–3, 177, 209 and reciprocity, 97–8, 101, 102 shocks to post-1945 norms, 98–105 shrinking of extended family, 101–2, 109–10, 161 social maternalism concept, 154–5, 157–8, 190 two-parent families as preferable, 155–6, 157 see also childhood; marriage Farage, Nigel, 202 fascism, 6, 13*, 47, 113 Federalist papers, 82 feminism, 13, 99 Fillon, François, 204 financial crisis, global (2008–9), 4, 34, 71, 160 no bankers sent to gaol for, 95–6 financial sector, 77–9, 80–81, 83–5 asymmetric information, 88, 185 co-ordination role, 145–6 economies of scale, 87 localized past of, 84, 146 toxic rivalries in, 189 trading in financial assets, 78–9, 84, 184–5, 186, 187 Finland, 63 firms, 19, 21, 69 CEO pay, 77–8, 79, 80–81 competition, 21, 25, 56, 85, 86 control/accountability of, 75–81, 82–5 cultures of good corporate behaviour, 94–5 demutualization in UK, 83, 84 deteriorating behaviour of, 18, 69, 78, 80–81 economies of scale, 17–18, 37, 86–7, 88–91, 126–7, 144–5, 146–7 ethical, 70–71, 172, 209–10 and ethical citizens, 93–4, 95, 96 failure/bankruptcy of, 70, 71, 72, 74, 75–6 flattening of hierarchies in, 39 Friedman’s profit nostrum, 69–70, 71, 76, 78–9, 210 global e-utilities, 37, 38, 86–7, 89–90, 91 ideologies hostile to, 37, 81 low productivity-low cost business model, 173–4 ‘maximising of shareholder value’, 69–70, 76, 79, 82–3 ‘mutuals’, 83 need for bankslaughter crime, 95–6 new network features, 86–7 policing the public interest, 93–4 public dislike of, 69, 95–6 public interest representation on boards, 92–3 regulation of, 87–90, 174 reward linked to short-term performance, 77, 78–81 sense of purpose, 39–40, 41, 70–75, 80–81, 93–4, 96 shareholder control of, 76–7, 79, 80, 82–3 societal role of, 81–2, 92–3, 96, 209–10 utility services, 86, 89, 90 worker interests on boards, 83, 84–5 Fisher, Stephen, 196* Five Star, 125 Ford, 70, 71 France, 7, 63, 67, 114 écoles maternelles in, 164 labour market in, 176, 189 pensions policy, 180 presidential election (2017), 5, 9, 204 universities in, 170 working week reduced in, 189 Frederiksen, Mette, 214* Friedman, Milton, 15, 69–70, 71, 76 The Full Monty (film), 7, 129 G20 group, 118 G7 group, 118 G8 group, 194 Ganesh, Janan, 125 Geldof, Bob, 169 General Agreement on Tariffs and Trade (GATT), 114, 115, 116–17 General Motors (GM), 72, 73–4, 75, 86, 172 geographic divide, 3, 16, 18, 19, 215 author’s proposed policies, 19, 207 and Brexit vote, 125, 196 broken cities, 4, 7, 19, 48, 125, 129–30, 147–9 business zones, 150 co-ordination problem over new clusters, 145–50, 207 decline of provincial cities, 4, 7, 19, 48, 125, 129–30, 131, 144–5 economic forces driving, 126–30 and education spending, 167 first mover disadvantage, 148–9 ideological responses, 130–32 investment promotion agencies, 150–51 and local universities, 151–2 and metropolitan disdain, 125 need for political commitment, 153 as recent and reversible, 152–3 regenerating provincial cities, 19, 142, 144–50 and spending per school pupil, 167 widening of since 1980, 125 George, Henry, 133–6, 141 Germany 2017 election, 5, 205 local banks in, 146 Nazi era, 57 and oppositional identities, 56–7 oversight of firms in, 76 post-war industrial relations policy, 94–5 and post-war settlement, 114 re-emergence of far right, 5 rights of refugees in, 14 ‘social market economy’, 49 TVET in, 171–2, 174, 175 vereine (civil society groups), 181 worker interests on boards, 84–5 global divide, 7–8, 20, 59–60, 191–8, 208 globalization, 4, 18, 20, 126–7, 128, 129, 130–31, 191–8 Goldman Sachs, 70†, 83–4, 94 Google, 87 Great Depression (1930s), 114 Green, Sir Philip, 80 Grillo, Beppe, 202 ‘Grimm and Co’, Rotherham, 168–9 Gunning, Jan Willem, 165 Haidt, Jonathan, 11–12, 14, 16, 28, 29, 132–3 Haiti, 208 Halifax Building Society, 8, 84 Hamon, Benoît, 9, 204 Harvard-MIT, 7, 152 Hershey, 77 HIV sufferers in poor countries, 120–21 Hofer, Norbert, 202 Hollande, Francois, 9, 204 Hoover, 148 housing market, 181–4 buy-to-let, 182, 183, 184 and lawyers, 187 mortgages, 84, 176, 182, 183–4 proposed stock transfer from landlords to tenants, 184 Hume, David, 14, 21, 21–2†, 29 Huxley, Aldous, Brave New World (1932), 5 Iceland, 63 Identity Economics, 50–56, 65–7 ideologies based on hatred of ‘other’ part of society, 43, 56, 213, 214 ‘end of history’ triumphalism, 6, 43–4 hostile to families, 36–7 hostile to firms, 37, 81 hostile to the state, 37–8 and housing policy, 183 and migration, 198 New Right, 14–15, 26, 81, 129 norms of care and equality, 116, 132–3 polarization of politics, 38, 63, 202–5 pragmatic eschewal of, 17, 18, 21, 22, 29–30 and principle of reason, 9, 13, 14, 15, 21, 43 Rawlsian vanguard, 13–14, 30, 49–50, 53, 67, 112, 113, 201, 202, 203, 214 return of left-right confrontation, 5, 6, 81, 202–5 and rights, 12–14, 44, 112 seduction of, 6 and twentieth century’s catastrophes, 5–6, 22 views on an ethical world, 112 see also Marxism; rights ideology; Utilitarianism IFC (International Finance Corporation), 122 Imperial Chemical Industries (ICI), 69–70, 75 India, 118–19 individualism entitled individual vs family obligation, 99–103, 104–6, 108–9, 210 fulfilment through personal achievement, 28, 99, 100–101, 102, 103, 108–9, 213 New Right embrace of, 14–15, 53, 81, 214–15 as rampant in recent decades, 19, 214–15 reciprocity contrasted with, 44–5 and withering of spatial community, 61–2 industrial revolution, 8, 126 inequality and assortative mating among new elite, 99–100, 154, 188–9 and divergence dynamic, 7, 18, 48, 98–108, 154–61, 170–71, 172–80, 181–90 and financial sector, 185 and geographic divide, 3, 7–8, 20, 125 global divide, 7–8, 20, 59–60, 191–8, 208 persistence of, 106–8 Rawls’ disadvantaged groups, 3–4, 13–14, 16, 50, 53, 121, 203–4, 214 and revolt against social democracy, 15–16 rising levels of, 3–5, 106, 125, 181, 190 and Utilitarian calculus, 132 innovation, 185–6, 208 International Monetary Fund (IMF), 114, 117 international relations achievement of post-WW2 leaders, 113–16, 122 building of shared identity, 114–16 core concepts of ethical world, 112, 113–14 erosion of ethical world, 116–18 expansion of post-war ‘clubs’, 116–18, 210 new, multipurpose club needed, 118–19, 122 and patriotism narrative, 67 situation in 1945, 112–13, 122 investment promotion agencies, 150–51 Irish Investment Authority, 151 Islamist terrorism, 42, 212, 213 Italy, 4, 58, 160 James, William, 29* Janesville (US study), 178 Japan, 72–3, 94, 101, 149, 192 John Lewis Partnership, 83, 172 Johnson, Robert Wood, 39–40, 72 Johnson & Johnson, 39–40, 41, 72, 74*, 79 Jolie, Angelina, 112 JP Morgan, 71* Juppé, Alain, 204 Kagame, Paul, 22 Kay, John, 82*, 84, 211 Keynes, John Maynard, 115 General Theory (1936), 47 kindergartens, 163 Knausgård, Karl Ove, 173 knowledge revolution, 126, 127–8 Kranton, Rachel, 35, 50–51 Krueger, Anne, 141 Krugman, Paul, 47 labour market flexicurity concept, 178 function of, 176–7 and globalization, 192, 194–6 and immigration, 194, 195, 196 investment in skills, 176–7 job security, 176, 177 and low productivity-low cost business model, 173–4 minimum wage strategies, 147, 174, 176, 180 need for reductions in working hours, 189 need for renewed purpose in work, 190 regulation of, 174, 189 and robotics revolution, 178–9 role of state, 177–8, 189 see also unemployment Labour Party, 49, 206 Marxist take-over of, 9, 204–5 language, 31, 32, 33, 39–40, 54, 57 Larkin, Philip, 99, 156 lawyers, 13–14, 45 Buiter’s three types, 186 and shell companies, 193, 194 surfeit of, 186–7 taxation of private litigation proposal, 187–8 Le Pen, Marine, 5, 63, 125, 202, 204 leadership and belief systems, 41–2, 43, 95 building of shared identity, 39–42, 49, 68, 114–16 changing role of, 39 and flattening of hierarchies, 39 and ISIS, 42 political achievements in post-war period, 113–16, 122 and pragmatist philosophy, 22 and shared purpose in firms, 39–40, 41, 71–5 strategic use of morality, 39–40, 41 transformation of power into authority, 39, 41–2, 57 League of Nations, 116 Lee Kwan Yew, 22, 147 Lehman Brothers, 71*, 76 liberalism, 30 libertarianism, 12–13, 15 New Right failures, 16, 21 Silicon Valley, 37–8 lobbying, 85, 141 local government, 182, 183 London, 3, 125, 127–8, 165–6, 193 impact of Brexit on, 131, 196 migration to, 195–6 Macron, Emmanuel, 67, 204 Manchester terror attack (2017), 212, 213 market economy, 19, 20, 21, 25, 48 and collapse of clusters, 129–30, 144–5 failure over pensions, 180 failure over skill-formation, 173–4 mutual benefit from exchange, 28 market fundamentalists, 147, 150 marriage assortative mating, 35, 99–100, 154, 188–9 cohabitation prior to, 99, 100 as ‘commitment technology’, 109, 155–6 divorce rates, 98, 99, 100–101, 102, 103 and female oppression, 156 religious associations, 109, 156 and rent-seeking, 141 ‘shotgun weddings’, 103 and unemployment, 103 Marxism, 13*, 26, 30, 43, 47, 113, 203, 214 alienation concept, 17–18 and the family, 36–7 late capitalism concept, 6 takeover of Labour Party, 9, 204–5 and ‘useful idiots’, 205* view of the state, 37 Maxwell, Robert, 80 May, Theresa, 205 Mayer, Colin, 18, 70 media celebrities, 6, 112, 204 Mélenchon, Jean-Luc, 5, 202, 204 mental health, 157, 158–9, 162 Mercier, Hugo, 29 meritocratic elites, 3–4, 5, 12–17, 20 Rawlsian vanguard, 13–14, 30, 49–50, 53, 67, 112, 113, 201, 202, 203, 214 Utilitarian vanguard, 9–10, 11–13, 15–16, 18, 52, 53, 59, 66–7, 209 see also Utilitarianism WEIRD (Western, Educated, Industrial, Rich and Developed), 3–4, 12, 14, 16, 17, 20, 116, 121, 133, 214* and white working class, 5, 16 Merkel, Angela, 14, 205 metropolitan areas, 3, 4, 7, 16, 19, 48, 125 co-ordination problem over new clusters, 145–50, 207 economies of agglomeration, 18, 19, 129, 131, 133–44, 195, 196, 207 gains from public goods, 134–5, 138–9 migration to, 195–6 political responses to dominance of, 131–2 scale and specialization in, 126–8, 130, 144–5 and taxation, 131, 132–43, 187, 207 Middle East, 192 Middleton, Kate, 188–9 migration, 121, 194–8, 203 as driven by absolute advantage, 20, 194–5, 208–9 and housing market, 182, 183 Mill, John Stuart, 9–10 minimum wage strategies, 147, 174, 176, 180 Mitchell, Andrew, 188 Mitchell, Edson, 78 modernist architecture, 12 Monarch Airlines, 75 monopolies, natural, 86–7, 88 and asymmetric information, 88, 90 auctioning of rights, 88–9 taxation of, 91–2 utility services, 86, 89, 90 ‘moral hazard’, 179 morality and ethics deriving from values not reason, 27, 28–9, 42–3 and economic man, 10, 19, 25, 26–7, 31, 34–5 and empathy, 12, 27 evolution of ethical norms, 35–6 Haidt’s fundamental values, 11–12, 14, 16, 29, 42–3, 132–3 and market economy, 21, 25, 28, 48 and modern capitalism, 25–6 and new elites, 3–4, 20–21 Adam Smith’s theories, 26–8 use for strategic purposes, 39–40, 41 and Utilitarianism, 9–10, 11, 14, 16, 55, 66–7, 209, 214 motivated reasoning, 28–9, 36, 86, 144, 150, 167 Museveni, President, 121 narratives and childhood mentors, 169–70 and consistency, 41, 67, 81, 96 conveyed by language, 31, 33, 57 detachment from place by e-networks, 38, 61–2 and heyday of social democracy, 49 and identity formation, 32 mis-ranking of cognitive and non-cognitive training, 174–6 moral norms generated from, 33, 97–8 and purposive action, 33–4, 40–41, 42, 68 and schools, 165 of shared identity, 53–6, 81 use of by leaders, 39–42, 43, 49, 80–81 see also belonging, narrative of; obligation, narrative of; purposive action National Health Service (NHS), 49, 159 national identity and citizens-of-the-world agenda, 59–61, 63, 65 contempt of the educated for, 53, 59, 60–61, 63 and distinctive common culture, 37†, 63 established in childhood, 32 esteem from, 51–3 fracture to skill-based identities, 3–5, 51–6, 78 legacy of Second World War, 15, 16 methods of rebuilding, 64, 65–8, 211–15 and new nationalists, 62–3, 67, 203, 204, 205 patriotism narrative, 21, 63, 67, 215 place-based identity, 51–6, 65–8, 211–14, 215 and polarization of society, 54–5 and secession movements, 58 unravelling of shared identity, 15, 50, 51–6, 57*, 58–61, 63, 215 and value identity, 64–5 National Review, 16 nationalism, 34 based on ethnicity or religion, 62–3 capture of national identity notion by, 62, 67, 215 and narratives of hatred, 56, 57, 58–9 and oppositional identities, 56–7, 58–9, 62–3, 68, 215 traditional form of, 62 natural rights concept, 12, 13 Nestlé, 70, 71 Netherlands, 206 networked groups as arena for exchanging obligations, 28 and ‘common knowledge’, 32–3, 34, 54, 55, 66, 212 decline of civil society networks/ groups, 180–81 and early man, 31 evolution of ethical norms, 35–6 exclusion of disruptive narratives, 34 families as, 97–8 leadership’s use of narratives, 39–42, 49 narratives detached from place, 38, 61–2 value-based echo-chambers, 38, 61–2, 64–5, 212, 215 see also family; firms Neustadt, Richard, 39* New York City, 5, 125, 128, 143–4, 193 NGOs, 71, 118, 157–8 ‘niche construction’, 35*, 36* Nigeria, 58 Noble, Diana, 149* Norman, Jesse, 21–2† North Atlantic Treaty Organization (NATO), 114, 115, 116, 117 North Korea, 85 Northern League, Italy, 58 Norway, 63, 206, 208–9 Nozick, Robert, 14–15 obligation, narrative of, 11, 12–13, 16, 19, 29, 33 and collapse of social democracy, 53–6, 210 entitled individual vs family obligation, 99–103, 104–6, 108–9, 210 in ethical world, 112, 113–22 and expansion of post-war ‘clubs’, 117–18, 210 fairness and loyalty instilled by, 34 heyday of the ethical state, 48–9, 68, 196–7 and immigration, 196–7 and leadership, 39, 40–41, 49 ‘oughts’ and ‘wants’, 27, 28, 33, 43 and secession movements, 58 and Adam Smith, 27, 28 see also reciprocity; rescue, duty of oil industry, 192 Organization for Economic Co-operation and Development (OECD), 114–15, 125 Orwell, George, Nineteen Eighty-Four (1949), 5 Oxford university, 7, 70, 100 Paris, 5, 7, 125, 128, 174, 179 patriotism, 21, 63, 67, 215 Pause (NGO), 157–8 pension funds, 76–7, 79–81, 179–80, 185 Pew Research Center, 169 Pinker, Steven, 12* Plato, The Republic, 9, 11, 12, 15, 43 Playboy magazine, 99 political power and holders of economic rent, 135–6, 144 leadership selection systems in UK, 204–5, 206 minimum age for voting, 203 need to restore the centre, 205–7 polarization within polities, 38, 63, 202–5 polities as spatial, 38, 61–2, 65, 68, 211–13 and shared identity, 8, 57–61, 65, 114–16, 211–15 transformation into authority, 41–2, 57–8 trust in government, 4, 5, 48, 59, 210, 211–12 populism, political, 6, 22, 43, 58–9, 202 and geographic divide, 130–31 headless-heart, 30, 60, 112, 119, 121, 122 media celebrities, 6, 112, 204 pragmatism as opposed to, 30 and US presidential election (2016), 5, 203–4 pragmatist philosophy, 6, 9, 19, 21, 21–2†, 46, 201 author’s proposed policies, 19–20, 21, 207–15 limitations of, 30 and Macron in France, 204 and migration, 198 and post-war settlement, 113, 116, 122 and social democracy, 18, 201–2 successful leaders, 22 and taxation, 132, 207 and teaching methods, 166–7 values and reason, 29–30, 43–4 proportional representation, 206 protectionism, 113, 114, 130–31 psychology, social, 16, 54 co-ordination problems, 32–3 esteem’s trumping of money, 174 Haidt’s fundamental values, 11–12, 14, 16, 29, 42–3, 132–3 narratives, 31, 32, 33–4, 38, 39–42, 49, 53–6 norms, 33, 35–6, 39, 42–3, 44, 97–8, 107–8 ‘oughts’ and ‘wants’, 27, 28, 33, 43 personal achievement vs family obligation, 99–103, 104–6, 108–9, 210 ‘theory of mind’, 27, 55 Public Choice Theory, 15–16 public goods, 134–5, 138–9, 186, 202, 213 public ownership, 90 Puigdemont, Carles, 202 purposive action, 18, 21, 25, 26, 34, 40*, 53–4, 68, 112, 211–13 autonomy and responsibility, 38–9 and belonging narrative, 68, 98, 114, 211, 212, 213 in Bhutan, 37† decline in ethical purpose across society, 48 and heyday of social democracy, 47, 49, 114 and narratives, 33–4, 40–41, 42, 68 in workplace, 190 Putnam, Robert, 45–6, 106 Bowling Alone, 181 ‘quality circles’, 72–3 Rajan, Raghuram, 178 Rand, Ayn, 32 rational social woman, 31, 50–51, 196 Rawls, John, 13–14 Reagan, Ronald, 15, 26 Reback, Gary, 90 reciprocity, 9, 19, 31, 212–15 and belonging, 25, 40–41, 49, 53–6, 67, 68, 98, 181, 182, 210–11, 212–13 and collapse of social democracy, 11, 14, 53–6, 58–61, 201, 210 and corporate behaviour, 95 in ethical world, 112, 113–15, 116 and expansion of post-war ‘clubs’, 117–18, 210 fairness and loyalty as supporting, 29, 31, 34 and the family, 97–8, 101, 102 and geographic divide, 125 heyday of the ethical state, 48–9, 68, 96, 196–7, 201 and ISIS, 42 Macron’s patriotism narrative, 67 nineteenth-century co-operatives, 8 rights matched to obligations, 44–5 and three types of narrative, 33, 34, 40–41 transformation of power into authority, 39, 41–2, 57–8 Refuge (Betts and Collier), 27 refugees, 14, 27, 115, 119–20, 213 regulation, 87–90 and globalization, 193–4 of labour market, 174 religion, 56–7, 62–3, 109, 156 religious fundamentalism, 6, 30, 36–7, 212, 213, 215 rent-seeking concept, 140–41, 150, 186, 187–8, 195 rescue, duty of, 40, 54, 119–21, 210, 213 as instrument for ethical imperialism, 117–18, 210 as not matched by rights, 44, 45, 117 and post-war settlement, 113, 115–16 restoring and augmenting autonomy, 121–2 and stressed young families, 163 term defined, 27, 112 value of care as underpinning, 29 retirement pensions, 179–80 rights ideology and corresponding obligations, 44–5 emergence in 1970s, 12–14 human rights lobby, 112, 118, 118* individualism as rampant in recent decades, 19, 214–15 and lawyers, 13–14, 45 Libertarian use of, 12–13, 14–15 natural rights concept, 12, 13 and New Right, 12–13, 14–15, 53 Rawls’ disadvantaged groups, 3–4, 13–14, 16, 50, 53, 112, 121, 203–4, 214 ‘rights of the child’ concept, 103–4 and Utilitarian atate, 12–14 see also individualism Romania, communist, 32, 36 Rotherham, ‘Grimm and Co’, 168–9 rule of law, 138–9, 186 Rwanda, 22 Salmond, Alex, 202 Sandel, Michael, 105 Sanders, Bernie, 9, 64, 202, 203 Sarkozy, Nicolas, 204 Schultz, Martin, 14 Schumpeter, Joseph, 21* Scotland, 58 Seligman, Martin, 108–9 sexual behaviour birth-control pill, 98–9, 102 and class divide, 99, 102, 155–6 concept of sin, 156 and HIV, 121 and stigma, 156–8 sexual orientation, 3, 45 Sheffield, 7, 8, 126, 128–9, 131, 151, 168, 192 shell companies, 193, 194 Shiller, Robert, 34 Sidgwick, Henry, 55 Signalling, Theory of, 41, 43, 53, 63, 95 Silicon Valley, 37–8, 62, 145, 152, 164 Singapore, 22, 147 Slovenia, 58 Smith, Adam, 14, 21, 21–2†, 174 and mutual benefit from exchange, 28 and pursuit of self- interest, 26–7, 40 on reason, 29 The Theory of Moral Sentiments (1759), 27, 28, 174 Wealth of Nations (1776), 26, 28, 174 Smith, Vernon, 28 social democracy ‘Butskellism’, 49* collapse of, 9, 11, 50, 51–6, 116–18, 201–2, 210 communitarian roots, 8–9, 11, 13, 14, 17, 48–9, 201 and group identities, 3–4, 13–14, 51–6 heyday of, 8–9, 15, 17, 47, 48–9, 68, 96, 196–7, 201, 210 and housing, 181–2 influence of Utilitarianism, 9, 10, 14, 16, 18, 49–50, 201, 203, 214 Libertarian challenge, 12–13, 14–15 New Right abandonment of, 14–15, 16, 26, 53 and Public Choice Theory, 15–16 replaced by social paternalism, 11–13, 49–50, 209–10 and rights ideology, 12–14 and secession movements, 58 shared identity harnessed by, 15, 196–7 unravelling of shared identity, 15, 50, 51–6, 57*, 58–61, 63, 215 and Utilitarianism, 214 social maternalism concept, 21, 154–5, 190 free pre-school education, 163–4 mentoring for children, 169–70, 208 support for stressed families, 20, 155, 157–60, 161–3, 208 social media, 27, 61, 87, 173, 207, 215 social paternalism backlash against, 11–13, 15–16 as cavalier about globalization, 20 and child-rearing/family, 105, 110, 154–5, 157, 158, 159, 160, 190, 209 replaces social democracy, 11–13, 49–50, 209–10 ‘rights of the child’ concept, 103–4 and Utilitarian vanguard, 9–10, 11–13, 15–16, 18, 66–7, 209 social services, 159 scrutiny role, 162 Solow, Robert, 141 Soros, George, 15* South Africa, 85 South Asia, 192 South Korea, 129, 130–31 South Sudan, 192 Soviet Union, 114, 115, 116, 203 Spain, 58, 160 specialization, 17–18, 36, 126–8, 130, 144–5, 192 Spence, Michael, 41, 53, 95 Sperber, Dan, 29 St Andrews University, 189 Stanford University, 145, 152 Starbucks, 193 the state, 19 ethical capacities of, 11, 20–21, 48–9 failures in 1930s, 47, 48 ideologies hostile to, 37–8 and pre-school education, 163–4 and prosperity, 37 public policy and job shocks, 177–8 public policy on the family, 21, 154–5, 157–70, 171–3, 177, 209 public-sector and co-ordination problem, 147–8 social maternalism policies, 21, 157, 190 Utilitarian takeover of public policy, 10–12, 13–14, 15–17, 18, 49–50, 113, 201 Stiglitz, Joseph, 56 Stoke-on-Trent, 129 Stonehenge, 64 Sudan, 8 Summers, Larry, 187 Sure Start programme, 164 Sutton, John, 151* Sweden, 178 Switzerland, 175, 206 Tanzania, 193 taxation and corporate globalization, 193, 194 of economic rents, 91–2, 187–8 ethics and efficiency, 132–43 on financial transactions, 187 generational differences in attitudes, 59 Henry George’s Theorem, 133–6, 141 heyday of the ethical state, 49 issues of desert, 132–3, 134–9 and the metropolis, 131, 132–43, 187, 207 and migration, 197 of natural monopolies, 91–2 ‘optimal’, 10 of private litigation in courts, 187–8 and reciprocity, 54, 55, 59 redesign of needed, 19 redistributive, 10, 11, 14, 49, 54, 55, 60, 197 of rents of agglomeration, 19, 132–44, 207 social maternalism policies, 21, 157 substantial decline in top rates, 55 tax havens, 62 Venables-Collier theory, 136–9 Teach First programme, 165–6 technical vocational education and training (TVET), 171–6 technological change, 4 robotics revolution, 178–9 and withering of spatial community, 61–2 see also digital networks telomeres, 155–6 Tepperman, Jonathan, The Fix, 22 Thatcher, Margaret, 15, 26 Thirty Years War, 56–7 Tirole, Jean, 177, 178 Toyota, 72–3, 74, 94, 172 trade unions, 173, 174, 176 Troubled Families Programme (TFP), 162 Trudeau, Pierre, 22 Trump, Donald, 5, 9, 63, 64, 86, 125, 136, 202, 204, 206, 215 Uber, 87 unemployment in 1930s, 47 and collapse of industry, 7, 103, 129, 192 impact on children, 160–61 older workers, 4, 103, 213 retraining schemes, 178 in USA, 160 young people, 4 Unilever, 70, 71 United Kingdom collapse of heavy industry, 7, 103, 129, 192 extreme politics in, 5 and falling life expectancy, 4 financial sector, 80, 83, 84–5 IMF bail-out (1976), 115 local banks in past, 146 northern England, 3, 7, 8, 84, 126, 128–9, 131, 151, 168, 192 shareholder control of firms, 76–7, 79, 80, 82–3 statistics on firms in, 37 universities in, 170, 172, 175* vocational education in, 172, 175† widening of geographic divide, 125 United Nations, 65, 112 ‘Club of 77’, 116 Security Council, 116 UNHCR, 115 United States breakdown of ethical family, 104–5 broken cities in, 129, 130 extreme politics in, 5, 63 and falling life expectancy, 4 financial sector, 83–4, 186 and global e-utilities, 89–90 growth in inequality since 1980, 125 heyday of the ethical state, 49 and knowledge industries, 192 labour market in, 176, 178 local banks in past, 146 oversight of firms in, 76 pessimism in, 5, 45–6 presidential election (2016), 5, 9, 203–4 Public Interest Companies, 93 public policy as predominantly national, 212 ‘rights of the child’ concept in, 103–4 Roosevelt’s New Deal, 47 statistics on firms in, 37 taxation in, 143–4, 144* unemployment in, 160 universities in, 170, 172, 173 weakening of NATO commitment, 117 universities in broken cities, 151–2 in EU countries, 170 expansion of, 99–100, 127 knowledge clusters at, 127, 151–2 low quality vocational courses, 172–3 in UK, 170, 172, 175* in US, 170, 172, 173 urban planning, post-war, 11–12 Utilitarianism, 19, 30, 49–50, 55, 108, 112, 121, 210–11 backlash against, 11–13, 201, 202 belonging as absent from discourse, 16, 59, 66–7, 210–11 care as key value, 12 and consumption, 10, 11, 16, 19–20, 209 equality as key value, 12, 13, 14, 15, 116, 132–3, 214 incorporated into economics, 10–11, 13–14, 16 influence on social democrats, 9, 10, 14, 16, 18, 49–50, 201, 203, 214 origins of, 9–10 paternalistic guardians, 9–10, 11–13, 66–7, 210 takeover of public policy, 10–12, 13–14, 15–17, 18, 49–50, 113, 201 and taxation, 10, 132*, 133 vanguard’s switch of identity salience, 52, 53, 59 Valls, Manuel, 204 Venables, Tony, 18, 136, 191* Venezuela, 120, 214 vested interests, 85–6, 135–6, 165, 166, 207 Volkswagen, 74–5 Walmart, 87 Warsi, Baroness Sayeeda, 65 Wedgwood, Josiah, 129 welfare state, 9, 48–9 unlinked from contributions, 14 well-being and happiness belonging and esteem, 16, 25, 27, 29, 31–3, 34, 42, 51–6, 97–8, 174 entitled individual vs family obligation, 108–9 and financial success, 26, 94 ‘ladder of life’, 25* poverty in Africa, 37 reciprocity as decisive for, 31 Westminster, Duke of, 136 white working class ‘elite’ attitudes to, 4, 5, 16 falling life expectancy, 4, 16 pessimism of, 5 William, Prince, 188–9 Williams, Bernard, 55* Wittgenstein, 62, 63 Wolf, Alison, 52–3, 155 World Bank, 115, 117, 118, 118*, 122 World Food Programme, 115 World Health Organization, 115 World Trade Organization (WTO), 116–17 Yugoslavia, 58 Zingales, Luigi, 178 Zuma, Jacob, 85 Copyright THE FUTURE OF CAPITALISM.

By reading novels people learned to see a situation from the perspective of someone else – a training in empathy, and Pinker explains the demise in the previously popular spectacle of public hangings as a consequence. * This being the common political strategy of fascism and Marxism. * Correspondingly, the anomalous individuals who were both very good and very rich, such as my old friend George Soros, became super-villains, distrusted by both sides. * ‘Creative destruction’ is the process by which efficient firms drive out less efficient through competition in the market. It accounts for much of the gradual increase in average incomes. The term was coined by Joseph Schumpeter (1942), who described it as ‘the essential fact about capitalism’. It is why all the other ‘isms’, however romantically appealing, are at best irrelevant.


pages: 338 words: 85,566

Restarting the Future: How to Fix the Intangible Economy by Jonathan Haskel, Stian Westlake

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Andrei Shleifer, Big Tech, Black Lives Matter, book value, Boris Johnson, Brexit referendum, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, Charles Lindbergh, charter city, cloud computing, cognitive bias, cognitive load, congestion charging, coronavirus, corporate governance, COVID-19, creative destruction, cryptocurrency, David Graeber, decarbonisation, Diane Coyle, Dominic Cummings, Donald Shoup, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, equity risk premium, Erik Brynjolfsson, Estimating the Reproducibility of Psychological Science, facts on the ground, financial innovation, Francis Fukuyama: the end of history, future of work, general purpose technology, gentrification, Goodhart's law, green new deal, housing crisis, income inequality, index fund, indoor plumbing, industrial cluster, inflation targeting, intangible asset, interchangeable parts, invisible hand, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, knowledge worker, lockdown, low interest rates, low skilled workers, Marc Andreessen, market design, Martin Wolf, megacity, mittelstand, new economy, Occupy movement, oil shock, patent troll, Peter Thiel, Phillips curve, postindustrial economy, pre–internet, price discrimination, quantitative easing, QWERTY keyboard, remote working, rent-seeking, replication crisis, risk/return, Robert Gordon, Robert Metcalfe, Robert Shiller, Ronald Coase, Sam Peltzman, Second Machine Age, secular stagnation, shareholder value, Silicon Valley, six sigma, skeuomorphism, social distancing, superstar cities, the built environment, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber for X, urban planning, We wanted flying cars, instead we got 140 characters, work culture , X Prize, Y2K

Also, as we saw in figure 1.4, influential research by a team at the Organisation for Economic Co-operation and Development (OECD), led by Chiara Criscuolo, has found a steady rise since 2001 between the leading firms in the industry and the laggards.4 To many economists, enduring leader/laggard gaps looks like another symbol of competition gone wrong. After all, the genius of competition is that only firms with the best product will do well in the marketplace. But the best product is subject to continual change, what the economist Joseph Schumpeter called creative destruction: “This process of creative destruction is the essential fact about capitalism.”5 In a well-functioning market we would expect to see laggard firms either exiting the market or replacing the leading firms as their products get better. For some, another troubling aspect of competition in the modern economy is the overwhelmingly conglomerate nature of some of our new firms.

accounting, 157 Acemoglu, Daron, 85, 95–96, 266n1 Adler, Gustavo, 60 agglomeration effects, 65, 186 Aghion, Philippe, 276n39 Ahn, JaeBin, 155, 178 Allen, Paul, 204 Andreessen, Marc, 242 antitrust, 212 Arnold, John, 130 Arora, Ashish, 160–61 Arrow, Kenneth, 268n28 authenticity, 6, 35–36, 79–81 automobile, 1–3 Bahaj, Saleem, 174 Bajgar, Matej, 217 bank lending channel, 164 Barnett, Corelli, 107 Basque Country, 204–5 Baudrillard, Jean, 7 Baumol’s cost disease, 265n45, 265n49 Belenzon, Sharon, 160–61 Bell, Daniel, 56 Benkard, Lanier, 217 Benmelech, Efraim, 58 Bergeaud, Antonin, 276n39 Berners-Lee, Tim, 146 Bessen, James, 61 Biden, Joe, 212 Blackberry (phone), 131 Blanchard, Olivier, 179–80 block-wide zoning, 197–98 Blundell, Richard, 276n39 “Blurred Lines” (Thicke and Williams), 131–32 Brandeis, Louis, 212 Brav, Alon, 160 Brazier, Alex, 154, 273n56 Brexit, 61, 145, 258 Brief History of Neoliberalism, A (Harvey), 41 broad credit channel, 164 Brynjolfsson, Erik, 39–40, 69, 243 Buffett, Warren, 156 “bullshit jobs,” 6, 80 Burgess, Simon, 277n22 business dynamism, 30–31, 69, 226–27 Buyuklieva, Boyana, 193 Byrne, David, 45 Cairncross, Frances, 190 Campbell, Donald, 128 capacity building, 15–16, 143–46, 240, 244, 245f, 247, 249–53 Capital in the Twenty-First Century (Piketty), 27, 75 capital stock, 48 Caplan, Bryan, 234 Cardwell’s law, 242 Carillion, 80 cars, 1–3 Case, Anne, 29 Castellani, Lorenzo, 257 Cecchetti, Stephen, 151 centralisation, 135–36, 249–55 Cheshire, Paul, 193 China, 111–12 cities, 14–15; COVID-19 and, 185; gap between, and towns, 185; housing capacity and, 196–99; housing costs and, 187–88; infrastructure and, 199–201; institutions and, 196–201; Matthew effect and, 189–90; planning laws and, 193–96; rise of, 184, 186–93, 191f, 192f; technocrats and, 193–96; transport infrastructure and, 188–89 Cities Unlimited, 194 Clancy, Matt, 187 climate change, 5–6, 34 clustering, 64–65, 75–76 cognitive load, 151, 159, 208, 259 collateral, 151–54, 173–74 collective action, 10, 89–90 collective decision-making, 94–95 collective goods, 96, 244–49, 245f, 249f commitment, 10, 114 community wealth building, 205 competition, dysfunctional: conglomeration and, 215–16; declining competition and, 214–16, 214f; education and, 231–38; Great Economic Disappointment and, 5, 29–32, 30f, 31f; institutions and, 227–30; intangibles and, 216–20, 218f, 220–27; intangibles crisis and, 70–73, 71f, 72f, 73f; monopolies and, 211–12; reducing, 211–39, 214f, 218f; workers and, 231–39 competition policy, 15 concentration, competition and, 214 conglomeration, 215–16 contestedness, 65–67 contractual enforcement, 65–67, 95–96 Cook, Tim, 208 Corrado, Carol, 45, 72, 219 cost of capital channel, 164 COVID-19 pandemic, 5–6, 14, 21–22, 24, 31, 34, 57–58, 65, 76–77, 88–89, 129, 140, 180–81, 185, 190–92, 251 Cowen, Tyler, 30–31, 37, 69, 138, 252 Cowperthwait, James, 252 creative destruction, 215 Criscuolo, Chiara, 215, 217 Cummings, Dominic, 145, 258 Daly, Kevin, 169 Davies, Dan, 151, 174 “death of distance,” 190, 195, 206–10 “deaths of despair,” 29 Deaton, Angus, 29 debt: collateral and, 151–54; finance, 150–55; institutional, 12–17; IP-backed, 171; technical, 12 Decadent Society, The (Douthat), 79 decision-making, collective, 94–95 delegation, 247–48 Dell, Melissa, 85 Dell’Ariccia, Giovanni, 152, 174, 179–80 De Loecker, Jan, 215 Deming, David, 210 Democracy Collaborative, 205 Demsetz, Harold, 87, 93–94 Dickens, Charles, 148 Diewert, Erwin, 270n6 disappointment, economic.


The Future of Technology by Tom Standage

air freight, Alan Greenspan, barriers to entry, business process, business process outsourcing, call centre, Clayton Christensen, computer vision, connected car, corporate governance, creative destruction, disintermediation, disruptive innovation, distributed generation, double helix, experimental economics, financial engineering, Ford Model T, full employment, hydrogen economy, hype cycle, industrial robot, informal economy, information asymmetry, information security, interchangeable parts, job satisfaction, labour market flexibility, Larry Ellison, Marc Andreessen, Marc Benioff, market design, Menlo Park, millennium bug, moral hazard, natural language processing, Network effects, new economy, Nicholas Carr, optical character recognition, PalmPilot, railway mania, rent-seeking, RFID, Salesforce, seminal paper, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, smart grid, software as a service, spectrum auction, speech recognition, stem cell, Steve Ballmer, Steve Jurvetson, technological determinism, technology bubble, telemarketer, transcontinental railway, vertical integration, Y2K

It may not be for everyone yet, but over the next decade, as the fiddliness of connecting to the internet – whether through the air, the power socket, the old phone jack, the cable-tv dongle, or by satellite – is resolved, that connection will increasingly be the only link needed. Communicating, by voice or any other means, will be free. Will it be simpler? Ask Ms Baumholtz. 106 MAKE IT SIMPLE The blood of incumbents Stand by for a spot of creative destruction n the record, any top executive in the it, consumer-electronics and telecoms industries today will profess that his firm is leading the way towards simplicity. But are those claims justified? In theory, says Ray Lane, a venture capitalist, the company best placed to deliver simplicity should be Microsoft.

And though it may not be an Intel killer, it could prevent that firm from extending its dominance of the desktop into the living room. Consumer-electronics devices, unlike desktop pcs, do not have to be compatible with existing software. In that sense, the Cell does pose a threat to Intel, which regards the “digital home” as a promising area for future growth. Stand by, therefore, for another round of creative destruction in the field of information technology. And no matter what the Cell does to the broader computer-industry landscape, the virtual game-vistas it will conjure up are certain to look fantastic. The material on pages 198–200 first appeared in The Economist in February 2005. 200 7 THE DIGITAL HOME THE FUTURE OF TECHNOLOGY Life in the vault Companies are fighting to turn your home into an entertainment multiplex n june 2004, Intel, the world’s largest chipmaker, launched two new lines of chips, code-named Grantsdale and Alderwood, which it called the “most compelling” changes to the way personal computers (pcs) work in “over a decade”.

Kearney 163, 189 AAAI see American Association of Artificial Intelligence ABB 287, 289 ABI Research 295, 296 Accenture 39, 118–20, 126, 129, 131–2, 134–5, 138, 145–6 ActivCard 69 Activision 186–7 Adobe 39 Advanced Cell Technology 268 Africa 251–2 agricultural biotechnology ix, 238–9, 251–7, 270–1 see also genetic modifications AI see artificial intelligence AIBO 332, 334, 338 AIDS 247, 250 airlines 37–8, 42 AirPort 211 airport approach, security issues 68–9 Airvana 140–1 Alahuhta, Matti 164 Albert 339–40 “always on” IT prospects 94–5, 203 Amazon.com 10, 37, 91 AMD 85, 313 American Association of Artificial Intelligence (AAAI) 337–8 American Express 22, 27, 126 American football 194–7 American Superconductor 288 amino acids 241–8, 253–5 analogues see late adopters Anderson, Roger 287 Anderson, Ross 61, 73–4, 76 Andreessen, Marc 8, 15 animal husbandry 256–7 anti-piracy systems 34–5 anti-virus software 50–1, 60, 67–8 antibodies 249–50, 256–7 AOL 93 Apache 10 Apple 95, 97, 99–101, 165–6, 172, 192, 198, 202–3, 204, 207–8, 211, 219–29 Applera 242–3 application service providers (ASPs) 19–20, 91–2, 109 Applied Molecular Evolution 246, 258 architects, green buildings 299–304 Archos AV 206 Argentina 319 Arima 156 Armand, Michel 281, 283 ARPU see average revenue per user Arthur, Brian 39 artificial intelligence (AI) x, 89, 102, 233, 336–40 artists 83–4 ASCII 96 Asian cultures 93, 142, 176 see also individual countries ASPs see application service providers AstraZeneca 312 AT&T 108, 110 ATMs see automated teller machines atoms, nanotechnology ix–x, 233, 263–4, 306–29 Atos Origin 123, 130, 134, 143 audits 44, 46 automated teller machines (ATMs) 61 autonomic computing 88–92, 335, 339 Avax office building 304 average revenue per user (ARPU), mobile phones 157, 162–3 B B2B see business-to-business computing Baan 30 Babic, Vasa 159 back-up systems 43–4 Bacon, Sir Francis 236, 271 Ballard, Geoffrey 290 Balliet, Marvin 28 Ballmer, Steve 98 Bamford, Peter 164–5, 167 banks 37, 42, 48, 61, 72, 80, 87, 115, 116–18, 121, 126, 146 Bardhan, Ashok 138 barriers to entry, mobile phones 155–6 Battat, Randy 140–1 batteries 233, 277–9, 280–4 Baumholtz, Sara 103, 105–6 Bayesian decision-making 338 BEA 21–2, 87 Bell 108 Bell, Genevieve 93 Bell, Gordon 13 Bell Labs 210 341 THE FUTURE OF TECHNOLOGY Benioff, Marc 19, 22, 84, 92 Benjamin, Dan 295 BenQ 156–7 Berliner, Emile 82 Bernstein, Phillip 300, 304 Berquist, Tom 37 Bhattacharya, Arindam 131 Bhide, Amar 128 Big Brother 179–83 biological weapons 265–6 biometric systems 60, 64–5, 71, 74 biopolymers 259–64 biotechnology ix–x, 233, 236–71 agricultural biotechnology ix, 238–9, 251–7, 270–1 categorisations 238–9, 241 cloning 239, 256, 267–71, 329 clusters 240 concepts ix–x, 233, 236–71, 327 embryonic stem cells 268–9 enzymes 258–64 fuels ix–x, 233, 259–64, 271, 274–9, 314–15 funding problems 237–8 future prospects 236–48, 267–71 genomics 239, 241–8, 262–4, 308 GM ix–x, 233, 236–40, 251–5, 267–71, 318–20 historical background 241 industrial biotechnology 258–64 medical applications ix–x, 145, 233, 236–40, 247, 249–50, 256–7, 267–71 pharmaceutical companies 239–40, 241–50, 312 plastics 238–9, 259–64 problems 236–40 revenue streams 237–8, 241–2 RNA molecules 241–2, 249–50, 265 therapeutic antibodies 249–50, 256–7 virtual tissue 248 warfare 265–6 x-ray crystallography 247–8 BlackBerry e-mail device 152–3, 156, 171 Blade Runner (movie) 269 Bloomberg, Jason 91 Bluetooth wireless links 171–2, 173, 214–15, 218 BMG 222–3, 227, 229 BMW 159, 176 Boeing 69 Bonneville Power Administration (BPA) 287 boom-and-bust cycles, innovations vii–viii, 4–39, 82–3, 107, 134 Bosch 142 Boston Consulting Group 120, 131, 140, 142, 160, 203, 226 Bowie, David 19 Brazil 114, 309, 319 BREEAM standard 300–1 342 Breese, Jack 100, 102 Brenner, Sydney 242, 252–3 Brillian 112–14 Brin, David 179, 183 Brin, Sergey 9 British Airways 126–7 broadband ix, 34–5, 52–3, 93, 96–7, 103, 168–9, 203, 207, 209–13 Broockman, Eric 216 Brooke, Lindsay 297 Brown, Tim 101, 106 Buddhism 19 budgets 7, 9, 14, 28–31, 45–6, 71, 186 bugs, software 20–1, 54–6 built-in obsolescence 8–9, 29 Bull, Michael 220 Bush, George W. 35, 144, 268–9, 274–6 Business Engine 28, 30 business models ix, 10, 19–20, 36–40, 109 business plans 10 business units 28–31 business-process outsourcing (BPO) 118 business-to-business computing (B2B) 90 Byrnes, Chris 44, 46 byte’s-eye view, complexity problems 85–7 C Calderone, Tom 224 call centres 79, 121, 125–9, 136, 144 Cambridge University 61, 73, 76 camcorders 214 camera phones 156, 170–2, 179–83, 203 see also mobile phones Cameron, Bobby 28 Canada 152, 181, 290 cancer cells 249–50, 317, 329 canola 252–3 Canon 108 capitalism 28 Capossela, Chris 79, 94 car industry 5, 38–9, 82–4, 113, 114, 116, 118–19, 120–1, 134, 146, 158–9, 175–6, 284, 290–8 diesel cars 296–7, 314–15 electric cars 284, 290, 291–8 hybrid cars 233, 284, 291–8 mobile phones 158–9, 175–6 particulate filters 296–7 performance issues 291–8 Toyota hybrid cars 291–5, 297 CARB 296 carbon nanotubes 311–12, 322, 325, 328 carbon-dioxide emissions 275, 296, 300 Cargill 253–4, 259–60 Carnegie Mellon 44–5 Carr, David 194 Carr, Nicholas vii–viii, 83 Cato Institute 34 INDEX CBS 36, 225 CDMA2000-1XEV-DO technology 165, 168–9 CDs 207, 212–13, 223–8, 315 celebrity customers, mobile phones 173–4 Celera 241–2, 262 Cell chips 198–200 cell phones 172 see also mobile phones Celltech 243 Centrino 11 Cenzic 54, 68 CFOs see chief financial officers Chand, Rajeev 217–18 Chapter 11 bankruptcies 37 Charles, Prince of Wales 317 Charney, Scott 43, 47, 72–3 Chase, Stuart 136, 139 Chasm Group 12, 36 Check Point Software 52–3, 86 chemistry 239, 310–11 Chi Mei 156–7 chief financial officers (CFOs) 21, 28–31, 73–4 Chile 319 China 38–9, 109, 112–15, 120–1, 130, 136, 140, 142, 145, 154, 156, 160, 171, 269, 276, 301, 309, 319–20 Christensen, Clayton 9, 107–8 Chuang, Alfred 87 CIA 18, 33, 50, 56 Cisco 106, 110, 211 Citibank 30, 121, 126 civil liberties, security issues 74 civilisation processes 84 clamshell design, mobile phones 170–1 Clarke, Richard 43, 75–6 cleaner energy ix–x, 233, 274–6 climate change ix clocks 82 clones, IBM PCs 9 cloning, biotechnology 239, 256, 267–71, 329 Clyde, Rob 67 CMOS chips 313–14 co-branding trends, mobile phones 161 Coburn, Pip 80–1, 89 Cockayne, Bill 66 Code Red virus 45, 49, 50, 54–5 Cognizant 125, 131 Cohen, Ted 228 cold technologies 31, 80 Cole, Andrew 163–5, 167 Comber, Mike 222 commoditisation issues, concepts 6–7, 8–16, 25, 132–5, 159, 203 Compal 156 Company 51 45–6, 54 Compaq 38 competitive advantages viii, 30 complexity problems ASPs 91–2, 109 byte’s-eye view 85–7 concepts viii, 14–16, 78–81, 82–110, 117–22 consumer needs 93–7 costs 79 creative destruction 107–10, 200, 326 desktops 100–2 digital homes 95–7 disappearance 82–4 “featuritis” 83–4 filtering needs 101–2, 339 front-end simplicity needs 84, 88, 99–102 historical background 80–4 infrastructural considerations 85–7, 117–22 IT viii, 14–16, 78–81, 82–110, 117–22 mergers 87 metaphors 100–2 “mom” tests 98 outsourcing 118–22 simplicity needs 78–81, 84, 87, 88–92, 98–110 web services 88–92 wireless technology 95–7, 109–10 “ws splat” 90–1 computer chips 4–12, 32–4, 85–7, 93, 95, 109, 119, 158, 161, 198–200, 202–3, 216, 313–14, 325–7 see also processing power Cell chips 198–200 costs 10, 14 heat generation 11–12 nanotechnology 313–14, 325–7 types 199–200, 202–3, 313–14 UWB chips 216 Computer Security Institute (CSI) 50–2, 62 Comviq 109 Condé Nast Building 301 consumer electronics see also customers; digital homes; gaming; mobile phones Cell chips 198–200 concepts viii–ix, 94–7, 99–102, 119, 147, 198–200, 203, 338–9 hard disks 204–8 control systems see also security... cyber-terrorism threats 75–6 Convergys 121, 126–9 copyright ix, 34 Corn, Joe 82 Cornice 208 Corporate Watch 318 costs viii, 4–7, 10, 14–15, 29–31, 70–4, 79, 186, 275–6, 283, 295–8, 311, 332–6 calculations 30–1 complexity problems 79 computer chips 10, 14 343 THE FUTURE OF TECHNOLOGY downward trends viii, 4–7, 14 energy alternatives 275–6 flat-panel displays 230–1 gaming budgets 186 hybrid cars 295–8 networks 14–15 outsourcing 112–24, 131–5, 140–3 performance links 29–30 robots 332–6 security issues 45–6, 50–1, 62, 70–4 storage costs 14–15 viruses 50–1 VOIP 104–6, 167 cotton 252–5 crashes, innovations vii, 4, 5–8, 39, 107, 134 creative destruction 107–10, 200, 326 credit cards 114, 117–18, 129, 338 Crick, Francis 236, 247, 271 crime fraud 52, 61–3, 181–3 mobile phones 180–3 CRM see customer relationship management crops, GM 251–5, 270–1 Crosbie, Michael 302 Cruise, Tom 64–5 Crystal Palace 299 CSI see Computer Security Institute CSM Worldwide 291–2, 297 CTC 288 cultural issues outsourcing 122, 142 technology 93–4 customer relationship management (CRM) 19, 47 customers see also consumer electronics complexity issues 93–7 cultural issues 93–4, 142 powers 26–7, 28–31, 36–40, 83–4 satisfaction 22, 24, 28–31 simplicity needs 78–81, 84, 87, 88–92, 98–110 vendors 94–7 cutting-edge economics 17 Cypress Semiconductor 32 Czech Republic 114, 120, 319 Czerwinski, Mary 100 D D-VARS 288 DaimlerChrysler 292, 295–6 Danger 152 data centres 17, 21, 84–92, 117–22 data services, mobile phones 164–5, 170–1 databases 17–18, 20–1, 35, 36–7, 56, 69, 101–2 Davidson, Mary Ann 56 Davies, Geoff 53, 72–4 de Felipe, Charles 87 344 de Vries, Pierre 55 Dean, David 160 deCODE 243–4 Dedo, Doug 67 Delacourt, Francis 143 Dell 8, 9, 85, 88, 109, 114–15, 131, 150, 202–3, 230 DeLong, Brad 36 Demos 318 Denman, Ken 212 Denmark 289 deployment period, revolutionary ideas 6 Dertouzos, Michael 78 desktops 100–2 Deutsche Bank 121, 126, 161, 164 diesel cars 296–7, 314–15 Diffie, Whitfield 43, 56 digital cameras 78, 95, 179–83, 203, 204 digital homes ix, 94–7, 147, 200, 202–32 see also flat-panel displays; TV; video...; wireless technology competitors 202–3 concepts 147, 200, 202–32 future prospects 202–3 hard disks 204–8, 219–20 iPod music-players ix, 99–100, 102, 172, 192, 203, 204, 207–8, 219–29 media hubs 202–3 music 204, 207–8, 219–29 PCs 202–3 UWB 96–7, 214–19 Wi-Fi 34–5, 66–7, 93, 95–7, 153, 203, 209–18 digital immigrants 81, 93, 109 digital natives 81, 93 digital video recorders (DVRs) 205–6 direct-sequence ultrawideband (DS-UWB) 215–17 disaster-recovery systems 43–4 Dish Network 205 Disney 168 disruptive innovations, concepts 107–10, 200, 326 Diversa 253–4 DNA 236–41, 243–4, 247, 250, 262, 265, 312, 328 Dobbs, Lou 144 Dobkin, Arkadiy 130, 142 Dolly-the-sheep clone 256, 268 Donaldson, Ken 317 Dorel Industries 140 dotcom boom vii, 19, 37–9, 66, 79–81, 90, 92, 162, 309, 322, 339 double-clicking dangers, viruses 59–60 Dow 259–60, 263 DreamWorks 186 Drexler, Eric 316 DS, Nintendo 191–3 DS-UWB see direct-sequence ultrawideband INDEX Dun & Bradstreet 126 DuPont 259–60 DVD technology 203, 214, 224, 315 DVRs see digital video recorders E E*Trade 37 e-commerce 14, 71, 113 see also internet e-homes see digital homes e-mail viii, 42–57, 59–60, 99, 101, 104–6, 150, 156–7, 180 see also internet historical background 106 eBay 37, 91 economics, cutting-edge economics 17 The Economist x, 7, 66 Edison, Thomas Alva 82–3, 289 eDonkey 229 EDS 19–20, 60, 88, 120, 126, 134 Eigler, Don 310 electric cars 284, 290, 291–8 Electric Power Research Institute (EPRI) 285–9, 290, 295–6 electricity fuel cells 274–9, 280–1, 289–90, 297–8, 301, 315, 325 green buildings 233, 299–304 hybrid cars 233, 284, 291–8 hydrogen 233, 262–4, 271, 274–9, 289–90, 297–8 lithium-ion batteries 233, 280–4 micropower concepts 289 nanotechnology 314–15 power grids 233, 285–90 storage problems 275–6, 289–90 electrification age ix, 5, 19, 23, 39, 82, 83, 84, 134 Electronic Arts 187, 190 electronic-manufacturing services (EMS), mobile phones 155–6, 159–60 electrons 307 Eli Lilly 44 Ellison, Larry 5, 21–2, 38–40 embryonic stem cells 268–9 EMI 222–9 Emotion Engine chips 199–200 Empedocles, Stephen 321 employees future job prospects 136–9, 144–6 office boundaries 80–1, 94 outsourcing viii, 112–46 resistance problems 31 security threats 58–63, 69 VOIP 104–6 EMS see electronic-manufacturing services encryption 53–4, 86–7 energy internet 285–90 energy technology ix–x, 233, 274–304, 314–15 alternative production-methods 275–6, 286, 289 concepts 274–304, 314–15 demand forecasts 277–9 fuel cells 233, 262–4, 271, 274–9, 280–1, 289–90, 297–8, 301, 315, 325 green buildings 233, 299–304 hybrid cars 233, 284, 291–8 hydrogen 233, 262–4, 271, 274–9, 289–90, 297–8 lithium-ion batteries 233, 280–4 nanotechnology 314–15 power grids 233, 285–90 production costs 275–6 renewable energy 275–6, 286, 289, 300 Engelberger, Joe 334 enterprise consumers 94–7 enterprise software 20, 35 Environmental Defence 319 enzymes, biotechnology 258–64 Epicyte 256–7 EPRI see Electric Power Research Institute Eralp, Osman 225 Ericsson 155–6, 158, 171 ETC 317–18 Ethernet 210–11 Europe see also individual countries fuel cells 274 mobile phones 163–9, 174 outsourcing 140–6 EV-DO see CDMA...


pages: 654 words: 120,154

The Firm by Duff McDonald

"World Economic Forum" Davos, Alan Greenspan, AOL-Time Warner, Asian financial crisis, asset light, Bear Stearns, benefit corporation, book value, borderless world, collective bargaining, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, family office, financial independence, Frederick Winslow Taylor, Glass-Steagall Act, income inequality, invisible hand, Jeff Bezos, Joseph Schumpeter, Ken Thompson, Kickstarter, laissez-faire capitalism, Mahatma Gandhi, Nelson Mandela, new economy, pets.com, Ponzi scheme, Ralph Nader, risk tolerance, risk-adjusted returns, Robert Solow, scientific management, shareholder value, Sheryl Sandberg, Silicon Valley, Steve Jobs, supply-chain management, The Nature of the Firm, vertical integration, young professional

McKinsey partner Richard Foster’s 2001 book, Creative Destruction, was nothing short of a big wet kiss to Enron’s way of doing business. It was also a mere repackaging of economist Joseph Schumpeter’s own work on the strengths of capitalism a half century before, but with a crucial twist: It was celebrating the worst instincts of laissez-faire capitalism, not the best. The War for Talent, a 2001 book by McKinsey consultants Ed Michaels, Helen Handfield-Jones, and Beth Axelrod (now head of HR at eBay), might have been an even wetter kiss for Enron than Creative Destruction. The book set off a worldwide craze for a raft of flimsy ideas, many of which were based on simple observation of Skilling’s management style and practices, a large part of which had come out of McKinsey itself.

McKinsey’s 1997 study, “The War for Talent,” had caused a mad rush to add a new (and questionable) dimension to the traditional human resources function: the talent manager. The idea, in its simplest sense: Rapidly promote “talented” employees (whatever that meant), encourage them to think outside the box, and pay them more than they are worth. One Enron employee quoted in McKinsey consultant Richard Foster’s book Creative Destruction made the following absurd remark: “We hire very smart people and we pay them more than they think they are worth.” It was nothing short of theory gone mad in practice. As Gladwell wryly observed in reference to Enron, “It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.”47 “What if smart people are overrated?”

McKinsey & Company, 30 at Marshall Field, 29–30, 53 McDonald and, 126–31 at McKinsey, 30, 269, 297 McKinsey (James O.) views about, 12, 29–30 in McKinsey New York office, 71 McKinsey revenue and, 96 McKinsey as scapegoat for, 8, 96, 107, 117, 248 in 1990s, 211 as product of McKinsey, 174, 278–79 reengineering and, 211. See also specific corporation Coulter, Jim, 167 Cox, David, 286 Cozinc Rio Tinto, 94 Crainer, Stuart, 110, 173 Cravath, Swaine & Moore, 83 Creative Destruction (Foster), 247, 248, 263 Crédit Lyonnais, 79 Credit Suisse, 245, 253, 257 Credit Suisse First Boston, 279 Cresap, McCormick and Paget, 42, 55, 118 Crocker Bank, 166 Crockett, Horace “Guy,” 31, 37, 38, 39, 56–57, 61, 86, 102 Crutchfield, Edward, 254–55 cubic consulting, 225–27 culture/values, McKinsey: clients and, 275, 331, 333 and cult of servitude, 102 of dissent, 266–67 and Enron-McKinsey relationship, 247 and expansion of McKinsey, 325 impact of Enron collapse on, 251 and individual ethos, 66, 94, 156, 163 internal concerns about Gupta influence on, 237 Katzenbach comments about, 171 and knowledge, 218 and McKinsey in the future, 325, 330, 331 and recruiting and training, 171 risk taking, 209–10 sharing and, 143 and size of McKinsey, 320 team building and, 208 and turnover of employees, 330.


pages: 472 words: 117,093

Machine, Platform, Crowd: Harnessing Our Digital Future by Andrew McAfee, Erik Brynjolfsson

"World Economic Forum" Davos, 3D printing, additive manufacturing, AI winter, Airbnb, airline deregulation, airport security, Albert Einstein, algorithmic bias, AlphaGo, Amazon Mechanical Turk, Amazon Web Services, Andy Rubin, AOL-Time Warner, artificial general intelligence, asset light, augmented reality, autism spectrum disorder, autonomous vehicles, backpropagation, backtesting, barriers to entry, behavioural economics, bitcoin, blockchain, blood diamond, British Empire, business cycle, business process, carbon footprint, Cass Sunstein, centralized clearinghouse, Chris Urmson, cloud computing, cognitive bias, commoditize, complexity theory, computer age, creative destruction, CRISPR, crony capitalism, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, data science, Dean Kamen, deep learning, DeepMind, Demis Hassabis, discovery of DNA, disintermediation, disruptive innovation, distributed ledger, double helix, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ethereum, ethereum blockchain, everywhere but in the productivity statistics, Evgeny Morozov, fake news, family office, fiat currency, financial innovation, general purpose technology, Geoffrey Hinton, George Akerlof, global supply chain, Great Leap Forward, Gregor Mendel, Hernando de Soto, hive mind, independent contractor, information asymmetry, Internet of things, inventory management, iterative process, Jean Tirole, Jeff Bezos, Jim Simons, jimmy wales, John Markoff, joint-stock company, Joseph Schumpeter, Kickstarter, Kiva Systems, law of one price, longitudinal study, low interest rates, Lyft, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, Marc Andreessen, Marc Benioff, Mark Zuckerberg, meta-analysis, Mitch Kapor, moral hazard, multi-sided market, Mustafa Suleyman, Myron Scholes, natural language processing, Network effects, new economy, Norbert Wiener, Oculus Rift, PageRank, pattern recognition, peer-to-peer lending, performance metric, plutocrats, precision agriculture, prediction markets, pre–internet, price stability, principal–agent problem, Project Xanadu, radical decentralization, Ray Kurzweil, Renaissance Technologies, Richard Stallman, ride hailing / ride sharing, risk tolerance, Robert Solow, Ronald Coase, Salesforce, Satoshi Nakamoto, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Skype, slashdot, smart contracts, Snapchat, speech recognition, statistical model, Steve Ballmer, Steve Jobs, Steven Pinker, supply-chain management, synthetic biology, tacit knowledge, TaskRabbit, Ted Nelson, TED Talk, the Cathedral and the Bazaar, The Market for Lemons, The Nature of the Firm, the strength of weak ties, Thomas Davenport, Thomas L Friedman, too big to fail, transaction costs, transportation-network company, traveling salesman, Travis Kalanick, Two Sigma, two-sided market, Tyler Cowen, Uber and Lyft, Uber for X, uber lyft, ubercab, Vitalik Buterin, warehouse robotics, Watson beat the top human players on Jeopardy!, winner-take-all economy, yield management, zero day

Fuji: The Battle for Global Market Share,” 2000, https://www.pace.edu/emplibrary/tfinnerty.pdf. 131 the Casio QV-10: Sam Byford, “Casio QV-10, the First Consumer LCD Digital Camera, Lauded as ‘Essential’ to Tech History,” Verge, September 14, 2012, http://www.theverge.com/2012/9/14/3330924/first-lcd-digital-camera-casio-qv-10. 131 Its $900 price tag: Richard Baguley, “The Gadget We Miss: The Casio QV-10 Digital Camera,” Medium, August 31, 2013, https://medium.com/people-gadgets/the-gadget-we-miss-the-casio-qv-10-digital-camera-c25ab786ce49#.3cbg1m3wu. 132 print ad revenue had declined by 70%: Mark J. Perry, “Creative Destruction: Newspaper Ad Revenue Continued Its Precipitous Free Fall in 2013, and It’s Probably Not Over Yet,” AEIdeas, April 25, 2014, https://www.aei.org/publication/creative-destruction-newspaper-ad-revenue-continued-its-precipitous-free-fall-in-2013-and-its-probably-not-over-yet. 132 $3.4 billion: Pew Research Center, “State of the News Media 2015,” April 29, 2015, http://www.journalism.org/files/2015/04/FINAL-STATE-OF-THE-NEWS-MEDIA1.pdf. 132 “print dollars were being replaced by digital dimes”: Waldman, “Information Needs of Communities.” 132 13,400 newspaper newsroom jobs: Ibid. 132 Tucson Citizen: Tucson Citizen, accessed January 31, 2017, http://tucsoncitizen.com. 132 Rocky Mountain News: Lynn DeBruin, “Rocky Mountain News to Close, Publish Final Edition Friday,” Rocky Mountain News, February 26, 2009, http://web.archive.org/web/20090228023426/http://www.rockymountainnews.com/news/2009/feb/26/rocky-mountain-news-closes-friday-final-edition. 132 lost more than 90% of their value: Yahoo!

Understanding the implications of these developments for business can make the difference between thriving and merely surviving. Or between surviving and perishing. Technological progress tests firms. Indeed, the average life span of the most valuable US companies, those listed in the S&P 500, has fallen from about sixty years in 1960 to less than twenty years today. A lot of Joseph Schumpeter’s “creative destruction” has taken place in this digital era, and most of this book has focused on how executives can navigate that destruction successfully. But although we field many requests for advice on how a company can thrive in the digital era, some of the most common questions we get take a broader view: What does the machine-platform-crowd transformation mean for society?

Shaw), 267 composition, musical, 117 computational biology, 116–17 computer-aided design, 119–20 computers (generally) and Go, 3–6 origins of programming, 66–67 and standard partnership, 31 concentration, sales/profits, 311–12 confabulation, 45n conference venues, 189 confirmation bias, 57 Confucius, 1 connections, human, 122–24 consciousness, 120 construction sites, drones for mapping, 99 consumer loyalty and, 210–11 consumer surplus, 155–56, 159, 161, 164, 173 content, crowd-created, 8, 234 content platforms, 139 contracts blockchain and, 291–95 and failure mode of decentralized things, 317–19 inherent incompleteness of, 314–17 contributions, to open-source software, 242–43 coordination costs, 313–14 Cope, David, 117, 119 Copyright Arbitration Royalty Panel (CARP), 147n core in centrally planned economies, 235, 236 as counterpart to the crowd, 15 crowd as, 230–31 crowd as independent of, 271–75 DAO vs., 303 handling of bad actors, 234 leveraging of crowd by, 260–70 libraries as, 230 mismatching of problem to, 256–58 Cornell Aeronautical Laboratory, 72 “Corporal Coles hand,” 273–74 counterfeit goods, 290 Cowen, Tyler, 208–9 Craigslist, 138–39 Crawford, Kate, 52 creative destruction, 330 creativity definitions of, 113 human connection in digitized world, 122–24 limits of computers’ contributions, 119–22 machines and, 110–19 other forms of computer-aided activity vs., 119–22 credit cards, 214–16 credit scores, 46–47 CRISPR, 258 CRISPR-Cas9 gene-editing tool, 271–72 Crocker, F.


pages: 471 words: 124,585

The Ascent of Money: A Financial History of the World by Niall Ferguson

Admiral Zheng, Alan Greenspan, An Inconvenient Truth, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Bear Stearns, Black Monday: stock market crash in 1987, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, classic study, collateralized debt obligation, colonial exploitation, commoditize, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, equity risk premium, financial engineering, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, Future Shock, German hyperinflation, Greenspan put, Herman Kahn, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, iterative process, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Meriwether, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour mobility, Landlord’s Game, liberal capitalism, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, Nelson Mandela, Nick Bostrom, Nick Leeson, Northern Rock, Parag Khanna, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, risk free rate, Robert Shiller, rolling blackouts, Ronald Reagan, Savings and loan crisis, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, stocks for the long run, structural adjustment programs, subprime mortgage crisis, tail risk, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, transaction costs, two and twenty, undersea cable, value at risk, W. E. B. Du Bois, Washington Consensus, Yom Kippur War

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the same process of industrial mutation - if I may use the biological term - that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.23 A key point that emerges from recent research is just how much destruction goes on in a modern economy. Around one in ten US companies disappears each year. Between 1989 and 1997, to be precise, an average of 611,000 businesses a year vanished out of a total of 5.73 million firms.

Ten per cent is the average extinction rate, it should be noted; in some sectors of the economy it can rise as high as 20 per cent in a bad year (as in the District of Columbia’s financial sector in 1989, at the height of the Savings and Loans crisis).24 According to the UK Department of Trade and Industry, 30 per cent of tax-registered businesses disappear after three years.25 Even if they survive the first few years of existence and go on to enjoy great success, most firms fail eventually. Of the world’s 100 largest companies in 1912, 29 were bankrupt by 1995, 48 had disappeared, and only 19 were still in the top 100.26 Given that a good deal of what banks and stock markets do is to provide finance to companies, we should not be surprised to find a similar pattern of creative destruction in the financial world. We have already noted the high attrition rate among hedge funds. (The only reason that more banks do not fail, as we shall see, is that they are explicitly and implicitly protected from collapse by governments.) What are the common features shared by the financial world and a true evolutionary system?

In the evolutionary process, animals eat one another, but that is not the driving force behind evolutionary mutation and the emergence of new species and sub-species. The point is that economies of scale and scope are not always the driving force in financial history. More often, the real drivers are the process of speciation - whereby entirely new types of firm are created - and the equally recurrent process of creative destruction, whereby weaker firms die out. Take the case of retail and commercial banking, where there remains considerable biodiversity. Although giants like Citigroup and Bank of America exist, North America and some European markets still have relatively fragmented retail banking sectors. The cooperative banking sector has seen the most change in recent years, with high levels of consolidation (especially following the Savings and Loans crisis of the 1980s), and most institutions moving to shareholder ownership.


pages: 677 words: 121,255

Giving the Devil His Due: Reflections of a Scientific Humanist by Michael Shermer

Alfred Russel Wallace, anthropic principle, anti-communist, anti-fragile, barriers to entry, Berlin Wall, Black Lives Matter, Boycotts of Israel, Chelsea Manning, clean water, clockwork universe, cognitive dissonance, Colonization of Mars, Columbine, cosmological constant, cosmological principle, creative destruction, dark matter, deplatforming, Donald Trump, Edward Snowden, Elon Musk, fake news, Flynn Effect, germ theory of disease, Great Leap Forward, gun show loophole, Hans Rosling, heat death of the universe, hedonic treadmill, helicopter parent, Higgs boson, hindsight bias, illegal immigration, income inequality, intentional community, invisible hand, Johannes Kepler, Joseph Schumpeter, Kim Stanley Robinson, laissez-faire capitalism, Laplace demon, luminiferous ether, Mars Society, McMansion, means of production, mega-rich, Menlo Park, microaggression, military-industrial complex, moral hazard, moral panic, More Guns, Less Crime, Multics, Oklahoma City bombing, Peter Singer: altruism, phenotype, positional goods, power law, public intellectual, race to the bottom, Richard Feynman, Ronald Coase, Silicon Valley, Skype, social intelligence, Social Justice Warrior, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, Suez crisis 1956, TED Talk, the scientific method, The Wealth of Nations by Adam Smith, Timothy McVeigh, transaction costs, WikiLeaks, working poor, Yogi Berra

Schumpeter, Joseph. 1942. Capitalism, Socialism and Democracy. London: Routledge. 13. Reinert, Hugo and Erik S. Reinert. 2006. “Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter.” In J. G. Backhaus and W. Drechsler (Eds.). Friedrich Nietzsche: Economy, and Society. New York: Springer. 14. Gould, Stephen Jay. Wonderful Life: The Burgess Shale and the Nature of History. 1988. New York: W. W. Norton, 318. 15. Foster, Richard and Sarah Kaplan. 2001. Creative Destruction: Why Companies That Are Built to Last Underperform the Market – and How to Successfully Transform Them. New York: Crown Business. 16.

In evolution, extinction is the rule, survival the exception. Most species go extinct because they fail to adapt to changing environments, and in their stead arise new species that are better adapted … for the time being anyway. The economist Joseph Schumpeter’s descriptor for this process in an economy was “creative destruction.”12 Although Schumpeter derived the concept from a Marxian analysis of the negative implications of capitalism, the term has been adopted by modern economists to describe the natural evolution of firms, companies, corporations, and even entire industries that go extinct and/or are replaced with new ventures better adapted to the ever-changing needs and wants of consumers.13 The meteor impact 65 million years ago that wiped out the dinosaurs opened up new niches to be filled by fledgling mammals living in the nooks and crannies on the margins of ecosystems.

Arkansas, 52 Erasmus, 225 eSkeptic, 81 Espionage Act (1917), 2 European Union founding of, 249–250 evil myth of pure evil, 28–37 nature of, 28–37 evolution argument for decentralising authority, 215–217 case for bottom-up self-organization, 215–217 development of Darwin’s theory, 44–46 impact of the Darwinian revolution, 44–47 religious-based skepticism, 47–50 support for creationism in America, 46 why people do not support it, 47–50 evolution–creationism controversy, 44–54 Evolutionary Creationists, 51 evolutionary economics collective action problem, 198–201 Darwin economy, 199–201 hidden costs of market failures and moral hazards, 201–202 importance of positional rank, 200–201 role of ostentatious display, 200–201 “sin taxes”, 201–202 taxation, 203 top-down government, 199–201 transaction costs of keeping up with the Joneses, 201–202 See also evonomics evonomics advantages gained from ostentatious display, 207–210 argument for wealth redistribution, 210–213 bottom-up self-organization, 203–205 connection between Adam Smith and Charles Darwin, 203–205 corporations as species, 205–207 creative destruction concept, 206 fatal conceit of top-down government, 215–217 positional ranking, 210–213 relative happiness, 210–213 what is seen and not seen in government actions, 213–215 Expanding Circle theory, 240 expanding sphere of knowledge metaphor, 125 externalities, 199 extraterrestrial intelligence, 221 Fawcett, Henry, 45–46 Feder, Ken, 324–325 feminism victimhood culture, 73 Ferris, Timothy, 228 Festinger, Leon, 95 Feynman, Richard, 123, 316 First World War, 1, 16 Fisher, Helen, 158 flat-Earthers, 51 Flynn, James, 19, 23, 24–25 Flynn Effect, 25 Forbes, Bertie, 206 Ford, Henry, 31 Foundation for Individual Rights in Education (FIRE), 25, 70 Foundation for the Future, 289 14/88 code, 30–31 Fox, James Alan, 169, 175 Fox News, 181 fragile children, 74 Frank, Robert H., 198, 199–202, 203, 204, 208–213, 215–217 Franklin, Benjamin, 84, 226 Frankowski, Nathan, 55 Freakonomics theory, 174 free trade institutions, 249–251 free will–determinism debate, 264–265 freedom of inquiry, 8, 19–27search for truth in science, 26–27 freedom of speech, 19–27campus unrest over controversial speakers, 64–78 college speaker disinvitations, 70–71 democracy and, 26 evolution–creationism controversy, 44–54 Free Speech Movement of the late 1960s, 64–65 giving the devil his due, 1–9 hate speech, 13–16, 28–37 Holocaust denial, 38–43 increasing viewpoint diversity in colleges, 76–78 Intelligent Design conspiracy theory, 55–63 Jordan Peterson on gender pronouns and Bill C-16, 300–303 microaggressions, 68–70 Ten Commandments of free speech and thought, 7–8 trigger warnings, 66–67 French Revolution, 72 Fuji film, 206 Gacy, John Wayne, 35 Gap Creationists, 51 Gardner, Martin, 270, 271, 319 Geivett, Douglas, 104 Geller, Uri, 271, 272 gender differences research on, 22–23 gender pronouns Jordan Peterson on, 300–303 General Electric (GE), 206 General Motors (GM), 206 Generation X, 65 Generation Z how they handle challenges, 64–65 Geocentrists, 51 Geoffroy, Gregory, 60 George, Robby, 83 Ghawi, Jessica, 176 Gibbon, Edward, 204 Giffords, Gabrielle, 175 Gingrich, Newt, 82, 83 Gish, Duane, 280 Göbekli Tepe stone structures, 324–326 God and the purpose of the universe, 103–108 creation of the universe ex nihilo (out of nothing), 115–117 ontological argument for the existence of, 114 Goldberg, Jeffrey, 279–280 Goldberg, Jonah, 131 Goldhagen, Daniel, 61 Goldman, Emma, 2 Goldwater, Barry, 77 Gonzales, Guillermo, 59–60 Google, 206, 260 Gore, Al, 137 Gould, John, 44 Gould, Stephen Jay, 292, 294 governance experiments artificial communities, 154 HMS Bounty mutineers on Pitcairn Island, 156–159 intentional communities, 154 shipwrecked groups, 155–156 social experiments, 154–156 unintentional communities, 154–156 governance systems avoiding weak government, 153–154 challenges for, 147–148 delegative democracy, 149 designing extraterrestrial systems, 150–152 direct democracy, 149–150 features of good societies, 154–155 impact of cyber-technology, 153 in science fiction, 152–153 representational democracy, 149 types of, 149–150 government top-down government, 199–201 Grafen, Alan, 287 grand unified theory, 121 gravitational waves, 122 Gray, Asa, 287 Grayling, A.


pages: 578 words: 168,350

Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies by Geoffrey West

"World Economic Forum" Davos, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Benoit Mandelbrot, Black Swan, British Empire, butterfly effect, caloric restriction, caloric restriction, carbon footprint, Cesare Marchetti: Marchetti’s constant, clean water, coastline paradox / Richardson effect, complexity theory, computer age, conceptual framework, continuous integration, corporate social responsibility, correlation does not imply causation, cotton gin, creative destruction, dark matter, Deng Xiaoping, double helix, driverless car, Dunbar number, Edward Glaeser, endogenous growth, Ernest Rutherford, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Gehry, Geoffrey West, Santa Fe Institute, Great Leap Forward, Guggenheim Bilbao, housing crisis, Index librorum prohibitorum, invention of agriculture, invention of the telephone, Isaac Newton, Jane Jacobs, Jeff Bezos, Johann Wolfgang von Goethe, John von Neumann, Kenneth Arrow, laissez-faire capitalism, Large Hadron Collider, Larry Ellison, Lewis Mumford, life extension, Mahatma Gandhi, mandelbrot fractal, Marc Benioff, Marchetti’s constant, Masdar, megacity, Murano, Venice glass, Murray Gell-Mann, New Urbanism, Oklahoma City bombing, Peter Thiel, power law, profit motive, publish or perish, Ray Kurzweil, Richard Feynman, Richard Florida, Salesforce, seminal paper, Silicon Valley, smart cities, Stephen Hawking, Steve Jobs, Stewart Brand, Suez canal 1869, systematic bias, systems thinking, technological singularity, The Coming Technological Singularity, The Death and Life of Great American Cities, the scientific method, the strength of weak ties, time dilation, too big to fail, transaction costs, urban planning, urban renewal, Vernor Vinge, Vilfredo Pareto, Von Neumann architecture, Whole Earth Catalog, Whole Earth Review, wikimedia commons, working poor

See science of companies company mortality, 6, 191, 393–410 growth of sales, 395 revenue of major U.S. companies, 393, 394 revenue with inflation deflator, 393, 394 survivorship/mortality curves, 397, 398–400, 400–402 competition, 381 complex adaptive systems, 23–24, 116, 430–31, 433, 435 big data and, 439 cities as, 355–56 complexity characteristics of complex systems, 21–25, 72 definitions of, 19–21 grand unified theory of, 430–31 scaling and, 19–25 science of, 23, 79–81 simplicity underlying, 90–93, 116 turbulence and, 72 composite risk index, 315 compound interest, 217, 218 Compustat, 385–86, 393 computer analysis, 22–23, 75 computer programming, 264–65 consciousness, 87, 178–79, 181–82, 282, 283 conservation of electric charge, 197–98 conservation of energy, 164–65, 197–98 contraception, 227, 229 contraction of time, 332 Copernicus, Nicolaus, 37 Coriolanus (Shakespeare), 252–53 Cornell University, 274, 298, 300 “corporate social responsibility,” 233 cosmic scale factor, 209 Cowan, George, 438 Cray-2, 439–40 “creative destruction,” 403 Creative Destruction (Foster), 404 Crick, Francis, 84, 437 crime, 30, 261, 278, 279 in Japan, 277, 279 ranking of cities and, 355–59 crinkliness (fractality), 130, 139, 141, 152, 291 crumpled balls of paper, 153 cube-square law, 39–42, 43, 58, 59, 158–59 cumulative advantage, 368–71 cyberattacks, 134 cyborgs, 163, 422 Daepp, Madeleine, 402–3 Dallas, 251, 297–98 damage-based theories of aging, 199–203 decline of body functions with age, 195, 197, 201, 202 dark energy, 238 Darwin, Charles (Darwinism), 23–24, 60, 63, 87, 89–90, 98, 106, 185, 228, 428 Darwin, Charles Galton, 331–32 Darwinian fitness, 115 data.

REQUIESCANT IN PACE Although there are significant differences, it’s hard not to be struck by how similar the growth and death of companies and organisms are when viewed through the lens of scaling—and how dissimilar they both are to cities. Companies are surprisingly biological and from an evolutionary perspective their mortality is an important ingredient for generating innovative vitality resulting from “creative destruction” and “the survival of the fittest.” Just as all organisms must die in order that the new and novel may blossom, so it is that all companies disappear or morph to allow new innovative variations to flourish: better to have the excitement and innovation of a Google or Tesla than the stagnation of a geriatric IBM or General Motors.

That’s only a 12 percent survival rate, the other 88 percent having gone bankrupt, merged, or fallen from the list because of underperformance. More poignant, perhaps, is that most of those on the list in 1955 are unrecognizable and completely forgotten today; how many remember Armstrong Rubber or Pacific Vegetable Oil? In 2000 Foster wrote an influential best-seller on business, aptly titled Creative Destruction.8 He was much taken by the ideas on complexity being developed at the Santa Fe Institute, so much so that he joined the board of trustees and persuaded McKinsey to fund a professorship in finance which was held by Doyne Farmer. I got to know him when I first engaged with SFI in the late 1990s.


pages: 540 words: 168,921

The Relentless Revolution: A History of Capitalism by Joyce Appleby

1919 Motor Transport Corps convoy, agricultural Revolution, Alan Greenspan, An Inconvenient Truth, anti-communist, Asian financial crisis, asset-backed security, Bartolomé de las Casas, Bear Stearns, Bernie Madoff, Bretton Woods, BRICs, British Empire, call centre, Charles Lindbergh, classic study, collateralized debt obligation, collective bargaining, Columbian Exchange, commoditize, Cornelius Vanderbilt, corporate governance, cotton gin, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, Doha Development Round, double entry bookkeeping, epigenetics, equal pay for equal work, European colonialism, facts on the ground, failed state, Firefox, fixed income, Ford Model T, Ford paid five dollars a day, Francisco Pizarro, Frederick Winslow Taylor, full employment, General Magic , Glass-Steagall Act, Gordon Gekko, Great Leap Forward, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, hiring and firing, Ida Tarbell, illegal immigration, informal economy, interchangeable parts, interest rate swap, invention of movable type, invention of the printing press, invention of the steam engine, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeff Bezos, John Bogle, joint-stock company, Joseph Schumpeter, junk bonds, knowledge economy, land bank, land reform, Livingstone, I presume, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, military-industrial complex, moral hazard, Nixon triggered the end of the Bretton Woods system, PalmPilot, Parag Khanna, pneumatic tube, Ponzi scheme, profit maximization, profit motive, race to the bottom, Ralph Nader, refrigerator car, Ronald Reagan, scientific management, Scramble for Africa, Silicon Valley, Silicon Valley startup, South China Sea, South Sea Bubble, special economic zone, spice trade, spinning jenny, strikebreaker, Suez canal 1869, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thorstein Veblen, total factor productivity, trade route, transatlantic slave trade, transcontinental railway, two and twenty, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, vertical integration, War on Poverty, working poor, Works Progress Administration, Yogi Berra, Yom Kippur War

Constant innovations didn’t come without cost, because every improved device rendered obsolete its predecessor. Prodded by the lure of stronger sales and higher profits, backers of incessant inventiveness hurt established industries and firms. The early-twentieth-century Austrian economist Joseph Schumpeter captured the essence of capitalism, with his “creative destruction” of the old by the new.28 Rarely has anyone so precisely hit the nail on the head, implying the consequences associated with both “creative” and “destruction.” Less catchy is the economists’ take on this, “early obsolescence,” a phrase meant to indicate that commercial objects don’t grow old; they just become obsolete when they are replaced by something better.

As early as 1900, their famous catalogs featured a thousand pages of illustrated items.17 In the inexorable logic of market success, these modern emporiums began the long war of attrition against mom-and-pop stores, the little shops that had long serviced local neighborhoods. Capitalism’s “creative destruction” had found a new battlefield. Trains and trolley cars made it feasible to build houses in the suburbs of the cities where people worked. The same streetcars, interurban trolleys, and private automobiles that carried men “downtown,” as the American city center became known, at the beginning and ending of the workday were also available for shoppers, most of them women, in the middle of the day.

When in 1909 a federal court ordered the dissolution of Standard Oil, managers who had chafed under the centralization of authority in the company’s New York City headquarters had the chance to try new techniques. There’s almost a law hidden here, a corollary to Joseph Schumpeter’s famous remark that capitalism involved creative destruction. Capitalism benefits from periodic liberation from established authorities, freeing those who yearn to experiment, innovate, and learn from fresh ideas.50 Corporate power in the United States waxed strong as the nineteenth century came to an end. The imperialist forays of Western governments into Africa and Asia made them more accommodating of their domestic capitalists.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

3D printing, AlphaGo, Alvin Toffler, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Charles Babbage, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, Cornelius Vanderbilt, creative destruction, data science, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, driverless car, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, Fairchild Semiconductor, falling living standards, first square of the chessboard / second half of the chessboard, Ford Model T, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, general purpose technology, Gini coefficient, Great Leap Forward, Hans Moravec, high-speed rail, Hyperloop, income inequality, income per capita, independent contractor, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeremy Corbyn, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, Kiva Systems, knowledge economy, knowledge worker, labor-force participation, labour mobility, Lewis Mumford, Loebner Prize, low skilled workers, machine translation, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Nick Bostrom, Norbert Wiener, nowcasting, oil shock, On the Economy of Machinery and Manufactures, OpenAI, opioid epidemic / opioid crisis, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, Robert Solow, robot derives from the Czech word robota Czech, meaning slave, safety bicycle, Second Machine Age, secular stagnation, self-driving car, seminal paper, Silicon Valley, Simon Kuznets, social intelligence, sparse data, speech recognition, spinning jenny, Stephen Hawking, tacit knowledge, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, warehouse automation, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

But while hand-loom weavers’ incomes diminished almost immediately, it took decades for the wages of power-loom weavers to rise, as they had to acquire new skills and a new labor market had to develop for those skills.36 Because replacing technological progress often comes with what Schumpeter called a “perennial gale of creative destruction,” there are always winners and losers.37 The overwhelming focus of popular commentary on unanswerable questions like whether there will be enough jobs in 2050 is unfortunate. In fact, it misses the point. Even if new jobs emerge as old ones are lost to automation, that might be little reassurance for the person who loses his or her job.

As Daron Acemoglu and the political scientist James Robinson point out in Why Nations Fail, economic and technological development will move forward only “if not blocked by the economic losers who anticipate that their economic privileges will be lost and by the political losers who fear that their political power will be eroded.”42 Workers alone might struggle to block new technologies effectively. But the ruling elites slowed labor-replacing progress for millennia.43 Political incumbents, for the most part, had little interest in the destabilizing process of creative destruction, as groups of economic losers could challenge the political status quo. As the eminent economic historian Joel Mokyr has argued in separate accounts: Any change in technology leads almost inevitably to an improvement in the welfare of some and a deterioration in that of others. To be sure, it is possible to think of changes in production technology that are Pareto superior, but in practice such occurrences are extremely rare.

It shows that many significant technologies emerged before the eighteenth century, but they failed to improve material conditions for ordinary people. Chapter 2 demonstrates that though living standards had improved before the Industrial Revolution, growth was predominantly based on trade. The Schumpeterian growth of our modern age, based on labor-saving technology, creative destruction in employment, and the acquisition of new skills, was not the engine of economic progress. Chapter 3 seeks to explain why this was the case. As we shall see, innovation also flourished at times before the Industrial Revolution, but it rarely served to replace workers—and when it did, it was vehemently opposed or even blocked.


pages: 142 words: 45,733

Utopia or Bust: A Guide to the Present Crisis by Benjamin Kunkel

Alan Greenspan, Anthropocene, anti-communist, Bear Stearns, Bretton Woods, business cycle, capital controls, Carmen Reinhart, creative destruction, David Graeber, declining real wages, full employment, Hyman Minsky, income inequality, late capitalism, Lewis Mumford, liberal capitalism, liquidity trap, means of production, money: store of value / unit of account / medium of exchange, mortgage debt, Occupy movement, peak oil, price stability, profit motive, public intellectual, savings glut, Slavoj Žižek, The Wealth of Nations by Adam Smith, transatlantic slave trade, vertical integration, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, zero-sum game

In Valences of the Dialectic, one of the most striking suggestions made in the introductory essay is that Hegel, who articulated his omnivorous philosophical logic at a time when industrial capitalism was hardly more than a local English affair, may have been seized by an intimation of the ultimately global logic of capitalism: capitalism too is forever enlarging itself, and bringing under one rule the most disparate people and places. So does creative destruction on the economic plane resemble the dialectic’s refusal to freeze or reify its concepts and stand pat. Dialectical thought, then, would be at once the mirror of capitalism and (in Marxist hands) its rival: the totalizing imperative that is the dialectic confronting the totality that is capitalism.

The temporary triumph of some important firms and the destruction of others might set the stage for higher rates of growth, but this growth would take off, after a vast “slaughter of capital values” (as Marx once put it), from a lower plane of overall prosperity. The abandonment of American factories could only accelerate, and the unemployment rate with it. Even then, following a bout of creative destruction the likes of which the world has never seen, the result would presumably be, though Brenner doesn’t say so, the eventual reemergence of overcompetition and incipient global stagnation. The strength of this vision lies in its treatment of the great supposed virtue of contemporary capitalism—unfettered international competition—as its deadly vice.


pages: 484 words: 136,735

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, classic study, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, eat what you kill, Edward Glaeser, electricity market, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, foreign exchange controls, full employment, geopolitical risk, George Akerlof, global rebalancing, Goodhart's law, Great Leap Forward, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, long and variable lags, Long Term Capital Management, low interest rates, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, military-industrial complex, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, Paul Volcker talking about ATMs, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, systems thinking, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

This mutability is the key condition for capitalism’s prosperity and long-term survival. Yet politicians, businesspeople, and economists to the right of the ideological spectrum, the people supposedly most dedicated to capitalism’s historic triumph, are mostly blind to the most important reason for its success. They extol the virtues of Joseph Schumpeter’s process of “creative destruction,”3 whereby dying industries are replaced by previously unimagined new technologies and managerial systems, but they wilfully ignore the same process of creative self-destruction that renews the system as a whole. Why should the politico-economic structure of the capitalist system be considered immutable, while its microfoundations are in constant flux?

Andrew Gamble, the Cambridge political scientist, distinguishes between such truly transformative crises of capitalism and mere crises in capitalism, 7 the regular financial cycles that have produced busts and crashes throughout economic history and have helped to reorganize businesses through Schumpeter’s process of “creative destruction.” In a crisis of capitalism, what is reorganized is not just a group of businesses and industries but the capitalist system itself. Such events are rare and, as Gamble says, “intensely political in nature . . . they become the occasion for far-reaching change both within states and between states.

The conversion into dollars uses an exchange rate of $1.6 to the pound, and the relationship with wages assumes average annual growth of 1 percent. http://www.bankofengland.co.uk/education/inflation/calculator/. 3 Christopher Reed, “‘The Damn’d South Sea’: Britain’s Greatest Financial Speculation and Its Unhappy Ending,” Harvard Magazine (May-June 1999). 4 George Soros, The New Paradigm for Financial Markets. 5 Mohamed El-Erian, When Markets Collide: Investment Strategies for the Age of Global Economic Change. 6 The Gartman Letter, January 27, 2009. http://www.thegartmanletter.com. Chapter Nine 1 This is one facet of Joseph Schumpeter’s famous process of “creative destruction,” though not the most important one, which is driven by technological innovation, rather than credit. Schumpeter, Capitalism, Socialism and Democracy. 2 The more extreme followers of the Austrian school even demand the repeal of “tyrannical” laws against drunk driving. See Llewellyn Rockwell Jr., “Legalize Drunk Driving,” Mises Daily, Ludwig von Mises Institute, November 3, 2000.


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Factory Man: How One Furniture Maker Battled Offshoring, Stayed Local - and Helped Save an American Town by Beth Macy

8-hour work day, affirmative action, AltaVista, Apollo 13, belly landing, Berlin Wall, Bretton Woods, call centre, company town, corporate governance, corporate raider, creative destruction, currency manipulation / currency intervention, desegregation, gentleman farmer, Great Leap Forward, interchangeable parts, Joseph Schumpeter, new economy, old-boy network, one-China policy, race to the bottom, reshoring, Saturday Night Live, Silicon Valley, Skype, special economic zone, supply-chain management, Thomas L Friedman, union organizing, value engineering, work culture

Its promotional mini-cedar-chest program was once so popular that nearly two-thirds of young women graduating from American high schools received certificates for them. “It’s the Real Love-Gift”: http://www.ebay.com/itm/1948-Lane-Cedar-Hope-Chest-Wanda-Hendrix-vintage-2pg-ad-/150536985049?pt=LH_DefaultDomain_0&hash=item230cb419d9. “creative destruction”: Joseph Schumpeter (1883–1950) coined the term to describe the free market’s messy way of delivering progress. He called capitalism “the perennial gale of creative destruction.” The World Is Flat: The benefits of globalization appear on page 143 of Friedman’s The World Is Flat (New York: Picador, 2005); he is quoting a study by Morgan Stanley that was originally reported in Fortune magazine on October 4, 2004.

“It’s the Real Love-Gift,” Say America’s Most Romantic Sweethearts, proclaimed a 1948 ad featuring Audie Murphy, the decorated combat soldier and movie star. Joel pointed to the silk mills where his aunts had once worked, now closed, every one of them: the victims of what economists call “creative destruction.” The lost jobs and vanishing industries that resulted from the ratification of the North American Free Trade Agreement in 1994 and China’s joining the World Trade Organization in 2001 were necessary outcomes, the theory goes. Over time, society becomes richer and more productive, and citizens across the globe benefit from higher living standards.

Fulton eschewed the style of the old-line misters, who’d run the business as a model of efficiency—working weekends, sweating every detail, hiring people “who got up with the chickens and went to bed with the chickens,” as Mr. Doug liked to say. He replaced them with marketing guys who emphasized short-term stock-market gains and profit margins and gobbled up what the economists, bankers, and business schools were saying about creative destruction. Retired now for twelve years, Gale said he loves Rob Spilman like a son. But he still wakes up every morning “tee-totally mad” over the factory closures, which he sees as an intentional failure to compete and a total disregard for the generations of factory workers who made the Bassett family and other shareholders rich.


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The Impulse Society: America in the Age of Instant Gratification by Paul Roberts

"Friedman doctrine" OR "shareholder theory", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, Abraham Maslow, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Alan Greenspan, American Society of Civil Engineers: Report Card, AOL-Time Warner, asset allocation, business cycle, business process, carbon tax, Carl Icahn, Cass Sunstein, centre right, choice architecture, classic study, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, disruptive innovation, double helix, Evgeny Morozov, factory automation, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, game design, Glass-Steagall Act, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, insecure affluence, invisible hand, It's morning again in America, job automation, John Markoff, Joseph Schumpeter, junk bonds, knowledge worker, late fees, Long Term Capital Management, loss aversion, low interest rates, low skilled workers, mass immigration, Michael Shellenberger, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, stock buybacks, technological determinism, technological solutionism, technoutopianism, Ted Nordhaus, the built environment, the long tail, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, value engineering, Walter Mischel, winner-take-all economy

These new sectors offered not only higher wages, but also entirely new kinds of employment. Making a car, for example, required steel workers and tire makers—plus a lot of engineers and designers and marketing experts and Freudian analysts—and the wages from these new jobs led to even more economic activity. This “gale of creative destruction,” as economist Joseph Schumpeter called it, was the defining force of industrial capitalism, “incessantly destroying the old [economic order], incessantly creating a new one.” And generally speaking, the new order was a definite improvement. In most industrial societies, this surge in new prosperity was broadly enjoyed.

We got higher wages, lower prices, and a steady stream of innovations, such as jet engines and X-ray photography and color TV, which lifted everyone’s living standards while creating still more avenues for growth and employment. When economists, historians, and your grandparents wax rhapsodic about the postwar economy, they are not being sentimental: it was a prosperity machine. So what happened to the machine? Why has the age-old pattern of creative destruction become one that often seems mainly about destruction? Again, there are many parts to this story—cultural, political, and ideological. But an important one is that our innovation has, somewhat paradoxically, become less disruptive—at least, in the way Schumpeter meant. The industrial revolution of Ford’s era was hugely disruptive because it involved multiple breakthroughs—automobiles and assembly lines, but also logistics, business administration, accounting, petrochemicals, pharmaceuticals, and communication, among others—all feeding off one another and creating an economic whole that was much larger than the sum of its parts.

In the United States, another six million manufacturing jobs, or a third of the total, went away between 2000 and 2007.11 Granted, we should not sentimentalize manufacturing jobs, which are often monotonous, dangerous, and unpleasant; many a factory worker would likely be glad to upgrade to something better. Nor, obviously, is there anything inherently wrong with automation or even offshoring. They are simply instruments of Schumpeter’s creative destruction: In “destroying” these older jobs in industrialized economies, automation and offshoring are, ideally, “creating” room for the next generation of jobs that will allow those displaced workers to step up the ladder to more productivity, better wages, and higher aspirations. Except that, under the Impulse Society, this is not what has happened.


pages: 330 words: 91,805

Peers Inc: How People and Platforms Are Inventing the Collaborative Economy and Reinventing Capitalism by Robin Chase

Airbnb, Amazon Web Services, Andy Kessler, Anthropocene, Apollo 13, banking crisis, barriers to entry, basic income, Benevolent Dictator For Life (BDFL), bike sharing, bitcoin, blockchain, Burning Man, business climate, call centre, car-free, carbon tax, circular economy, cloud computing, collaborative consumption, collaborative economy, collective bargaining, commoditize, congestion charging, creative destruction, crowdsourcing, cryptocurrency, data science, deal flow, decarbonisation, different worldview, do-ocracy, don't be evil, Donald Shoup, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, Eyjafjallajökull, Ferguson, Missouri, Firefox, Free Software Foundation, frictionless, Gini coefficient, GPS: selective availability, high-speed rail, hive mind, income inequality, independent contractor, index fund, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jane Jacobs, Jeff Bezos, jimmy wales, job satisfaction, Kickstarter, Kinder Surprise, language acquisition, Larry Ellison, Lean Startup, low interest rates, Lyft, machine readable, means of production, megacity, Minecraft, minimum viable product, Network effects, new economy, Oculus Rift, off-the-grid, openstreetmap, optical character recognition, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, Post-Keynesian economics, Richard Stallman, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Salesforce, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, smart cities, smart grid, Snapchat, sovereign wealth fund, Steve Crocker, Steve Jobs, Steven Levy, TaskRabbit, The Death and Life of Great American Cities, The Future of Employment, the long tail, The Nature of the Firm, Tragedy of the Commons, transaction costs, Turing test, turn-by-turn navigation, Uber and Lyft, uber lyft, vertical integration, Zipcar

So how do you spark the necessary change when your institution is deeply conventional and has been for decades? Dan Doney (head of innovation at the U.S. Defense Intelligence Agency) explained to me that “virtually everything in a bureaucracy resists change. It is always ‘We need to stick to the plan.’ But innovation requires creative destruction—that is, the free flow of resources from ideas that are falling behind to new and better ideas. To embrace this principle, an organization must decentralize decision-making, delegating to the edge as much as possible. Our mantra: Start small. Scale fast. Fail cheap.” Regardless of whether you are big business or big government, this is sound advice.

The weight of these legacy assets are responsible for the decreasing life span of companies on the S&P 500. Many people have written about the need for big companies to reinvent themselves and the difficulty of doing so, perhaps most prominently Clay Christensen (The Innovator’s Dilemma) and Dick Foster (Creative Destruction). We can think about the music industry, which was just about ready to collapse under the pressure of Napster, a platform that unlocked the excess capacity found in other people’s music, until iTunes came up with a business model—a platform—for selling single songs quickly and easily. This gave the music industry another decade.

“Freelancing in America: A National Survey of the New Workforce,” 2014, independent study commissioned by the Freelancers Union and ElanceoDesk, http://chaoscc.ro/wp-content/uploads/2014/09/freelancinginamerica_report-1.pdf. 17. Søren Mark Peterson, “Loser-Generated Content: From Participation to Exploitation,” First Monday 13, no. 3 (2008), http://firstmonday.org/article/view/2141/1948. CHAPTER 8: EMBRACING THE CHANGE 1. “Creative Destruction Whips Through Corporate America,” INNOSIGHT Executive Briefing, Winter 2012. 2. Barry Libert, Yoram Wind, Megan Beck Fenley, “What Airbnb, Uber, and Alibaba Have in Common,” Harvard Business Review, November 20, 2014, https://hbr.org/2014/11/what-airbnb-uber-and-alibaba-have-in-common. 3.


pages: 295 words: 90,821

Fully Grown: Why a Stagnant Economy Is a Sign of Success by Dietrich Vollrath

active measures, additive manufacturing, American Legislative Exchange Council, barriers to entry, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, creative destruction, Deng Xiaoping, endogenous growth, falling living standards, hiring and firing, income inequality, intangible asset, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, light touch regulation, low skilled workers, manufacturing employment, old age dependency ratio, patent troll, Peter Thiel, profit maximization, rising living standards, Robert Gordon, Robert Solow, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, tacit knowledge, The Rise and Fall of American Growth, total factor productivity, women in the workforce, working-age population

In particular, they looked into how innovation is used to grab customers and market share away from existing competitors. In their work, they take seriously the turnover among firms and workers as firms compete. Aghion and Howitt refer to their theory as “Schumpeterian,” as it involves the idea of creative destruction—the replacement of old firms with new ones—originally described by Joseph Schumpeter. To see their logic, it is easiest to think of the extreme cases first. If there is intense competition within an industry, perhaps because it is hard to exclude others from copying one firm’s ideas, or because a firm’s product (e.g., gasoline) is something people don’t have strong preferences about, there is little incentive to innovate.

Howitt. 2005. “Competition and Innovation: An Inverted-U Relationship.” Quarterly Journal of Economics 120 (2): 701–28. Aghion, P., and R. Griffith. 2005. Competition and Growth: Reconciling Theory and Evidence. Cambridge, MA: MIT Press. Aghion, P., and P. Howitt. 1992. “A Model of Growth through Creative Destruction.” Econometrica 60 (2): 323–51. Aghion, P., and P. Howitt. 2009. The Economics of Growth. Cambridge, MA: MIT Press. Akcigit, U., J. Grigsby, T. Nicholas, and S. Stantcheva. 2018. “Taxation and Innovation in the 20th Century.” Working Paper No. 24982, National Bureau of Economic Research, Cambridge, MA.

See also trade Clayton Act, 136, 241 commuting zone, 201, 202 concentration: of firms, 105, 121–24, 137, 153, 154; of income, 185 constant returns to scale, 43, 224, 225, 227 construction industry, 74, 85, 165, 167, 181, 182, 209 contraception, 4, 68, 208, 231; birth control pill, 4, 35, 68, 124, 231 copyright, 130, 133 cost disease of services. See services cost minimization, 44, 110, 224–26, 235 cost share of physical capital, 45, 226 creative destruction, 143 demographics, 5, 69, 138; age structure, 31, 32, 56, 68, 228; baby boom, 4, 33, 55, 56, 59, 64, 65, 154, 208; birth rate, 4, 55–57; dependency ratio, 59, 228; family size, 66, 68, 206–8, 231; fertility rate, 4, 56, 57, 60, 65, 67, 208, 229, 231; life expectancy, 60, 215; marriage, 4, 66–68, 208, 230, 231.


pages: 384 words: 93,754

Green Swans: The Coming Boom in Regenerative Capitalism by John Elkington

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, agricultural Revolution, Anthropocene, anti-fragile, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, Berlin Wall, bitcoin, Black Swan, blockchain, Boeing 737 MAX, Boeing 747, Buckminster Fuller, business cycle, Cambridge Analytica, carbon footprint, carbon tax, circular economy, Clayton Christensen, clean water, cloud computing, corporate governance, corporate social responsibility, correlation does not imply causation, creative destruction, CRISPR, crowdsourcing, David Attenborough, deglobalization, degrowth, discounted cash flows, distributed ledger, do well by doing good, Donald Trump, double entry bookkeeping, drone strike, Elon Musk, en.wikipedia.org, energy transition, Extinction Rebellion, Future Shock, Gail Bradbrook, Geoffrey West, Santa Fe Institute, George Akerlof, global supply chain, Google X / Alphabet X, green new deal, green transition, Greta Thunberg, Hans Rosling, hype cycle, impact investing, intangible asset, Internet of things, invention of the wheel, invisible hand, Iridium satellite, Jeff Bezos, John Elkington, Jony Ive, Joseph Schumpeter, junk bonds, Kevin Kelly, Kickstarter, M-Pesa, Marc Benioff, Mark Zuckerberg, Martin Wolf, microplastics / micro fibres, more computing power than Apollo, move fast and break things, Naomi Klein, Nelson Mandela, new economy, Nikolai Kondratiev, ocean acidification, oil shale / tar sands, oil shock, opioid epidemic / opioid crisis, placebo effect, Planet Labs, planetary scale, plant based meat, plutocrats, Ponzi scheme, radical decentralization, Ralph Nader, reality distortion field, Recombinant DNA, Rubik’s Cube, Salesforce, self-driving car, shareholder value, sharing economy, Sheryl Sandberg, Silicon Valley, smart cities, smart grid, sovereign wealth fund, space junk, Steven Pinker, Stewart Brand, supply-chain management, synthetic biology, systems thinking, The future is already here, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Tim Cook: Apple, urban planning, Whole Earth Catalog

This final chapter focuses on five core principles that can help make what seems impossible today pretty much inevitable tomorrow. Politics may seem to have attracted a generation of breakers not makers, grim portents of a Black Swan future, but you could equally well see them as symptoms of accelerating processes of creative destruction. Processes helping to break down old orders to clear the ground for the new. Whatever they may intend, and narcissism seems to be a key factor, the “breakers,” unwittingly, may be playing the role of slime molds in forests, breaking down the old to liberate space and nutrients for the new.

It does so by giving a ‘smart’ and green direction to innovation and investment that can bring employment, profits, and growth, at the same time as providing a set of guidelines for government policy to aim at increasing social wellbeing.”61 Listening to Perez, the latter stages of the U-bend snap into focus. She continues, “My historical research shows that, at first, technological revolutions bring decades of ‘creative destruction,’ with income-polarizing bubble prosperities. When the bubbles collapse, the reality of the rich getting richer while the poor get poorer is fully revealed and the victims of the transformation become easy prey to extremists, as in the 1930s and now.” She concludes, “Getting out of the doldrums requires feasible win-win policies to be established to reverse the social polarization at the same time as opening the way for profitable investment and innovation.

But cities are also now a rapidly growing focus of attention. They are increasingly seen as the places where humanity’s greatest challenges impact the most people, from inequality, migration, and climate change—and where some of the most powerful solutions will come from.67 As a result, they too suffer from the forces of creative destruction. However, cities like Pittsburgh, once known as “Steel City,” are showing how urban transformations can succeed, with the new economy built around technologies like autonomous vehicles, AI, and renewable energy. At the same time, too, we see a new breed of urban scientist, among them Geoffrey West of the Santa Fe Institute, demonstrating how we can exploit new forms of system thinking to great sustainability effect across what some call the “World City.”68 West explained his team’s early findings, “With every doubling of city size, whether from 20,000 to 40,000 people or 2M to 4M people, socioeconomic quantities—the good, the bad, and the ugly—increase by approximately 15% per person with a concomitant 15% savings on all city infrastructure-related costs.”69 Understanding these new laws of life, growth, and death in organisms, cities, and companies will be critical in managing tomorrow’s urban Swans, Black and Green.


The New Harvest: Agricultural Innovation in Africa by Calestous Juma

agricultural Revolution, Albert Einstein, barriers to entry, bioinformatics, business climate, carbon footprint, clean water, colonial rule, conceptual framework, creative destruction, CRISPR, double helix, electricity market, energy security, energy transition, export processing zone, global value chain, high-speed rail, impact investing, income per capita, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), Joseph Schumpeter, knowledge economy, land tenure, M-Pesa, microcredit, mobile money, non-tariff barriers, off grid, out of africa, precautionary principle, precision agriculture, Recombinant DNA, rolling blackouts, search costs, Second Machine Age, self-driving car, Silicon Valley, sovereign wealth fund, structural adjustment programs, supply-chain management, synthetic biology, systems thinking, total factor productivity, undersea cable

For Schumpeter, economic development is nonlinear; it arises from endogenous systemic change—not external stimuli—and must take into account more than just economic conditions. At the heart of economic transformation lies creative destruction of the status quo. In a famous example, he explains that adding mail coaches incrementally will not result in the creation of a railway. Instead, he argued, “[the] process of industrial mutation . . . incessantly revolutionizes the economic structure from within, incessantly destroying the old The Growing Economy 11 one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.”12 Economic transformation occurs through the creation of new combinations of existing technologies, which includes products as well as processes.

See CAADP Congo, Democratic Republic of the: Academy of Engineering and, 231; East African Community (EAC) and, 35; hydroelectric power and, 124; land tenure system in, 32; seed exports to, 191 conservation: biodiversity and, 255–56, 259; farming techniques and, 132, 167; forests and, 228; soil and, 31; sustainability and, 11, 255–56 Consultative Group on International Agricultural Research (CGIAR), 58 Cooperative Viniculture Organization, 103 corn, 72, 81, 212 Cornell University, 71–72 Costa Rica, 157, 168 Côte d'Ivoire, 28, 34, 125 cotton: global prices of, 69; innovation and, 4–5, 45, 64–65, 67; international markets in, 23, 119; pest-resistant varieties of, 65, 67; seed prices and, 70; transgenic varieties of, 64–65, 67, 69–70 “creative destruction” (Schumpter), 11 CRIN (Cocoa Research Institute of Nigeria), 92 306 Index crop quality: Africa in international context, 20–21; climate change and, 36, 61, 256; diversification and, 211–13; entrepreneurship and, 189–92; genetically modified crops and, 62; genetic engineering and, 62–63; Green Revolution and, 13, 68; innovation and, 53; irrigation and, 141 culture: clusters and, 96–97, 101; economic-agricultural linkages and, 162; of innovation, 222–23 Czech Republic, 66 Dais Analytic Corporation, 55–56 Dakar Conference (2000), 150 Dangote, Aliko, 4 deforestation, 16 Democratic Republic of Congo.


pages: 351 words: 100,791

The World Beyond Your Head: On Becoming an Individual in an Age of Distraction by Matthew B. Crawford

airport security, behavioural economics, Cass Sunstein, choice architecture, collateralized debt obligation, creative destruction, David Brooks, delayed gratification, dematerialisation, deskilling, digital Maoism, Google Glasses, hive mind, index card, informal economy, Jaron Lanier, large denomination, new economy, new new economy, Norman Mailer, online collectivism, Plato's cave, plutocrats, precautionary principle, Richard Thaler, Rodney Brooks, scientific management, self-driving car, Silicon Valley, Silicon Valley ideology, Stanford marshmallow experiment, tacit knowledge, the built environment, the scientific method, The Wisdom of Crowds, theory of mind, Walter Mischel, winner-take-all economy

It is pathetic to watch the endless efforts—equipped with microscopy and chemistry, with mathematics and electronics—to reproduce a single violin of the kind the half-literate Stradivari turned out as a matter of routine more than 200 years ago.12 Cultural Revolutions aren’t imposed only by totalitarian regimes. We call ours “the creative destruction of capitalism,” and shower venture capital on “disruptive technologies,” especially ones that promise to mechanize human interaction. It hardly needs to be said that the results are both positive and negative. But it does need to be said that in the university, the survival of our traditions of intellectual apprenticeship should not be taken for granted.

massification and social class and sovereign self and uncertain notions of of will autotelic activities Avalon (Toyota) Averaged American, The (Igo) Bach, Johann Sebastian ball bearings barbarians, skateboarders as Baroque era bartending baseball baseball bats Beat era Beckerath, Rudolf von Bedos, Dom Behavioral and Brain Sciences behavioral conditioning behavioral economics Benihana biases big data, era of blackjack Blind Spot Assist (Mercedes) bluegrass BMW Boardwalk Hall Auditorium organ Bono, Chris Boody, John motivation by reverse engineering by Boudreau, Bruce Brake Assist (Mercedes) Brewer, Talbot Brombaugh, John Brooks, David Burke, Edmund business-class lounge Calvin, John Canada cane capital concentration of social capitalism affective creative destruction in carbon fiber caretaking practices carpenters Car Talk cartoons cave, allegory of cell phone, driving while on centralization of authority certainty Chamberlain, Neville character Charles de Gaulle airport chiff children’s television chimpanzees China Cultural Revolution in choice freedom as and presentation of options as totem of consumer capitalism choice architects chopsticks Churchill, Winston Cindy (bookkeeper) Circuit of the Americas citizens, relationship of (sovereign) to Civil War, English Clark, Andy classical conditioning Clinton, Bill clustering cognition, advanced cognitive extension cognitive psychology cognitive sciences coherence colored walls commerce, regulation of communism communitarianism computational theory of mind concentration of motorcycle riders concepts, skilled activities and conflict, between self and world conformity individuality vs.

massification and social class and sovereign self and uncertain notions of of will autotelic activities Avalon (Toyota) Averaged American, The (Igo) Bach, Johann Sebastian ball bearings barbarians, skateboarders as Baroque era bartending baseball baseball bats Beat era Beckerath, Rudolf von Bedos, Dom Behavioral and Brain Sciences behavioral conditioning behavioral economics Benihana biases big data, era of blackjack Blind Spot Assist (Mercedes) bluegrass BMW Boardwalk Hall Auditorium organ Bono, Chris Boody, John motivation by reverse engineering by Boudreau, Bruce Brake Assist (Mercedes) Brewer, Talbot Brombaugh, John Brooks, David Burke, Edmund business-class lounge Calvin, John Canada cane capital concentration of social capitalism affective creative destruction in carbon fiber caretaking practices carpenters Car Talk cartoons cave, allegory of cell phone, driving while on centralization of authority certainty Chamberlain, Neville character Charles de Gaulle airport chiff children’s television chimpanzees China Cultural Revolution in choice freedom as and presentation of options as totem of consumer capitalism choice architects chopsticks Churchill, Winston Cindy (bookkeeper) Circuit of the Americas citizens, relationship of (sovereign) to Civil War, English Clark, Andy classical conditioning Clinton, Bill clustering cognition, advanced cognitive extension cognitive psychology cognitive sciences coherence colored walls commerce, regulation of communism communitarianism computational theory of mind concentration of motorcycle riders concepts, skilled activities and conflict, between self and world conformity individuality vs. consciousness consent conservatives consumer credit contingencies contract, authority of conversations, retrospective understanding enhanced by cooking, see short-order cooks cooperation Corporate Gaming Act courts, failing to appear in craft craps creative destruction creativity Critique of Judgment (Kant) cross-modal binding cultural authority cultural jigs Cultural Revolution culture culture of performance Cussins, Adrian cybernetics Davis, Miles death instinct pleasure principle and the will and debt Declaration of Independence Declaration of the Rights of Man Demain, Erik Demain, Martin democracy without flattening social effects of in statistical constructs Democracy in America (Tocqueville) Denmark Dennett, Daniel depression deregulation Descartes, René American individualism and epistemology of on primary vs. secondary qualities design: attention and of automobiles computer-aided in glassmaking interior in machine gambling in organ making determinism de Zengotita, Thomas Diagnostic and Statistical Manual of Mental Disorders Diderot, Denis differentiation from others as basis of communal feeling as basis of individuality and identity politics as incubator of genuine attachments as inherently hierarchal vs. viewing oneself as representative “digital Maoism” dissidents distraction in cultural crisis of attention as neuroscience finding political economy and summary view of diversity divorce dogs, Frisbees as caught by Dreyfus, Hubert driving Droid Dumbaugh, Eric Dunkin’ Donuts Ebbesen, E.


The Pirate's Dilemma by Matt Mason

Albert Einstein, augmented reality, barriers to entry, blood diamond, citizen journalism, creative destruction, digital divide, don't be evil, Donald Trump, Douglas Engelbart, East Village, Firefox, Free Software Foundation, future of work, glass ceiling, global village, Hacker Ethic, haute couture, Howard Rheingold, Internet of things, invisible hand, Isaac Newton, jimmy wales, job satisfaction, John Markoff, John Perry Barlow, Joseph Schumpeter, Kickstarter, Lao Tzu, Marshall McLuhan, means of production, Naomi Klein, new economy, New Urbanism, patent troll, peer-to-peer, prisoner's dilemma, public intellectual, RAND corporation, RFID, Richard Florida, Richard Stallman, SETI@home, side hustle, Silicon Valley, South China Sea, Stephen Hawking, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, the long tail, Tim Cook: Apple, urban sprawl, Whole Earth Catalog

When the hairstyle lost its meaning, Hell lost the hairstyle. But his 12 | THE PIRATE’S DILEMMA statement and the do-it-yourself ideal he promoted affected the world. Today it is the driving force behind a new generation of D.I.Y. entrepreneurs who are raising hell once again. Disruptive new D.I.Y. technologies are causing unprecedented creative destruction. The history of punk offers us valuable insights into how this new world works. Punk was an angry outburst, a reaction to mass culture, but it offered new ideas about how mass culture could be replaced with a more personalized, less centralized worldview. Punk has survived in many incarnations musically—it became new wave, influenced hip-hop, and conceived grunge and the notion of indie bands.

The do-it-yourself movement of more than thirty years ago offered some suggestions as to how mass culture could be brought down. Today the ideas and technologies empowering us are underpinned by D.I.Y., and mass culture is beginning to falter. Hurricane Punk Economist Joseph Schumpeter once said economic development requires “gales of creative destruction.” Punk was a category five hurricane. Punk Capitalism | 15 This hurricane had been brewing since the nineteenth century at least, through a number of countercultural movements that sought to subvert the status quo. Realism, Impressionism, Dadaism, and surrealism all helped forge the spirit of punk, encouraging artists to break the rules and ignore traditions.

“Punk was about not taking it, not believing what you see on TV or in the newspapers, and I think that definitely carried over, because people get their news from the Internet and don’t believe any of the major networks. I don’t know if it’s necessarily anarchy, but it’s definitely thinking for yourself.” Creative Destruction Punk amplified the idea that nothing else mattered apart from the will to do it yourself. “We wanted to be amateurs,” Jonny Rotten once said. Technology is helping the D.I.Y. mentality realize its full potential. On every continent, amateurs are now armed with easily (and sometimes freely) accessible state-of-the-art hardware and software, not to mention the open, global distribution channel that is the Internet.


Firefighting by Ben S. Bernanke, Timothy F. Geithner, Henry M. Paulson, Jr.

Asian financial crisis, asset-backed security, bank run, Basel III, Bear Stearns, break the buck, Build a better mousetrap, business cycle, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Doomsday Book, financial deregulation, financial engineering, financial innovation, Glass-Steagall Act, housing crisis, Hyman Minsky, income inequality, invisible hand, Kenneth Rogoff, labor-force participation, light touch regulation, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, money market fund, moral hazard, mortgage debt, negative equity, Northern Rock, opioid epidemic / opioid crisis, pets.com, price stability, quantitative easing, regulatory arbitrage, Robert Shiller, Savings and loan crisis, savings glut, short selling, sovereign wealth fund, special drawing rights, tail risk, The Great Moderation, too big to fail

* * * — The Bagehot prescription was the necessary response to a liquidity crunch. We hoped it would help to calm market fears and stabilize the situation, without artificially sustaining the financial boom. We didn’t intend to provide any more government support for the financial system than was necessary to protect the overall economy. Capitalism depends on creative destruction. Someone builds a better mousetrap, so incumbent mousetrap makers must adapt or die. Automakers wipe out buggy-whip manufacturers, then the market determines which automakers survive. The same principles normally apply to financial firms. The strong, nimble, and reliable thrive, while the imprudent and mismanaged get devoured.

and expansion of crisis, 46 and expansion of emergency authorities, 79 and Fannie Mae/Freddie Mac conservatorship, 58, 59 and onset of financial crisis, 1 and politics of crisis management, 9 and TARP, 80, 93–94, 95, 105 capitalism, 36–37, 74, 110 capital levels capitalization strategies, 164 and current state of financial system, 6 and Fannie Mae/Freddie Mac conservatorship, 56, 59 and onset of financial crisis, 30 and policy responses to crisis, 174–82 and politics of crisis management, 126 and post-crisis reforms, 117 and shortcomings of U.S. regulatory regime, 25–26, 27 and TARP, 89–90 Capital Purchase Program (CPP), 163, 176, 177, 208 “CDOs-Squared,” 19 central banks and arsenal for dealing with future crises, 119–20, 123 and Bear Stearns rescue, 48–49 and coordinated interest rate cuts, 197 and Fed liquidity programs, 217n and Lehman failure, 69 and policy responses to crisis, 33, 103–4, 162, 163 and politics of crisis management, 126 and post-crisis reforms, 118 and quantitative easing, 104 and swap lines, 42–43, 196, 217n and TARP, 89 and theoretical approaches to financial crises, 34–36, 38 CEOs and executives of financial institutions, 40–41, 52, 73–74, 82, 91, 101 Chrysler, 95, 97, 105, 208 Citigroup and acceleration of crisis, 21 and federal asset guarantees, 178 government investment in, 176, 177 and Lehman failure, 69 management firings, 73 and policy responses to crisis, 97 private capital raised during crisis, 175, 181 and stress tests, 180 structured investment vehicles, 41 and TARP, 94–95, 96, 101 and taxpayer profit from rescue, 208 and Wachovia crisis, 81, 82 write-down of troubled assets, 40–41 collateral and acceleration of crisis, 20–22, 24 and AIG rescue, 72, 73 and arsenal for dealing with future crises, 118–19 and Bear Stearns rescue, 47, 52 collateralized debt obligations (CDOs), 19, 41 collateralized funding, 24 and Countrywide sale, 42 and Lehman failure, 62, 63, 68, 69 and TARP, 94 and Term Securities Lending Facility, 45 and triage process, 40 commercial banks, 5, 126–27, 173 Commercial Paper Funding Facility (CPFF), 88, 163, 168, 208 commercial paper market, 88 Commodity Futures Trading Commission (CFTC), 23, 116 complacency, 26, 146 Consumer Financial Protection Bureau, 116 consumer lending and debt, 94, 116, 120–21, 149, 169 Continuing Extension Act, 187 corporate bonds, 75 corporate financing, 22 Council of Economic Advisers, 28 Countrywide Financial and AIG rescue, 71 and Bear Stearns rescue, 48, 52 crisis and sale of, 38–40 and expansion of crisis, 46–47 management firings, 73 and onset of financial crisis, 31, 155 and oversight of nonbanks, 23 and post-crisis reforms, 115, 116 and spark of crisis, 18 creative destruction, 36–37 credit booms, 3–4, 12, 13, 16, 117, 150 credit crunch, 36, 108 credit default swaps (CDS) and AIG rescue, 72 and effect of stabilization efforts, 201 and expansion of crisis, 75 and Lehman failure, 69 and phases of financial crisis, 153 and policy responses to crisis, 173 currency exchanges, 42–43, 196 Darling, Alistair, 67–68 debt bank debt, 90 and causes of financial crisis, 3 collateralized debt obligations (CDOs), 19, 41 federal debt levels, 124 household debt levels, 16, 149 Latin American debt crisis, 37 and post-crisis reforms, 112 “runnable” forms of debt, 12, 112 and spark of crisis, 16, 19 and TARP, 87 Debt Guarantee Program, 217n defaults, 22 Defense Appropriations Act, 187 deficit spending, 104, 124–25, 128 Democratic Party, 5, 80, 83, 104–5, 129 deposit insurance, 14–15, 22–23, 34, 162, 163, 172 Deposit Insurance Fund, 81, 88 derivatives and acceleration of crisis, 24 and AIG rescue, 71–72 and Bear Stearns rescue, 48, 53 and Lehman failure, 63 and post-crisis reforms, 112, 114, 116–17 and roots of financial crisis, 13 and shortcomings of U.S. regulatory regime, 26, 28–29 and spark of crisis, 20 Diamond, Bob, 67 Dimon, Jamie, 50 discount window lending and acceleration of crisis, 22 and Countrywide sale, 39 failure to ease crisis, 42 and Fed liquidity programs, 217n and policy responses to crisis, 162, 166, 167 stigma associated with Fed borrowing, 40 and theoretical approaches to financial crises, 34, 35 dividends, 41 Dodd, Christopher, 56, 79–80 Dodd-Frank Wall Street Reform and Consumer Protection Act, 113–16, 120–21, 127, 172 “Doomsday Book,” 118 dot-com bubble, 21 Dugan, John, 91 E. coli effect, 31, 42 economic output, 207 Economic Stimulus Act, 185 electronic banking, 15 Emergency Economic Stabilization Act, 172 emergency powers arsenal for dealing with future crises, 118–25, 211 and Bear Stearns rescue, 49–51 and Countrywide sale, 39 expansion of emergency authorities, 78–83 and onset of financial crisis, 44–45 and TARP, 94 employment levels, 4, 92, 95, 108, 110, 141, 202 Enhanced Leverage Fund, 31 entitlement programs, 124 European banking, 91, 182 European Central Bank (ECB), 35, 42, 89, 196, 197 European recovery, 206 European sovereign debt crisis, 123 Exchange Stabilization Fund, 76–77 executive compensation, 80, 82 FAA Air Transportation Act, 187 failure of financial firms, 8, 36–37.


Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs, Arthur A. Ekirch, Jr.

Alistair Cooke, American ideology, business cycle, clean water, collective bargaining, creative destruction, credit crunch, declining real wages, endowment effect, fiat currency, fixed income, foreign exchange controls, full employment, Glass-Steagall Act, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, Jones Act, Joseph Schumpeter, laissez-faire capitalism, land bank, manufacturing employment, means of production, military-industrial complex, minimum wage unemployment, plutocrats, post-industrial society, power law, price discrimination, profit motive, rent control, rent-seeking, Richard Thaler, road to serfdom, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Simon Kuznets, strikebreaker, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, transcontinental railway, union organizing, Upton Sinclair, War on Poverty, Works Progress Administration

American governments in the twentieth century, impelled by a more "progressive" ideology, readily accepted-indeed eagerly sought-expanded powers. The crisis of the 1890s, the last major battle in which the forces of classical liberalism won a clear victory, serves as an illuminating backdrop against which the crises of the twentieth century stand out in bold relief. CREATIVE DESTRUCTION IDEOLOGICALLY SUSTAINED, 1865-1893 When Joseph Schumpeter coined the expression "creative destruction" to describe the dynamics of "relatively unfettered capitalism," he might have had in mind the United States in the late nineteenth century. Certainly the nation's economic development had never been so rapid, nor so erratic and disruptive.

Crisis, Bigger Government, and Ideological Change: Toward an Understanding of the Ratchet 57 A Schematic View of the Prohlem Why Stage II? A Cost-Concealment Hypothesis Why Stage IV? A (Partial) Hypothesis on Ideological Change Recapitulation: Why the Ratchet? The Task A head PART II. History 5. Crisis under the Old Regime, 1893-1896 77 Creative Destruction Ideologically Sustained, 1865-1893 Depression and Social Unrest, 1893-1896 Saving the Gold Standard Maintaining Law and Order in the Lahor Market Striking Down the Income Tax Conclusions 6. The Progressive Era: A Bridge to Modern Times 106 Economic Development and Political Change, 1898-1916 The Ideological Winds Shift End and Beginning: The Railroad Lahor Trouhles, 1916-1917 Conclusions 7.

For an analytical extension and updating of Schumpeter's argument about the role of inflation, see Robert Higgs, "Inflation and the Destruction of the Free Market Economy," Intercollegiate RetView 14 (Spring 1979): 67-76. 8. Seymour E. Harris, ed., Schumpeter, Social Scientist (Cambridge, Mass.: Harvard University Press, 1951); Arnold Heertje, ed., Schumpeter's Vision (New York: Praeger, 1981); john E. Elliott, "Marx and Schumpeter on Capitalism's Creative Destruction: A Comparative Restatement," Quarterly Journal of Economics 95 (August 1980): 45-68; Richard D. Coe and Charles K. Wilber, eds., Capitalism and Democracy: Schumpeter RetVisited (Notre Dame, Ind.: University of Notre Dame Press, 1985). 9. William Fellner, "March into Socialism, or Viable Postwar Stage of Capitalism?"


pages: 416 words: 106,532

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond by Chris Burniske, Jack Tatar

Airbnb, Alan Greenspan, altcoin, Alvin Toffler, asset allocation, asset-backed security, autonomous vehicles, Bear Stearns, bitcoin, Bitcoin Ponzi scheme, blockchain, Blythe Masters, book value, business cycle, business process, buy and hold, capital controls, carbon tax, Carmen Reinhart, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, correlation coefficient, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, disintermediation, distributed ledger, diversification, diversified portfolio, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, fiat currency, financial engineering, financial innovation, fixed income, Future Shock, general purpose technology, George Gilder, Google Hangouts, high net worth, hype cycle, information security, initial coin offering, it's over 9,000, Jeff Bezos, Kenneth Rogoff, Kickstarter, Leonard Kleinrock, litecoin, low interest rates, Marc Andreessen, Mark Zuckerberg, market bubble, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, packet switching, passive investing, peer-to-peer, peer-to-peer lending, Peter Thiel, pets.com, Ponzi scheme, prediction markets, quantitative easing, quantum cryptography, RAND corporation, random walk, Renaissance Technologies, risk free rate, risk tolerance, risk-adjusted returns, Robert Shiller, Ross Ulbricht, Salesforce, Satoshi Nakamoto, seminal paper, Sharpe ratio, Silicon Valley, Simon Singh, Skype, smart contracts, social web, South Sea Bubble, Steve Jobs, transaction costs, tulip mania, Turing complete, two and twenty, Uber for X, Vanguard fund, Vitalik Buterin, WikiLeaks, Y2K

To quote a May 2016 article in Harvard Business Review by Don and Alex Tapscott: “The technology most likely to change the next decade of business is not the social web, big data, the cloud, robotics, or even artificial intelligence. It’s the blockchain, the technology behind digital currencies like bitcoin.”7 Incumbents are sensing the inherent creative destruction, especially within the financial services sector, understanding that winners will grow new markets and feast off the disintermediated. Many startups are eyeing these middlemen with the oft-flickering thought that has been credited to Amazon’s Jeff Bezos: “Your fat margins are my opportunity.”8 If financial incumbents don’t embrace the technology themselves, Bitcoin and blockchain technology could do to banks what cell phones did to telephone poles.

Other Internet-based high flyers that ended up crashing include Pets.com, Worldcom, and WebVan.11 Today, none of those stocks exist. Whether specific cryptoassets will survive or go the way of Books-A-Million remains to be seen. What’s clear, however, is that some will be big winners. Altogether, between the assets native to blockchains and the companies that stand to capitalize on this creative destruction, there needs to be a game plan that investors use to analyze and ultimately profit from this new investment theme of cryptoassets. The goal of this book is not to predict the future—it’s changing too fast for all but the lucky to be right—but rather to prepare investors for a variety of futures.

Don’t let the use of the word “money” cause an investor to dismiss any applicability to digital currency or cryptoassets, as later cases have expanded the meaning of the term money. 27. https://www.coinbase.com/legal/securities-law-framework.pdf. 28. https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings. 29. www.angel.co. 30. www.crunchbase.com. 31. https://angel.co/blockchains. 32. http://bitangels.co 33. http://bitcoinist.com/coinagenda-startup-winners/. 34. https://bnktothefuture.com/pitches/airbitz. Chapter 17 1. Clayton M. Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail Harvard (Business Review Press, 2016). 2. http://www.aei.org/publication/charts-of-the-day-creative-destruction-in-the-sp500-index/. 3. http://research.ark-invest.com/thematic-investing-white-paper. 4. Don and Alex Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business and the World (Portfolio/Penguin, 2016). 5. http://fortune.com/2015/11/04/jamie-dimon-virtual-currency-bitcoin/. 6. http://blogs.worldbank.org/peoplemove/impactevaluations/digital-remittances-and-global-financial-health. 7. https://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1199807908806/4549025-1450455807487/Factbookpart1.pdf. 8. http://www.imf.org/external/pubs/ft/fandd/basics/remitt.htm. 9. https://www.cryptocoinsnews.com/india-see-bitcoin-blockchain-remittance-new-partnership/. 10. https://news.bitcoin.com/why-volume-is-exploding-at-mexican-bitcoin-exchange-bitso/. 11. https://bnktothefuture.com/pitches/bitso. 12. https://usa.visa.com/visa-everywhere/innovation/visa-b2b-connect.html. 13. https://bnktothefuture.com/pitches/bitpesa-2. 14. https://ripple.com/network/financial-institutions/. 15. https://ripple.com/xrp-portal/. 16. https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/innovation/ch-en-innovation-deloitte-blockchain-app-in-insurance.pdf. 17. https://augur.net/. 18. http://insidebitcoins.com/news/how-blockchain-technology-could-revolutionize-the-1-1-trillion-insurance-industry/28516. 19. http://www.businessinsider.com/us-bank-stocks-update-november-9-2016-11. 20. https://www.cbinsights.com/blog/financial-services-corporate-blockchain-investments/. 21. https://www.hyperledger.org/about/members. 22. https://www.hyperledger.org/. 23. https://www.hyperledger.org/industries. 24. http://www.coindesk.com/big-corporates-unite-for-launch-of-enterprise-ethereum-alliance/. 25. https://www.fastcompany.com/3017509/look-inside-google-garage-the-collaborative-workspace-that-thrives-on-crazy-creat. 26. https://www.irs.gov/pub/irs-drop/n-14-21.pdf. 27. https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings. 28. https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance. 29. https://www.irs.gov/pub/irs-drop/n-14-21.pdf. 30. https://www.fincen.gov/sites/default/files/shared/FIN-2013-G001.pdf. 31. http://www.CoinDesk.com/cftc-ruling-defines-bitcoin-and-digital-currencies-as-commodities/. 32. http://www.cftc.gov/PressRoom/PressReleases/pr7231-15. 33. https://bitcoinmagazine.com/articles/tax-day-is-coming-a-primer-on-bitcoin-and-taxes-1459786613/. 34.


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Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic management, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, bond market vigilante , business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Charles Babbage, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, data science, debt deflation, deep learning, deskilling, digital divide, disruptive innovation, diversified portfolio, driverless car, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Ford Model T, Fractional reserve banking, Freestyle chess, full employment, general purpose technology, Geoffrey Hinton, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, Kiva Systems, knowledge worker, labor-force participation, large language model, liquidity trap, low interest rates, low skilled workers, low-wage service sector, Lyft, machine readable, machine translation, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, plutocrats, post scarcity, precision agriculture, price mechanism, public intellectual, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Robert Solow, Rodney Brooks, Salesforce, Sam Peltzman, secular stagnation, self-driving car, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, the long tail, Thomas L Friedman, too big to fail, Tragedy of the Commons, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, Vernor Vinge, very high income, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, women in the workforce

What’s more, they offer compelling evidence for how the relationship between technology and employment has changed. There is a widely held belief—based on historical evidence stretching back at least as far as the industrial revolution—that while technology may certainly destroy jobs, businesses, and even entire industries, it will also create entirely new occupations, and the ongoing process of “creative destruction” will result in the emergence of new industries and employment sectors—often in areas that we can’t yet imagine. A classic example is the rise of the automotive industry in the early twentieth century, and the corresponding demise of businesses engaged in manufacturing horse-drawn carriages.

It seems nearly inconceivable that successful new industries will emerge that do not take full advantage of that powerful new utility, as well as the distributed machine intelligence that accompanies it. As a result, emerging industries will rarely, if ever, be highly labor-intensive. The threat to overall employment is that as creative destruction unfolds, the “destruction” will fall primarily on labor-intensive businesses in traditional areas like retail and food preparation, while the “creation” will generate new businesses and industries that simply don’t hire many people. In other words, the economy is likely on a path toward a tipping point where job creation will begin to fall consistently short of what is required to fully employ the workforce.

A 2014 report by a coalition of bank regulators from the United States and nine other developed countries warned that “five years after the crisis large firms have made only some progress” in addressing the risks associated with derivatives, and that “progress has been uneven and remains, on the whole, unsatisfactory.”24 In other words, the danger that even a localized increase in loan defaults could set off another global crisis remains very real. The most frightening long-term scenario of all might be if the global economic system eventually manages to adapt to the new reality. In a perverse process of creative destruction, the mass-market industries that currently power our economy would be replaced by new industries producing high-value products and services geared exclusively toward a super-wealthy elite. The vast majority of humanity would effectively be disenfranchised. Economic mobility would become nonexistent.


pages: 576 words: 105,655

Austerity: The History of a Dangerous Idea by Mark Blyth

"there is no alternative" (TINA), accounting loophole / creative accounting, Alan Greenspan, balance sheet recession, bank run, banking crisis, Bear Stearns, Black Swan, book value, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, deindustrialization, disintermediation, diversification, en.wikipedia.org, ending welfare as we know it, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial repression, fixed income, floating exchange rates, Fractional reserve banking, full employment, German hyperinflation, Gini coefficient, global reserve currency, Greenspan put, Growth in a Time of Debt, high-speed rail, Hyman Minsky, income inequality, information asymmetry, interest rate swap, invisible hand, Irish property bubble, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, Long Term Capital Management, low interest rates, market bubble, market clearing, Martin Wolf, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Occupy movement, offshore financial centre, paradox of thrift, Philip Mirowski, Phillips curve, Post-Keynesian economics, price stability, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Solow, savings glut, short selling, structural adjustment programs, tail risk, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, Two Sigma, unorthodox policies, value at risk, Washington Consensus, zero-sum game

“Economic progress, in capitalist society, means turmoil.”113 Capitalism therefore cannot be judged over the short run. In fact, “we must judge its performance over time, as it unfolds through decades and even centuries.”114 By definition, then, compensating for turmoil, acting on the immediate short run, not only halts the process of creative destruction by entrepreneurs that lies at the heart of capitalism; doing so is guaranteed to produce more malinvestment that simply stores up trouble ahead since the job of austerity is left undone. Capitalism, Socialism and Democracy appears, then, as a longer and more elaborate restatement of his earlier beliefs.

Austrian school economists continued to give austerity a globalized intellectual home, while German ordoliberals, as we shall shortly see, gave austerity a national base of operations. 5 THE INTELLECTUAL HISTORY OF A DANGEROUS IDEA, 1942–2012 Part One: Austerity Finds a European Home—and an American Pied-à-Terre Welcome to Germany: Erst Sparen, Dann Kaufen! One1 of Joseph Schumpeter’s lasting contributions to economic thought was his concept of gales of “creative destruction” that sweep through the economy.2 Torn asunder by the entrepreneurial utilization of technology, continual organizational innovation, and the rigors of competition, businesses rise and fall, driving the business cycle over time. It is, then, hard to imagine a less Schumpeterian economy than Germany’s.

See risk-management techniques Portugal, 3, 4 bailout in, 71–73 Eurozone Current Account Imbalances, 78 fig. 3.1 Eurozone Ten-Year Government Bond Yields, 80 fig. 3.2 government debt 2006–2012, 47 fig. 2.3 slow growth crisis, 68–71 “Positive Theory of Fiscal Deficits and Government Debt in a Democracy, A” (Alesini), 167 Posner, Richard, 55 Prescott, Edward, 55, 157 President’s Conference on Unemployment, 120 Prices and Production (Hayek), 144 Principles of Political Economy (Mill), 116 Quiggin, John, 55 and Australian expectations-augmented austerity, 209 “zombie economics”, 10, 234 Rand, Ayn Atlas Shrugged, 130 rational expectations hypothesis, 42 Real Business Cycle school, 157 real estate “collateralized debt obligation”, 28 “tranching the security”, 28, 30–31 equity, 28 mezzanine, 28 senior, 28 “uncorrelated within their class”, 27–28 REBLL alliance, 103, 178–180, 179–180, 205, 216–226, 217 fig. 6.1 GDP and consumption growth in 2009, 221 table 6.1 See also names of countries recapitalization, 45, 52 Reinhardt, Carmen, 11, 73, 241 Ricardian equivalence, 41, 49 Ricardo, David, 115–117, 117–119, 171 in Germany, 195 risk-management techniques, 49 hedging, 32 long position, 32 options, 32 portfolio diversification, 31 short sell, 32 Ritschl, Albrecht, 193 Road to Serfdom, The (Hayek), 144 Robins, Lionel, 144 Robinson, Joan, 122, 126 Rodrik, Dani, 162, 163 Rogoff, Kenneth, 11, 73 Romania austerity in, 18, 103, 190, 216–226, 217 fig. 6.1, 221 Romney, Mitt, 243 Roosevelt, Franklin Delano, 126 administration policies, 128 balancing the budget, 188 Röpke, Wilhelm, 138 Rothbard, Murray, 148 Sachs, Jeffrey, 60 Saez, Emanuel, 243 Say’s law, 137 Sbrancia, M. Belen, 241 Scandinavia, 225 Schäuble, Wolfgang, 61 Schiff, Peter, 149 Schularick, Moritz, 73 Schumpeter, Joseph, 17, 119, 151 and creative destruction, 132–134 and the New Liberals, 118 Capitalism, Socialism and Democracy, 128 Economics of the Recovery Program, The, 128 on austerity, 101, 121, 125–131 on the capital structure of capitalism, 120, 125 Second Treatise of Government (Locke), 104 securitization, 24 Shambaugh, Jay, 90 Sherman Acts, 119 Siemens, 132 sigma, 32, 33, 34 Skidelsky, Lord, 56 Smith, Adam, 15, 17, 100–101, 119, 167 and productive parsimony, 110–112 and public debt, 109–110 producing austerity, 114–115, 127 relationship between the state and the market, 112–113, 115–122, 123 Société Générale, 87 Soros, George, 77 sovereign debt crisis, 5, 7 Adam Smith on, 113 in Europe, 51, 79 in Greece, 62–64 Spain, 1, 3, 4, 5, 6, 222, 225 austerity in, 176 capital-flow cycle in, 11 Eurozone Current Account Imbalances, 78 fig. 3.1 Eurozone Ten-Year Government Bond Yields, 80 fig. 3.2 government debt 2006–2012 real estate in rise in prices, 27, 64–68 unemployment in, 2 Sperling, Gene, 12 stagflation, 40 Standard & Poors, 86 starve the beast theory of public spending, 167 Steinbrück, Peer, 52 Stigler, George, 155 Stiglitz, Joseph, 55 “Successful Austerity in the United States, Europe and Japan” (Battini), 214–215 Summers, Larry, 58 supply-side economics, 111, 242 See also demand-side economics Svensson, Lars E.


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A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, antiwork, AOL-Time Warner, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, Charles Babbage, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial engineering, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, Great Leap Forward, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land bank, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Neal Stephenson, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, proprietary trading, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, search costs, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

Like the Austrians, Schumpeter worked under the shadow of the Marxist school – so much so that the first four chapters of his magnum opus, Capitalism, Socialism, and Democracy (henceforth CSD), published in 1942, are devoted to Marx.17 Joan Robinson, the famous Keynesian economist, once famously quipped that Schumpeter was just ‘Marx with the adjectives changed’. Gales of creative destruction: Schumpeter’s theory of capitalist development Schumpeter developed Marx’s emphasis on the role of technological development as the driving force of capitalism. He argued that capitalism develops through innovations by entrepreneurs, namely, the creation of new production technologies, new products and new markets.

This competition driven by technological innovations, in Schumpeter’s view, is much more powerful and important than Neoclassical price competition – producers trying to undercut each other with lower prices, by increasing the efficiency with which they use given technologies. He argued that competition through innovation is ‘as much more effective than [price competition] as a bombardment is in comparison with forcing a door’. On this, Schumpeter has proven prescient. He argued that no firm, however entrenched it may look, is safe from these ‘gales of creative destruction’ in the long run. The decline of companies like IBM and General Motors, or the disappearance of Kodak, which at their peaks dominated the world in their respective industries, demonstrates the power of competition through innovation. Why did Schumpeter predict the atrophy of capitalism and why was he wrong?

As I discussed in Chapter 4, the Schumpeterians and the Austrians denounce the state of perfect competition, which the Neoclassical economists idealize, as a state of economic stasis, where there is no innovation. When the lure of (temporary) monopoly profit is exactly what motivates firms to innovate, clamping down on – or even breaking up – monopolies will reduce innovation and bring about technological stagnation. In what Schumpeter calls the ‘gales of creative destruction’, they argue, no monopoly is safe in the long run; General Motors, IBM, Xerox, Kodak, Microsoft, Sony, BlackBerry, Nokia and many other companies that once had near-monopoly of their respective markets and had been considered invincible have lost such positions and even disappeared into the dustbin of history, as in the case of Kodak.1 What constitutes a market failure depends on your theory of how markets work I have just shown that the same market dominated by a monopoly can be seen as a most successful one by one school of economics (the Schumpeterian school or the Austrian school) and as a case of most abject failure by another (the Neoclassical school).


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The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Albert Einstein, AlphaGo, Alvin Toffler, anti-work, antiwork, autonomous vehicles, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Bletchley Park, blockchain, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Chris Urmson, computer age, Computing Machinery and Intelligence, conceptual framework, corporate governance, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, Demis Hassabis, deskilling, Dr. Strangelove, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, facts on the ground, fake news, financial intermediation, full employment, future of work, Future Shock, general purpose technology, Great Leap Forward, Hans Moravec, income inequality, income per capita, industrial robot, Internet of things, invention of the wheel, Isaac Newton, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, license plate recognition, low interest rates, machine translation, Marc Andreessen, Mark Zuckerberg, market bubble, mega-rich, natural language processing, Network effects, new economy, Nicholas Carr, Ocado, Paul Samuelson, Peter Thiel, Phillips curve, positional goods, quantitative easing, RAND corporation, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Rutger Bregman, Second Machine Age, secular stagnation, self-driving car, seminal paper, Silicon Valley, Silicon Valley billionaire, Simon Kuznets, Skype, social intelligence, spinning jenny, Stanislav Petrov, Stephen Hawking, Steven Pinker, synthetic biology, technological singularity, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, universal basic income, US Airways Flight 1549, Vernor Vinge, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, wealth creators, winner-take-all economy, world market for maybe five computers, Y2K, Yogi Berra

Furthermore, the technological “progress” that underpinned the Industrial Revolution undermined the livelihoods of many individuals and groups. This was not an unfortunate, incidental extra; it was intrinsic to the very process of economic growth, which relied upon old skills and occupations becoming redundant and new ones taking their place. The great Austrian American economist Joseph Schumpeter called this process “creative destruction.” Admittedly, even before the Industrial Revolution, there were also some cases of technological redundancy. For instance, the Venetian shipwrights, who for centuries had made their living out of constructing galleys and ships with fixed sails to ply their trade across the Mediterranean, eventually faced redundancy when oceangoing ships with adjustable sails came to dominate international trade.

So, just as many economists have started to become pessimistic about the capacity for economic progress and rising living standards, along has come a new “revolution” which promises to deliver just what they were beginning to despair of. But is it all that it is cracked up to be? And, if it is, so that the post-Industrial Revolution engine of progress is back in business, will the overall effects be the same as those that dominated the nineteenth and twentieth centuries? That is to say, will the “creative destruction” that powered previous advances again ensure that there are new jobs to take the place of the old? Or will it this time be a case of destructive destruction? 2 Could this time be different? “The pace of change has never been this fast, and yet it will never be this slow again.” Justin Trudeau, 20181 “Machines will be capable, within twenty years, of doing any work a man can do.”

But the state can also contribute to the funding of life-time learning and retraining, thereby again helping people to reequip themselves with useful skills. This is particularly important as a way of ameliorating the conditions of all those millions of people who will, from time to time, suffer from the gales of creative destruction blowing through the economy, including as a result of the spread of robots and AI. Most importantly, in order to reduce inequality in the AI economy, the education system needs to help produce the kind of workers who will thrive as complements to AI. The MIT professor David Autor makes the point that in 1900 the typical young, native-born American had only a very basic education.


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The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century by Rodrigo Aguilera

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, availability heuristic, barriers to entry, basic income, benefit corporation, Berlin Wall, Bernie Madoff, Bernie Sanders, bitcoin, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, carbon footprint, Carmen Reinhart, centre right, clean water, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer age, Corn Laws, corporate governance, corporate raider, creative destruction, cryptocurrency, cuban missile crisis, David Graeber, David Ricardo: comparative advantage, death from overwork, decarbonisation, deindustrialization, Deng Xiaoping, Doha Development Round, don't be evil, Donald Trump, Doomsday Clock, Dunning–Kruger effect, Elon Musk, European colonialism, fake news, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, fundamental attribution error, gig economy, Gini coefficient, Glass-Steagall Act, Great Leap Forward, green new deal, Hans Rosling, housing crisis, income inequality, income per capita, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, karōshi / gwarosa / guolaosi, Kenneth Rogoff, Kickstarter, lake wobegon effect, land value tax, Landlord’s Game, late capitalism, liberal capitalism, long peace, loss aversion, low interest rates, Mark Zuckerberg, market fundamentalism, means of production, meta-analysis, military-industrial complex, Mont Pelerin Society, moral hazard, moral panic, neoliberal agenda, Network effects, North Sea oil, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, Overton Window, Pareto efficiency, passive investing, Peter Thiel, plutocrats, principal–agent problem, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, risk tolerance, road to serfdom, Robert Shiller, Robert Solow, savings glut, Scientific racism, secular stagnation, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, Social Justice Warrior, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Stanislav Petrov, Steven Pinker, structural adjustment programs, surveillance capitalism, tail risk, tech bro, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transatlantic slave trade, trolley problem, unbiased observer, universal basic income, Vilfredo Pareto, Washington Consensus, Winter of Discontent, Y2K, young professional, zero-sum game

“We are taking chemotherapy for a cold”.47 The astronomic growth of the renewables industry over the past few decades suggests that an environmentally-friendly economy would still remain highly profitable. It is also incongruent that the Schumpeterian affinity of hyper-capitalist climate deniers towards “creative destruction” applies to most other industries but not the dirty ones; typically, the absurdist defense of obsolete industries is seen as a mantra of the left, not the right. It does not help that climate change denial is a tribalist narrative held primarily by conservatives, at least in the United States.

Truman Employee ownership would be a necessary but insufficient policy to ensure that capitalism’s current problems are corrected. At the top of many economists’ concerns today is the threat of automation, which over the next few decades could lead to the mass replacement of a significant section of the workforce by robots or AI. Historically, technological change has been an opportunity rather than a threat. “Creative destruction”, to use the term coined by economist Joseph Schumpeter, has meant that job losses from technological change have been offset by job creation in new industries that this change has brought about. But considerable evidence suggests that this time it will be different, particularly since large swathes of both working- and middle-class jobs appear under threat and the level of specialization needed in most emerging industries appears too high to be feasible for those whose jobs are on the line.

., “Capitalism, Democracy, and Elections”, Democracy At Work, 13 Jun. 2013, https://www.democracyatwork.info/capitalism_democracy_and_elections 58 Ostry, J.D., Loungani, P. and Furceri, D., “Neoliberalism: Oversold?”, Finance and Development, 53(2), Jun. 2016, https://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm 59 Harvey, D., “Neoliberalism as Creative Destruction”, The Annals of the American Academy of Political and Social Science, 610, Mar. 2007, https://doi.org/10.1177/0002716206296780 60 Biebricher, T., “Neoliberalism and Democracy”, Constellations, 22(2), 2015, https://doi.org/10.1111/1467-8675.12157 61 “Statement of Aims”, The Mont Pelerin Society, https://www.montpelerin.org/statement-of-aims/ Epilogue: Winds of Change 1 “Matt Ridley - Stories for Change”, OpenLearn, 13 Nov. 2015, https://www.open.edu/openlearn/nature-environment/the-environment/creative-climate/stories-change/matt-ridley-stories-change 2 Global Warming of 1.5 °C (Intergovernmental Panel on Climate Change, 2018), Ch. 1, https://www.ipcc.ch/sr15/ 3 Pinker, S., Enlightenment Now, pg. 7 4 Scripps CO2 program, https://scripps.ucsd.edu/programs/keelingcurve/permissions-and-data-sources/ http://scrippsco2.ucsd.edu/data/atmospheric_co2/icecore_merged_products 5 Bernanke, B., “The Global Saving Glut and the U.S.


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The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life You Want by Diane Mulcahy

Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, basic income, Clayton Christensen, cognitive bias, collective bargaining, creative destruction, David Brooks, deliberate practice, digital nomad, diversification, diversified portfolio, fear of failure, financial independence, future of work, gig economy, helicopter parent, Home mortgage interest deduction, housing crisis, independent contractor, job satisfaction, Kickstarter, loss aversion, low interest rates, low skilled workers, Lyft, mass immigration, mental accounting, minimum wage unemployment, mortgage tax deduction, negative equity, passive income, Paul Graham, remote working, risk tolerance, Robert Shiller, seminal paper, Silicon Valley, Snapchat, social contagion, TaskRabbit, TED Talk, the strength of weak ties, Uber and Lyft, uber lyft, universal basic income, wage slave, WeWork, Y Combinator, Zipcar

Komisar, Randy, and Kent Lineback, The Monk and the Riddle: The Art of Creating a Life While Making a Living (Boston, MA: Harvard Business School, 2001). 3. Gladwell, Malcolm, Outliers: The Story of Success (New York: Back Bay Books, 2011). CHAPTER 3 1. Foster, Richard, “Creative Destruction Whips Through Corporate America,” Innosight, Winter 2012. www.innosight.com/innovation-resources/strategy-innovation/upload/creative-destruction-whips-through-corporate-america_final2015.pdf 2. Daepp, Madeleine I. G., Marcus J. Hamilton, Geoffrey B. West, and Luis M. A. Bettencourt, “The Mortality of Companies,” The Royal Society Publishing. Santa Fe Institute, April 1, 2015. rsif.royalsocietypublishing.org/content/12/106/20150120 3.


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Models. Behaving. Badly.: Why Confusing Illusion With Reality Can Lead to Disaster, on Wall Street and in Life by Emanuel Derman

Albert Einstein, Asian financial crisis, Augustin-Louis Cauchy, Black-Scholes formula, British Empire, Brownian motion, capital asset pricing model, Cepheid variable, creative destruction, crony capitalism, currency risk, diversified portfolio, Douglas Hofstadter, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial engineering, Financial Modelers Manifesto, fixed income, Ford Model T, Great Leap Forward, Henri Poincaré, I will remember that I didn’t make the world, and it doesn’t satisfy my equations, Isaac Newton, Johannes Kepler, law of one price, low interest rates, Mikhail Gorbachev, Myron Scholes, quantitative trading / quantitative finance, random walk, Richard Feynman, riskless arbitrage, savings glut, Schrödinger's Cat, Sharpe ratio, stochastic volatility, the scientific method, washing machines reduced drudgery, yield curve

They used sublimation as a metaphor to describe the way capitalism’s endless urge for new sources of profits results in the destruction of traditional values. Solid-to-vapor is an apt summary of the evanescence of value, financial and ethical, that has taken place throughout the great and ongoing financial crisis that commenced in 2007. The United States, the global evangelist for the benefits of creative destruction, has favored its own church. When governments of emerging markets complained that foreign investors were fearfully yanking capital from their markets during the Asian financial crisis of 1997, liberal democrats in the West told them that this was the way free markets worked. Now we prop up our own markets because it suits us to do so.

coin tossing Coleridge, Samuel Taylor collateralized default obligations (CDOs) collective model, of nucleus Collie, Max commodities communism: in South Africa The Communist Manifesto (Marx and Engels) complex numbers, theory of computer programs consciousness Consolidated Edison stock contempt content: Goethe’s view about method and method and contradictions control: purpose of models and theories and self- and theory of controlling engineering devices Cornell, Joseph Cornford, Francis corporate bonds corporate welfare corporations: bailouts of cosmology Coulomb, Charles creative destruction credit crisis (2007) credit markets curls: electromagnetic theory and currency/cash darkness: Goethe’s view about light and light and Darwin, Charles de Klerk, F. W. De Morgan, Augustus debt markets debt securities deduction Deleuze, Gilles deliciousness: analogy with risk democracy derivative emotions derivatives, financial Derman, Chaim (father) Derman, Emanuel: childhood and youth of education of in England eyesight of four questions of graduate education of moth in refrigerator example and professional background of quantum dream of Derman, Joshua (son) Derman, Sonia (mother) Derman, Sonya (daughter) Descartes, René desires: definition of disappointment and freedom and money and Spinoza’s emotions theory and will and desperation: love and devotion; Spinoza’s emotions theory and diagrams, Feynman diffusion Dirac Equation: analogies and bare and dressed electrons and Dirac wave function and as explanation of reality idea of electrons and impact on physics of intuition and knowledge and matter and metaphors and nature of models and nature of theories and positrons and quantum electrodynamics and Standard Model and as successful theory Dirac, Paul Dirac sea distance: measurement of divergences: electromagnetic theory and diversification domino computer dressed electrons drift Du Fay, Charles “Ducks Ditty” (song) Dyson, Freeman Earth: as magnet earthquakes: probability of economic models See also financial models; specific model Eddington, A.


pages: 403 words: 111,119

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth

"Friedman doctrine" OR "shareholder theory", 3D printing, Alan Greenspan, Alvin Toffler, Anthropocene, Asian financial crisis, bank run, basic income, battle of ideas, behavioural economics, benefit corporation, Berlin Wall, biodiversity loss, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Cass Sunstein, choice architecture, circular economy, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, degrowth, dematerialisation, disruptive innovation, Douglas Engelbart, Douglas Engelbart, Easter island, en.wikipedia.org, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, Future Shock, Garrett Hardin, Glass-Steagall Act, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, land reform, land value tax, Landlord’s Game, loss aversion, low interest rates, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, Minsky moment, mobile money, Money creation, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, ocean acidification, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, retail therapy, Richard Thaler, Robert Solow, Ronald Reagan, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, Steve Ballmer, systems thinking, TED Talk, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, Tragedy of the Commons, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons

‘Economists set themselves too easy, too useless a task,’ he wrote, ‘if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.’17 In the 1940s, Joseph Schumpeter drew on Marx’s insights into dynamism to describe how capitalism’s inherent process of ‘creative destruction’, through continual waves of innovation and decline, gave rise to business cycles.18 In the 1950s, Bill Phillips created his MONIAC precisely with the aim of replacing comparative statics with system dynamics, complete with the time lags and fluctuations that can be observed as water flows into and out of tanks.

Page numbers in italics denote illustrations A Aalborg, Denmark, 290 Abbott, Anthony ‘Tony’, 31 ABCD group, 148 Abramovitz, Moses, 262 absolute decoupling, 260–61 Acemoglu, Daron, 86 advertising, 58, 106–7, 112, 281 Agbodjinou, Sénamé, 231 agriculture, 5, 46, 72–3, 148, 155, 178, 181, 183 Alaska, 9 Alaska Permanent Fund, 194 Alperovitz, Gar, 177 alternative enterprise designs, 190–91 altruism, 100, 104 Amazon, 192, 196, 276 Amazon rainforest, 105–6, 253 American Economic Association, 3 American Enterprise Institute, 67 American Tobacco Corporation, 107 Andes, 54 animal spirits, 110 Anthropocene epoch, 48, 253 anthropocentrism, 115 Apertuso, 230 Apple, 85, 192 Archer Daniels Midland (ADM), 148 Arendt, Hannah, 115–16 Argentina, 55, 274 Aristotle, 32, 272 Arrow, Kenneth, 134 Articles of Association and Memoranda, 233 Arusha, Tanzania, 202 Asia Wage Floor Alliance, 177 Asian financial crisis (1997), 90 Asknature.org, 232 Athens, 57 austerity, 163 Australia, 31, 103, 177, 180, 211, 224–6, 255, 260 Austria, 263, 274 availability bias, 112 AXIOM, 230 Axtell, Robert, 150 Ayres, Robert, 263 B B Corp, 241 Babylon, 13 Baker, Josephine, 157 balancing feedback loops, 138–41, 155, 271 Ballmer, Steve, 231 Bangla Pesa, 185–6, 293 Bangladesh, 10, 226 Bank for International Settlements, 256 Bank of America, 149 Bank of England, 145, 147, 256 banking, see under finance Barnes, Peter, 201 Barroso, José Manuel, 41 Bartlett, Albert Allen ‘Al’, 247 basic income, 177, 194, 199–201 basic personal values, 107–9 Basle, Switzerland, 80 Bauwens, Michel, 197 Beckerman, Wilfred, 258 Beckham, David, 171 Beech-Nut Packing Company, 107 behavioural economics, 11, 111–14 behavioural psychology, 103, 128 Beinhocker, Eric, 158 Belgium, 236, 252 Bentham, Jeremy, 98 Benyus, Janine, 116, 218, 223–4, 227, 232, 237, 241 Berger, John, 12, 281 Berlin Wall, 141 Bermuda, 277 Bernanke, Ben, 146 Bernays, Edward, 107, 112, 281–3 Bhopal gas disaster (1984), 9 Bible, 19, 114, 151 Big Bang (1986), 87 billionaires, 171, 200, 289 biodiversity, 10, 46, 48–9, 52, 85, 115, 155, 208, 210, 242, 299 as common pool resource, 201 and land conversion, 49 and inequality, 172 and reforesting, 50 biomass, 73, 118, 210, 212, 221 biomimicry, 116, 218, 227, 229 bioplastic, 224, 293 Birmingham, West Midlands, 10 Black, Fischer, 100–101 Blair, Anthony ‘Tony’, 171 Blockchain, 187, 192 blood donation, 104, 118 Body Shop, The, 232–4 Bogotá, Colombia, 119 Bolivia, 54 Boston, Massachusetts, 3 Bowen, Alex, 261 Bowles, Sam, 104 Box, George, 22 Boyce, James, 209 Brasselberg, Jacob, 187 Brazil, 124, 226, 281, 290 bread riots, 89 Brisbane, Australia, 31 Brown, Gordon, 146 Brynjolfsson, Erik, 193, 194, 258 Buddhism, 54 buen vivir, 54 Bullitt Center, Seattle, 217 Bunge, 148 Burkina Faso, 89 Burmark, Lynell, 13 business, 36, 43, 68, 88–9 automation, 191–5, 237, 258, 278 boom and bust, 246 and circular economy, 212, 215–19, 220, 224, 227–30, 232–4, 292 and complementary currencies, 184–5, 292 and core economy, 80 and creative destruction, 142 and feedback loops, 148 and finance, 183, 184 and green growth, 261, 265, 269 and households, 63, 68 living metrics, 241 and market, 68, 88 micro-businesses, 9 and neoliberalism, 67, 87 ownership, 190–91 and political funding, 91–2, 171–2 and taxation, 23, 276–7 workers’ rights, 88, 91, 269 butterfly economy, 220–42 C C–ROADS (Climate Rapid Overview and Decision Support), 153 C40 network, 280 calculating man, 98 California, United States, 213, 224, 293 Cambodia, 254 Cameron, David, 41 Canada, 196, 255, 260, 281, 282 cancer, 124, 159, 196 Capital Institute, 236 carbon emissions, 49–50, 59, 75 and decoupling, 260, 266 and forests, 50, 52 and inequality, 58 reduction of, 184, 201, 213, 216–18, 223–7, 239–41, 260, 266 stock–flow dynamics, 152–4 taxation, 201, 213 Cargill, 148 Carney, Mark, 256 Caterpillar, 228 Catholic Church, 15, 19 Cato Institute, 67 Celts, 54 central banks, 6, 87, 145, 146, 147, 183, 184, 256 Chang, Ha-Joon, 82, 86, 90 Chaplin, Charlie, 157 Chiapas, Mexico, 121–2 Chicago Board Options Exchange (CBOE), 100–101 Chicago School, 34, 99 Chile, 7, 42 China, 1, 7, 48, 154, 289–90 automation, 193 billionaires, 200, 289 greenhouse gas emissions, 153 inequality, 164 Lake Erhai doughnut analysis, 56 open-source design, 196 poverty reduction, 151, 198 renewable energy, 239 tiered pricing, 213 Chinese Development Bank, 239 chrematistics, 32, 273 Christianity, 15, 19, 114, 151 cigarettes, 107, 124 circular economy, 220–42, 257 Circular Flow diagram, 19–20, 28, 62–7, 64, 70, 78, 87, 91, 92, 93, 262 Citigroup, 149 Citizen Reaction Study, 102 civil rights movement, 77 Cleveland, Ohio, 190 climate change, 1, 3, 5, 29, 41, 45–53, 63, 74, 75–6, 91, 141, 144, 201 circular economy, 239, 241–2 dynamics of, 152–5 and G20, 31 and GDP growth, 255, 256, 260, 280 and heuristics, 114 and human rights, 10 and values, 126 climate positive cities, 239 closed systems, 74 coffee, 221 cognitive bias, 112–14 Colander, David, 137 Colombia, 119 common-pool resources, 82–3, 181, 201–2 commons, 69, 82–4, 287 collaborative, 78, 83, 191, 195, 196, 264, 292 cultural, 83 digital, 82, 83, 192, 197, 281 and distribution, 164, 180, 181–2, 205, 267 Embedded Economy, 71, 73, 77–8, 82–4, 85, 92 knowledge, 197, 201–2, 204, 229, 231, 292 commons and money creation, see complementary currencies natural, 82, 83, 180, 181–2, 201, 265 and regeneration, 229, 242, 267, 292 and state, 85, 93, 197, 237 and systems, 160 tragedy of, 28, 62, 69, 82, 181 triumph of, 83 and values, 106, 108 Commons Trusts, 201 complementary currencies, 158, 182–8, 236, 292 complex systems, 28, 129–62 complexity science, 136–7 Consumer Reaction Study, 102 consumerism, 58, 102, 121, 280–84 cooking, 45, 80, 186 Coote, Anna, 278 Copenhagen, Denmark, 124 Copernicus, Nicolaus, 14–15 copyright, 195, 197, 204 core economy, 79–80 Corporate To Do List, 215–19 Costa Rica, 172 Council of Economic Advisers, US, 6, 37 Cox, Jo, 117 cradle to cradle, 224 creative destruction, 142 Cree, 282 Crompton, Tom, 125–6 cross-border flows, 89–90 crowdsourcing, 204 cuckoos, 32, 35, 36, 38, 40, 54, 60, 159, 244, 256, 271 currencies, 182–8, 236, 274, 292 D da Vinci, Leonardo, 13, 94–5 Dallas, Texas, 120 Daly, Herman, 74, 143, 271 Danish Nudging Network, 124 Darwin, Charles, 14 Debreu, Gerard, 134 debt, 37, 146–7, 172–3, 182–5, 247, 255, 269 decoupling, 193, 210, 258–62, 273 defeat device software, 216 deforestation, 49–50, 74, 208, 210 degenerative linear economy, 211–19, 222–3, 237 degrowth, 244 DeMartino, George, 161 democracy, 77, 171–2, 258 demurrage, 274 Denmark, 180, 275, 290 deregulation, 82, 87, 269 derivatives, 100–101, 149 Devas, Charles Stanton, 97 Dey, Suchitra, 178 Diamond, Jared, 154 diarrhoea, 5 differential calculus, 131, 132 digital revolution, 191–2, 264 diversify–select–amplify, 158 double spiral, 54 Doughnut model, 10–11, 11, 23–5, 44, 51 and aspiration, 58–9, 280–84 big picture, 28, 42, 61–93 distribution, 29, 52, 57, 58, 76, 93, 158, 163–205 ecological ceiling, 10, 11, 44, 45, 46, 49, 51, 218, 254, 295, 298 goal, 25–8, 31–60 and governance, 57, 59 growth agnosticism, 29–30, 243–85 human nature, 28–9, 94–128 and population, 57–8 regeneration, 29, 158, 206–42 social foundation, 10, 11, 44, 45, 49, 51, 58, 77, 174, 200, 254, 295–6 systems, 28, 129–62 and technology, 57, 59 Douglas, Margaret, 78–9 Dreyfus, Louis, 148 ‘Dumb and Dumber in Macroeconomics’ (Solow), 135 Durban, South Africa, 214 E Earning by Learning, 120 Earth-system science, 44–53, 115, 216, 288, 298 Easter Island, 154 Easterlin, Richard, 265–6 eBay, 105, 192 eco-literacy, 115 ecological ceiling, 10, 11, 44, 45, 46, 49, 51, 218, 254, 295, 298 Ecological Performance Standards, 241 Econ 101 course, 8, 77 Economics (Lewis), 114 Economics (Samuelson), 19–20, 63–7, 70, 74, 78, 86, 91, 92, 93, 262 Economy for the Common Good, 241 ecosystem services, 7, 116, 269 Ecuador, 54 education, 9, 43, 45, 50–52, 85, 169–70, 176, 200, 249, 279 economic, 8, 11, 18, 22, 24, 36, 287–93 environmental, 115, 239–40 girls’, 57, 124, 178, 198 online, 83, 197, 264, 290 pricing, 118–19 efficient market hypothesis, 28, 62, 68, 87 Egypt, 48, 89 Eisenstein, Charles, 116 electricity, 9, 45, 236, 240 and Bangla Pesa, 186 cars, 231 Ethereum, 187–8 and MONIAC, 75, 262 pricing, 118, 213 see also renewable energy Elizabeth II, Queen of the United Kingdom, 145 Ellen MacArthur Foundation, 220 Embedded Economy, 71–93, 263 business, 88–9 commons, 82–4 Earth, 72–6 economy, 77–8 finance, 86–8 household, 78–81 market, 81–2 power, 91–92 society, 76–7 state, 84–6 trade, 89–90 employment, 36, 37, 51, 142, 176 automation, 191–5, 237, 258, 278 labour ownership, 188–91 workers’ rights, 88, 90, 269 Empty World, 74 Engels, Friedrich, 88 environment and circular economy, 220–42, 257 conservation, 121–2 and degenerative linear economy, 211–19, 222–3 degradation, 5, 9, 10, 29, 44–53, 74, 154, 172, 196, 206–42 education on, 115, 239–40 externalities, 152 fair share, 216–17 and finance, 234–7 generosity, 218–19, 223–7 green growth, 41, 210, 243–85 nudging, 123–5 taxation and quotas, 213–14, 215 zero impact, 217–18, 238, 241 Environmental Dashboard, 240–41 environmental economics, 7, 11, 114–16 Environmental Kuznets Curve, 207–11, 241 environmental space, 54 Epstein, Joshua, 150 equilibrium theory, 134–62 Ethereum, 187–8 ethics, 160–62 Ethiopia, 9, 226, 254 Etsy, 105 Euclid, 13, 15 European Central Bank, 145, 275 European Commission, 41 European Union (EU), 92, 153, 210, 222, 255, 258 Evergreen Cooperatives, 190 Evergreen Direct Investing (EDI), 273 exogenous shocks, 141 exponential growth, 39, 246–85 externalities, 143, 152, 213 Exxon Valdez oil spill (1989), 9 F Facebook, 192 fair share, 216–17 Fama, Eugene, 68, 87 fascism, 234, 277 Federal Reserve, US, 87, 145, 146, 271, 282 feedback loops, 138–41, 143, 148, 155, 250, 271 feminist economics, 11, 78–81, 160 Ferguson, Thomas, 91–2 finance animal spirits, 110 bank runs, 139 Black–Scholes model, 100–101 boom and bust, 28–9, 110, 144–7 and Circular Flow, 63–4, 87 and complex systems, 134, 138, 139, 140, 141, 145–7 cross-border flows, 89 deregulation, 87 derivatives, 100–101, 149 and distribution, 169, 170, 173, 182–4, 198–9, 201 and efficient market hypothesis, 63, 68 and Embedded Economy, 71, 86–8 and financial-instability hypothesis, 87, 146 and GDP growth, 38 and media, 7–8 mobile banking, 199–200 and money creation, 87, 182–5 and regeneration, 227, 229, 234–7 in service to life, 159, 234–7 stakeholder finance, 190 and sustainability, 216, 235–6, 239 financial crisis (2008), 1–4, 5, 40, 63, 86, 141, 144, 278, 290 and efficient market hypothesis, 87 and equilibrium theory, 134, 145 and financial-instability hypothesis, 87 and inequality, 90, 170, 172, 175 and money creation, 182 and worker’s rights, 278 financial flows, 89 Financial Times, 183, 266, 289 financial-instability hypothesis, 87, 146 First Green Bank, 236 First World War (1914–18), 166, 170 Fisher, Irving, 183 fluid values, 102, 106–9 food, 3, 43, 45, 50, 54, 58, 59, 89, 198 food banks, 165 food price crisis (2007–8), 89, 90, 180 Ford, 277–8 foreign direct investment, 89 forest conservation, 121–2 fossil fuels, 59, 73, 75, 92, 212, 260, 263 Foundations of Economic Analysis (Samuelson), 17–18 Foxconn, 193 framing, 22–3 France, 43, 165, 196, 238, 254, 256, 281, 290 Frank, Robert, 100 free market, 33, 37, 67, 68, 70, 81–2, 86, 90 free open-source hardware (FOSH), 196–7 free open-source software (FOSS), 196 free trade, 70, 90 Freeman, Ralph, 18–19 freshwater cycle, 48–9 Freud, Sigmund, 107, 281 Friedman, Benjamin, 258 Friedman, Milton, 34, 62, 66–9, 84–5, 88, 99, 183, 232 Friends of the Earth, 54 Full World, 75 Fuller, Buckminster, 4 Fullerton, John, 234–6, 273 G G20, 31, 56, 276, 279–80 G77, 55 Gal, Orit, 141 Gandhi, Mohandas, 42, 293 Gangnam Style, 145 Gardens of Democracy, The (Liu & Hanauer), 158 gender equality, 45, 51–2, 57, 78–9, 85, 88, 118–19, 124, 171, 198 generosity, 218–19, 223–9 geometry, 13, 15 George, Henry, 149, 179 Georgescu-Roegen, Nicholas, 252 geothermal energy, 221 Gerhardt, Sue, 283 Germany, 2, 41, 100, 118, 165, 189, 211, 213, 254, 256, 260, 274 Gessel, Silvio, 274 Ghent, Belgium, 236 Gift Relationship, The (Titmuss), 118–19 Gigerenzer, Gerd, 112–14 Gintis, Herb, 104 GiveDirectly, 200 Glass–Steagall Act (1933), 87 Glennon, Roger, 214 Global Alliance for Tax Justice, 277 global material footprints, 210–11 Global Village Construction Set, 196 globalisation, 89 Goerner, Sally, 175–6 Goffmann, Erving, 22 Going for Growth, 255 golden rule, 91 Goldman Sachs, 149, 170 Gómez-Baggethun, Erik, 122 Goodall, Chris, 211 Goodwin, Neva, 79 Goody, Jade, 124 Google, 192 Gore, Albert ‘Al’, 172 Gorgons, 244, 256, 257, 266 graffiti, 15, 25, 287 Great Acceleration, 46, 253–4 Great Depression (1929–39), 37, 70, 170, 173, 183, 275, 277, 278 Great Moderation, 146 Greece, Ancient, 4, 13, 32, 48, 54, 56–7, 160, 244 green growth, 41, 210, 243–85 Greenham, Tony, 185 greenhouse gas emissions, 31, 46, 50, 75–6, 141, 152–4 and decoupling, 260, 266 and Environmental Kuznets Curve, 208, 210 and forests, 50, 52 and G20, 31 and inequality, 58 reduction of, 184, 201–2, 213, 216–18, 223–7, 239–41, 256, 259–60, 266, 298 stock–flow dynamics, 152–4 and taxation, 201, 213 Greenland, 141, 154 Greenpeace, 9 Greenspan, Alan, 87 Greenwich, London, 290 Grenoble, France, 281 Griffiths, Brian, 170 gross domestic product (GDP), 25, 31–2, 35–43, 57, 60, 84, 164 as cuckoo, 32, 35, 36, 38, 40, 54, 60, 159, 244, 256, 271 and Environmental Kuznets Curve, 207–11 and exponential growth, 39, 53, 246–85 and growth agnosticism, 29–30, 240, 243–85 and inequality, 173 and Kuznets Curve, 167, 173, 188–9 gross national product (GNP), 36–40 Gross World Product, 248 Grossman, Gene, 207–8, 210 ‘grow now, clean up later’, 207 Guatemala, 196 H Haifa, Israel, 120 Haldane, Andrew, 146 Han Dynasty, 154 Hanauer, Nick, 158 Hansen, Pelle, 124 Happy Planet Index, 280 Hardin, Garrett, 69, 83, 181 Harvard University, 2, 271, 290 von Hayek, Friedrich, 7–8, 62, 66, 67, 143, 156, 158 healthcare, 43, 50, 57, 85, 123, 125, 170, 176, 200, 269, 279 Heilbroner, Robert, 53 Henry VIII, King of England and Ireland, 180 Hepburn, Cameron, 261 Herbert Simon, 111 heuristics, 113–14, 118, 123 high-income countries growth, 30, 244–5, 254–72, 282 inequality, 165, 168, 169, 171 labour, 177, 188–9, 278 overseas development assistance (ODA), 198–9 resource intensive lifestyles, 46, 210–11 trade, 90 Hippocrates, 160 History of Economic Analysis (Schumpeter), 21 HIV/AIDS, 123 Holocene epoch, 46–8, 75, 115, 253 Homo economicus, 94–103, 109, 127–8 Homo sapiens, 38, 104, 130 Hong Kong, 180 household, 78 housing, 45, 59, 176, 182–3, 269 Howe, Geoffrey, 67 Hudson, Michael, 183 Human Development Index, 9, 279 human nature, 28 human rights, 10, 25, 45, 49, 50, 95, 214, 233 humanistic economics, 42 hydropower, 118, 260, 263 I Illinois, United States, 179–80 Imago Mundi, 13 immigration, 82, 199, 236, 266 In Defense of Economic Growth (Beckerman), 258 Inclusive Wealth Index, 280 income, 51, 79–80, 82, 88, 176–8, 188–91, 194, 199–201 India, 2, 9, 10, 42, 124, 164, 178, 196, 206–7, 242, 290 Indonesia, 90, 105–6, 164, 168, 200 Indus Valley civilisation, 48 inequality, 1, 5, 25, 41, 63, 81, 88, 91, 148–52, 209 and consumerism, 111 and democracy, 171 and digital revolution, 191–5 and distribution, 163–205 and environmental degradation, 172 and GDP growth, 173 and greenhouse gas emissions, 58 and intellectual property, 195–8 and Kuznets Curve, 29, 166–70, 173–4 and labour ownership, 188–91 and land ownership, 178–82 and money creation, 182–8 and social welfare, 171 Success to the Successful, 148, 149, 151, 166 inflation, 36, 248, 256, 275 insect pollination services, 7 Institute of Economic Affairs, 67 institutional economics, 11 intellectual property rights, 195–8, 204 interest, 36, 177, 182, 184, 275–6 Intergovernmental Panel on Climate Change, 25 International Monetary Fund (IMF), 170, 172, 173, 183, 255, 258, 271 Internet, 83–4, 89, 105, 192, 202, 264 Ireland, 277 Iroquois Onondaga Nation, 116 Israel, 100, 103, 120 Italy, 165, 196, 254 J Jackson, Tim, 58 Jakubowski, Marcin, 196 Jalisco, Mexico, 217 Japan, 168, 180, 211, 222, 254, 256, 263, 275 Jevons, William Stanley, 16, 97–8, 131, 132, 137, 142 John Lewis Partnership, 190 Johnson, Lyndon Baines, 37 Johnson, Mark, 38 Johnson, Todd, 191 JPMorgan Chase, 149, 234 K Kahneman, Daniel, 111 Kamkwamba, William, 202, 204 Kasser, Tim, 125–6 Keen, Steve, 146, 147 Kelly, Marjorie, 190–91, 233 Kennedy, John Fitzgerald, 37, 250 Kennedy, Paul, 279 Kenya, 118, 123, 180, 185–6, 199–200, 226, 292 Keynes, John Maynard, 7–8, 22, 66, 69, 134, 184, 251, 277–8, 284, 288 Kick It Over movement, 3, 289 Kingston, London, 290 Knight, Frank, 66, 99 knowledge commons, 202–4, 229, 292 Kokstad, South Africa, 56 Kondratieff waves, 246 Korzybski, Alfred, 22 Krueger, Alan, 207–8, 210 Kuhn, Thomas, 22 Kumhof, Michael, 172 Kuwait, 255 Kuznets, Simon, 29, 36, 39–40, 166–70, 173, 174, 175, 204, 207 KwaZulu Natal, South Africa, 56 L labour ownership, 188–91 Lake Erhai, Yunnan, 56 Lakoff, George, 23, 38, 276 Lamelara, Indonesia, 105–6 land conversion, 49, 52, 299 land ownership, 178–82 land-value tax, 73, 149, 180 Landesa, 178 Landlord’s Game, The, 149 law of demand, 16 laws of motion, 13, 16–17, 34, 129, 131 Lehman Brothers, 141 Leopold, Aldo, 115 Lesotho, 118, 199 leverage points, 159 Lewis, Fay, 178 Lewis, Justin, 102 Lewis, William Arthur, 114, 167 Lietaer, Bernard, 175, 236 Limits to Growth, 40, 154, 258 Linux, 231 Liu, Eric, 158 living metrics, 240–42 living purpose, 233–4 Lomé, Togo, 231 London School of Economics (LSE), 2, 34, 65, 290 London Underground, 12 loss aversion, 112 low-income countries, 90, 164–5, 168, 173, 180, 199, 201, 209, 226, 254, 259 Lucas, Robert, 171 Lula da Silva, Luiz Inácio, 124 Luxembourg, 277 Lyle, John Tillman, 214 Lyons, Oren, 116 M M–PESA, 199–200 MacDonald, Tim, 273 Machiguenga, 105–6 MacKenzie, Donald, 101 macroeconomics, 36, 62–6, 76, 80, 134–5, 145, 147, 150, 244, 280 Magie, Elizabeth, 149, 153 Malala effect, 124 malaria, 5 Malawi, 118, 202, 204 Malaysia, 168 Mali, Taylor, 243 Malthus, Thomas, 252 Mamsera Rural Cooperative, 190 Manhattan, New York, 9, 41 Mani, Muthukumara, 206 Manitoba, 282 Mankiw, Gregory, 2, 34 Mannheim, Karl, 22 Maoris, 54 market, 81–2 and business, 88 circular flow, 64 and commons, 83, 93, 181, 200–201 efficiency of, 28, 62, 68, 87, 148, 181 and equilibrium theory, 131–5, 137, 143–7, 155, 156 free market, 33, 37, 67–70, 90, 208 and households, 63, 69, 78, 79 and maxi-max rule, 161 and pricing, 117–23, 131, 160 and rational economic man, 96, 100–101, 103, 104 and reciprocity, 105, 106 reflexivity of, 144–7 and society, 69–70 and state, 84–6, 200, 281 Marshall, Alfred, 17, 98, 133, 165, 253, 282 Marx, Karl, 88, 142, 165, 272 Massachusetts Institute of Technology (MIT), 17–20, 152–5 massive open online courses (MOOCs), 290 Matthew Effect, 151 Max-Neef, Manfred, 42 maxi-max rule, 161 maximum wage, 177 Maya civilisation, 48, 154 Mazzucato, Mariana, 85, 195, 238 McAfee, Andrew, 194, 258 McDonough, William, 217 Meadows, Donella, 40, 141, 159, 271, 292 Medusa, 244, 257, 266 Merkel, Angela, 41 Messerli, Elspeth, 187 Metaphors We Live By (Lakoff & Johnson), 38 Mexico, 121–2, 217 Michaels, Flora S., 6 micro-businesses, 9, 173, 178 microeconomics, 132–4 microgrids, 187–8 Micronesia, 153 Microsoft, 231 middle class, 6, 46, 58 middle-income countries, 90, 164, 168, 173, 180, 226, 254 migration, 82, 89–90, 166, 195, 199, 236, 266, 286 Milanovic, Branko, 171 Mill, John Stuart, 33–4, 73, 97, 250, 251, 283, 284, 288 Millo, Yuval, 101 minimum wage, 82, 88, 176 Minsky, Hyman, 87, 146 Mises, Ludwig von, 66 mission zero, 217 mobile banking, 199–200 mobile phones, 222 Model T revolution, 277–8 Moldova, 199 Mombasa, Kenya, 185–6 Mona Lisa (da Vinci), 94 money creation, 87, 164, 177, 182–8, 205 MONIAC (Monetary National Income Analogue Computer), 64–5, 75, 142, 262 Monoculture (Michaels), 6 Monopoly, 149 Mont Pelerin Society, 67, 93 Moral Consequences of Economic Growth, The (Friedman), 258 moral vacancy, 41 Morgan, Mary, 99 Morogoro, Tanzania, 121 Moyo, Dambisa, 258 Muirhead, Sam, 230, 231 MultiCapital Scorecard, 241 Murphy, David, 264 Murphy, Richard, 185 musical tastes, 110 Myriad Genetics, 196 N national basic income, 177 Native Americans, 115, 116, 282 natural capital, 7, 116, 269 Natural Economic Order, The (Gessel), 274 Nedbank, 216 negative externalities, 213 negative interest rates, 275–6 neoclassical economics, 134, 135 neoliberalism, 7, 62–3, 67–70, 81, 83, 84, 88, 93, 143, 170, 176 Nepal, 181, 199 Nestlé, 217 Netherlands, 211, 235, 224, 226, 238, 277 networks, 110–11, 117, 118, 123, 124–6, 174–6 neuroscience, 12–13 New Deal, 37 New Economics Foundation, 278, 283 New Year’s Day, 124 New York, United States, 9, 41, 55 Newlight Technologies, 224, 226, 293 Newton, Isaac, 13, 15–17, 32–3, 95, 97, 129, 131, 135–7, 142, 145, 162 Nicaragua, 196 Nigeria, 164 nitrogen, 49, 52, 212–13, 216, 218, 221, 226, 298 ‘no pain, no gain’, 163, 167, 173, 204, 209 Nobel Prize, 6–7, 43, 83, 101, 167 Norway, 281 nudging, 112, 113, 114, 123–6 O Obama, Barack, 41, 92 Oberlin, Ohio, 239, 240–41 Occupy movement, 40, 91 ocean acidification, 45, 46, 52, 155, 242, 298 Ohio, United States, 190, 239 Okun, Arthur, 37 onwards and upwards, 53 Open Building Institute, 196 Open Source Circular Economy (OSCE), 229–32 open systems, 74 open-source design, 158, 196–8, 265 open-source licensing, 204 Organisation for Economic Co-operation and Development (OECD), 38, 210, 255–6, 258 Origin of Species, The (Darwin), 14 Ormerod, Paul, 110, 111 Orr, David, 239 Ostrom, Elinor, 83, 84, 158, 160, 181–2 Ostry, Jonathan, 173 OSVehicle, 231 overseas development assistance (ODA), 198–200 ownership of wealth, 177–82 Oxfam, 9, 44 Oxford University, 1, 36 ozone layer, 9, 50, 115 P Pachamama, 54, 55 Pakistan, 124 Pareto, Vilfredo, 165–6, 175 Paris, France, 290 Park 20|20, Netherlands, 224, 226 Parker Brothers, 149 Patagonia, 56 patents, 195–6, 197, 204 patient capital, 235 Paypal, 192 Pearce, Joshua, 197, 203–4 peer-to-peer networks, 187, 192, 198, 203, 292 People’s QE, 184–5 Perseus, 244 Persia, 13 Peru, 2, 105–6 Phillips, Adam, 283 Phillips, William ‘Bill’, 64–6, 75, 142, 262 phosphorus, 49, 52, 212–13, 218, 298 Physiocrats, 73 Pickett, Kate, 171 pictures, 12–25 Piketty, Thomas, 169 Playfair, William, 16 Poincaré, Henri, 109, 127–8 Polanyi, Karl, 82, 272 political economy, 33–4, 42 political funding, 91–2, 171–2 political voice, 43, 45, 51–2, 77, 117 pollution, 29, 45, 52, 85, 143, 155, 206–17, 226, 238, 242, 254, 298 population, 5, 46, 57, 155, 199, 250, 252, 254 Portugal, 211 post-growth society, 250 poverty, 5, 9, 37, 41, 50, 88, 118, 148, 151 emotional, 283 and inequality, 164–5, 168–9, 178 and overseas development assistance (ODA), 198–200 and taxation, 277 power, 91–92 pre-analytic vision, 21–2 prescription medicines, 123 price-takers, 132 prices, 81, 118–23, 131, 160 Principles of Economics (Mankiw), 34 Principles of Economics (Marshall), 17, 98 Principles of Political Economy (Mill), 288 ProComposto, 226 Propaganda (Bernays), 107 public relations, 107, 281 public spending v. investment, 276 public–private patents, 195 Putnam, Robert, 76–7 Q quantitative easing (QE), 184–5 Quebec, 281 Quesnay, François, 16, 73 R Rabot, Ghent, 236 Rancière, Romain, 172 rating and review systems, 105 rational economic man, 94–103, 109, 111, 112, 126, 282 Reagan, Ronald, 67 reciprocity, 103–6, 117, 118, 123 reflexivity of markets, 144 reinforcing feedback loops, 138–41, 148, 250, 271 relative decoupling, 259 renewable energy biomass energy, 118, 221 and circular economy, 221, 224, 226, 235, 238–9, 274 and commons, 83, 85, 185, 187–8, 192, 203, 264 geothermal energy, 221 and green growth, 257, 260, 263, 264, 267 hydropower, 118, 260, 263 pricing, 118 solar energy, see solar energy wave energy, 221 wind energy, 75, 118, 196, 202–3, 221, 233, 239, 260, 263 rentier sector, 180, 183, 184 reregulation, 82, 87, 269 resource flows, 175 resource-intensive lifestyles, 46 Rethinking Economics, 289 Reynebeau, Guy, 237 Ricardo, David, 67, 68, 73, 89, 250 Richardson, Katherine, 53 Rifkin, Jeremy, 83, 264–5 Rise and Fall of the Great Powers, The (Kennedy), 279 risk, 112, 113–14 Robbins, Lionel, 34 Robinson, James, 86 Robinson, Joan, 142 robots, 191–5, 237, 258, 278 Rockefeller Foundation, 135 Rockford, Illinois, 179–80 Rockström, Johan, 48, 55 Roddick, Anita, 232–4 Rogoff, Kenneth, 271, 280 Roman Catholic Church, 15, 19 Rombo, Tanzania, 190 Rome, Ancient, 13, 48, 154 Romney, Mitt, 92 Roosevelt, Franklin Delano, 37 rooted membership, 190 Rostow, Walt, 248–50, 254, 257, 267–70, 284 Ruddick, Will, 185 rule of thumb, 113–14 Ruskin, John, 42, 223 Russia, 200 rust belt, 90, 239 S S curve, 251–6 Sainsbury’s, 56 Samuelson, Paul, 17–21, 24–5, 38, 62–7, 70, 74, 84, 91, 92, 93, 262, 290–91 Sandel, Michael, 41, 120–21 Sanergy, 226 sanitation, 5, 51, 59 Santa Fe, California, 213 Santinagar, West Bengal, 178 São Paolo, Brazil, 281 Sarkozy, Nicolas, 43 Saumweder, Philipp, 226 Scharmer, Otto, 115 Scholes, Myron, 100–101 Schumacher, Ernst Friedrich, 42, 142 Schumpeter, Joseph, 21 Schwartz, Shalom, 107–9 Schwarzenegger, Arnold, 163, 167, 204 ‘Science and Complexity’ (Weaver), 136 Scotland, 57 Seaman, David, 187 Seattle, Washington, 217 second machine age, 258 Second World War (1939–45), 18, 37, 70, 170 secular stagnation, 256 self-interest, 28, 68, 96–7, 99–100, 102–3 Selfish Society, The (Gerhardt), 283 Sen, Amartya, 43 Shakespeare, William, 61–3, 67, 93 shale gas, 264, 269 Shang Dynasty, 48 shareholders, 82, 88, 189, 191, 227, 234, 273, 292 sharing economy, 264 Sheraton Hotel, Boston, 3 Siegen, Germany, 290 Silicon Valley, 231 Simon, Julian, 70 Sinclair, Upton, 255 Sismondi, Jean, 42 slavery, 33, 77, 161 Slovenia, 177 Small Is Beautiful (Schumacher), 42 smart phones, 85 Smith, Adam, 33, 57, 67, 68, 73, 78–9, 81, 96–7, 103–4, 128, 133, 160, 181, 250 social capital, 76–7, 122, 125, 172 social contract, 120, 125 social foundation, 10, 11, 44, 45, 49, 51, 58, 77, 174, 200, 254, 295–6 social media, 83, 281 Social Progress Index, 280 social pyramid, 166 society, 76–7 solar energy, 59, 75, 111, 118, 187–8, 190 circular economy, 221, 222, 223, 224, 226–7, 239 commons, 203 zero-energy buildings, 217 zero-marginal-cost revolution, 84 Solow, Robert, 135, 150, 262–3 Soros, George, 144 South Africa, 56, 177, 214, 216 South Korea, 90, 168 South Sea Bubble (1720), 145 Soviet Union (1922–91), 37, 67, 161, 279 Spain, 211, 238, 256 Spirit Level, The (Wilkinson & Pickett), 171 Sraffa, Piero, 148 St Gallen, Switzerland, 186 Stages of Economic Growth, The (Rostow), 248–50, 254 stakeholder finance, 190 Standish, Russell, 147 state, 28, 33, 69–70, 78, 82, 160, 176, 180, 182–4, 188 and commons, 85, 93, 197, 237 and market, 84–6, 200, 281 partner state, 197, 237–9 and robots, 195 stationary state, 250 Steffen, Will, 46, 48 Sterman, John, 66, 143, 152–4 Steuart, James, 33 Stiglitz, Joseph, 43, 111, 196 stocks and flows, 138–41, 143, 144, 152 sub-prime mortgages, 141 Success to the Successful, 148, 149, 151, 166 Sugarscape, 150–51 Summers, Larry, 256 Sumner, Andy, 165 Sundrop Farms, 224–6 Sunstein, Cass, 112 supply and demand, 28, 132–6, 143, 253 supply chains, 10 Sweden, 6, 255, 275, 281 swishing, 264 Switzerland, 42, 66, 80, 131, 186–7, 275 T Tableau économique (Quesnay), 16 tabula rasa, 20, 25, 63, 291 takarangi, 54 Tanzania, 121, 190, 202 tar sands, 264, 269 taxation, 78, 111, 165, 170, 176, 177, 237–8, 276–9 annual wealth tax, 200 environment, 213–14, 215 global carbon tax, 201 global financial transactions tax, 201, 235 land-value tax, 73, 149, 180 non-renewable resources, 193, 237–8, 278–9 People’s QE, 185 tax relief v. tax justice, 23, 276–7 TED (Technology, Entertainment, Design), 202, 258 Tempest, The (Shakespeare), 61, 63, 93 Texas, United States, 120 Thailand, 90, 200 Thaler, Richard, 112 Thatcher, Margaret, 67, 69, 76 Theory of Moral Sentiments (Smith), 96 Thompson, Edward Palmer, 180 3D printing, 83–4, 192, 198, 231, 264 thriving-in-balance, 54–7, 62 tiered pricing, 213–14 Tigray, Ethiopia, 226 time banking, 186 Titmuss, Richard, 118–19 Toffler, Alvin, 12, 80 Togo, 231, 292 Torekes, 236–7 Torras, Mariano, 209 Torvalds, Linus, 231 trade, 62, 68–9, 70, 89–90 trade unions, 82, 176, 189 trademarks, 195, 204 Transatlantic Trade and Investment Partnership (TTIP), 92 transport, 59 trickle-down economics, 111, 170 Triodos, 235 Turkey, 200 Tversky, Amos, 111 Twain, Mark, 178–9 U Uganda, 118, 125 Ulanowicz, Robert, 175 Ultimatum Game, 105, 117 unemployment, 36, 37, 276, 277–9 United Kingdom Big Bang (1986), 87 blood donation, 118 carbon dioxide emissions, 260 free trade, 90 global material footprints, 211 money creation, 182 MONIAC (Monetary National Income Analogue Computer), 64–5, 75, 142, 262 New Economics Foundation, 278, 283 poverty, 165, 166 prescription medicines, 123 wages, 188 United Nations, 55, 198, 204, 255, 258, 279 G77 bloc, 55 Human Development Index, 9, 279 Sustainable Development Goals, 24, 45 United States American Economic Association meeting (2015), 3 blood donation, 118 carbon dioxide emissions, 260 Congress, 36 Council of Economic Advisers, 6, 37 Earning by Learning, 120 Econ 101 course, 8, 77 Exxon Valdez oil spill (1989), 9 Federal Reserve, 87, 145, 146, 271, 282 free trade, 90 Glass–Steagall Act (1933), 87 greenhouse gas emissions, 153 global material footprint, 211 gross national product (GNP), 36–40 inequality, 170, 171 land-value tax, 73, 149, 180 political funding, 91–2, 171 poverty, 165, 166 productivity and employment, 193 rust belt, 90, 239 Transatlantic Trade and Investment Partnership (TTIP), 92 wages, 188 universal basic income, 200 University of Berkeley, 116 University of Denver, 160 urbanisation, 58–9 utility, 35, 98, 133 V values, 6, 23, 34, 35, 42, 117, 118, 121, 123–6 altruism, 100, 104 anthropocentric, 115 extrinsic, 115 fluid, 28, 102, 106–9 and networks, 110–11, 117, 118, 123, 124–6 and nudging, 112, 113, 114, 123–6 and pricing, 81, 120–23 Veblen, Thorstein, 82, 109, 111, 142 Venice, 195 verbal framing, 23 Verhulst, Pierre, 252 Victor, Peter, 270 Viner, Jacob, 34 virtuous cycles, 138, 148 visual framing, 23 Vitruvian Man, 13–14 Volkswagen, 215–16 W Wacharia, John, 186 Wall Street, 149, 234, 273 Wallich, Henry, 282 Walras, Léon, 131, 132, 133–4, 137 Ward, Barbara, 53 Warr, Benjamin, 263 water, 5, 9, 45, 46, 51, 54, 59, 79, 213–14 wave energy, 221 Ways of Seeing (Berger), 12, 281 Wealth of Nations, The (Smith), 74, 78, 96, 104 wealth ownership, 177–82 Weaver, Warren, 135–6 weightless economy, 261–2 WEIRD (Western, educated, industrialised, rich, democratic), 103–5, 110, 112, 115, 117, 282 West Bengal, India, 124, 178 West, Darrell, 171–2 wetlands, 7 whale hunting, 106 Wiedmann, Tommy, 210 Wikipedia, 82, 223 Wilkinson, Richard, 171 win–win trade, 62, 68, 89 wind energy, 75, 118, 196, 202–3, 221, 233, 239, 260, 263 Wizard of Oz, The, 241 Woelab, 231, 293 Wolf, Martin, 183, 266 women’s rights, 33, 57, 107, 160, 201 and core economy, 69, 79–81 education, 57, 124, 178, 198 and land ownership, 178 see also gender equality workers’ rights, 88, 91, 269 World 3 model, 154–5 World Bank, 6, 41, 119, 164, 168, 171, 206, 255, 258 World No Tobacco Day, 124 World Trade Organization, 6, 89 worldview, 22, 54, 115 X xenophobia, 266, 277, 286 Xenophon, 4, 32, 56–7, 160 Y Yandle, Bruce, 208 Yang, Yuan, 1–3, 289–90 yin yang, 54 Yousafzai, Malala, 124 YouTube, 192 Yunnan, China, 56 Z Zambia, 10 Zanzibar, 9 Zara, 276 Zeitvorsoge, 186–7 zero environmental impact, 217–18, 238, 241 zero-hour contracts, 88 zero-humans-required production, 192 zero-interest loans, 183 zero-marginal-cost revolution, 84, 191, 264 zero-waste manufacturing, 227 Zinn, Howard, 77 PICTURE ACKNOWLEDGEMENTS Illustrations are reproduced by kind permission of: archive.org

Page numbers in italics denote illustrations A Aalborg, Denmark, 290 Abbott, Anthony ‘Tony’, 31 ABCD group, 148 Abramovitz, Moses, 262 absolute decoupling, 260–61 Acemoglu, Daron, 86 advertising, 58, 106–7, 112, 281 Agbodjinou, Sénamé, 231 agriculture, 5, 46, 72–3, 148, 155, 178, 181, 183 Alaska, 9 Alaska Permanent Fund, 194 Alperovitz, Gar, 177 alternative enterprise designs, 190–91 altruism, 100, 104 Amazon, 192, 196, 276 Amazon rainforest, 105–6, 253 American Economic Association, 3 American Enterprise Institute, 67 American Tobacco Corporation, 107 Andes, 54 animal spirits, 110 Anthropocene epoch, 48, 253 anthropocentrism, 115 Apertuso, 230 Apple, 85, 192 Archer Daniels Midland (ADM), 148 Arendt, Hannah, 115–16 Argentina, 55, 274 Aristotle, 32, 272 Arrow, Kenneth, 134 Articles of Association and Memoranda, 233 Arusha, Tanzania, 202 Asia Wage Floor Alliance, 177 Asian financial crisis (1997), 90 Asknature.org, 232 Athens, 57 austerity, 163 Australia, 31, 103, 177, 180, 211, 224–6, 255, 260 Austria, 263, 274 availability bias, 112 AXIOM, 230 Axtell, Robert, 150 Ayres, Robert, 263 B B Corp, 241 Babylon, 13 Baker, Josephine, 157 balancing feedback loops, 138–41, 155, 271 Ballmer, Steve, 231 Bangla Pesa, 185–6, 293 Bangladesh, 10, 226 Bank for International Settlements, 256 Bank of America, 149 Bank of England, 145, 147, 256 banking, see under finance Barnes, Peter, 201 Barroso, José Manuel, 41 Bartlett, Albert Allen ‘Al’, 247 basic income, 177, 194, 199–201 basic personal values, 107–9 Basle, Switzerland, 80 Bauwens, Michel, 197 Beckerman, Wilfred, 258 Beckham, David, 171 Beech-Nut Packing Company, 107 behavioural economics, 11, 111–14 behavioural psychology, 103, 128 Beinhocker, Eric, 158 Belgium, 236, 252 Bentham, Jeremy, 98 Benyus, Janine, 116, 218, 223–4, 227, 232, 237, 241 Berger, John, 12, 281 Berlin Wall, 141 Bermuda, 277 Bernanke, Ben, 146 Bernays, Edward, 107, 112, 281–3 Bhopal gas disaster (1984), 9 Bible, 19, 114, 151 Big Bang (1986), 87 billionaires, 171, 200, 289 biodiversity, 10, 46, 48–9, 52, 85, 115, 155, 208, 210, 242, 299 as common pool resource, 201 and land conversion, 49 and inequality, 172 and reforesting, 50 biomass, 73, 118, 210, 212, 221 biomimicry, 116, 218, 227, 229 bioplastic, 224, 293 Birmingham, West Midlands, 10 Black, Fischer, 100–101 Blair, Anthony ‘Tony’, 171 Blockchain, 187, 192 blood donation, 104, 118 Body Shop, The, 232–4 Bogotá, Colombia, 119 Bolivia, 54 Boston, Massachusetts, 3 Bowen, Alex, 261 Bowles, Sam, 104 Box, George, 22 Boyce, James, 209 Brasselberg, Jacob, 187 Brazil, 124, 226, 281, 290 bread riots, 89 Brisbane, Australia, 31 Brown, Gordon, 146 Brynjolfsson, Erik, 193, 194, 258 Buddhism, 54 buen vivir, 54 Bullitt Center, Seattle, 217 Bunge, 148 Burkina Faso, 89 Burmark, Lynell, 13 business, 36, 43, 68, 88–9 automation, 191–5, 237, 258, 278 boom and bust, 246 and circular economy, 212, 215–19, 220, 224, 227–30, 232–4, 292 and complementary currencies, 184–5, 292 and core economy, 80 and creative destruction, 142 and feedback loops, 148 and finance, 183, 184 and green growth, 261, 265, 269 and households, 63, 68 living metrics, 241 and market, 68, 88 micro-businesses, 9 and neoliberalism, 67, 87 ownership, 190–91 and political funding, 91–2, 171–2 and taxation, 23, 276–7 workers’ rights, 88, 91, 269 butterfly economy, 220–42 C C–ROADS (Climate Rapid Overview and Decision Support), 153 C40 network, 280 calculating man, 98 California, United States, 213, 224, 293 Cambodia, 254 Cameron, David, 41 Canada, 196, 255, 260, 281, 282 cancer, 124, 159, 196 Capital Institute, 236 carbon emissions, 49–50, 59, 75 and decoupling, 260, 266 and forests, 50, 52 and inequality, 58 reduction of, 184, 201, 213, 216–18, 223–7, 239–41, 260, 266 stock–flow dynamics, 152–4 taxation, 201, 213 Cargill, 148 Carney, Mark, 256 Caterpillar, 228 Catholic Church, 15, 19 Cato Institute, 67 Celts, 54 central banks, 6, 87, 145, 146, 147, 183, 184, 256 Chang, Ha-Joon, 82, 86, 90 Chaplin, Charlie, 157 Chiapas, Mexico, 121–2 Chicago Board Options Exchange (CBOE), 100–101 Chicago School, 34, 99 Chile, 7, 42 China, 1, 7, 48, 154, 289–90 automation, 193 billionaires, 200, 289 greenhouse gas emissions, 153 inequality, 164 Lake Erhai doughnut analysis, 56 open-source design, 196 poverty reduction, 151, 198 renewable energy, 239 tiered pricing, 213 Chinese Development Bank, 239 chrematistics, 32, 273 Christianity, 15, 19, 114, 151 cigarettes, 107, 124 circular economy, 220–42, 257 Circular Flow diagram, 19–20, 28, 62–7, 64, 70, 78, 87, 91, 92, 93, 262 Citigroup, 149 Citizen Reaction Study, 102 civil rights movement, 77 Cleveland, Ohio, 190 climate change, 1, 3, 5, 29, 41, 45–53, 63, 74, 75–6, 91, 141, 144, 201 circular economy, 239, 241–2 dynamics of, 152–5 and G20, 31 and GDP growth, 255, 256, 260, 280 and heuristics, 114 and human rights, 10 and values, 126 climate positive cities, 239 closed systems, 74 coffee, 221 cognitive bias, 112–14 Colander, David, 137 Colombia, 119 common-pool resources, 82–3, 181, 201–2 commons, 69, 82–4, 287 collaborative, 78, 83, 191, 195, 196, 264, 292 cultural, 83 digital, 82, 83, 192, 197, 281 and distribution, 164, 180, 181–2, 205, 267 Embedded Economy, 71, 73, 77–8, 82–4, 85, 92 knowledge, 197, 201–2, 204, 229, 231, 292 commons and money creation, see complementary currencies natural, 82, 83, 180, 181–2, 201, 265 and regeneration, 229, 242, 267, 292 and state, 85, 93, 197, 237 and systems, 160 tragedy of, 28, 62, 69, 82, 181 triumph of, 83 and values, 106, 108 Commons Trusts, 201 complementary currencies, 158, 182–8, 236, 292 complex systems, 28, 129–62 complexity science, 136–7 Consumer Reaction Study, 102 consumerism, 58, 102, 121, 280–84 cooking, 45, 80, 186 Coote, Anna, 278 Copenhagen, Denmark, 124 Copernicus, Nicolaus, 14–15 copyright, 195, 197, 204 core economy, 79–80 Corporate To Do List, 215–19 Costa Rica, 172 Council of Economic Advisers, US, 6, 37 Cox, Jo, 117 cradle to cradle, 224 creative destruction, 142 Cree, 282 Crompton, Tom, 125–6 cross-border flows, 89–90 crowdsourcing, 204 cuckoos, 32, 35, 36, 38, 40, 54, 60, 159, 244, 256, 271 currencies, 182–8, 236, 274, 292 D da Vinci, Leonardo, 13, 94–5 Dallas, Texas, 120 Daly, Herman, 74, 143, 271 Danish Nudging Network, 124 Darwin, Charles, 14 Debreu, Gerard, 134 debt, 37, 146–7, 172–3, 182–5, 247, 255, 269 decoupling, 193, 210, 258–62, 273 defeat device software, 216 deforestation, 49–50, 74, 208, 210 degenerative linear economy, 211–19, 222–3, 237 degrowth, 244 DeMartino, George, 161 democracy, 77, 171–2, 258 demurrage, 274 Denmark, 180, 275, 290 deregulation, 82, 87, 269 derivatives, 100–101, 149 Devas, Charles Stanton, 97 Dey, Suchitra, 178 Diamond, Jared, 154 diarrhoea, 5 differential calculus, 131, 132 digital revolution, 191–2, 264 diversify–select–amplify, 158 double spiral, 54 Doughnut model, 10–11, 11, 23–5, 44, 51 and aspiration, 58–9, 280–84 big picture, 28, 42, 61–93 distribution, 29, 52, 57, 58, 76, 93, 158, 163–205 ecological ceiling, 10, 11, 44, 45, 46, 49, 51, 218, 254, 295, 298 goal, 25–8, 31–60 and governance, 57, 59 growth agnosticism, 29–30, 243–85 human nature, 28–9, 94–128 and population, 57–8 regeneration, 29, 158, 206–42 social foundation, 10, 11, 44, 45, 49, 51, 58, 77, 174, 200, 254, 295–6 systems, 28, 129–62 and technology, 57, 59 Douglas, Margaret, 78–9 Dreyfus, Louis, 148 ‘Dumb and Dumber in Macroeconomics’ (Solow), 135 Durban, South Africa, 214 E Earning by Learning, 120 Earth-system science, 44–53, 115, 216, 288, 298 Easter Island, 154 Easterlin, Richard, 265–6 eBay, 105, 192 eco-literacy, 115 ecological ceiling, 10, 11, 44, 45, 46, 49, 51, 218, 254, 295, 298 Ecological Performance Standards, 241 Econ 101 course, 8, 77 Economics (Lewis), 114 Economics (Samuelson), 19–20, 63–7, 70, 74, 78, 86, 91, 92, 93, 262 Economy for the Common Good, 241 ecosystem services, 7, 116, 269 Ecuador, 54 education, 9, 43, 45, 50–52, 85, 169–70, 176, 200, 249, 279 economic, 8, 11, 18, 22, 24, 36, 287–93 environmental, 115, 239–40 girls’, 57, 124, 178, 198 online, 83, 197, 264, 290 pricing, 118–19 efficient market hypothesis, 28, 62, 68, 87 Egypt, 48, 89 Eisenstein, Charles, 116 electricity, 9, 45, 236, 240 and Bangla Pesa, 186 cars, 231 Ethereum, 187–8 and MONIAC, 75, 262 pricing, 118, 213 see also renewable energy Elizabeth II, Queen of the United Kingdom, 145 Ellen MacArthur Foundation, 220 Embedded Economy, 71–93, 263 business, 88–9 commons, 82–4 Earth, 72–6 economy, 77–8 finance, 86–8 household, 78–81 market, 81–2 power, 91–92 society, 76–7 state, 84–6 trade, 89–90 employment, 36, 37, 51, 142, 176 automation, 191–5, 237, 258, 278 labour ownership, 188–91 workers’ rights, 88, 90, 269 Empty World, 74 Engels, Friedrich, 88 environment and circular economy, 220–42, 257 conservation, 121–2 and degenerative linear economy, 211–19, 222–3 degradation, 5, 9, 10, 29, 44–53, 74, 154, 172, 196, 206–42 education on, 115, 239–40 externalities, 152 fair share, 216–17 and finance, 234–7 generosity, 218–19, 223–7 green growth, 41, 210, 243–85 nudging, 123–5 taxation and quotas, 213–14, 215 zero impact, 217–18, 238, 241 Environmental Dashboard, 240–41 environmental economics, 7, 11, 114–16 Environmental Kuznets Curve, 207–11, 241 environmental space, 54 Epstein, Joshua, 150 equilibrium theory, 134–62 Ethereum, 187–8 ethics, 160–62 Ethiopia, 9, 226, 254 Etsy, 105 Euclid, 13, 15 European Central Bank, 145, 275 European Commission, 41 European Union (EU), 92, 153, 210, 222, 255, 258 Evergreen Cooperatives, 190 Evergreen Direct Investing (EDI), 273 exogenous shocks, 141 exponential growth, 39, 246–85 externalities, 143, 152, 213 Exxon Valdez oil spill (1989), 9 F Facebook, 192 fair share, 216–17 Fama, Eugene, 68, 87 fascism, 234, 277 Federal Reserve, US, 87, 145, 146, 271, 282 feedback loops, 138–41, 143, 148, 155, 250, 271 feminist economics, 11, 78–81, 160 Ferguson, Thomas, 91–2 finance animal spirits, 110 bank runs, 139 Black–Scholes model, 100–101 boom and bust, 28–9, 110, 144–7 and Circular Flow, 63–4, 87 and complex systems, 134, 138, 139, 140, 141, 145–7 cross-border flows, 89 deregulation, 87 derivatives, 100–101, 149 and distribution, 169, 170, 173, 182–4, 198–9, 201 and efficient market hypothesis, 63, 68 and Embedded Economy, 71, 86–8 and financial-instability hypothesis, 87, 146 and GDP growth, 38 and media, 7–8 mobile banking, 199–200 and money creation, 87, 182–5 and regeneration, 227, 229, 234–7 in service to life, 159, 234–7 stakeholder finance, 190 and sustainability, 216, 235–6, 239 financial crisis (2008), 1–4, 5, 40, 63, 86, 141, 144, 278, 290 and efficient market hypothesis, 87 and equilibrium theory, 134, 145 and financial-instability hypothesis, 87 and inequality, 90, 170, 172, 175 and money creation, 182 and worker’s rights, 278 financial flows, 89 Financial Times, 183, 266, 289 financial-instability hypothesis, 87, 146 First Green Bank, 236 First World War (1914–18), 166, 170 Fisher, Irving, 183 fluid values, 102, 106–9 food, 3, 43, 45, 50, 54, 58, 59, 89, 198 food banks, 165 food price crisis (2007–8), 89, 90, 180 Ford, 277–8 foreign direct investment, 89 forest conservation, 121–2 fossil fuels, 59, 73, 75, 92, 212, 260, 263 Foundations of Economic Analysis (Samuelson), 17–18 Foxconn, 193 framing, 22–3 France, 43, 165, 196, 238, 254, 256, 281, 290 Frank, Robert, 100 free market, 33, 37, 67, 68, 70, 81–2, 86, 90 free open-source hardware (FOSH), 196–7 free open-source software (FOSS), 196 free trade, 70, 90 Freeman, Ralph, 18–19 freshwater cycle, 48–9 Freud, Sigmund, 107, 281 Friedman, Benjamin, 258 Friedman, Milton, 34, 62, 66–9, 84–5, 88, 99, 183, 232 Friends of the Earth, 54 Full World, 75 Fuller, Buckminster, 4 Fullerton, John, 234–6, 273 G G20, 31, 56, 276, 279–80 G77, 55 Gal, Orit, 141 Gandhi, Mohandas, 42, 293 Gangnam Style, 145 Gardens of Democracy, The (Liu & Hanauer), 158 gender equality, 45, 51–2, 57, 78–9, 85, 88, 118–19, 124, 171, 198 generosity, 218–19, 223–9 geometry, 13, 15 George, Henry, 149, 179 Georgescu-Roegen, Nicholas, 252 geothermal energy, 221 Gerhardt, Sue, 283 Germany, 2, 41, 100, 118, 165, 189, 211, 213, 254, 256, 260, 274 Gessel, Silvio, 274 Ghent, Belgium, 236 Gift Relationship, The (Titmuss), 118–19 Gigerenzer, Gerd, 112–14 Gintis, Herb, 104 GiveDirectly, 200 Glass–Steagall Act (1933), 87 Glennon, Roger, 214 Global Alliance for Tax Justice, 277 global material footprints, 210–11 Global Village Construction Set, 196 globalisation, 89 Goerner, Sally, 175–6 Goffmann, Erving, 22 Going for Growth, 255 golden rule, 91 Goldman Sachs, 149, 170 Gómez-Baggethun, Erik, 122 Goodall, Chris, 211 Goodwin, Neva, 79 Goody, Jade, 124 Google, 192 Gore, Albert ‘Al’, 172 Gorgons, 244, 256, 257, 266 graffiti, 15, 25, 287 Great Acceleration, 46, 253–4 Great Depression (1929–39), 37, 70, 170, 173, 183, 275, 277, 278 Great Moderation, 146 Greece, Ancient, 4, 13, 32, 48, 54, 56–7, 160, 244 green growth, 41, 210, 243–85 Greenham, Tony, 185 greenhouse gas emissions, 31, 46, 50, 75–6, 141, 152–4 and decoupling, 260, 266 and Environmental Kuznets Curve, 208, 210 and forests, 50, 52 and G20, 31 and inequality, 58 reduction of, 184, 201–2, 213, 216–18, 223–7, 239–41, 256, 259–60, 266, 298 stock–flow dynamics, 152–4 and taxation, 201, 213 Greenland, 141, 154 Greenpeace, 9 Greenspan, Alan, 87 Greenwich, London, 290 Grenoble, France, 281 Griffiths, Brian, 170 gross domestic product (GDP), 25, 31–2, 35–43, 57, 60, 84, 164 as cuckoo, 32, 35, 36, 38, 40, 54, 60, 159, 244, 256, 271 and Environmental Kuznets Curve, 207–11 and exponential growth, 39, 53, 246–85 and growth agnosticism, 29–30, 240, 243–85 and inequality, 173 and Kuznets Curve, 167, 173, 188–9 gross national product (GNP), 36–40 Gross World Product, 248 Grossman, Gene, 207–8, 210 ‘grow now, clean up later’, 207 Guatemala, 196 H Haifa, Israel, 120 Haldane, Andrew, 146 Han Dynasty, 154 Hanauer, Nick, 158 Hansen, Pelle, 124 Happy Planet Index, 280 Hardin, Garrett, 69, 83, 181 Harvard University, 2, 271, 290 von Hayek, Friedrich, 7–8, 62, 66, 67, 143, 156, 158 healthcare, 43, 50, 57, 85, 123, 125, 170, 176, 200, 269, 279 Heilbroner, Robert, 53 Henry VIII, King of England and Ireland, 180 Hepburn, Cameron, 261 Herbert Simon, 111 heuristics, 113–14, 118, 123 high-income countries growth, 30, 244–5, 254–72, 282 inequality, 165, 168, 169, 171 labour, 177, 188–9, 278 overseas development assistance (ODA), 198–9 resource intensive lifestyles, 46, 210–11 trade, 90 Hippocrates, 160 History of Economic Analysis (Schumpeter), 21 HIV/AIDS, 123 Holocene epoch, 46–8, 75, 115, 253 Homo economicus, 94–103, 109, 127–8 Homo sapiens, 38, 104, 130 Hong Kong, 180 household, 78 housing, 45, 59, 176, 182–3, 269 Howe, Geoffrey, 67 Hudson, Michael, 183 Human Development Index, 9, 279 human nature, 28 human rights, 10, 25, 45, 49, 50, 95, 214, 233 humanistic economics, 42 hydropower, 118, 260, 263 I Illinois, United States, 179–80 Imago Mundi, 13 immigration, 82, 199, 236, 266 In Defense of Economic Growth (Beckerman), 258 Inclusive Wealth Index, 280 income, 51, 79–80, 82, 88, 176–8, 188–91, 194, 199–201 India, 2, 9, 10, 42, 124, 164, 178, 196, 206–7, 242, 290 Indonesia, 90, 105–6, 164, 168, 200 Indus Valley civilisation, 48 inequality, 1, 5, 25, 41, 63, 81, 88, 91, 148–52, 209 and consumerism, 111 and democracy, 171 and digital revolution, 191–5 and distribution, 163–205 and environmental degradation, 172 and GDP growth, 173 and greenhouse gas emissions, 58 and intellectual property, 195–8 and Kuznets Curve, 29, 166–70, 173–4 and labour ownership, 188–91 and land ownership, 178–82 and money creation, 182–8 and social welfare, 171 Success to the Successful, 148, 149, 151, 166 inflation, 36, 248, 256, 275 insect pollination services, 7 Institute of Economic Affairs, 67 institutional economics, 11 intellectual property rights, 195–8, 204 interest, 36, 177, 182, 184, 275–6 Intergovernmental Panel on Climate Change, 25 International Monetary Fund (IMF), 170, 172, 173, 183, 255, 258, 271 Internet, 83–4, 89, 105, 192, 202, 264 Ireland, 277 Iroquois Onondaga Nation, 116 Israel, 100, 103, 120 Italy, 165, 196, 254 J Jackson, Tim, 58 Jakubowski, Marcin, 196 Jalisco, Mexico, 217 Japan, 168, 180, 211, 222, 254, 256, 263, 275 Jevons, William Stanley, 16, 97–8, 131, 132, 137, 142 John Lewis Partnership, 190 Johnson, Lyndon Baines, 37 Johnson, Mark, 38 Johnson, Todd, 191 JPMorgan Chase, 149, 234 K Kahneman, Daniel, 111 Kamkwamba, William, 202, 204 Kasser, Tim, 125–6 Keen, Steve, 146, 147 Kelly, Marjorie, 190–91, 233 Kennedy, John Fitzgerald, 37, 250 Kennedy, Paul, 279 Kenya, 118, 123, 180, 185–6, 199–200, 226, 292 Keynes, John Maynard, 7–8, 22, 66, 69, 134, 184, 251, 277–8, 284, 288 Kick It Over movement, 3, 289 Kingston, London, 290 Knight, Frank, 66, 99 knowledge commons, 202–4, 229, 292 Kokstad, South Africa, 56 Kondratieff waves, 246 Korzybski, Alfred, 22 Krueger, Alan, 207–8, 210 Kuhn, Thomas, 22 Kumhof, Michael, 172 Kuwait, 255 Kuznets, Simon, 29, 36, 39–40, 166–70, 173, 174, 175, 204, 207 KwaZulu Natal, South Africa, 56 L labour ownership, 188–91 Lake Erhai, Yunnan, 56 Lakoff, George, 23, 38, 276 Lamelara, Indonesia, 105–6 land conversion, 49, 52, 299 land ownership, 178–82 land-value tax, 73, 149, 180 Landesa, 178 Landlord’s Game, The, 149 law of demand, 16 laws of motion, 13, 16–17, 34, 129, 131 Lehman Brothers, 141 Leopold, Aldo, 115 Lesotho, 118, 199 leverage points, 159 Lewis, Fay, 178 Lewis, Justin, 102 Lewis, William Arthur, 114, 167 Lietaer, Bernard, 175, 236 Limits to Growth, 40, 154, 258 Linux, 231 Liu, Eric, 158 living metrics, 240–42 living purpose, 233–4 Lomé, Togo, 231 London School of Economics (LSE), 2, 34, 65, 290 London Underground, 12 loss aversion, 112 low-income countries, 90, 164–5, 168, 173, 180, 199, 201, 209, 226, 254, 259 Lucas, Robert, 171 Lula da Silva, Luiz Inácio, 124 Luxembourg, 277 Lyle, John Tillman, 214 Lyons, Oren, 116 M M–PESA, 199–200 MacDonald, Tim, 273 Machiguenga, 105–6 MacKenzie, Donald, 101 macroeconomics, 36, 62–6, 76, 80, 134–5, 145, 147, 150, 244, 280 Magie, Elizabeth, 149, 153 Malala effect, 124 malaria, 5 Malawi, 118, 202, 204 Malaysia, 168 Mali, Taylor, 243 Malthus, Thomas, 252 Mamsera Rural Cooperative, 190 Manhattan, New York, 9, 41 Mani, Muthukumara, 206 Manitoba, 282 Mankiw, Gregory, 2, 34 Mannheim, Karl, 22 Maoris, 54 market, 81–2 and business, 88 circular flow, 64 and commons, 83, 93, 181, 200–201 efficiency of, 28, 62, 68, 87, 148, 181 and equilibrium theory, 131–5, 137, 143–7, 155, 156 free market, 33, 37, 67–70, 90, 208 and households, 63, 69, 78, 79 and maxi-max rule, 161 and pricing, 117–23, 131, 160 and rational economic man, 96, 100–101, 103, 104 and reciprocity, 105, 106 reflexivity of, 144–7 and society, 69–70 and state, 84–6, 200, 281 Marshall, Alfred, 17, 98, 133, 165, 253, 282 Marx, Karl, 88, 142, 165, 272 Massachusetts Institute of Technology (MIT), 17–20, 152–5 massive open online courses (MOOCs), 290 Matthew Effect, 151 Max-Neef, Manfred, 42 maxi-max rule, 161 maximum wage, 177 Maya civilisation, 48, 154 Mazzucato, Mariana, 85, 195, 238 McAfee, Andrew, 194, 258 McDonough, William, 217 Meadows, Donella, 40, 141, 159, 271, 292 Medusa, 244, 257, 266 Merkel, Angela, 41 Messerli, Elspeth, 187 Metaphors We Live By (Lakoff & Johnson), 38 Mexico, 121–2, 217 Michaels, Flora S., 6 micro-businesses, 9, 173, 178 microeconomics, 132–4 microgrids, 187–8 Micronesia, 153 Microsoft, 231 middle class, 6, 46, 58 middle-income countries, 90, 164, 168, 173, 180, 226, 254 migration, 82, 89–90, 166, 195, 199, 236, 266, 286 Milanovic, Branko, 171 Mill, John Stuart, 33–4, 73, 97, 250, 251, 283, 284, 288 Millo, Yuval, 101 minimum wage, 82, 88, 176 Minsky, Hyman, 87, 146 Mises, Ludwig von, 66 mission zero, 217 mobile banking, 199–200 mobile phones, 222 Model T revolution, 277–8 Moldova, 199 Mombasa, Kenya, 185–6 Mona Lisa (da Vinci), 94 money creation, 87, 164, 177, 182–8, 205 MONIAC (Monetary National Income Analogue Computer), 64–5, 75, 142, 262 Monoculture (Michaels), 6 Monopoly, 149 Mont Pelerin Society, 67, 93 Moral Consequences of Economic Growth, The (Friedman), 258 moral vacancy, 41 Morgan, Mary, 99 Morogoro, Tanzania, 121 Moyo, Dambisa, 258 Muirhead, Sam, 230, 231 MultiCapital Scorecard, 241 Murphy, David, 264 Murphy, Richard, 185 musical tastes, 110 Myriad Genetics, 196 N national basic income, 177 Native Americans, 115, 116, 282 natural capital, 7, 116, 269 Natural Economic Order, The (Gessel), 274 Nedbank, 216 negative externalities, 213 negative interest rates, 275–6 neoclassical economics, 134, 135 neoliberalism, 7, 62–3, 67–70, 81, 83, 84, 88, 93, 143, 170, 176 Nepal, 181, 199 Nestlé, 217 Netherlands, 211, 235, 224, 226, 238, 277 networks, 110–11, 117, 118, 123, 124–6, 174–6 neuroscience, 12–13 New Deal, 37 New Economics Foundation, 278, 283 New Year’s Day, 124 New York, United States, 9, 41, 55 Newlight Technologies, 224, 226, 293 Newton, Isaac, 13, 15–17, 32–3, 95, 97, 129, 131, 135–7, 142, 145, 162 Nicaragua, 196 Nigeria, 164 nitrogen, 49, 52, 212–13, 216, 218, 221, 226, 298 ‘no pain, no gain’, 163, 167, 173, 204, 209 Nobel Prize, 6–7, 43, 83, 101, 167 Norway, 281 nudging, 112, 113, 114, 123–6 O Obama, Barack, 41, 92 Oberlin, Ohio, 239, 240–41 Occupy movement, 40, 91 ocean acidification, 45, 46, 52, 155, 242, 298 Ohio, United States, 190, 239 Okun, Arthur, 37 onwards and upwards, 53 Open Building Institute, 196 Open Source Circular Economy (OSCE), 229–32 open systems, 74 open-source design, 158, 196–8, 265 open-source licensing, 204 Organisation for Economic Co-operation and Development (OECD), 38, 210, 255–6, 258 Origin of Species, The (Darwin), 14 Ormerod, Paul, 110, 111 Orr, David, 239 Ostrom, Elinor, 83, 84, 158, 160, 181–2 Ostry, Jonathan, 173 OSVehicle, 231 overseas development assistance (ODA), 198–200 ownership of wealth, 177–82 Oxfam, 9, 44 Oxford University, 1, 36 ozone layer, 9, 50, 115 P Pachamama, 54, 55 Pakistan, 124 Pareto, Vilfredo, 165–6, 175 Paris, France, 290 Park 20|20, Netherlands, 224, 226 Parker Brothers, 149 Patagonia, 56 patents, 195–6, 197, 204 patient capital, 235 Paypal, 192 Pearce, Joshua, 197, 203–4 peer-to-peer networks, 187, 192, 198, 203, 292 People’s QE, 184–5 Perseus, 244 Persia, 13 Peru, 2, 105–6 Phillips, Adam, 283 Phillips, William ‘Bill’, 64–6, 75, 142, 262 phosphorus, 49, 52, 212–13, 218, 298 Physiocrats, 73 Pickett, Kate, 171 pictures, 12–25 Piketty, Thomas, 169 Playfair, William, 16 Poincaré, Henri, 109, 127–8 Polanyi, Karl, 82, 272 political economy, 33–4, 42 political funding, 91–2, 171–2 political voice, 43, 45, 51–2, 77, 117 pollution, 29, 45, 52, 85, 143, 155, 206–17, 226, 238, 242, 254, 298 population, 5, 46, 57, 155, 199, 250, 252, 254 Portugal, 211 post-growth society, 250 poverty, 5, 9, 37, 41, 50, 88, 118, 148, 151 emotional, 283 and inequality, 164–5, 168–9, 178 and overseas development assistance (ODA), 198–200 and taxation, 277 power, 91–92 pre-analytic vision, 21–2 prescription medicines, 123 price-takers, 132 prices, 81, 118–23, 131, 160 Principles of Economics (Mankiw), 34 Principles of Economics (Marshall), 17, 98 Principles of Political Economy (Mill), 288 ProComposto, 226 Propaganda (Bernays), 107 public relations, 107, 281 public spending v. investment, 276 public–private patents, 195 Putnam, Robert, 76–7 Q quantitative easing (QE), 184–5 Quebec, 281 Quesnay, François, 16, 73 R Rabot, Ghent, 236 Rancière, Romain, 172 rating and review systems, 105 rational economic man, 94–103, 109, 111, 112, 126, 282 Reagan, Ronald, 67 reciprocity, 103–6, 117, 118, 123 reflexivity of markets, 144 reinforcing feedback loops, 138–41, 148, 250, 271 relative decoupling, 259 renewable energy biomass energy, 118, 221 and circular economy, 221, 224, 226, 235, 238–9, 274 and commons, 83, 85, 185, 187–8, 192, 203, 264 geothermal energy, 221 and green growth, 257, 260, 263, 264, 267 hydropower, 118, 260, 263 pricing, 118 solar energy, see solar energy wave energy, 221 wind energy, 75, 118, 196, 202–3, 221, 233, 239, 260, 263 rentier sector, 180, 183, 184 reregulation, 82, 87, 269 resource flows, 175 resource-intensive lifestyles, 46 Rethinking Economics, 289 Reynebeau, Guy, 237 Ricardo, David, 67, 68, 73, 89, 250 Richardson, Katherine, 53 Rifkin, Jeremy, 83, 264–5 Rise and Fall of the Great Powers, The (Kennedy), 279 risk, 112, 113–14 Robbins, Lionel, 34 Robinson, James, 86 Robinson, Joan, 142 robots, 191–5, 237, 258, 278 Rockefeller Foundation, 135 Rockford, Illinois, 179–80 Rockström, Johan, 48, 55 Roddick, Anita, 232–4 Rogoff, Kenneth, 271, 280 Roman Catholic Church, 15, 19 Rombo, Tanzania, 190 Rome, Ancient, 13, 48, 154 Romney, Mitt, 92 Roosevelt, Franklin Delano, 37 rooted membership, 190 Rostow, Walt, 248–50, 254, 257, 267–70, 284 Ruddick, Will, 185 rule of thumb, 113–14 Ruskin, John, 42, 223 Russia, 200 rust belt, 90, 239 S S curve, 251–6 Sainsbury’s, 56 Samuelson, Paul, 17–21, 24–5, 38, 62–7, 70, 74, 84, 91, 92, 93, 262, 290–91 Sandel, Michael, 41, 120–21 Sanergy, 226 sanitation, 5, 51, 59 Santa Fe, California, 213 Santinagar, West Bengal, 178 São Paolo, Brazil, 281 Sarkozy, Nicolas, 43 Saumweder, Philipp, 226 Scharmer, Otto, 115 Scholes, Myron, 100–101 Schumacher, Ernst Friedrich, 42, 142 Schumpeter, Joseph, 21 Schwartz, Shalom, 107–9 Schwarzenegger, Arnold, 163, 167, 204 ‘Science and Complexity’ (Weaver), 136 Scotland, 57 Seaman, David, 187 Seattle, Washington, 217 second machine age, 258 Second World War (1939–45), 18, 37, 70, 170 secular stagnation, 256 self-interest, 28, 68, 96–7, 99–100, 102–3 Selfish Society, The (Gerhardt), 283 Sen, Amartya, 43 Shakespeare, William, 61–3, 67, 93 shale gas, 264, 269 Shang Dynasty, 48 shareholders, 82, 88, 189, 191, 227, 234, 273, 292 sharing economy, 264 Sheraton Hotel, Boston, 3 Siegen, Germany, 290 Silicon Valley, 231 Simon, Julian, 70 Sinclair, Upton, 255 Sismondi, Jean, 42 slavery, 33, 77, 161 Slovenia, 177 Small Is Beautiful (Schumacher), 42 smart phones, 85 Smith, Adam, 33, 57, 67, 68, 73, 78–9, 81, 96–7, 103–4, 128, 133, 160, 181, 250 social capital, 76–7, 122, 125, 172 social contract, 120, 125 social foundation, 10, 11, 44, 45, 49, 51, 58, 77, 174, 200, 254, 295–6 social media, 83, 281 Social Progress Index, 280 social pyramid, 166 society, 76–7 solar energy, 59, 75, 111, 118, 187–8, 190 circular economy, 221, 222, 223, 224, 226–7, 239 commons, 203 zero-energy buildings, 217 zero-marginal-cost revolution, 84 Solow, Robert, 135, 150, 262–3 Soros, George, 144 South Africa, 56, 177, 214, 216 South Korea, 90, 168 South Sea Bubble (1720), 145 Soviet Union (1922–91), 37, 67, 161, 279 Spain, 211, 238, 256 Spirit Level, The (Wilkinson & Pickett), 171 Sraffa, Piero, 148 St Gallen, Switzerland, 186 Stages of Economic Growth, The (Rostow), 248–50, 254 stakeholder finance, 190 Standish, Russell, 147 state, 28, 33, 69–70, 78, 82, 160, 176, 180, 182–4, 188 and commons, 85, 93, 197, 237 and market, 84–6, 200, 281 partner state, 197, 237–9 and robots, 195 stationary state, 250 Steffen, Will, 46, 48 Sterman, John, 66, 143, 152–4 Steuart, James, 33 Stiglitz, Joseph, 43, 111, 196 stocks and flows, 138–41, 143, 144, 152 sub-prime mortgages, 141 Success to the Successful, 148, 149, 151, 166 Sugarscape, 150–51 Summers, Larry, 256 Sumner, Andy, 165 Sundrop Farms, 224–6 Sunstein, Cass, 112 supply and demand, 28, 132–6, 143, 253 supply chains, 10 Sweden, 6, 255, 275, 281 swishing, 264 Switzerland, 42, 66, 80, 131, 186–7, 275 T Tableau économique (Quesnay), 16 tabula rasa, 20, 25, 63, 291 takarangi, 54 Tanzania, 121, 190, 202 tar sands, 264, 269 taxation, 78, 111, 165, 170, 176, 177, 237–8, 276–9 annual wealth tax, 200 environment, 213–14, 215 global carbon tax, 201 global financial transactions tax, 201, 235 land-value tax, 73, 149, 180 non-renewable resources, 193, 237–8, 278–9 People’s QE, 185 tax relief v. tax justice, 23, 276–7 TED (Technology, Entertainment, Design), 202, 258 Tempest, The (Shakespeare), 61, 63, 93 Texas, United States, 120 Thailand, 90, 200 Thaler, Richard, 112 Thatcher, Margaret, 67, 69, 76 Theory of Moral Sentiments (Smith), 96 Thompson, Edward Palmer, 180 3D printing, 83–4, 192, 198, 231, 264 thriving-in-balance, 54–7, 62 tiered pricing, 213–14 Tigray, Ethiopia, 226 time banking, 186 Titmuss, Richard, 118–19 Toffler, Alvin, 12, 80 Togo, 231, 292 Torekes, 236–7 Torras, Mariano, 209 Torvalds, Linus, 231 trade, 62, 68–9, 70, 89–90 trade unions, 82, 176, 189 trademarks, 195, 204 Transatlantic Trade and Investment Partnership (TTIP), 92 transport, 59 trickle-down economics, 111, 170 Triodos, 235 Turkey, 200 Tversky, Amos, 111 Twain, Mark, 178–9 U Uganda, 118, 125 Ulanowicz, Robert, 175 Ultimatum Game, 105, 117 unemployment, 36, 37, 276, 277–9 United Kingdom Big Bang (1986), 87 blood donation, 118 carbon dioxide emissions, 260 free trade, 90 global material footprints, 211 money creation, 182 MONIAC (Monetary National Income Analogue Computer), 64–5, 75, 142, 262 New Economics Foundation, 278, 283 poverty, 165, 166 prescription medicines, 123 wages, 188 United Nations, 55, 198, 204, 255, 258, 279 G77 bloc, 55 Human Development Index, 9, 279 Sustainable Development Goals, 24, 45 United States American Economic Association meeting (2015), 3 blood donation, 118 carbon dioxide emissions, 260 Congress, 36 Council of Economic Advisers, 6, 37 Earning by Learning, 120 Econ 101 course, 8, 77 Exxon Valdez oil spill (1989), 9 Federal Reserve, 87, 145, 146, 271, 282 free trade, 90 Glass–Steagall Act (1933), 87 greenhouse gas emissions, 153 global material footprint, 211 gross national product (GNP), 36–40 inequality, 170, 171 land-value tax, 73, 149, 180 political funding, 91–2, 171 poverty, 165, 166 productivity and employment, 193 rust belt, 90, 239 Transatlantic Trade and Investment Partnership (TTIP), 92 wages, 188 universal basic income, 200 University of Berkeley, 116 University of Denver, 160 urbanisation, 58–9 utility, 35, 98, 133 V values, 6, 23, 34, 35, 42, 117, 118, 121, 123–6 altruism, 100, 104 anthropocentric, 115 extrinsic, 115 fluid, 28, 102, 106–9 and networks, 110–11, 117, 118, 123, 124–6 and nudging, 112, 113, 114, 123–6 and pricing, 81, 120–23 Veblen, Thorstein, 82, 109, 111, 142 Venice, 195 verbal framing, 23 Verhulst, Pierre, 252 Victor, Peter, 270 Viner, Jacob, 34 virtuous cycles, 138, 148 visual framing, 23 Vitruvian Man, 13–14 Volkswagen, 215–16 W Wacharia, John, 186 Wall Street, 149, 234, 273 Wallich, Henry, 282 Walras, Léon, 131, 132, 133–4, 137 Ward, Barbara, 53 Warr, Benjamin, 263 water, 5, 9, 45, 46, 51, 54, 59, 79, 213–14 wave energy, 221 Ways of Seeing (Berger), 12, 281 Wealth of Nations, The (Smith), 74, 78, 96, 104 wealth ownership, 177–82 Weaver, Warren, 135–6 weightless economy, 261–2 WEIRD (Western, educated, industrialised, rich, democratic), 103–5, 110, 112, 115, 117, 282 West Bengal, India, 124, 178 West, Darrell, 171–2 wetlands, 7 whale hunting, 106 Wiedmann, Tommy, 210 Wikipedia, 82, 223 Wilkinson, Richard, 171 win–win trade, 62, 68, 89 wind energy, 75, 118, 196, 202–3, 221, 233, 239, 260, 263 Wizard of Oz, The, 241 Woelab, 231, 293 Wolf, Martin, 183, 266 women’s rights, 33, 57, 107, 160, 201 and core economy, 69, 79–81 education, 57, 124, 178, 198 and land ownership, 178 see also gender equality workers’ rights, 88, 91, 269 World 3 model, 154–5 World Bank, 6, 41, 119, 164, 168, 171, 206, 255, 258 World No Tobacco Day, 124 World Trade Organization, 6, 89 worldview, 22, 54, 115 X xenophobia, 266, 277, 286 Xenophon, 4, 32, 56–7, 160 Y Yandle, Bruce, 208 Yang, Yuan, 1–3, 289–90 yin yang, 54 Yousafzai, Malala, 124 YouTube, 192 Yunnan, China, 56 Z Zambia, 10 Zanzibar, 9 Zara, 276 Zeitvorsoge, 186–7 zero environmental impact, 217–18, 238, 241 zero-hour contracts, 88 zero-humans-required production, 192 zero-interest loans, 183 zero-marginal-cost revolution, 84, 191, 264 zero-waste manufacturing, 227 Zinn, Howard, 77 PICTURE ACKNOWLEDGEMENTS Illustrations are reproduced by kind permission of: archive.org


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How Will Capitalism End? by Wolfgang Streeck

"there is no alternative" (TINA), accounting loophole / creative accounting, air traffic controllers' union, Airbnb, Alan Greenspan, basic income, behavioural economics, Ben Bernanke: helicopter money, billion-dollar mistake, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, market bubble, means of production, military-industrial complex, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, tacit knowledge, technological determinism, The Future of Employment, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

While disruption has traditionally been associated with unanticipated, destructive and even violent discontinuity – with disaster for those affected by it – it is now to stand for radical economic and social innovation, and indeed the only innovation left to make a difference, as it attacks and destroys in particular firms and markets that operate to everybody’s satisfaction.62 Innovation that is not in this sense disruptive is not innovative enough as it respects too much of the old and may even be concerned, or politically constrained, not to cause too many casualties. It is therefore doomed to be overtaken in the competitive struggles of the contemporary marketplace, where it is not enough for something to work if something else promises higher profits. Disruption may be considered the neoliberal version of ‘creative destruction’: more ruthless, more out-of-the-blue, and less willing to take prisoners or accept delay in order to be ‘socially compatible’. While for those at the receiving end disruptive innovation can be catastrophic, regrettably they have to be sacrificed as collateral damage on the Darwinian battlefield of global capitalism.

In contrast, I suggest to conceive of capitalism, past as well as present, ‘liberal’ just as ‘coordinated’, as of a political economy in permanent disequilibrium caused by continuous innovation and pervasive political conflict over the relationship between social and economic justice; over frictions between collective obligations to protect individuals from the fallout of ‘creative destruction’, and individual obligations to adjust to economic change; and over the moral limits, if any, to the individual pursuit of economic advantage. As the current crisis forcefully reminds us, it is both theoretically and empirically far more instructive for the study of contemporary capitalism to focus, not on stability, but on uncertainty, risk, fragility, precariousness and the generally transitory and never quite pacified nature of social and political settlements in capitalist societies.

The concept of capitalism, outdated as some may have thought it was, has the important advantage that it reminds us of the fact that the political regulation of economic life in contemporary modern societies is always precarious as it is typically condemned to limping behind the dynamic expansion of commercialized market relations. Speaking of capitalism, that is to say, protects us from forgetting that capitalist land-grabbing permanently imparts Schumpeterian creative destruction, not just on established ‘economic’ practice, but also on social structures and institutions, in particular by replacing the conservatism of social obligations with the voluntarism of free contractual exchange, regardless of the collective consequences.24 As I have shown empirically for the German case,25 the decline of postwar pacified capitalism must primarily be attributed to endogenous subversion and erosion of an institutional framework that had become suboptimal for capital accumulation, rather than, as Block suggests, to the frivolous fancies of neoliberal economists and misled politicians.


pages: 457 words: 125,329

Value of Everything: An Antidote to Chaos The by Mariana Mazzucato

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, bank run, banks create money, Basel III, behavioural economics, Berlin Wall, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, business cycle, butterfly effect, buy and hold, Buy land – they’re not making it any more, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, clean tech, Corn Laws, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, European colonialism, Evgeny Morozov, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, full employment, G4S, George Akerlof, Glass-Steagall Act, Google Hangouts, Growth in a Time of Debt, high net worth, Hyman Minsky, income inequality, independent contractor, index fund, informal economy, interest rate derivative, Internet of things, invisible hand, John Bogle, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, laissez-faire capitalism, light touch regulation, liquidity trap, London Interbank Offered Rate, low interest rates, margin call, Mark Zuckerberg, market bubble, means of production, military-industrial complex, Minsky moment, Money creation, money market fund, negative equity, Network effects, new economy, Northern Rock, obamacare, offshore financial centre, Pareto efficiency, patent troll, Paul Samuelson, peer-to-peer lending, Peter Thiel, Post-Keynesian economics, profit maximization, proprietary trading, quantitative easing, quantitative trading / quantitative finance, QWERTY keyboard, rent control, rent-seeking, Robert Solow, Sand Hill Road, shareholder value, sharing economy, short selling, Silicon Valley, Simon Kuznets, smart meter, Social Responsibility of Business Is to Increase Its Profits, software patent, Solyndra, stem cell, Steve Jobs, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, transaction costs, two and twenty, two-sided market, very high income, Vilfredo Pareto, wealth creators, Works Progress Administration, you are the product, zero-sum game

Or consider the way that entrepreneurs in the dot.com and IT industry lobby for advantageous tax treatment by governments in the name of ‘wealth creation'. With ‘innovation' as the new force in modern capitalism, Silicon Valley's do-gooders have successfully projected themselves as the entrepreneurs and garage tinkerers who unleash the ‘creative destruction' from which the jobs of the future come. These new actors, from Google to Uber to Airbnb, are often described as the ‘wealth creators'. Yet this seductive story of value creation leads to questionable broader tax policies by policymakers: for example, the ‘patent box' policy that reduces tax on any products whose inputs are patented, supposedly to incentivize innovation by rewarding the generation of intellectual property.

Meanwhile, innovation is seen as the new force in modern capitalism, not just in Silicon Valley but globally. Phrases like the ‘new economy', ‘the innovation economy', ‘the information society' or ‘smart growth' encapsulate the idea that it is entrepreneurs, garage tinkerers and their patents that unleash the ‘creative destruction' from which the jobs of the future come. We are told to welcome the likes of Uber and Airbnb because they are the forces of renewal that sweep away the old incumbents, whether black cabs in London or ‘dinosaur' hotel chains like Hilton. The success of some of the companies has been extraordinary.

Investments in science, technology, skills and new organizational forms of production (such as Adam Smith's emphasis on the division of labour) drive productivity and long-term increases in GDP. Building on the work of Marx, who highlighted the role of technological change in capitalism, Joseph Schumpeter (1883-1950) is probably the economist who has most emphasized the importance of innovation in capitalism. He coined the term ‘creative destruction' to describe the way that product innovations (new products replacing old) and process innovations (new ways to organize production and distribution of goods and services) caused a dynamic process of renewal but also a process of destruction, with old ways falling aside and in the process causing many companies to go bankrupt.


pages: 374 words: 114,660

The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton

Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, carbon tax, clean water, colonial exploitation, Columbian Exchange, compensation consultant, creative destruction, declining real wages, Downton Abbey, Easter island, Edward Jenner, end world poverty, financial engineering, financial innovation, Ford Model T, germ theory of disease, Gini coefficient, Glass-Steagall Act, Great Leap Forward, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, off-the-grid, Paul Volcker talking about ATMs, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, Tragedy of the Commons, very high income, War on Poverty, zoonotic diseases

A good example is the discovery of oral rehydration therapy in the refugee camps of Bangladesh in the 1970s; millions of children suffering from diarrhea have been saved from dehydration and possible death by a cheap and easily made remedy. But it works the other way too. Powerful interests have much to lose from new inventions and new ways of doing things. Economists think of eras of innovation as powering up waves of “creative destruction.” New methods sweep away old methods, destroying the lives and livelihoods of those who were dependent on the old order. Globalization today has hurt many such groups; importing cheaper goods from abroad is like a new way of making them, and woe betide those who earned their livings making such goods at home.

Growth in each recent decade has been lower than in the previous one. Almost everywhere, the faltering of growth has come with expansions of inequality. In the case of the United States, current extremes of income and wealth have not been seen for more than a hundred years. Great concentrations of wealth can undermine democracy and growth, stifling the creative destruction that makes growth possible. Such inequality encourages the previous escapees to block the escape routes behind them. Mancur Olson predicted that rich countries would decline like this, undermined by the rent seeking of an ever-growing number of focused interest groups pursuing their own self-interest at the expense of an uncoordinated majority.2 Slower growth makes distributional conflict inevitable, because the only way forward for me is at your expense.

See taxes India: birth attendants in, 99; child malnutrition in, 102; child mortality in, 114–15, 115f, 116, 117; diets in, 163; economic growth in, 44, 114, 115f, 116, 235, 236–38, 254; education in, 105, 329; foreign aid received by, 277–78, 279, 296, 302; foreign investment in, 277–78; government regulations, 212–13; health care system of, 123, 124–25; health perceptions in, 122; heights in, 161, 162–64; income inequality in, 258, 259; incomes in, 27; life expectancies in, 25–26, 163; middle class of, 254; population growth in, 240; poverty in, 102, 240, 247, 253–55; poverty line in, 223, 248, 254–55, 256–57; poverty reduction in, 44, 46, 247, 250, 253–55; sterilization programs in, 243; women’s heights in, 160 Industrial Revolution, 4, 5, 9–10, 94–95, 97–98, 100 inequality: economic growth and, 4–6, 41–42, 168, 327; global, 4–5, 42, 44; importance of, 11; origins of, 4–6; progress and, xiii, 1, 4–6, 10–11; racial, 67. See also health inequalities; income inequalities infant mortality. See child mortality infectious diseases. See diseases; HIV/AIDS; smallpox; tuberculosis influenza epidemic, xi, 61–62, 63 innovation: creative destruction, 10; economic growth and, 173–74; inventions, 9–11; scientific, 99, 100, 326; technological change, 191–93, 194–95, 327–28. See also medical innovations institutions: effects of foreign aid on, 298–99, 305; legal and political, 234, 242–43, 294, 295–96 investment, 173, 277–78, 280, 288 Isma’il Pasha, 297 Italy, life expectancies in, 87–88, 88f Japan: economic growth in, 49, 237; foreign aid of, 274, 275; life expectancies in, 33, 36, 129, 154; smoking rates in, 133; wellbeing in, 51 Jayachandran, Seema, 322 Jenner, Edward, 84 Jobs, Steve, 208, 214 Johansson, Sheila Ryan, 86 Johnson, Lyndon, 302, 305 Johnson, Simon, 216 Johnson administration, 182 Jones, Eric, 215 Kanbur, Ravi, 300–301, 315 Kant, Immanuel, 84 Katz, Lawrence F., 191 Kenya: commodity exports of, 286; corruption in, 302; foreign aid received by, 296, 301, 302; incomes in, 20, 284 Koch, Robert, 96, 99 Kravis, Irving, 222 Kremer, Michael, 322 Krueger, Alan B., 197 Kuznets, Simon, 203 labor markets: education and, 191–93, 202; globalization impacts on, 194–96, 257; minimum wages, 196–98; service jobs, 195–96; skilled workers, 191–93; unemployment, 176; wages in, 9–10, 191, 194–95, 257; women in, 176, 195–96, 201 labor unions, decline of, 198 Lam, David, 244–45 Layard, Richard, 29 Leeuwenhoek, Anthony van, 99 leisure, 175–76 Lesotho, 304–5 Liberia, 43 life, value of, 64 life evaluation measures: generational differences in, 51; incomes and, 17–22, 18f, 21f, 28, 48–51; surveys of, 17–22, 29, 47–49, 51 life expectancies: at age 15, 89–90, 90f; at age 50, 128–29, 128f, 135, 143; of aristocrats, 82–83, 82f; at birth, 24–26, 60, 62, 89–90, 90f, 128; in Britain, 67, 70, 81–83, 82f, 87–90, 88f, 90f, 94–95; calculating, 62, 73; in cities, 94; in Enlightenment, 81–83; by gender, 60–61, 61f, 65–66, 135; global differences in, 25–26, 88–89, 107–8, 107f, 152–55, 153f; incomes and, 26–28, 29–38, 30f, 34f, 37f, 41; as measure of inequality, 154–55; as measure of wellbeing, 60, 64–65, 328; period measures, 63, 70; in poor countries, 25; in prehistory, 77, 79, 80; racial differences, 66–67; in rich countries, 67–68; in Sweden, 67–68, 70; in United States, 24–25, 27, 35, 60–62, 61f, 63, 65–67, 135; upper limits of, 33, 148–49 life expectancy increases: in Britain, 83, 89; child mortality reductions and, 64, 65, 103; factors in, 41, 103–7, 127–28, 129–40, 142–43; in future, 63, 148–49; gender differences in, 60–61, 61f, 135; global, 152–55, 153f; income growth and, 41, 105–7; in poor countries, 101–4, 107, 107f, 108, 109; public health improvements and, 94, 95–96; in rich countries, 6–7, 87–88, 88f, 107–8, 107f, 127–30, 128f; in United States, 24–25, 60–62, 65 life satisfaction.


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Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma

"World Economic Forum" Davos, 3D printing, affirmative action, Alan Greenspan, Albert Einstein, American energy revolution, anti-communist, Asian financial crisis, banking crisis, Berlin Wall, book value, BRICs, British Empire, business climate, business cycle, business process, business process outsourcing, call centre, capital controls, Carmen Reinhart, central bank independence, centre right, cloud computing, collective bargaining, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, deindustrialization, demographic dividend, Deng Xiaoping, eurozone crisis, financial engineering, Gini coefficient, global macro, global supply chain, Goodhart's law, high-speed rail, housing crisis, income inequality, indoor plumbing, inflation targeting, informal economy, junk bonds, Kenneth Rogoff, knowledge economy, labor-force participation, land reform, low interest rates, M-Pesa, Mahatma Gandhi, Marc Andreessen, market bubble, Masayoshi Son, mass immigration, megacity, Mexican peso crisis / tequila crisis, middle-income trap, Nelson Mandela, new economy, no-fly zone, oil shale / tar sands, oil shock, open economy, Peter Thiel, planetary scale, public intellectual, quantitative easing, reserve currency, Robert Gordon, rolling blackouts, Shenzhen was a fishing village, Silicon Valley, software is eating the world, sovereign wealth fund, The Great Moderation, Thomas L Friedman, trade liberalization, Tyler Cowen, Watson beat the top human players on Jeopardy!, working-age population, zero-sum game

Healthy emerging markets should produce billionaires, but their number must also be in proportion to the size of the nation’s economy; the billionaires should face competition and turnover at the top; and ideally they should emerge predominantly from productive economic sectors, not cozy relationships with politicians. Creative destruction lies at the heart of a prospering capitalist society, and because well-connected incumbents have everything to gain from the established order, they are the enemies of capitalism. Comparing the changes in the list of top-ten billionaires in India and China reveals how differently each economy is developing.

Roughly 40 percent of the biggest Korean companies were allowed to go under, including well-known multinationals like Daewoo, and many more were sold off to new owners. After a purgatory year South Korea was soon back in the thick of global events as South Korean tech stocks rose sharply in the dotcom-driven bacchanalia of 1999 and 2000. By mid-2001 the IMF debt was repaid. It is this embrace of creative destruction that separates South Korea from both Taiwan and Japan. The great national housecleaning set up Korean conglomerates to take on the world. After 1998 the big Korean corporations brought in more professional managers to oversee day-to-day operations, but with the founding families still in charge the long-term strategic decisions were no less bold.

., 49 Cinnamon Lodge resort, 196 Citibank, 91 Ciudad Juárez, 79 Clinton, Bill, 225–26 CLSA, 238 CNBC, 70–71 coal, 133, 135, 170, 180, 225 Coca-Cola, 75 coffee, 67, 69, 232 Cold War, 86, 87, 134 Coleman, 247 college endowments, viii Collor de Mello, Fernando, 66 Colombo, 191, 192 Commission on Growth and Development, 235 “commodity.com” illusion, 223–39 “commodity supercycle,” 223 Commonwealth Games, 42 Communism, 4, 21–22, 25, 26–30, 83, 84, 85, 86, 89, 97, 102, 103, 104, 111, 117, 170, 175, 199–200, 202–3, 247 computers, 158, 164, 203–4, 236–39 Confucianism, 199 conglomerates, 125–26, 134, 138, 161–63, 167–69, 178 Congo, Democratic Republic of, 205, 209 Congo, Republic of, 4 Congress of South African Trade Unions (COSATU), 175, 181 Congress Party, 39, 41–42, 47–49, 55–56, 174, 176 conspicuous consumption, 6 construction industry, 123, 166, 213 consumer electronics, 147–48 consumer prices, 6, 12, 16, 18, 22–23, 24, 25, 31–32, 38, 39, 42, 49, 52–54, 57, 59–61, 62, 66, 67–68, 71, 75–76, 83–84, 86, 87, 94, 121, 126, 137–38, 157, 179, 232, 235 container vessels, 200–201 contracts, labor, 17 Coolidge, Calvin, 39 copper, 19, 120, 141, 223, 224, 229, 231 Cornerstone Analytics, 227 corporate governance, 134 corporate taxes, 63, 76, 126–27, 214–15, 254 corruption, 25, 76–77, 89, 91, 93, 107, 117–18, 134–35, 137, 151, 204–5, 206, 209, 210, 217 see also graft counterrevolution, 111, 118, 125–26 creative destruction, 46 credit, 8, 32, 38, 42, 43–44, 45, 46–47, 49–51, 58, 150, 157, 202 credit cards, 8, 157 Credit Suisse, 50 crime rate, 71, 78, 181, 211 “crony capitalism,” 10, 25, 38, 42, 46–47, 49, 50–51, 58, 131, 139 Cuba, 191 cuisine, 52–53 currencies, 4–5, 9, 12, 13–14, 26, 28, 32–33, 59–61, 62, 66, 67, 68–69, 73, 80, 92–93, 100–108, 115, 120, 131, 132, 146–47, 149, 159–60, 178, 179, 196, 209, 232, 233, 243, 246–47, 254 “czarist mentality,” 96 Czech Republic: auto industry of, 103 banking in, 103, 105–7 as breakout nation, 99–100 currency of (koruna), 108 as emerging market, 106, 110 as Eurozone candidate, 11, 99–100, 106–8, 109, 254 GDP of, 100 growth rate of, 97, 99–104, 244–45 inflation rate of, 249 national debt of, 105–6 population of, 106 post-Communist era of, 97, 102, 104, 111 Dae Jang Geum, 167 Daewoo, 160, 162 day traders, 220, 224 debt, national, 4, 5–6, 8, 17, 18, 24, 57, 61–62, 66, 76, 80–81, 85, 86, 92–93, 100, 105–6, 119–22, 134–35, 170, 176, 177, 231, 252 debt, personal, 8, 57–58, 157, 182–83 defaults, 61–62, 66, 252–53 deficits, x, 109–10, 147, 254 Delhi, vii–viii, 43 Dell, 158 democracy, 29–30, 48–49, 50, 55–56, 58, 77, 89, 96, 114, 118, 119, 123, 127, 143, 156, 173–76, 194, 205 Democratic Alliance Party, 175–76 Democratic Republic of Congo, see Congo, Democratic Republic of “demographic dividend,” 37–38, 55–56, 58, 126 demographics, 17–18, 21–22, 37–38, 55–56, 58, 126, 225, 231–32 Deng Xiaoping, 8–9, 17, 25, 26–28, 199, 200–201 dependency ratio, 37–38 Detroit, 162 devaluations, currency, 62, 108, 132 developing countries, vii–x, 2, 7, 10–16, 20, 28, 38–39, 42, 44, 49, 61, 65, 68, 89–90, 113, 123, 158, 184–91, 204–8, 233–39, 242–4 commodity exports of, 204, 223–39 see also breakout nations diamonds, 176, 205 dictatorships, 29–30, 127, 173, 246 Disney, 3 DMK, 48 Dogus family, 125 dollar, 7, 13–14, 18, 32–33, 59, 67, 70, 73, 103, 131, 132, 232, 233, 234, 243 “domestic content” rules, 213 Domino’s Pizza, 53 dotcom bubble, 3, 6, 157, 164, 189, 223–24, 225, 227, 230 Dow Jones Industrial Average, 9, 47 dowries, 145 “Dr.


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Designing Social Interfaces by Christian Crumlish, Erin Malone

A Pattern Language, Amazon Mechanical Turk, anti-pattern, barriers to entry, c2.com, carbon footprint, cloud computing, collaborative editing, commons-based peer production, creative destruction, crowdsourcing, en.wikipedia.org, Firefox, folksonomy, Free Software Foundation, game design, ghettoisation, Howard Rheingold, hypertext link, if you build it, they will come, information security, lolcat, Merlin Mann, Nate Silver, Network effects, Potemkin village, power law, recommendation engine, RFC: Request For Comment, semantic web, SETI@home, Skype, slashdot, social bookmarking, social graph, social software, social web, source of truth, stealth mode startup, Stewart Brand, systems thinking, tacit knowledge, telepresence, the long tail, the strength of weak ties, The Wisdom of Crowds, web application, Yochai Benkler

To do so, provide a persistent search box that is always in the same location (most commonly the upper-right or upper-left of the screen), and when displaying search results, offer related links, “more like this,” and other opportunities for lateral exploration. Download at WoweBook.Com 350 Chapter 13: Social Media Junkies Unite! Further Reading “Creative destruction … Google slayed by the Notificator?”, by John Borthwick, http://www.borthwick.com/weblog/2009/02/05/ creative-destruction-google-slayed-by-the-notificator/ “Do your friends make you smarter? Exploring social interactions in search,” by Brynn M. Evans, http://www.slideshare.net/bmevans/ do-your-friends-make-you-smarter-exploring-social-interactions-in-search “Social Objects for Beginners,” by Hugh MacLeod, http://www.gapingvoid.com/Moveable_Type/archives/004390.html TweetNews, http://tweetnews.appspot.com/ “Why social search won’t topple Google (anytime soon),” by Brynn M.

Download at WoweBook.Com Social Search 343 Real-Time Search What People can’t always find breaking news and current topics of public conversation with ordinary keyword searches of indexed web resources, and already get frequent pointers to current information by the electronic equivalent of word of mouth (Figure 13-13). Figure 13-13. After acquiring Summize, Twitter now offers real-time search of its public feed. Five new tweets came in while I was setting up the screen snap. Also known as “The Notificator” (http://www.borthwick.com/weblog/2009/02/05/ creative-destruction-google-slayed-by-the-notificator/). Use when Use this pattern with an activity stream service to enable people to find concepts in up-tothe-minute status updates and activities. How • Provide the familiar elements of a search interface (a text box and a search button), and make it clear to the person searching that the results will be ordered by recency (reverse-chronological order) and not by relevancy (Figure 13-14).


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Arriving Today: From Factory to Front Door -- Why Everything Has Changed About How and What We Buy by Christopher Mims

air freight, Airbnb, Amazon Robotics, Amazon Web Services, Apollo 11, augmented reality, autonomous vehicles, big-box store, blue-collar work, Boeing 747, book scanning, business logic, business process, call centre, cloud computing, company town, coronavirus, cotton gin, COVID-19, creative destruction, data science, Dava Sobel, deep learning, dematerialisation, deskilling, digital twin, Donald Trump, easy for humans, difficult for computers, electronic logging device, Elon Musk, Frederick Winslow Taylor, fulfillment center, gentrification, gig economy, global pandemic, global supply chain, guest worker program, Hans Moravec, heat death of the universe, hive mind, Hyperloop, immigration reform, income inequality, independent contractor, industrial robot, interchangeable parts, intermodal, inventory management, Jacquard loom, Jeff Bezos, Jessica Bruder, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kaizen: continuous improvement, Kanban, Kiva Systems, level 1 cache, Lewis Mumford, lockdown, lone genius, Lyft, machine readable, Malacca Straits, Mark Zuckerberg, market bubble, minimum wage unemployment, Nomadland, Ocado, operation paperclip, Panamax, Pearl River Delta, planetary scale, pneumatic tube, polynesian navigation, post-Panamax, random stow, ride hailing / ride sharing, robot derives from the Czech word robota Czech, meaning slave, Rodney Brooks, rubber-tired gantry crane, scientific management, self-driving car, sensor fusion, Shenzhen special economic zone , Shoshana Zuboff, Silicon Valley, six sigma, skunkworks, social distancing, South China Sea, special economic zone, spinning jenny, standardized shipping container, Steve Jobs, supply-chain management, surveillance capitalism, TED Talk, the scientific method, Tim Cook: Apple, Toyota Production System, traveling salesman, Turing test, two-sided market, Uber and Lyft, Uber for X, uber lyft, Upton Sinclair, vertical integration, warehouse automation, warehouse robotics, workplace surveillance

It was one tiny element of the mass shift in the global economy from services to goods, from being out in the world to working, entertaining, and learning from home. It’s just a tiny, inexpensive gadget, but it’s also an embodiment of the journey of billions of dollars’ worth of other goods, all part of a tsunami of creative destruction that has permanently transformed the way we live. Chapter 16 Bezosism For Austin Morreale, working as a stower at Amazon was one of the toughest jobs he’s ever loved. The hours were long and the work grueling. The night shift he took at Amazon on top of his day job as a nonprofit case manager was plainly unsustainable, but he had only planned to do it for a summer, anyway.

In an economy providing new services, like next-day delivery, automating one part of that service simply pushes workers toward other roles necessary to achieve it. But the robot I’ve come for, and the systems that support it, are, like the automated loom or the steam drill, a singular example of the kind of technological change that drives the economic “gale of creative destruction” first described by economist Joseph Schumpeter in 1942. In the center of this warehouse, surrounded by concentric rings of automation, the robot I’ve come for doesn’t look like much: just your run of the mill industrial robot arm, pneumatic tubes snaking down its length, ending in a suction device for grabbing items.

recover after performing it: Mark Middlesworth, “A Step-by-Step Guide to the REBA Assessment Tool,” ErgoPlus, https://ergo-plus.com/reba-assessment-tool-guide. 3 million Americans who are seriously injured: Talia Buford and Maryam Jameel, “Workplace Injury, Illness Costs Being Foisted on Workers, Government, OSHA’s Michaels Says,” Center for Public Integrity, March 4, 2015, https://publicintegrity.org/inequality-poverty-opportunity/workers-rights/workplace-injury-illness-costs-being-foisted-on-workers-government-oshas-michaels-says. habitually underreport: Steven Greenhouse, “Work-Related Injuries Underreported,” New York Times, November 16, 2009, https://www.nytimes.com/2009/11/17/us/17osha.html. Chapter 19: Amazon’s Employee-Lite Endgame “gale of creative destruction”: Joseph A. Schumpeter, Capitalism, Socialism, and Democracy, 3rd ed. (New York: Harper & Brothers, 1942). “grasping is going to be a solved problem”: Jeffrey Dastin, “Amazon’s Bezos Says Robotic Hands Will Be Ready for Commercial Use in Next 10 Years,” Reuters, June 6, 2019, https://www.reuters.com/article/us-amazon-com-conference/amazons-bezos-says-robotic-hands-will-be-ready-for-commercial-use-in-next-10-years-idUSKCN1T72JB.


Hacking Capitalism by Söderberg, Johan; Söderberg, Johan;

Abraham Maslow, air gap, Alvin Toffler, AOL-Time Warner, barriers to entry, Charles Babbage, collective bargaining, commoditize, computer age, corporate governance, creative destruction, Debian, deindustrialization, delayed gratification, Dennis Ritchie, deskilling, digital capitalism, digital divide, Donald Davies, Eben Moglen, Erik Brynjolfsson, Firefox, Free Software Foundation, frictionless, full employment, Garrett Hardin, Hacker Conference 1984, Hacker Ethic, Herbert Marcuse, Howard Rheingold, IBM and the Holocaust, informal economy, interchangeable parts, invention of radio, invention of the telephone, Jacquard loom, James Watt: steam engine, jimmy wales, John Markoff, John von Neumann, Joseph Schumpeter, Joseph-Marie Jacquard, Ken Thompson, knowledge economy, knowledge worker, labour market flexibility, late capitalism, Lewis Mumford, liberal capitalism, Marshall McLuhan, means of production, Mitch Kapor, mutually assured destruction, new economy, Norbert Wiener, On the Economy of Machinery and Manufactures, packet switching, patent troll, peer-to-peer, peer-to-peer model, planned obsolescence, post scarcity, post-Fordism, post-industrial society, price mechanism, Productivity paradox, profit motive, RFID, Richard Florida, Richard Stallman, Ronald Coase, safety bicycle, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, Slavoj Žižek, software patent, Steven Levy, Stewart Brand, subscription business, tech worker, technological determinism, technoutopianism, the Cathedral and the Bazaar, The Nature of the Firm, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, Thomas Davenport, Thorstein Veblen, tragedy of the anticommons, Tragedy of the Commons, transaction costs, Whole Earth Catalog, Yochai Benkler

These realities of the mundane will weight heavier upon the hacker community the more integrated FOSS development gets in the global economy and the world of business. Business Models Based on Free Software From a liberal perspective, FOSS development is understood as simply another business model that better approximates the free market. The economist Joseph Schumpeter’s idea about ‘creative destruction’ is often invoked at this point. According to him, the creative destruction of capitalism continuously leads to old monopolies being undercut by better technology and smarter entrepreneurs. The appeal of this narrative is twofold. Firstly, legislators, judges and the general public are more receptive to the arguments of FOSS advocates if the challenge to intellectual property rights is framed within a liberal discourse.

Tessa Morris-Suzuki’s reasoning provides a theoretical backbone for understanding the heightened relevance of innovation and collective learning processes in late capitalism. Valorisation of capital is concentrated to the starting-up of a production line, rather than the running of the production line. Capitalism has always sought to increase profitability by accelerating product cycles. When this logic turns on the innovation process itself, creative destruction enters ‘warp speed’. The odd situation is particular forthcoming in the computer sector. Since the manufacturing process here consists of little more than “copy-and-paste”, efforts are placed in the invention of new software algorithms. Software code is developed and made obsolete at such speeds that the product form of computer applications, i.e. boxes wrapped up and marketed in yearly releases, is dissolving into a continuous process where the application is upgraded every two weeks.


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Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy by Jonathan Taplin

"Friedman doctrine" OR "shareholder theory", "there is no alternative" (TINA), 1960s counterculture, affirmative action, Affordable Care Act / Obamacare, Airbnb, AlphaGo, Amazon Mechanical Turk, American Legislative Exchange Council, AOL-Time Warner, Apple's 1984 Super Bowl advert, back-to-the-land, barriers to entry, basic income, battle of ideas, big data - Walmart - Pop Tarts, Big Tech, bitcoin, Brewster Kahle, Buckminster Fuller, Burning Man, Clayton Christensen, Cody Wilson, commoditize, content marketing, creative destruction, crony capitalism, crowdsourcing, data is the new oil, data science, David Brooks, David Graeber, decentralized internet, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, equal pay for equal work, Erik Brynjolfsson, Fairchild Semiconductor, fake news, future of journalism, future of work, George Akerlof, George Gilder, Golden age of television, Google bus, Hacker Ethic, Herbert Marcuse, Howard Rheingold, income inequality, informal economy, information asymmetry, information retrieval, Internet Archive, Internet of things, invisible hand, Jacob Silverman, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John Perry Barlow, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kickstarter, labor-force participation, Larry Ellison, life extension, Marc Andreessen, Mark Zuckerberg, Max Levchin, Menlo Park, Metcalfe’s law, military-industrial complex, Mother of all demos, move fast and break things, natural language processing, Network effects, new economy, Norbert Wiener, offshore financial centre, packet switching, PalmPilot, Paul Graham, paypal mafia, Peter Thiel, plutocrats, pre–internet, Ray Kurzweil, reality distortion field, recommendation engine, rent-seeking, revision control, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Ross Ulbricht, Sam Altman, Sand Hill Road, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skinner box, smart grid, Snapchat, Social Justice Warrior, software is eating the world, Steve Bannon, Steve Jobs, Stewart Brand, tech billionaire, techno-determinism, technoutopianism, TED Talk, The Chicago School, the long tail, The Market for Lemons, The Rise and Fall of American Growth, Tim Cook: Apple, trade route, Tragedy of the Commons, transfer pricing, Travis Kalanick, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, vertical integration, We are as Gods, We wanted flying cars, instead we got 140 characters, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, you are the product

Under this so-called “Rank & Yank” policy, people proved perfectly willing to slit one another’s throats, resulting in a corporate atmosphere marked by appalling dishonesty within and ruthless exploitation outside the company. Since at least 1995, professors at business schools have dismissed this kind of behavior as a natural outgrowth of the Austrian economist Joseph Schumpeter’s notion of “creative destruction.” The growth of the tech economy with its constant change would create a new kind of employee: oriented to the short term and focused on potential ability rather than acquired knowledge. But most of us are like Epicurus or even the monks of Camaldoli. We need a life narrative in which we take pride in being good at a specific task, and we value the experiences we have lived through.

We need a life narrative in which we take pride in being good at a specific task, and we value the experiences we have lived through. Many of my colleagues on the faculty of USC certainly approach their work with this reverence for knowledge, but their students have new pressures on them to adopt the culture of creative destruction. They are expected to get a well-paying job the minute they leave college. No more thoughts of bumming around Europe for a year before you “get serious.” And the reason for this is the specter of debt that hangs over the head of most middle-class college kids. In 1970 the University of California raised the tuition for in-state students to $150 a year.


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China's Disruptors: How Alibaba, Xiaomi, Tencent, and Other Companies Are Changing the Rules of Business by Edward Tse

3D printing, Airbnb, Airbus A320, Asian financial crisis, barriers to entry, bilateral investment treaty, business process, capital controls, commoditize, conceptual framework, corporate governance, creative destruction, crowdsourcing, currency manipulation / currency intervention, David Graeber, Deng Xiaoping, disruptive innovation, experimental economics, global supply chain, global value chain, Great Leap Forward, high net worth, high-speed rail, household responsibility system, industrial robot, Joseph Schumpeter, Lyft, Masayoshi Son, middle-income trap, money market fund, offshore financial centre, Pearl River Delta, reshoring, rising living standards, risk tolerance, Silicon Valley, Skype, Snapchat, SoftBank, sovereign wealth fund, special economic zone, speech recognition, Steve Jobs, thinkpad, trade route, wealth creators, working-age population

Banks will have to compete; the health-care system will become more market-oriented, with the needs of users, be they patients or health-care providers, increasingly met by private companies; and private companies will be the primary content deliverers supplying video entertainment to most of the country’s population. While state companies can perform well at such fundamental tasks as building basic infrastructure, they are far weaker when it comes to undertaking the “creative destruction” (as Joseph Schumpeter called it) that an innovative economy requires. This involves the ceaseless testing of new products and processes conducted via a relentless churn of businesses, most of which fail. It also involves the relentless competition for consumer attention, which will inevitably be drawn by those businesses that offer access to information or services that state-owned companies do not provide.

., 182–83, 185–86, 187 BYD, 20, 76, 134 C2C market, 34–35, 184 C919, 110–11 Caixa Seguros, 123 cars, 12, 20, 44, 74, 76, 123, 130–34 Chang, Gordon, 9 Chang’an, 133 Changhong, 76 Chen, Steve, 112 Chen Dongsheng, 45, 54, 55, 148, 168–69 Chengdu, 24 Chen Haibin, 12, 155–56 Chery, 134, 138 China, People’s Republic of: agricultural output in, 43, 109 authoritarian rule in, 22–23 billionaires in, 8, 10, 45, 48 buying-power in, 19 consuming classes, 72–77, 74, 151 critics of, 8–9 debt in, 78, 80, 167 Deng’s reforms in, 17, 27, 28, 42–43, 47, 132, 140, 148, 166, 167, 176 earthquake in, 217 economic growth in, 8, 25, 70–71, 77–79, 97, 154, 165, 209–10 exports of, 9, 44, 48, 79, 104, 109, 133, 134–36, 140, 152, 188, 214 foreign currency reserves of, 22 founding of, 3 high-net-worth individuals in, 150, 151 housing privatized in, 48–49 hybrid government of, 71, 167, 210, 212, 213–16 innovation in, 93–116 institutional development in, 166, 195, 221 logistics costs in, 78 monthly wages in, 98 multinationals invited into, 46–51, 70, 71, 72–77, 188–90, 192, 195, 197–201, 222–23 number of companies by ownership in, 15 opportunities in, 41, 49–50, 115–16, 140–41, 180–81, 203–30 outbound investment from, 28, 120–24, 121, 138–39, 140 per capita GDP of, 113 per capita income in, 229 pioneers of 1980s in, 46 R&D spending in, 106–7, 107, 121, 122, 192, 193 revenues by company type in, 15 rising urban class in, 96 scale of, 71–72, 83, 85, 180–81 traded goods of, 109 trends shaped by, 18–19 U.S. and European investment in, 181, 223 as world’s biggest manufacturer, 19 China Auto Rental, 194–95 China Banking Regulatory Commission, 149 China Development Bank, 138 China Entrepreneurs Forum (CEF), 145, 169, 171, 223 China Food and Drug Administration, 155 China Guardian Auction Company, 45 China Investment Corporation, 149 China Merchants Bank, 205 China Mobile, 102, 212 China National Offshore Oil Corporation, 120 China Pages, 37 China Post, 100 China Resources Enterprise, 180 China Smart Device Innovation Fund, 113 China Telecom, 102 China Unicom, 102 China UnionPay, 36, 78 Chinese Academy of Sciences, 44 Chinese Academy of Sciences Computer Technology Research Institute New Technology Development Company, 54 Chinese People’s Political Consultative Conference, 81 Chongqing, 193, 224 Chu, Gary, 196 Cisco, 105 Citic Pacific, 123 climate change, 25, 29, 227, 229 clothes, 9 Club Med, 194 Cold War, 23 Coming Collapse of China, The (Chang), 9 Commercial Aircraft Corporation of China (COMAC), 110–11, 213 Communist Party, China, 22, 42, 44, 55, 77, 211, 218, 220, 226 purge of, 4 “competing on the edge,” 181–86, 188 computers, 9, 11, 125–28, 178 Congo, 137 Consumption Promotion Month, 73 copyright, 114 corporate flexibility, 190, 191–92 costs, controlling of, 97 counterfeiting, 75 creative destruction, 163 Ctrip, 113 Cultural Revolution, 4, 42, 43, 54, 207 Daimler, 180 Dalian Wanda, 48, 88, 120, 172 Datascope Corporation, 123 decision-making, 23, 58, 190–91, 211 Decorvet, Roland, 196 Dell, 95, 96, 126, 128 Deng Xiaoping: reforms of, 17, 27, 28, 42–43, 47, 132, 140, 148, 166, 167, 176 southern tour of, 44 Detroit Electric, 133 Development Research Center, of the State Council, 45 DHgate.com, 12, 57 Dian Diagnostics, 155–57 Diaoyu, 181 Digital China, 148 Ding Xuedong, 149 D’Long, 13 Dongfeng, 133 dotcom bubble, 37 Drivetrain Systems International, 133 eBay, 34, 40 e-commerce, 10, 11, 20, 38, 39, 78, 81–84, 88–89, 96–97, 99, 225 Economist Intelligence Unit, 140 education, 27 rising standards of, 98 Eisenhardt, Kathleen M., 182–83, 185–86, 187 Emerald Automotive, 133 energy, 9, 19, 25, 29, 42, 115, 119, 137, 186, 216–17 energy-efficient buildings, 216 engineering, 27 entrepreneurs, 56, 199–201, 226–28, 229–30 ambition of, 55, 57–61 boundaries pushed by, 26–27 everyday life changed by, 164–65 Gang of ’92, 45–46, 54 innovation by, 93–116 international talent of, 196–97 1980s generation of, 51–53 origins of, 42–46 overseas, 139 pride of, 55, 57 reforms sought by, 145–49 shared heritage of, 55, 61–64 strengths of, 24–26 see also specific entrepreneurs environment, 60, 168, 169–70 Epic Games, 135 Ericsson, 101, 102, 105 European Union, R&D spending in, 107 EV71 virus, 109 Evergrande Real Estate, 48 Export-Import Bank of China, 138 Facebook, 83, 87, 94, 222 Fanfou.com, 53 Feng Lun, 45–46, 148 finance, 149–53, 157, 162, 163, 186, 192–93 deregulation of, 164, 212–13, 229 1st Dibs, 135 Fisher & Paykal, 7 Fisker Automotive, 130 Food and Drug Administration, U.S., 123 Forbes, 10 Ford Motor Company, 123, 131, 133 Forever 21, 195 Fosun, 123, 138, 148, 155, 156, 194 Foursquare, 129 Foxconn, 112 Gang of ’92, 45–46, 54, 148, 168–69 Gao Feng Advisory Company, 25 Gavekal Dragonomics, 73 Geely Auto, 12, 44, 76, 123, 131–34, 138, 175, 185, 212 General Mills, 196 General Motors, 133, 137, 179 Gerke, Roland, 196 Germany, 121, 216 doctorates in, 108 global financial crisis, 73, 78 Global Solar Energy, 123 Golden Monkey, 194 Goldman Sachs, 37, 136 Gome Electrical Appliances, 13 Google, 83, 87, 112, 127, 128, 197 Great Firewall of China, 82 Great Leap Forward, 3–4 Great Wall Technology, 76, 126 Guo Guangchang, 148 Guo Wei, 148 Haier, 3, 5–8, 10, 47, 49, 58–60, 76, 84, 94, 98, 100, 101, 175, 185, 187, 200, 208, 224 Hainan, 46 Hangzhou Wahaha Group, 52, 76 Harvard Business Review, 93–94 health-care system, 12, 153–57, 162, 163, 212 Hengan International, 12, 53, 175–78, 199, 200 Hershey, 194 Hertz Global Rental, 194–95 Hewlett-Packard, 125, 128 Hoffman-La Roche, 155 Home Depot, 180 Honda, 133 Honeywell, 190, 192, 196 Hong Kong, 68, 214, 223–24 Hong Kong Stock Exchange, 68, 86, 177 hospitals, 154–56, 212 Household Responsibility System, 43 Huang Guangyu, 13 Huang Nubo, 45, 63, 168 Huawei Technologies, 11, 20, 43–44, 47, 54, 60, 67, 75, 84, 89, 122, 128, 136, 138, 139, 140, 175, 200, 222 innovation by, 94, 101–5 Hui Ka Yan, 48 Hu Jintao, 147 Hutchison Telecom, 103 Hyundai, 133 IBM, 125, 127–28, 129, 178 ICBC, 149 ICQ, 85 IDG, 85–86 India, 68 infrastructure, 71, 78, 79, 82, 83, 85, 99, 105, 111, 114, 137–38, 153, 163, 164, 166, 188, 191, 192, 210, 223, 224 Innovation Works, 111–12 Intel Capital, 113 interest-rate liberalization, 40, 152–53 Internet, 27, 81–90, 82, 135–36, 161, 186, 197, 209–10, 218–19, 221–22 iPhone, 68, 69, 94 iQiyi.com, 162 Japan, 94, 121, 141, 216 R&D spending in, 107 JD.com, 84, 87 revenue of, 89 Jialing, 76 Jiang Jianqing, 149 Johnson & Johnson, 175 Joyo.com, 12, 57, 68 Jumei.com, 206 “just-in-time” production system, 94 Kan, Michael, 69 Kandi Technologies Group, 133 Kao, 175 KFC, 180 Kimberly-Clark, 12, 175 Kingsoft, 68 Kirby, William C., 93–94 Konka, 76 Koo, Victor, 158–59, 160, 218 Krugman, Paul, 9 Kutcher, Ashton, 129 Lardy, Nicholas, 17 Lau, Martin, 136 Lau, Ricky, 225 Lee, Hudson, 196 Lee, Kai-fu, 111–12 legal infrastructure, 114 Legend, 44 Legend Holdings, 112, 126 Lei Jun, 11, 12, 57, 67, 81, 112, 162, 197, 226 Lenovo, 11, 20, 44, 54, 67, 75, 89, 112, 139, 140, 148, 171 expansion by, 124–29, 130 revenue of, 125–26, 127, 128 Leung, Antony, 224 Levi’s, 195 Li, Richard, 85–86 Li, Robin, 11, 49, 50, 64, 81, 88, 139 liberalization, 44, 55, 71, 72, 75, 78–79, 152, 154, 166–67, 178, 181, 210, 211, 223 of interest rates, 40, 152–53 Li Dongsheng, 148 Liebherr, 5–6 Lifan, 76 Li Ka-shing, 85 Li Keqiang, 210, 215 Lin Bin, 68 Li Shufu, 12, 44, 47, 131–34, 138, 175, 185 Little Emperors, 51–53 Liu Chuanzhi, 54, 171 Liu Junling, 96 Liu Mingkang, 149 Loncin, 76 L’Oréal, 205 Lu Guanqiu, 130 Lyft, 135 Ma, Jack, 10, 33–40, 41, 47, 50, 54–55, 60–61, 62–63, 64, 86, 136, 148, 197, 201, 221 background of, 36–37 environmental work of, 60, 168, 169–70 and U.S.


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Kings of Crypto: One Startup's Quest to Take Cryptocurrency Out of Silicon Valley and Onto Wall Street by Jeff John Roberts

4chan, Airbnb, Alan Greenspan, altcoin, Apple II, Bernie Sanders, Bertram Gilfoyle, Big Tech, bitcoin, blockchain, Blythe Masters, Bonfire of the Vanities, Burning Man, buttonwood tree, cloud computing, coronavirus, COVID-19, creative destruction, Credit Default Swap, cryptocurrency, democratizing finance, Dogecoin, Donald Trump, double helix, driverless car, Elliott wave, Elon Musk, Ethereum, ethereum blockchain, family office, financial engineering, Flash crash, forensic accounting, hacker house, Hacker News, hockey-stick growth, index fund, information security, initial coin offering, Jeff Bezos, John Gilmore, Joseph Schumpeter, litecoin, Marc Andreessen, Mark Zuckerberg, Masayoshi Son, Menlo Park, move fast and break things, Multics, Network effects, offshore financial centre, open borders, Paul Graham, Peter Thiel, Ponzi scheme, prediction markets, proprietary trading, radical decentralization, ransomware, regulatory arbitrage, reserve currency, ride hailing / ride sharing, Robert Shiller, rolodex, Ross Ulbricht, Sam Altman, Sand Hill Road, Satoshi Nakamoto, sharing economy, side hustle, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, smart contracts, SoftBank, software is eating the world, Startup school, Steve Ballmer, Steve Jobs, Steve Wozniak, transaction costs, Vitalik Buterin, WeWork, work culture , Y Combinator, zero-sum game

Alex Tapscott, a CFA and coauthor of the book Blockchain Revolution, notes how industry incumbents are rarely at the forefront of technological change. “Typically, the leaders of old paradigms don’t embrace new ones. That’s the reason Marriott didn’t embrace Airbnb and why the White Pages got replaced by Google,” Tapscott says. His observation is a perfect example of “the gale of creative destruction,” a phrase coined by legendary economist Joseph Schumpeter, who nearly eighty years ago defined it as “a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” But in the case of banks, Tapscott notes, some are more poised to adapt to the impending gale than typical incumbents.

Gox, 57 Casares, Wences, 182–183, 216 Casey, Michael, 23 celebrity endorsements, 144–145 Chainalysis, 196 Charles Schwab, 207–208 China, 81–83, 207 Choi, Emilie, 175, 191, 209 Circle, 55, 105 circuit breakers, 140 Clayton, Jay, 169 CNBC, 146 Coinbase, 173 acquisitions by, 186–187, 197, 209 agency trading model at, 174 Apple Store and, 40, 63 Balaji at, 185–187 Binance and, 179–181, 187–190 Bluxome Street office, 37–38, 66–67 capacity issues at, 151 Chicago and, 192 cold storage at, 43–44 competition for, 54–55, 178–181 the crypto winter and, 172–175 culture at, 39, 49–51, 67–68, 189–190 currencies added to, 96–97, 181–182, 187–190, 196 customer acquisition at, 47, 139, 154, 156–157 customer service at, 159, 173–175 diversification at, 64, 209 engineering strategy at, 187–188 Ethereum and, 93–95 Facebook and, 205–206 first hires at, 24–30 flash crash and, 139–141 funding rounds for, 33–37, 51, 64–65, 154–155, 173 future of, 216, 219–220, 225–226 hacking attacks on, 40–43, 143, 157 hiring at, 29, 37–41, 45–47, 49–51 Hirji at, 157–158 hot wallet attack on, 40–43 infrastructure issues at, 155–159, 209–210 IRS and, 121–126 JP Morgan and, 213 layoffs at, 74 leadership team at, 157, 175 Market Street office, 67 Moon Launch, 65 opposition to, 27 origins of, 3–15 in other countries, 65 private keys and, 9 profits at, 154–155 regulation and, 118, 121–131 reputation of, 42–43, 68, 71–72, 124, 125 running through brick walls at, 33–52, 63–64 security systems at, 79–80 Silicon Valley Bank and, 69–70, 72–73 staff departures from, 117–118, 193–195 super voting shares at, 112–113 threats against, 149–151 Wall Street and, 104 coinbase, in bitcoin, 21 CoinDesk, 145, 182 Commodity Futures Trading Commission (CFTC), 126 Conscious Leadership, 68 Consensus, 167 ConsenSys, 94 Covid-19 pandemic, 221–223 The Creamery, 37–38 creative destruction, 214 criminal activity, 18, 224 Dread Pirate Roberts and, 31, 59 money laundering, 45, 58 Mt. Gox and, 56–58 Ponzi schemes, 141–142 swindles, 141–145 threats of, 149–151 cryptocurrencies academic research on, 218–219 altcoins/shitcoins, 138 Binance and, 179–181 bubble around, 133–139 bubble in, 138–145, 149–155 bull run in, 201–203 celebrity endorsements of, 144–145 code for, 188–189 crash in, 160–161, 165–175 exchanges of, 127, 215–216 Libra, 205–207 as property versus currency, 122–126 swindles using, 141–145 See also individual currencies crypto winter, 170–175, 198, 201 Custody, 209 cypherpunks, 23, 99–100 CZ.


pages: 225 words: 70,241

Silicon City: San Francisco in the Long Shadow of the Valley by Cary McClelland

affirmative action, Airbnb, algorithmic bias, Apple II, autonomous vehicles, barriers to entry, Black Lives Matter, Burning Man, clean water, cloud computing, cognitive dissonance, Columbine, computer vision, creative destruction, driverless car, El Camino Real, Elon Musk, Fairchild Semiconductor, full employment, gamification, gentrification, gig economy, Golden Gate Park, Google bus, Google Glasses, high net worth, housing crisis, housing justice, income inequality, John Gilmore, John Perry Barlow, Joseph Schumpeter, Loma Prieta earthquake, Lyft, mass immigration, means of production, Menlo Park, Mitch Kapor, open immigration, PalmPilot, rent control, Salesforce, San Francisco homelessness, self-driving car, sharing economy, Silicon Valley, Skype, Social Justice Warrior, Steve Jobs, Steve Wozniak, TaskRabbit, tech bro, tech worker, transcontinental railway, Travis Kalanick, Uber and Lyft, uber lyft, urban planning, vertical integration, William Shockley: the traitorous eight, young professional

Now, if you want to go buy a Beanie Baby, you go to Google and you type in Beanie Baby and there are fifty places to buy it. Google is a time, and Google has done a good job of reinventing itself to stay relevant. Facebook has done the same thing. But think about AOL, CompuServe, Friendster . . . Who knows, something new can always come up. It’s creative destruction. It’s Schumpeter.‡ That’s what the Valley is all about. Go invent the next thing. Disrupt. When I started my company in Boston, it was so hard. There’s a cultural conservatism in the Northeast. Funders are like, “I don’t really get it. Why don’t you go prove that you’re a sure thing and then come back to me?”

† The Defense Advanced Research Projects Agency (DARPA) invests on behalf of the US government in groundbreaking technology for national security. It hosted a series of competitions, challenging students from the nation’s top universities to demonstrate breakthroughs in robotics and autonomous vehicles. ‡ Economist Joseph Schumpeter described “creative destruction” as a kind of mutagenic or Darwinian force at the heart of capitalism—one that “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” § The Stanford University Founding Grant provides that the gifted land “shall constitute the foundation and endowment for the University herein provided, and upon the trust that the principal thereof shall forever remain intact, and that the rents, issues, and profits thereof shall be devoted to the foundation and maintenance of the University hereby founded and endowed, and to the uses and purposes herein mentioned


Building and Dwelling: Ethics for the City by Richard Sennett

Anthropocene, Big Tech, Buckminster Fuller, car-free, classic study, clean water, cognitive dissonance, company town, complexity theory, creative destruction, dematerialisation, Deng Xiaoping, double helix, Downton Abbey, driverless car, East Village, en.wikipedia.org, Evgeny Morozov, Frank Gehry, gentrification, ghettoisation, housing crisis, illegal immigration, informal economy, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Joseph Schumpeter, Kickstarter, Lewis Mumford, Mark Zuckerberg, Masdar, mass immigration, means of production, megacity, megaproject, new economy, Nicholas Carr, Norbert Wiener, open borders, place-making, plutocrats, post-truth, Richard Florida, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, SimCity, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, surveillance capitalism, systems thinking, tacit knowledge, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Wealth of Nations by Adam Smith, urban planning, urban renewal, Victor Gruen, Yochai Benkler

Madame Q and her colleagues have put real money into basic materials, and the workmanship is excellent; this care appears in outside tree plantings as well, which are dug and drained properly.24 ‘Creative destruction’ is the theory often cited to describe what has happened in places like Shanghai. The phrase comes from the economist Joseph Schumpeter. Core investing is a good example of what he had in mind in Capitalism, Socialism and Democracy: a property like Nehru Place is bought, perhaps levelled flat and built anew, or its people are swept away by gentrification; something new is created which is more profitable. ‘Creative Destruction’, he declares, ‘is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.’

KLEE’S ANGEL LEAVES EUROPE – WALTER BENJAMIN IN MOSCOW The contrasts between Delhi and Shanghai today perhaps are clarified by a text which addresses neither and was written nearly a century earlier. This is an essay by Walter Benjamin called ‘Theses on the Philosophy of History’, a writer’s take on the dislocations of growth, the forms of nostalgia that have arisen through creative destruction, and the energies stimulated by informal activity – all these themes provoked by Benjamin’s journeys to the communizing city of Moscow in the 1920s and his musings on a painting. In 1920, Paul Klee created the image Angelus Novus, a starved, agonized figure with outstretched arms. The writer Gershom Scholem saw the piece that year, bought it and hung it in his apartment in Munich.


pages: 651 words: 180,162

Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb

"World Economic Forum" Davos, Air France Flight 447, Alan Greenspan, Andrei Shleifer, anti-fragile, banking crisis, Benoit Mandelbrot, Berlin Wall, biodiversity loss, Black Swan, business cycle, caloric restriction, caloric restriction, Chuck Templeton: OpenTable:, commoditize, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discrete time, double entry bookkeeping, Emanuel Derman, epigenetics, fail fast, financial engineering, financial independence, Flash crash, flying shuttle, Gary Taubes, George Santayana, Gini coefficient, Helicobacter pylori, Henri Poincaré, Higgs boson, high net worth, hygiene hypothesis, Ignaz Semmelweis: hand washing, informal economy, invention of the wheel, invisible hand, Isaac Newton, James Hargreaves, Jane Jacobs, Jim Simons, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, knowledge economy, language acquisition, Lao Tzu, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, Marc Andreessen, Mark Spitznagel, meta-analysis, microbiome, money market fund, moral hazard, mouse model, Myron Scholes, Norbert Wiener, pattern recognition, Paul Samuelson, placebo effect, Ponzi scheme, Post-Keynesian economics, power law, principal–agent problem, purchasing power parity, quantitative trading / quantitative finance, Ralph Nader, random walk, Ray Kurzweil, rent control, Republic of Letters, Ronald Reagan, Rory Sutherland, Rupert Read, selection bias, Silicon Valley, six sigma, spinning jenny, statistical model, Steve Jobs, Steven Pinker, Stewart Brand, stochastic process, stochastic volatility, synthetic biology, tacit knowledge, tail risk, Thales and the olive presses, Thales of Miletus, The Great Moderation, the new new thing, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Malthus, too big to fail, transaction costs, urban planning, Vilfredo Pareto, Yogi Berra, Zipf's Law

The Apollonian without the Dionysian is, as the Chinese would say, yang without yin. Nietzsche’s potency as a thinker continues to surprise me: he figured out antifragility. While many attribute (mistakenly) the notion of “creative destruction” to the economist Joseph Schumpeter (not wondering how something insightful and deep can come out of an economist),2 while, as we saw, the more erudite source it to Karl Marx, it is indeed Nietzsche who was first to coin the term with reference to Dionysus, whom he called “creatively destructive” and “destructively creative.” Nietzsche indeed figured out—in his own way—antifragility. I read Nietzsche’s The Birth of Tragedy twice, first as a child when I was very green.

Creative and Uncreative Destructions Someone who got a (minor) version of the point that generalized trial and error has, well, errors, but without much grasp of asymmetry (or what, since Chapter 12, we have been calling optionality), is the economist Joseph Schumpeter. He realized that some things need to break for the system to improve—what is labeled creative destruction—a notion developed, among so many other ones, by the philosopher Karl Marx and a concept discovered, we will show in Chapter 17, by Nietzsche. But a reading of Schumpeter shows that he did not think in terms of uncertainty and opacity; he was completely smoked by interventionism, under the illusion that governments could innovate by fiat, something that we will contradict in a few pages.

Ziliak, 1996, “The Standard Error of Regressions.” Journal of Economic Literature 34(1): 97–114. McConaugby, D., C. Matthews, and A. Fialko, 2001, “Founding Family Controlled Firms: Performance, Risk and Value.” Journal of Small Business Management 39: 31–49. McCraw, Thomas 2007, Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: The Belknap Press of Harvard University. McGill, S., 2007, Low Back Disorders: Evidence-Based Prevention and Rehabilitation. Human Kinetics Publishers. McGrath, R. G., 1999, “Falling Forward: Real Options Reasoning and Entrepreneurial Failure.” Academy of Management Review: 13–30.


pages: 1,773 words: 486,685

Global Crisis: War, Climate Change and Catastrophe in the Seventeenth Century by Geoffrey Parker

agricultural Revolution, British Empire, classic study, Climatic Research Unit, colonial rule, creative destruction, currency manipulation / currency intervention, Defenestration of Prague, Edmond Halley, en.wikipedia.org, European colonialism, failed state, Fellow of the Royal Society, financial independence, friendly fire, Google Earth, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, it's over 9,000, Johannes Kepler, Joseph Schumpeter, Khyber Pass, mass immigration, Mercator projection, moral hazard, mortgage debt, Peace of Westphalia, Peter Thiel, public intellectual, Republic of Letters, sexual politics, South China Sea, the market place, trade route, transatlantic slave trade, unemployed young men, University of East Anglia, World Values Survey, zero-sum game

By the 1660s Amsterdam paid 150 lightly armed citizens to patrol the streets each night, with as many again in reserve, and they summarily arrested anyone observed committing anti-social behaviour: beating their wives or servants; engaged in rape, theft or blatant street prostitution; acting in a drunk or disorderly manner.71 Many cities in Germany and elsewhere in the Dutch Republic emulated the Amsterdam system and, by the end of the seventeenth century, humans had for the first time in world history tamed the night. Non-Creative Destruction In his influential analysis of ‘Creative Destruction’, Joseph Schumpeter recognized that, in certain circumstances, exceptions existed to the process of ‘incessantly destroying’ old economic structures and then ‘incessantly creating a new one’, which he saw as central to economic growth. He wrote: Let us assume that there is a certain number of retailers in a neighborhood who try to improve their relative position by service and ‘atmosphere’ but avoid price competition and stick as to methods to the local tradition – a picture of stagnating routine.

Mauch and Pfister, Natural disasters, 6–7 (Mauch's introduction). The term ‘Creative Destruction’ is often misused. In 1848 Marx and Engels noted that most human societies face a ‘crisis’ whenever ‘a famine [or] a widespread war of destruction cuts off every means of subsistence and destroys industry and trade’; and they argued that these setbacks stimulated both ‘the conquest of new markets’ and ‘the more thorough exploitation of the old ones’ (Communist manifesto, ch. 1). They did not use the term ‘Creative Destruction’, which first appeared a century later as the title of ch. 7 of Joseph Schumpeter's critique of Marxist theory, Capitalism, socialism and democracy.

Disasters, as Christof Mauch reminds us, often have a phoenix effect: those who survive a crisis often emerge better prepared to cope with any sequel. Catastrophes ‘have improved emergency preparedness and spurred technological developments; they have also reduced the vulnerability of humans both in the emergent phase of natural catastrophes and during post-disaster recovery’ – a phenomenon sometimes termed ‘Creative destruction’.8 Those who survived the mid-seventeenth century developed a wide variety of ‘coping strategies’. Some involved escapism (indulging in pursuits that dulled the senses amid encircling horror: chapter 20). Others were innovative (limiting the spread of plague through quarantine, and of smallpox through inoculation; planting new crops with greater resistance to climate change; rebuilding towns in brick and stone to reduce the risk of catastrophic fires, and creating fire-insurance companies: chapter 21).


pages: 267 words: 72,552

Reinventing Capitalism in the Age of Big Data by Viktor Mayer-Schönberger, Thomas Ramge

accounting loophole / creative accounting, Air France Flight 447, Airbnb, Alvin Roth, Apollo 11, Atul Gawande, augmented reality, banking crisis, basic income, Bayesian statistics, Bear Stearns, behavioural economics, bitcoin, blockchain, book value, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, Cass Sunstein, centralized clearinghouse, Checklist Manifesto, cloud computing, cognitive bias, cognitive load, conceptual framework, creative destruction, Daniel Kahneman / Amos Tversky, data science, Didi Chuxing, disruptive innovation, Donald Trump, double entry bookkeeping, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Evgeny Morozov, flying shuttle, Ford Model T, Ford paid five dollars a day, Frederick Winslow Taylor, fundamental attribution error, George Akerlof, gig economy, Google Glasses, Higgs boson, information asymmetry, interchangeable parts, invention of the telegraph, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, joint-stock company, Joseph Schumpeter, Kickstarter, knowledge worker, labor-force participation, land reform, Large Hadron Collider, lone genius, low cost airline, low interest rates, Marc Andreessen, market bubble, market design, market fundamentalism, means of production, meta-analysis, Moneyball by Michael Lewis explains big data, multi-sided market, natural language processing, Neil Armstrong, Network effects, Nick Bostrom, Norbert Wiener, offshore financial centre, Parag Khanna, payday loans, peer-to-peer lending, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price mechanism, purchasing power parity, radical decentralization, random walk, recommendation engine, Richard Thaler, ride hailing / ride sharing, Robinhood: mobile stock trading app, Sam Altman, scientific management, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, six sigma, smart grid, smart meter, Snapchat, statistical model, Steve Jobs, subprime mortgage crisis, Suez canal 1869, tacit knowledge, technoutopianism, The Future of Employment, The Market for Lemons, The Nature of the Firm, transaction costs, universal basic income, vertical integration, William Langewiesche, Y Combinator

Machine learning system experts around the world are actively pursuing strategies to teach their systems to be creative, albeit currently with only very limited success. It seems that so far, creativity is a difficult nut to crack for machines. Until this changes, managers will continue to be needed to steer the complex process of creative destruction, which famed Austrian American economist Joseph Schumpeter saw as the source of sweeping innovation. FUKOKU’S CHOICE—WHICH WE CALL OPTION ONE—FOCUSES on cost. This solution works only if firms successfully automate and optimize decision-making, cutting down on overhead and permanently reducing the size of the workforce.

See mobile phones central banks, 134–135, 149 centralization, 13, 90, 95, 100 cognitive limitations and, 103 of communicative coordination, 28–30 matching and, 74 Champagne fairs, 160 Charles Schwab, 146 Charlotte, Queen, 94 checklists, 100–101 Chichén Itzá, 21 Chile, 175–179 Chilean Production Development Corporation, 175 China, 147, 196 communicative coordination in, 30–32 fintechs in, 151, 152 firms in, 28 labor market of, 184 choice, 6, 207–223 in banking and financial sector, 215–216 in education sector, 214 in energy markets, 213 in health care sector, 213–214 historical constraints on, 13–14 human error and, 14–15 questions about, 219–220 relinquishing some, 85 in retail sector, 207–212 about time management, 221–222 Chongqing Province (China), 31–32, 33 Cisco, 7 Claudico (machine learning system), 60 Coconut, 147 cognitive bias and constraints, 5, 62 automation and, 79, 80, 81 firms and, 102–104 markets and, 169–170 persistence of, 14–15 Colson, Eric, 209 command-and-control management, 29–30, 88, 120 Commerzbank, 136 communicative coordination, 10, 17–33 castell example, 17–20 effectiveness as measure of, 24–25 firms and, 26, 28–33, 90, 102 importance of, 20–23 markets and, 26–28, 30–33 price hampering of, 63 societal institutions and, 23–24 competition, 165–167, 202–203 comprehensive cost accounting, 94–95 concentrated markets, 161–169, 171, 217 Condorcet, Marquis de, 50 confirmation bias, 103 Confused.com, 52 conglomerates, 30 Consumer Reports, 51 Contix, 155 coordination. See communicative coordination Corrigon, 70 costs of automated decisions, 118, 120 bank, cutting of, 146–148 of data processing, 194 of information flows, 39–40, 44, 45, 81 volume increase and, 162 cowrie shells (as currency), 47 creativity/creative destruction, 119–120 credit scores, 150, 151 cybernetics, 159–160, 179 Cybersyn, 176–179 Daimler, 109–111, 120–121, 182, 215 Daisy Intelligence (machine learning system), 117 Dalio, Ray, 114, 115 data taxes, 199–200, 203, 218 data-rich markets, 4–15, 59–85 choice in (see choice) crucial technologies in, 64 (see also algorithms; automation/machine learning; ontology) design importance, 217 externalities and, 73, 74 firms’ application of principles, 128–129 growth of, 3 key areas of interest in, 8–9 key difference between conventional markets and, 7, 63 opportunities for investors in, 144–145 problems for investors in, 143–144 range of benefits in, 6–7 shortcomings of, 12–13 simplicity and ease of use, 5 ultimate goal of, 15 data-sharing mandate.


pages: 270 words: 73,485

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

3D printing, Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Glass-Steagall Act, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, market bubble, market clearing, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

The tradition of Marx and Wicksell takes the disequilibrium path. And there are insights in the disequilibrium tradition which can be illuminating. It was Joseph Schumpeter who gave economics not only a theory but a vision – weltanschauung – about how capitalism flourished through a series of cycles of booms and busts. Creative Destruction The second half of the nineteenth century witnessed one of the many episodes of globalization. This one was built on the industrial and financial revolutions. The new inventions in transport and communications – railroads, steamships and the introduction of the telegraph – had connected the many parts of the world.

(i) Clayton Act (i) Clinton Administration (i) closed economy (i), (ii), (iii), (iv), (v), (vi) Cobb, Charles (i) Cobb-Douglas Production Function (i), (ii) coincidence, vs.causation (i) Cold War (i) collateralized debt obligations (CDO) (i) colonization (i) Combinations (trade unions), as harmful (i) Committee on the Bank of England Charter (i) commodity markets price rises (i) regulation (i) Common Market (i) communications, advances in (i), (ii) companies, collapse of (i) comparative advantage (i) compatibility microeconomics/macroeconomics (i), (ii), (iii) unique static equilibrium/moving data (i) competition and efficiency (i) imperfect (i) theory of (Marshall) (i) computer technology development of (i), (ii); see also technological innovations stock markets (i) confidence, rise and fall (i) conflicting interests (i), (ii) Connally, John (i) consols (i) consumer credit (i) consumption function (i), (ii) contagion (i), (ii) control of money supply (i) convertibility (i) cooperation (i) correlation/coincidence, vs. causation (i) corruption (i) Countrywide Financial (i) Cournot, Antoine Augustin (i) Cowles, Alfred (i) Cowles Foundation (i) creative destruction (i) credit business dependence (i) cheap (i) as driver of investment (i) credit cards (i) credit default swaps (CDS) (i) crises beginnings of (i) developing countries (i) Juglar’s theory (i) Mexican (i) proliferation (i) as recurrent (i), (ii) as regular occurrences (i) ten year pattern (i) unpredictability (i) crisis of 1825 (i) crisis of profitability (i) Crosland, Anthony (i) The Future of Socialism (i) currency, convertibility (i) depreciation (i) pegging (i), (ii) cycles (i) banking system as root (i) combinations of (i) Goodwin (i), (ii) Juglar’s study (i) Keynes on (i) long (i) loss of interest in (i) Marx’s theories (i), (ii) measuring (i) origins (i) random events (i) reproduction by Keynesian models (i) rocking horse analogy (i) short (i) Wicksell’s theory (i) see also Frisch; Kondratieff cycles debit cards (i) Debreu, Gerard (i), (ii) debt crises (i) easy availability (i) levels (i) see also government debt debt-fueled boom (i) debts brokers (i) farmers’ (i) post-World War II (i) purchase of (i) decisions, patterns (i) deficits, endemic (i) deflation (i) deindustrialization (i), (ii) Deism (i) demand, factors in (i) demographics (i) demutualization (i) depreciation (i) advocacy of (i) Ricardo’s theory (i) value of goods (i) deregulation, banking (i) derivatives (i), (ii) Deserted Village, The (Oliver Goldsmith) (i) deutschmark (i) developing countries, Wicksellian boom (i) disequilibrium dynamic (i), (ii), (iii), (iv) stock (i) system, capitalism as (i) tradition (i) displacement effect, technological innovations (i) division of knowledge (i) division of labor (i), (ii) dollar purchasing power (i) as reserve currency (i), (ii) dollar exchange standard (i), (ii) dot.com boom (i) double deficits (i) Douglas, Paul (i), (ii) Dow Jones (i) Duménil, Gerard (i) durable goods (i) Dutch Disease (i) dynamic stochastic general equilibrium (DSGE) models (i), (ii) econometric modeling (i), (ii) Econometric Society (i), (ii) econometrics (i), (ii) economic activity, shift (i) economic analysis, applicability (i) economic cycles (i) Marx/Engels (i) see also Kondratieff cycles economic data, proliferation (i) economic growth, problems of (i) economic policy, activism (i) economic sectors, conflicting interests (i), (ii) economic slump, post-World War I (i) economic stagnation (i) economic theory (i) and individual lives (i) economic trajectories (i) economic vocabulary (i), (ii), (iii) economics background to (i) celebrated (i) changing scope of (i) as dismal science (i) professionalization (i) teaching of (i) “Economics and Knowledge” (Hayek) (i) economies, interconnections (i) economies of scale (i) economists, research methods (i) economy changing nature of (i) equilibrium/disequilibrium (i) visions of (i) efficiency, use of term (i) efficient market hypothesis (EMH) (i), (ii), (iii) Eisenhower, Dwight D.


pages: 252 words: 73,131

The Inner Lives of Markets: How People Shape Them—And They Shape Us by Tim Sullivan

Abraham Wald, Airbnb, airport security, Al Roth, Alvin Roth, Andrei Shleifer, attribution theory, autonomous vehicles, barriers to entry, behavioural economics, Brownian motion, business cycle, buy and hold, centralized clearinghouse, Chuck Templeton: OpenTable:, classic study, clean water, conceptual framework, congestion pricing, constrained optimization, continuous double auction, creative destruction, data science, deferred acceptance, Donald Trump, Dutch auction, Edward Glaeser, experimental subject, first-price auction, framing effect, frictionless, fundamental attribution error, George Akerlof, Goldman Sachs: Vampire Squid, Gunnar Myrdal, helicopter parent, information asymmetry, Internet of things, invisible hand, Isaac Newton, iterative process, Jean Tirole, Jeff Bezos, Johann Wolfgang von Goethe, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, late fees, linear programming, Lyft, market clearing, market design, market friction, medical residency, multi-sided market, mutually assured destruction, Nash equilibrium, Occupy movement, opioid epidemic / opioid crisis, Pareto efficiency, Paul Samuelson, Peter Thiel, pets.com, pez dispenser, power law, pre–internet, price mechanism, price stability, prisoner's dilemma, profit motive, proxy bid, RAND corporation, ride hailing / ride sharing, Robert Shiller, Robert Solow, Ronald Coase, school choice, school vouchers, scientific management, sealed-bid auction, second-price auction, second-price sealed-bid, sharing economy, Silicon Valley, spectrum auction, Steve Jobs, Tacoma Narrows Bridge, techno-determinism, technoutopianism, telemarketer, The Market for Lemons, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, two-sided market, uber lyft, uranium enrichment, Vickrey auction, Vilfredo Pareto, WarGames: Global Thermonuclear War, winner-take-all economy

Akerlof, with characteristic modesty, has observed that this was merely a return to the approach that iconic economists like Joseph Schumpeter and John Maynard Keynes had taken to describe the economy, where there was no pretension of modeling a complete system. Aspects of a market just drop from the sky. For instance, why do humans have the tendencies and instincts in market transactions that Keynes famously described as our “animal spirits”? Where did the entrepreneurs that wrought Schumpeter’s “creative destruction” come from? In both cases, they were assumed into existence, based on shrewd observation or perhaps appeal to the work of other disciplines. (If you want to understand animal spirits or other whims of human nature, economists are probably the last people you’d want to ask.) The journal editors and peer reviewers who read the paper only saw the square that Akerlof was describing rather than the topological insight, as it were.

., 169–170, 172 Camp, Garrett, 170 candle auctions, 82 capitalism, free-market, 172–173 car service platform, 169–171 cash-back bonus, 116 cash-for-sludge transactions, 167–169 See also Summers, Larry centralized clearinghouses, 140–141 Champagne fairs, 105–106, 126–128 Changi POW camp, 175–177 Le Chatelier, Henry Louis, 29 Le Chatelier’s principle, 29 cheap talk, 62–66, 69 chess, difference between Cold War and, 26 See also poker, bluffing in child labor, 180 cigarettes, as currency in German POW camp, 8–9 Clarke, Edward, 93 Clavell, James, 175 clerkship offers, with federal judges, 140 coat hook, 151–152, 174 Codes of the Underworld (Gambetta), 68 Cold War, difference between chess and, 26 See also poker, bluffing in Collectible Supplies, 128–129 “College Admissions and the Stability of Marriage” (Gale and Shapley), 137 commitment, signs of, 62–63, 69–71, 72–75 community game, 178–179 competition models of, 35, 166, 172–173 platform, 124–126 unethical conduct with, 180–181 “Competition is for Losers” (Thiel), 173 competitive equilibrium, existence of, 29, 31–34, 36–37, 40, 45, 76 competitive markets, 35, 124–126, 172–174, 180–181 See also platforms competitive signaling, 70–71 congestion pricing model, 86, 94 constrained optimization, 85–86, 133 contractorsfromhell.com, 120 copycat competitors, 172–173 corporate philanthropy, 72–75 Cowles, Alfred, 25, 27 Cowles Commission for Research in Economics, 25, 27, 31, 134 “creative destruction,” 50 credit card platforms, 113–116, 123–124 criminal organizations, informational challenges of, 68 currency, at Stalag VII-A POW camp, 8–9 customer feedback, 52, 74–75 Davis, Harry, 154, 157 Debreu, Gérard, 20, 24, 25, 32–33, 36–37 decentralized match, 139–140 deferred acceptance algorithm, 137–141, 145–149 Delmonico, Frank, 164 descending price auctions, 81–82 design, auction, 14, 101–102 Digital Dealing (Hall), 94 Discover card, 115–116 distribution of income, 22 Domar, Evsey, 36–37 Dorosin, Neil, 142–144 Douglas Aircraft Company, 25 Dow, Bob, 1–2 Dow, Edna, 1–2 Drèze, Jacques, 85–86 dumping toxic waste, transactions for, 167–169 Dutch auctions, 81–82 dysfunction, market, 36, 75–77, 143 eBay adverse selection on, 51–55, 57 auction listings, 94–97 concerns on model for, 43, 46, 48 on seller motivation for giving to charities, 73–75 start of, 39–41 as two-sided market, 109, 119 e-commerce, 41–43, 52–55 “The Economic Organization of a P.O.W.


pages: 268 words: 74,724

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank by John Tamny

Airbnb, Alan Greenspan, Apollo 13, bank run, Bear Stearns, Bernie Madoff, bitcoin, Bretton Woods, business logic, buy and hold, Carl Icahn, Carmen Reinhart, corporate raider, correlation does not imply causation, cotton gin, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Donald Trump, Downton Abbey, Fairchild Semiconductor, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, Glass-Steagall Act, Home mortgage interest deduction, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, Larry Ellison, liquidity trap, low interest rates, Mark Zuckerberg, market bubble, Michael Milken, Money creation, money market fund, moral hazard, mortgage tax deduction, NetJets, offshore financial centre, oil shock, peak oil, Peter Thiel, Phillips curve, price stability, profit motive, quantitative easing, race to the bottom, Ronald Reagan, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Solyndra, Steve Jobs, The Wealth of Nations by Adam Smith, too big to fail, Travis Kalanick, Uber for X, War on Poverty, yield curve

Compare this to the three decades prior to the post-2008 regulatory buildup, in which an average of more than one hundred new banks opened per year.16 Why the change? Some of it is happily attributable to market forces. As mentioned previously, nonbank sources of credit have been eroding the dominance of traditional banks for more than a century. The Internet has sped up the process of Schumpterian “creative destruction.” After that, the increasingly intrusive regulations foisted on traditional banks have rendered them rather weak relative to inventive outside-the-banking-system sources of credit. As Robert H. Smith described it in The Changed Face of Banking: After 2008 . . . banks came under new scrutiny from Washington involving pressure to reestablish themselves as safer, stronger partners to the financial system.

Paul Scott, “From Washed-Up Drug Addict to $100M Man,” Daily Mail Online, May 23, 2013. 15. Ibid. CHAPTER FOUR 1. Claire Cain, “Wearing Your Failures on Your Sleeve,” New York Times, November 8, 2014. 2. Mike Isaac, “Upstarts Raiding Giants for Staff in Silicon Valley,” New York Times, August 19, 2015. 3. Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction (Cambridge, Mass.: Belknap Press, 2007), 70. 4. Ibid., 73. 5. Julianne Pepitone & Stacy Cawley, “Facebook’s first big investor, Peter Thiel, cashes out,” CNNMoney, August 20, 2012. 6. Peter Thiel, with Blake Masters, Zero to One (New York: Crown Business, 2014), 84. 7. Tim Harford, Adapt: Why Success Always Starts with Failure (New York: Farrar Strauss and Giroux, 2011), 236. 8.


pages: 226 words: 71,540

Epic Win for Anonymous: How 4chan's Army Conquered the Web by Cole Stryker

4chan, barriers to entry, Berlin Wall, Chelsea Manning, cognitive dissonance, Columbine, commoditize, creative destruction, crowdsourcing, eternal september, Firefox, future of journalism, Gabriella Coleman, hive mind, informal economy, Internet Archive, it's over 9,000, Julian Assange, Kickstarter, lolcat, Mark Zuckerberg, Marshall McLuhan, Mason jar, pre–internet, Silicon Valley, slashdot, social bookmarking, social web, Stephen Hawking, Steve Jobs, Stewart Brand, Streisand effect, technoutopianism, TED Talk, wage slave, We are Anonymous. We are Legion, Whole Earth Catalog, WikiLeaks

O’Farrell agrees there’s no way to guarantee that something will go viral, but there are ways to help it along, like putting it in a familiar format; making it easy to parody with basic software; and pitching well to editors and bloggers—but only if the content has legs and clear legal rights. So this is 4chan’s lighter side that has bled out into the rest of the web. Participatory culture, meme creation, viral media: whatever you want to call it, we’re experiencing something new and exciting, and 4chan is at its forefront. And yet 4chan is not just creativity. It’s also creative destruction. We’ve already seen how anonymous trolls tried to ruin Jessi Slaughter’s life. What would happen if they went after global corporations or political candidates of the highest order? What happens when a toddler gets bored building sandcastles? He totters over to the next kid’s creation and obliterates it with one unexpected kick.

There are essentially twin themes that make 4chan what it is: the participatory creative culture and the spontaneous social activism. They can be seen as two manifestations of a process that social media researcher danah boyd calls “hacking the attention economy.” Whether through creativity or creative destruction, 4chan’s /b/tards (or lowercase a anonymous) and the politically oriented trolls (or capital A Anonymous) are exceptionally skilled at getting people to take notice, without spending a single dollar to promote their work. Neither of these capabilities could exist on Facebook at the same scale because they are only made possible by 4chan’s emphasis on anonymity and ephemerality.


pages: 240 words: 75,304

Time Lord: Sir Sandford Fleming and the Creation of Standard Time by Clark Blaise

British Empire, Cornelius Vanderbilt, creative destruction, Dava Sobel, digital divide, James Watt: steam engine, John Harrison: Longitude, junk bonds, Khartoum Gordon, Robert Gordon, scientific management, Silicon Valley, transcontinental railway, traveling salesman, undersea cable, Upton Sinclair

One thinks of nature’s power not only to soothe but to inspire reveries of timelessness, as in Keats’s “Ode on a Grecian Urn” (1818). But England soon embraced the Industrial Revolution with even deeper fervor, so that within little more than a generation, the nation had been transformed into a virtual laboratory for creative destruction. Thirty years after Keats’s ode, in The Communist Manifesto, time became cheaper than sand, not dearer than gold, a servant, not a master. It could be leased back to an employer at a fair rate and for a set duration, or even confiscated by the proposed new state on the behalf of labor. The social structure and the political order were transformed, but not by Marx and Engels.

Grand-trunk rail service of 1870 America is comparable to interstate travel by Winnebago today. THE ARCHAIC, if charming, clutter of ancient quartiers, a series of medieval hamlets making up the metropolis called Paris, did not escape redefinition by the railroad model. Baron Haussmann, in his redesign of Paris (what David Harvey termed its “creative destruction”), used his once-in-a-millennium opportunity to impose a bold grid of straight, broad, railroad-style boulevards through the nooks and crannies of medieval Paris. Proud France had been humiliated by technocratic, militaristic Germany, and part of the blame for the scale of the defeat was thought to rest with the country’s reverential embrace of its own self-regard.


pages: 245 words: 75,397

Fed Up!: Success, Excess and Crisis Through the Eyes of a Hedge Fund Macro Trader by Colin Lancaster

"World Economic Forum" Davos, Adam Neumann (WeWork), Airbnb, Alan Greenspan, always be closing, asset-backed security, beat the dealer, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, Black Monday: stock market crash in 1987, bond market vigilante , Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, buy the rumour, sell the news, Carmen Reinhart, Chuck Templeton: OpenTable:, collateralized debt obligation, coronavirus, COVID-19, creative destruction, credit crunch, currency manipulation / currency intervention, deal flow, Donald Trump, Edward Thorp, family office, fear index, fiat currency, fixed income, Flash crash, George Floyd, global macro, global pandemic, global supply chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Growth in a Time of Debt, housing crisis, index arbitrage, inverted yield curve, Jeff Bezos, Jim Simons, junk bonds, Kenneth Rogoff, liquidity trap, lockdown, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, Masayoshi Son, Michael Milken, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, moral hazard, National Debt Clock, Nixon triggered the end of the Bretton Woods system, Northern Rock, oil shock, pets.com, Ponzi scheme, price stability, proprietary trading, quantitative easing, Reminiscences of a Stock Operator, reserve currency, Ronald Reagan, Ronald Reagan: Tear down this wall, Sharpe ratio, short selling, short squeeze, social distancing, SoftBank, statistical arbitrage, stock buybacks, The Great Moderation, TikTok, too big to fail, trickle-down economics, two and twenty, value at risk, Vision Fund, WeWork, yield curve, zero-sum game

Sixty fucking mini-Madoffs running around stealing investors’ funds, the largest amount since the GFC. When the markets are flush with cash and people are hungry for yield, the fraudsters come out of the woodwork. They want their fair share. “Bailouts and monetary policy have stunted the creative destruction process in the capital markets,” I go on. “Markets can’t go down 5% without handwringing. And so, central bankers cut rates and buy assets, thinking they’re being the good guys, the saviors of the world … arrogance unchecked, naïve compassion. But at what cost? Assets go up in value, but wealth inequality increases.

Now it has announced a wide variety of programs to buy various forms of corporate and other debt. The Fed is also financing bank purchases of municipal debt, and given the present trend, Fed purchases of equities cannot be too far behind. Some would say that the bond markets have already been nationalized. And all of this is in addition to the creative destruction problem: the natural process of allowing weaker companies to die a normal death. Uh-oh, the Fed has squeezed guys such as Warren Buffett out of the markets. The people who were prudent, who were sitting on all the liquidity didn’t even get to deploy any. The markets all ripped back too fast.


pages: 263 words: 77,786

Tomorrow's Capitalist: My Search for the Soul of Business by Alan Murray

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Alvin Toffler, Berlin Wall, Bernie Sanders, Big Tech, Black Lives Matter, blockchain, Boris Johnson, call centre, carbon footprint, commoditize, coronavirus, corporate governance, corporate raider, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, decarbonisation, digital divide, disinformation, disruptive innovation, do well by doing good, don't be evil, Donald Trump, Ferguson, Missouri, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, future of work, gentrification, George Floyd, global pandemic, Greta Thunberg, gun show loophole, impact investing, income inequality, intangible asset, invisible hand, Jeff Bezos, job automation, knowledge worker, lockdown, London Whale, low interest rates, Marc Benioff, Mark Zuckerberg, market fundamentalism, means of production, minimum wage unemployment, natural language processing, new economy, old-boy network, price mechanism, profit maximization, remote working, risk-adjusted returns, Ronald Reagan, Salesforce, scientific management, shareholder value, side hustle, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, The Future of Employment, the payments system, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Washington Consensus, women in the workforce, work culture , working poor, zero-sum game

In their important 2013 study, “The Future of Employment: How Susceptible Are Jobs to Computerisation?,” Oxford professors Carl Benedikt Frey and Michael A. Osborne began by noting that “concern over technological unemployment is hardly a recent phenomenon. Throughout history, the process of creative destruction, following technological inventions, has created enormous wealth, but also undesired disruptions.”10 They tell an amusing anecdote about William Lee, who invented the stocking frame knitting machine in 1589 as a replacement for hand knitting. Lee traveled to London to present his invention to Queen Elizabeth I, hoping to receive patent protection.

The rapid pace of technological change and the onslaught of disruptive innovation have left most big companies anything but complacent. Regularly, I speak to companies that are more concerned with startups than with their legacy competitors. That’s a common refrain in today’s business world. We are in a period of Schumpeterian creative destruction that is driving the best big companies to transform themselves faster than ever before in their histories, or be subjected to disruption. Frankly, I’ve never seen CEOs less complacent. The elephants feel like they have to dance… or else. “We’re seeing [legacy] companies being replaced with companies with new DNA,” serial tech entrepreneur Tom Siebel, now CEO of C3.ai, said at the virtual Fortune Global Forum in December 2020.


pages: 494 words: 132,975

Keynes Hayek: The Clash That Defined Modern Economics by Nicholas Wapshott

airport security, Alan Greenspan, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, collective bargaining, complexity theory, creative destruction, cuban missile crisis, Francis Fukuyama: the end of history, full employment, Gordon Gekko, greed is good, Gunnar Myrdal, if you build it, they will come, Isaac Newton, Joseph Schumpeter, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, means of production, military-industrial complex, Mont Pelerin Society, mortgage debt, New Journalism, Nixon triggered the end of the Bretton Woods system, Northern Rock, Paul Samuelson, Philip Mirowski, Phillips curve, price mechanism, public intellectual, pushing on a string, road to serfdom, Robert Bork, Robert Solow, Ronald Reagan, Simon Kuznets, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, trickle-down economics, Tyler Cowen, War on Poverty, We are all Keynesians now, Yom Kippur War

At the height of the crisis there were few in the short run who countered this resurgence of Keynesianism, even fewer who with a straight face promoted the Hayekian solution, to let the market find its own level. The view of Austrian-American political philosopher Joseph Schumpeter that the free market must from time to time endure a period of “creative destruction” was not allowed to be put to the test. Having so markedly been proved wrong, the widely held assumption that the free market always righted itself over time was not given a second chance. Few have tried to plot the dire consequences that would accompany the collapse of the economy: how many made unemployed; how many deprived of their homes; how many declared bankrupt; how many businesses shuttered.

Between 1945 and 1947 he was chief economist to Clement Attlee’s Labour government. 8 Quoted in Marjorie Shepherd Turner, Joan Robinson and the Americans (M. E. Sharpe, Armonk, N.Y., 1989), p. 51. 9 Ibid., p. 62. 10 Collected Writings, vol. 13: General Theory and After, Part 1, p. 339. 11 Joseph Alois Schumpeter (1883–1950), Czech-born Austrian economist and political scientist who studied under Böhm-Bawerk and whose theories of “creative destruction” in economics complemented the Austrian School’s notions. He fled Nazism for America in 1932, finding safe haven at Harvard. 12 Kahn, Making of Keynes’ General Theory, p. 170. 13 Letter from Keynes to Pigou, quoted in Charles H. Hession, John Maynard Keynes (Macmillan, New York, 1984), p. 263. 14 Joseph Alois Schumpeter and Elizabeth Boody Schumpeter, History of Economic Analysis (Oxford University Press, Oxford, U.K., 1954), p. 1118.

., 204, 230, 292–93 Constitution of Liberty, The (Hayek), 218–23, 290 consumer credits, 77 consumer prices, 41, 49–50, 54–55, 76–77, 81, 117–18, 143–44, 184–87, 189, 191, 224, 229–30, 267–68 consumption, 81–82, 119–20, 127, 131, 143–44, 184–87, 191 contractions, monetary, 217, 248–49 “Contract with America,” 272–74, 278, 293 corporations, 145, 233, 262, 264, 267–68, 275, 293 corporatist states, 145, 293 corruption, 159, 250, 277, 278 Council of Economic Advisers, 229, 231–32, 236, 242, 244, 278 “creative destruction,” 294 Credit-Ansalt Bank, 83 credit derivatives, 275 credit policies, 25, 43, 55, 79, 84–85, 100, 117–18, 136–37, 142, 160, 188, 279, 280–81 Crimean War, 11 Cromwell, Oliver, 140 Croome, H. M., 139, 140 Cuban Missile Crisis, 237 currencies: —Bretton Woods agreement on, 56, 193, 198, 243, 255 —devaluation of, 159–60, 243 —dollar as basis of, 31–32, 37–40, 56, 159–60 —exchange rates for, 22, 26–27 —fixed-price, 23, 37–40, 55–56 —floating price of, 37, 38–39, 56 —gold standard for, 22–23, 25, 26–27, 28, 37–40, 55–56, 72, 73, 85–87, 94, 136–37, 159–60, 193, 243 —international regulation of, 55–56, 193, 243, 255, 282–83 —Keynes’s views on, 22–23, 31–32, 37–40, 55–56, 82, 85–86, 136–37, 159–60, 193 —markets for, 22, 26–27, 52 —printing of, 22, 25, 131, 136, 149–50 —stability of, 136–37 —unemployment rate and, 31–32, 38–40, 56, 85–87 —value of, 26–27 Currie, Lauchlin, 165–66, 170 Curtin, John, 227–28 Czechoslovakia, 9, 17, 18 Czech Republic, 266 Daily Herald (London), 86 “Danaid jar,” 127 Darwin, Charles, 35, 43, 132 Darwinism, 35, 43 Davenport, John, 221 Dawson, Geoffrey, 133 debt: —banking policies on, 31–33, 41, 84 —interest on, 74 —national, 12, 84, 85, 86, 135, 154–55, 165, 224, 237, 241–42, 259, 264–65, 272–75, 276, 282–83 —personal, 144, 278–80 —war, 4–5, 8–14, 21–22, 31–32, 84, 155–57, 206 Defense Department, U.S., 232 “deferred pay,” 191–92 deficit financing, 86, 135, 154–55, 163, 165, 233, 234–35, 237, 240, 241–42, 243, 245, 264–65, 267, 274–75, 277–78, 283 deflation, 24–25, 32, 37, 39, 111–12, 135–36, 141–42, 188–89, 276, 277 DeLay, Tom, 273, 274 democracy, 9, 37, 151, 189, 193, 196–97, 202, 204–5, 219–23, 252, 266, 288–89, 291–93 democratic egalitarians, 35 Democratic Party, 235, 237, 244, 271, 275, 283, 293, 320n Denmark, 289 Dennison, Stanley, 248 depressions, economic, 54–55, 77–78, 79, 228, 230, 233, 287–88, see also Great Depression devaluation, currency, 159–60, 243 Diaghilev, Sergei, 53 “Dilemma of Thrift, The” (Foster and Catchings), 48–50 Dillon, C.


pages: 441 words: 136,954

That Used to Be Us by Thomas L. Friedman, Michael Mandelbaum

addicted to oil, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, Amazon Web Services, American Society of Civil Engineers: Report Card, Andy Kessler, Ayatollah Khomeini, bank run, barriers to entry, Bear Stearns, Berlin Wall, blue-collar work, Bretton Woods, business process, call centre, carbon footprint, carbon tax, Carmen Reinhart, Cass Sunstein, centre right, Climatic Research Unit, cloud computing, collective bargaining, corporate social responsibility, cotton gin, creative destruction, Credit Default Swap, crowdsourcing, delayed gratification, drop ship, energy security, Fall of the Berlin Wall, fear of failure, full employment, Google Earth, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low interest rates, low skilled workers, Mark Zuckerberg, market design, mass immigration, more computing power than Apollo, Network effects, Nixon triggered the end of the Bretton Woods system, obamacare, oil shock, PalmPilot, pension reform, precautionary principle, proprietary trading, Report Card for America’s Infrastructure, rising living standards, Ronald Reagan, Rosa Parks, Saturday Night Live, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, the long tail, the scientific method, Thomas L Friedman, too big to fail, University of East Anglia, vertical integration, WikiLeaks

Moreover, with the introduction of the Social Security and unemployment insurance programs in a 1935 Fireside Chat, he founded the American social safety net, which is itself an indirect guarantor of capitalism. The competition that is central to a free-market economy produces losers as well as winners. This process of “creative destruction” so central to capitalism is just that—creative and destructive—and we cannot sustain the destruction without the social safety net that affords some protection to the losers. Without it, they might seek to bring down the very system that has made Americans wealthy. As America enters a necessary debate about how generous unemployment insurance, Social Security, and Medicare should be, it is well to remember that this social safety net ensures the legitimacy and stability of the free-market economy.

In the wake of the crisis, Congress passed and the president signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which imposed new regulations on the financial industry with the goal of making its operations safer. The banking industry, however, did everything it could to weaken that legislation, and the ultimate impact of the reforms remains to be seen. The result, as the Columbia University economist Jagdish Bhagwati observed, was that a financial industry built to finance “creative destruction” (the formation of new companies and industries to replace old ones) ended up promoting “destructive creation” (the buying and selling of financial instruments with little intrinsic value), the collective implosion of which threatened the whole economy. The fact that virtually none of the main culprits in bringing about this huge destruction of wealth has suffered any legal penalties suggests that our regulations need some updating.

In general, if you were to design a country ideally suited to flourish in the world we are living in, it would look more like the United States than any other. In a world in which individual creativity is becoming ever more important, America supports individual achievement and celebrates the quirky. In a world in which technological change and creative destruction take place at warp speed, requiring maximal economic flexibility, the American economy is as flexible as any on the planet. In a world in which transparent, reliable institutions, and especially the rule of law, are more important than ever for risk-taking and innovation, the United States has an outstanding legal environment.


pages: 689 words: 134,457

When McKinsey Comes to Town: The Hidden Influence of the World's Most Powerful Consulting Firm by Walt Bogdanich, Michael Forsythe

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Alistair Cooke, Amazon Web Services, An Inconvenient Truth, asset light, asset-backed security, Atul Gawande, Bear Stearns, Boris Johnson, British Empire, call centre, Cambridge Analytica, carbon footprint, Citizen Lab, cognitive dissonance, collective bargaining, compensation consultant, coronavirus, corporate governance, corporate social responsibility, Corrections Corporation of America, COVID-19, creative destruction, Credit Default Swap, crony capitalism, data science, David Attenborough, decarbonisation, deindustrialization, disinformation, disruptive innovation, do well by doing good, don't be evil, Donald Trump, double entry bookkeeping, facts on the ground, failed state, financial engineering, full employment, future of work, George Floyd, Gini coefficient, Glass-Steagall Act, global pandemic, illegal immigration, income inequality, information security, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, job-hopping, junk bonds, Kenneth Arrow, Kickstarter, load shedding, Mark Zuckerberg, megaproject, Moneyball by Michael Lewis explains big data, mortgage debt, Multics, Nelson Mandela, obamacare, offshore financial centre, old-boy network, opioid epidemic / opioid crisis, profit maximization, public intellectual, RAND corporation, Rutger Bregman, scientific management, sentiment analysis, shareholder value, Sheryl Sandberg, Silicon Valley, smart cities, smart meter, South China Sea, sovereign wealth fund, tech worker, The future is already here, The Nature of the Firm, too big to fail, urban planning, WikiLeaks, working poor, Yogi Berra, zero-sum game

The stadium’s creative design shared civic accolades with another Houston company that also sought to be different: Enron Corporation. Headquartered in a fifty-story building a short trip from the ballpark, Enron had quickly become a Wall Street favorite, riding an updraft of fawning articles and surging profits. The company embraced the fashionable new concept of creative destruction, where corporations are encouraged to periodically renew themselves. Under this philosophy stability and teamwork become less important in a marketplace that rewards risk today, not tomorrow. The individual rather than the corporation now reigns supreme, with rewards going to those least afraid of failure, a philosophy described in the widely praised book on Enron, The Smartest Guys in the Room.

GO TO NOTE REFERENCE IN TEXT “When management consulting untethered”: Daniel Markovits, “How McKinsey Destroyed the Middle Class,” Atlantic, Feb. 3, 2020. GO TO NOTE REFERENCE IN TEXT “Outstanding corporations do win the right”: Sarah Kaplan and Richard N. Foster, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them (New York: Currency/Doubleday, 2001), 10. GO TO NOTE REFERENCE IN TEXT “There is a distinct possibility…that McKinsey”: McDonald, Firm, 8. GO TO NOTE REFERENCE IN TEXT In 2020, just 10 percent: U.S.

See also specific agencies; and countries Corruption Watch, 240–41 cost-of-living adjustments, 32 Cotopaxi, 149 Cotton, Tom, 18 Countrywide Financial, 182, 187 Courtney, Marcus, 41 COVID-19 pandemic, 71–73, 163–65, 274–75 Cox, Bryan D., 83 Cozzi, Dr. Michael, 138 Crain’s Chicago Business, 55–56 Crane, Jim, 218 “Creating Change That Matters” report, 278 creative destruction, 204 credit card debt, 182, 184 credit default swaps, 172 credit enhancement, 183–84, 188 credit-rating agencies, 172, 183, 187 credit securitization, 172–73, 181–90, 207–8 Credit Suisse, 18 Crimea, 26 Crosthwaite, K.


pages: 693 words: 204,042

New York 2140 by Kim Stanley Robinson

Anthropocene, availability heuristic, back-to-the-land, Black-Scholes formula, Burning Man, central bank independence, creative destruction, credit crunch, crowdsourcing, decarbonisation, East Village, full employment, gentrification, happiness index / gross national happiness, hive mind, income inequality, invisible hand, Jane Jacobs, Ken Thompson, Kim Stanley Robinson, liquidity trap, Mason jar, mass immigration, megastructure, microbiome, music of the spheres, New Urbanism, offshore financial centre, Planet Labs, plutocrats, Ponzi scheme, precariat, quantitative easing, Reflections on Trusting Trust, rent-seeking, Social Justice Warrior, the built environment, too big to fail

That required a lot of shifting of gears these days, because my screen was a veritable anthology of narratives, and in many different genres. I had to shift between haiku and epics, personal essays and mathematical equations, Bildungsroman and Götterdämmerung, statistics and gossip, all telling me in their different ways the tragedies and comedies of creative destruction and destructive creation, also the much more common but less remarked-upon creative creation and destructive destruction. The temporalities in these genres ranged from the nanoseconds of high-frequency trading to the geological epochs of sea level rise, chopped into intervals of seconds, hours, days, weeks, months, quarters, and years.

Helping our success was the fact that the continuous panicked quantitative easing since the Second Pulse had put more money out there than there was good paper to buy, which in effect meant that investors were, not to put too fine a point on it, too rich. That meant new opportunities to invest needed to be invented, and so they were. Demand gets supplied. And it wasn’t that hard to invent new derivatives, as we had found out, because the floods had indeed been a case of creative destruction, which of course is capitalism’s middle name. Am I saying that the floods, the worst catastrophe in human history, equivalent or greater to the twentieth century’s wars in their devastation, were actually good for capitalism? Yes, I am. That said, the intertidal zone was turning out to be harder to deal with than the completely submerged zone, counterintuitive though that might seem to people from Denver, who might presume that the deeper you are drowned the deader you are.

So the people of the 2060s staggered on through the great depression that followed the First Pulse, and of course there was a crowd in that generation, a certain particular one percent of the population, that just by chance rode things out rather well, and considered that it was really an act of creative destruction, as was everything bad that didn’t touch them, and all people needed to do to deal with it was to buckle down in their traces and accept the idea of austerity, meaning more poverty for the poor, and accept a police state with lots of free speech and freaky lifestyles velvetgloving the iron fist, and hey presto!


pages: 105 words: 18,832

The Collapse of Western Civilization: A View From the Future by Naomi Oreskes, Erik M. Conway

Anthropocene, anti-communist, correlation does not imply causation, creative destruction, en.wikipedia.org, energy transition, Great Leap Forward, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Kim Stanley Robinson, laissez-faire capitalism, Lewis Mumford, market fundamentalism, mass immigration, means of production, military-industrial complex, oil shale / tar sands, Pierre-Simon Laplace, precautionary principle, road to serfdom, Ronald Reagan, stochastic process, the built environment, the market place

Typically these entities were operated for-profit, with the surplus value produced by workers funneled to owners, managers, and “investors,” third parties who owned “stock” in a company but had lia-bility neither for its debts nor its social consequences. The separation of work from ownership produced a concentration of wealth amongst a tiny elite, who could then purchase more favorable laws and regulations from their host governments. One popular notion about capitalism of the period was that it operated through a process of creative destruc-tion. Ultimately, capitalism was paralyzed in the face of the rapid climate destabilization it drove, destroying itself. carbon-combustion complex The interlinked fossil fuel extraction, refinement, and combustion industries, L e x i c o n o f A r c h A i c T e r m s 55 financiers, and government “regulatory” agencies that enabled and defended destabilization of the world’s climate in the name of employment, growth, and prosperity.


pages: 286 words: 82,065

Curation Nation by Rosenbaum, Steven

Amazon Mechanical Turk, Andrew Keen, AOL-Time Warner, barriers to entry, citizen journalism, cognitive dissonance, commoditize, creative destruction, crowdsourcing, disintermediation, en.wikipedia.org, Ford Model T, future of journalism, independent contractor, Jason Scott: textfiles.com, Mary Meeker, means of production, off-the-grid, PageRank, pattern recognition, post-work, postindustrial economy, pre–internet, Sand Hill Road, Silicon Valley, Skype, social graph, social web, Steve Jobs, Tony Hsieh, Yogi Berra

He’s smart enough to be able to point the way toward the future and agile enough to adjust his thesis as he is able to see around the bend. But he’s also honest enough to admit that what he knows about the past obscures his vision of the future. He counts on the students to help him achieve a clearer picture. And he says that we’re still at the early stages of creative destruction, watching the forest burn before the new growth emerges: “We still have to see a lot of edifices crash and burn before we see what the new world really looks like.” What’s clear on the horizon is that for every print publication that embraces new curated editorial models, many more will struggle and fade away.

The idea of leveraging writers and technology didn’t start with Demand Media or Yahoo’s Associated Content or AOL’s SEED platform. In many ways, though, it did start when AOL, under Jon Miller, discovered the nascent WebLogs Inc. platform. Cofounder Brian Alvey explains that it was post-bubble, the Internet economy had crashed, and mainstream journalism was beginning its painful decade of “creative destruction.” “So here’s what happened: all these great journalists were out of a job,” he says. “And by journalists I even mean people who were not working at Forbes and the Wall Street Journal. But they were working on small newsletter publications too. So really, I think there were two reasons why the blogging movement took off.


pages: 302 words: 83,116

SuperFreakonomics by Steven D. Levitt, Stephen J. Dubner

agricultural Revolution, airport security, An Inconvenient Truth, Andrei Shleifer, Atul Gawande, barriers to entry, behavioural economics, Bernie Madoff, Boris Johnson, call centre, clean water, cognitive bias, collateralized debt obligation, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, deliberate practice, Did the Death of Australian Inheritance Taxes Affect Deaths, disintermediation, endowment effect, experimental economics, food miles, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), John Nash: game theory, Joseph Schumpeter, Joshua Gans and Andrew Leigh, longitudinal study, loss aversion, Louis Pasteur, market design, microcredit, Milgram experiment, Neal Stephenson, ocean acidification, oil shale / tar sands, patent troll, power law, presumed consent, price discrimination, principal–agent problem, profit motive, randomized controlled trial, Richard Feynman, Richard Thaler, selection bias, South China Sea, Stanford prison experiment, Stephen Hawking, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, ultimatum game, urban planning, William Langewiesche, women in the workforce, young professional

But history has shown again and again that such assumptions are wrong. This is not to say the world is perfect. Nor that all progress is always good. Even widespread societal gains inevitably produce losses for some people. That’s why the economist Joseph Schumpeter referred to capitalism as “creative destruction.” But humankind has a great capacity for finding technological solutions to seemingly intractable problems, and this will likely be the case for global warming. It isn’t that the problem isn’t potentially large. It’s just that human ingenuity—when given proper incentives—is bound to be larger.

See also specific researcher or experiment Bernheim, Douglas, 105 Berrebi, Claude, 62–63 Bertrand, Marianne, 45–46 BigDoggie.net, 51 birth effects, 57–62 Bishop, John, 44 blood-pressure cuffs, disposable, 207 boats, wind-powered fiberglass, 202 Bolívar, Simón, 63 border security, 66 Budyko, Mikhail, 191 Budyko’s Blanket, 193–99, 200 Buffett, Warren, 195 “butterfly girls,” 24–25, 34 bystander effect, 99 Caldeira, Ken, 183–84, 185, 186, 191–92, 196, 200 Canada, Athabasca Oil Sands in, 195 cancer, 84–87, 92 cap-and-trade agreement, 187 capitalism, as “creative destruction,” 11 carbon emissions, 11, 166, 171, 173, 182–83, 184–85, 187–88, 192, 199, 203 cardiovascular disease, 86 careers/professions and feminist revolution, 43–44 and prostitution, 54–55 Carnegie Institution, 183 “casual sex,” 30–31 Cedars-Sinai Medical Center, 205–6 Chamberlen, Peter, 141 change behavioral, 148–49,173, 203–9 charitable giving, 106–7, 124 Chavez, Hugo, 198 cheap and simple fixes and Agricultural Revolution, 141–42 and automobiles, 146–58 and childbirth, 133–38 and drugs, 145–46 and hurricanes, 158–63,178 and law of unintended consequences, 138–41 and oil, 142–43 and polio, 143–45 and population, 141–42 and puerperal fever, 133–38 and technological innovation, 11 and whaling, 142–43 See also Myhrvold, Nathan cheating, 116–17, 121 chemotherapy, 84–86 Chen, Keith, 211–16 Chevrolet, 158 Chicago, Illinois, prostitution in, 23–25, 26–38, 40–42, 50–55, 70–71 chief executive officers (CEOs), women as, 44–45 childbirth and cheap and simple fixes, 133–38,177 forceps in, 140–41 children and MBA wage study, 45–46 seat belts for, 150–58 “chimney to the sky,” 200–201 circumcision, 208–9 civil rights, 100 Civil Rights Act (1964), 43 climate change and Budyko’s Blanket, 193–99, 200 and carbon emissions, 166, 171, 173, 182–83, 184–85, 187–88, 192 control of, 198 cost-benefit analysis about, 168–69 and hurricanes, 158–63 incentives concerning, 203 lack of experiments about, 168 manipulation of, 190–91 prediction models about, 181–86 scary scenarios about, 169, 202–3 and volcanoes, 188–90 See also global warming/cooling Clinton, Bill, 99 clouds, puffy white, 201–2 Club (anti-theft device), 173–74 coal, 187, 189, 200–201 competition, for prostitutes, 30–31 condoms in India, 5, 6 and prostitution, 36, 53 Congress, U.S.


pages: 318 words: 85,824

A Brief History of Neoliberalism by David Harvey

"World Economic Forum" Davos, affirmative action, air traffic controllers' union, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, business cycle, California energy crisis, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, gentrification, George Gilder, Gini coefficient, global reserve currency, Great Leap Forward, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low interest rates, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, megaproject, Mexican peso crisis / tequila crisis, military-industrial complex, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Savings and loan crisis, Silicon Valley, special economic zone, structural adjustment programs, Suez crisis 1956, the built environment, The Chicago School, Tragedy of the Commons, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, We are all Keynesians now, Winter of Discontent

Neoliberalism has, in short, become hegemonic as a mode of discourse. It has pervasive effects on ways of thought to the point where it has become incorporated into the common-sense way many of us interpret, live in, and understand the world. The process of neoliberalization has, however, entailed much ‘creative destruction’, not only of prior institutional frameworks and powers (even challenging traditional forms of state sovereignty) but also of divisions of labour, social relations, welfare provisions, technological mixes, ways of life and thought, reproductive activities, attachments to the land and habits of the heart.

J. 13, 84 consent, construction of 51, 53–4, 62–3 uneven development 92, 93, 103, 110 Coca Cola 53, 80 Cody, E. 218 coercion/force legitimation of 77, 159, 180–1 neoliberal state 64, 70, 82–3 see also financial system; military; power; war Cold War 5, 10, 88, 107, 118 end of 3, 9, 32, 87, 94, 110–11, 176, 196 Comaroff, J. and J. 222 commodification 70, 153, 157, 160–1, 164–72 ‘common sense’ 39, 41 commons/natural resources/environment exploited 8–9, 70, 122, 194 degradation/pollution 67–8, 100, 161, 172–5 movements to protect 186, 200–1 neoliberalism on trial 164, 174–5 ‘tragedy of disappearing’ 65, 146–7, 159, 160, 201, 204 communism see socialism competition, international 70, 80 increased 87–9, 101, 103, 106, 108–9 as virtue 65, 66 confiscatory deflation 162 Confucianism 86, 186 consent, construction of 39–63, 80, 210–11 Britain 39, 40, 55–63 United States 39–58 passim, 62–3 Conservatives 113–14 neoconservatism 81–5 see also Thatcher consumerism 62 contradictions of neoliberal state 67–70, 79–81 control see planning and control Coors, J. 44 Corbridge, S. 213–14, 219 corporations, power of 12 consent, construction of 42, 48–9, 50, 54–5 freedom’s prospect 192, 203 neoliberal state 77–8, 80, 84–5 neoliberalism on trial 152, 157, 160, 164–5 uneven development 89, 90, 99 see also financial system Costello, T. 221, 222 Council of Economic Advisers (US) 31 Council for National Policy (US) 51 Court, J. 210, 212 Cowan, J. 220 Crampton, T. 207 ‘creative destruction’ 3 crime 47–8, 100, 185 crisis management 162–3 Cuba 198 culture 85 values 39, 40–2 ‘wars’ 205 currency 68, 189, 193 exchange rates 10, 12, 123–4, 141 Daewoo 107, 111 Dahl, R. 10 Davis, D. 213 De la Madrid, H. M. 99–100 De la Rua, F. 105 debt of developing countries 9, 29, 162, 193 neoliberal state 73–5 uneven development and crises 94–6, 99, 104, 108 decadence of individualism 85–6 decolonization 55–6 deficit financing 188 deflation 162, 194–5 deindustrialization 26, 53, 59 Dembour, M.


pages: 283 words: 85,824

The People's Platform: Taking Back Power and Culture in the Digital Age by Astra Taylor

"World Economic Forum" Davos, A Declaration of the Independence of Cyberspace, Aaron Swartz, Alan Greenspan, American Legislative Exchange Council, Andrew Keen, AOL-Time Warner, barriers to entry, Berlin Wall, big-box store, Brewster Kahle, business logic, Californian Ideology, citizen journalism, cloud computing, collateralized debt obligation, Community Supported Agriculture, conceptual framework, content marketing, corporate social responsibility, creative destruction, cross-subsidies, crowdsourcing, David Brooks, digital capitalism, digital divide, digital Maoism, disinformation, disintermediation, don't be evil, Donald Trump, Edward Snowden, Evgeny Morozov, Fall of the Berlin Wall, Filter Bubble, future of journalism, Gabriella Coleman, gentrification, George Gilder, Google Chrome, Google Glasses, hive mind, income inequality, informal economy, Internet Archive, Internet of things, invisible hand, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Perry Barlow, Julian Assange, Kevin Kelly, Kickstarter, knowledge worker, Laura Poitras, lolcat, Mark Zuckerberg, means of production, Metcalfe’s law, Naomi Klein, Narrative Science, Network effects, new economy, New Journalism, New Urbanism, Nicholas Carr, oil rush, peer-to-peer, Peter Thiel, planned obsolescence, plutocrats, post-work, power law, pre–internet, profit motive, recommendation engine, Richard Florida, Richard Stallman, self-driving car, shareholder value, sharing economy, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, slashdot, Slavoj Žižek, Snapchat, social graph, Steve Jobs, Stewart Brand, technological solutionism, technoutopianism, TED Talk, the long tail, trade route, Tragedy of the Commons, vertical integration, Whole Earth Catalog, WikiLeaks, winner-take-all economy, Works Progress Administration, Yochai Benkler, young professional

Instead of lifetime employment, the new system valorized adaptability, mobility, and risk; in the place of full-time employment, there were temporary contracts and freelance instability. In this context, the wish for expressive, worthwhile work, the desire to combine employment and purpose, took on a perverse form. New-media thinkers, with their appetite for disintermediation and creative destruction, implicitly endorse and advance this transformation. The crumbling and hollowing out of established cultural institutions, from record labels to universities, and the liberation of individuals from their grip is a fantasy that animates discussions of amateurism. New technologies are hailed for enabling us to “organize without organizations,” which are condemned as rigid and suffocating and antithetical to the open architecture of the Internet.

Old-media corporations are the Catholic Church, ossified monoliths challenged by a newly empowered laity, the persecuted networked dissidents answering Luther’s call. (The state makes an occasional appearance as the monarchy, tainted by association with the papacy.) Here the Reformation is a stunning example of Schumpeterian creative destruction, an epic tale of innovation in which a new invention (the printing press) and a new idea (Protestantism) shattered old hierarchies, redistributing power and proliferating spiritual options for everyday people. By analogy, the Web is equally revolutionary. Yet the Reformation did more than transform politics and religion.


pages: 362 words: 83,464

The New Class Conflict by Joel Kotkin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alvin Toffler, American Society of Civil Engineers: Report Card, back-to-the-city movement, Bob Noyce, Boston Dynamics, California gold rush, Californian Ideology, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, classic study, Cornelius Vanderbilt, creative destruction, crony capitalism, David Graeber, degrowth, deindustrialization, do what you love, don't be evil, Downton Abbey, driverless car, Edward Glaeser, Elon Musk, energy security, falling living standards, future of work, Future Shock, Gini coefficient, Google bus, Herman Kahn, housing crisis, income inequality, independent contractor, informal economy, Internet of things, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kevin Roose, labor-force participation, Larry Ellison, Lewis Mumford, low interest rates, low-wage service sector, Marc Andreessen, Mark Zuckerberg, Mary Meeker, mass affluent, McJob, McMansion, medical bankruptcy, microapartment, Nate Silver, National Debt Clock, New Economic Geography, new economy, New Urbanism, obamacare, offshore financial centre, Paul Buchheit, payday loans, Peter Calthorpe, plutocrats, post-industrial society, public intellectual, RAND corporation, Ray Kurzweil, rent control, rent-seeking, Report Card for America’s Infrastructure, Richard Florida, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Solyndra, Steve Jobs, stock buybacks, tech worker, techlash, technoutopianism, The Death and Life of Great American Cities, Thomas L Friedman, Tony Fadell, too big to fail, transcontinental railway, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, upwardly mobile, urban planning, urban sprawl, Virgin Galactic, War on Poverty, women in the workforce, working poor, young professional

Richey Piiparinen, “The Psychology of the Creative Class: Not as Creative as You Think,” Richey Piiparinen (blog), March 1, 2013, http://richeypiiparinen.wordpress.com/2013/03/01/the-psychology-of-the-creative-class-uniquely-conforming-creatively-monotonizing; Alec MacGillis, “The Ruse of the Creative Class,” American Prospect, December 18, 2009, http://prospect.org/article/ruse-creative-class-0. 46. Richey Piiparinen, “The Creative Destruction of Creative Class-ification,” New Geography, September 3, 2012, http://www.newgeography.com/content/003060-the-creative-destruction-creative-class-ification; Alan Mallach, “The Heavy Hand of Demographic Change,” Rooflines, February 25, 2013, http://www.rooflines.org/3100/the_heavy_hand_of_demographic_change. 47. Dan Alexander, “California Leads All States (and All but 2 Countries) with 111 Billionaires,” Forbes, March 7, 2014, http://www.forbes.com/sites/danalexander/2014/03/07/california-leads-all-states-and-all-but-2-countries-with-111-billionaires. 48.


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How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, asset allocation, Basel III, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamond, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, commoditize, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, fear index, financial engineering, financial innovation, Flash crash, forward guidance, Garrett Hardin, Gini coefficient, Glass-Steagall Act, global reserve currency, high net worth, High speed trading, hindsight bias, hype cycle, income inequality, inflation targeting, interest rate swap, inverted yield curve, Isaac Newton, Jaron Lanier, John Perry Barlow, joint-stock company, joint-stock limited liability company, junk bonds, Kodak vs Instagram, Kondratiev cycle, Large Hadron Collider, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, low interest rates, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, negative equity, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, plutocrats, Ponzi scheme, precautionary principle, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Right to Buy, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Jobs, survivorship bias, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tragedy of the Commons, trickle-down economics, two and twenty, Two Sigma, Tyler Cowen, Washington Consensus, wealth creators, working poor, yield curve

Schumpeter, Joseph (1883–1950) A free-market economic theorist and the only prominent economist ever to have been a minister of finance, in his native Austria in 1919. He was especially interested in innovation, not at the time a central field of study in economics. Schumpeter came up with the term “creative destruction” to describe the way capitalism works. It’s an idea that is easier to swallow when it’s happening in a field other than the one in which you yourself work. One of the problems with capitalism in its modern form is the speed and thoroughness with which creative destruction is at work in some fields—entertainment being one of them, journalism another—and not at all in others, such as banking, where large entrenched actors have so much power that they are able to prevent change.


pages: 279 words: 87,910

How Much Is Enough?: Money and the Good Life by Robert Skidelsky, Edward Skidelsky

banking crisis, basic income, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, call centre, carbon credits, creative destruction, critique of consumerism, David Ricardo: comparative advantage, death of newspapers, Dr. Strangelove, financial innovation, Francis Fukuyama: the end of history, full employment, Great Leap Forward, guns versus butter model, happiness index / gross national happiness, Herbert Marcuse, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, market clearing, market fundamentalism, Meghnad Desai, Paul Samuelson, Philippa Foot, planned obsolescence, precautionary principle, profit motive, purchasing power parity, Ralph Waldo Emerson, retail therapy, Robert Solow, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, union organizing, University of East Anglia, Veblen good, wage slave, wealth creators, World Values Survey, zero-sum game

In practice, the protest movements of the 1960s were rapidly followed by the collapse of the Keynesian state on which the expectations of imminent abundance had been built. This killed off utopianism. Marcuse became a museum piece in the West (though not in Latin America) even before his death. The world of insecure work returned; the trend to more equal income distribution was reversed; creative destruction was back. Under Reagan and Thatcher capitalism recovered much of its old piratical, buccaneering spirit, and the dream of instinctual liberation from a springboard of managed affluence receded. But even if growth had continued at the old pace, the utopianism of the 1960s was bound to fail.

., Trajectories of Time Spent Reading as a Primary Activity: A Comparison of the Netherlands, Norway, France, UK and USA since the 1970s, CRESC Working Paper 39 (www.cresc.ac.uk/sites/default/files/wp39.pdf; accessed January 12, 2012). 55. See Randeep Ramesh, “Happiness index planned to influence government policy,” Guardian, July 25, 2011. CHAPTER 7. EXITS FROM THE RAT RACE 1. Adam Lent and Mathew Lockwood, Creative Destruction: Placing Innovation at the Heart of Progressive Economics (London: Institute for Public Policy Research, 2010). 2. Adair Turner, Economics after the Crisis: Objectives and Means, Lecture 3: Economic Freedom and Public Policy: Economics as a Moral Discipline, Lionel Robbins Memorial Lecture (http://www2.lse.ac.uk/publicEvents/pdf/20101013%20Adair%20Turner%20transcript.pdf; accessed January 12, 2012). 3.


pages: 296 words: 82,501

Stuffocation by James Wallman

3D printing, Abraham Maslow, Adam Curtis, Airbnb, Alvin Toffler, back-to-the-land, Berlin Wall, big-box store, Black Swan, BRICs, carbon footprint, Cass Sunstein, clean water, collaborative consumption, commoditize, creative destruction, crowdsourcing, David Brooks, Fall of the Berlin Wall, Future Shock, Great Leap Forward, happiness index / gross national happiness, hedonic treadmill, high net worth, income inequality, Intergovernmental Panel on Climate Change (IPCC), James Hargreaves, Joseph Schumpeter, Kitchen Debate, Martin Wolf, mass immigration, McMansion, means of production, Nate Silver, Occupy movement, Paul Samuelson, planned obsolescence, post-industrial society, post-materialism, public intellectual, retail therapy, Richard Florida, Richard Thaler, sharing economy, Silicon Valley, Simon Kuznets, Skype, spinning jenny, Streisand effect, The future is already here, The Signal and the Noise by Nate Silver, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, Tyler Cowen, Tyler Cowen: Great Stagnation, World Values Survey, Zipcar

The Austrian American economist Joseph Schumpeter noticed this. “The same process of industrial mutation – if I may use that biological term,” Schumpeter wrote, “incessantly revolutionises the economic structure from within, incessantly destroys the old, incessantly creating a new one. This process of Creative Destruction is the essential fact about Capitalism.” Seen this way, it is little wonder that obsolescence and the waste that came with the throwaway culture resonated so strongly with the captains of consciousness. To them, obsolescence and waste were more than simply ways to increase profits. They were not just by-products of the industrial equivalent of evolution.

Source: Giles Slade, Made to Break (Cambridge: Harvard University Press, 2006). “The same process of industrial mutation – if I may use that biological term,” Schumpeter wrote, “incessantly revolutionises the economic structure from within, incessantly destroys the old, incessantly creating a new one. This process of Creative Destruction is the essential fact about Capitalism.” From Joseph Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1942). Christine Frederick For more on Christine Frederick, read Christine McGaffey Frederick, Selling Mrs. Consumer (New York: Business Borse, 1929); also Janice Rutherford, Selling Mrs.


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The Corona Crash: How the Pandemic Will Change Capitalism by Grace Blakeley

Anthropocene, asset-backed security, basic income, Big Tech, bond market vigilante , Bretton Woods, business cycle, capital controls, carbon tax, central bank independence, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, crony capitalism, debt deflation, decarbonisation, degrowth, deindustrialization, don't be evil, financial deregulation, Francis Fukuyama: the end of history, full employment, gig economy, global pandemic, global value chain, green new deal, Greenspan put, income inequality, informal economy, inverted yield curve, invisible hand, Jeff Bezos, liberal capitalism, light touch regulation, lockdown, low interest rates, Martin Wolf, Modern Monetary Theory, moral hazard, move fast and break things, Network effects, North Sea oil, Northern Rock, offshore financial centre, pensions crisis, Philip Mirowski, post-war consensus, price mechanism, quantitative easing, regulatory arbitrage, rent control, reshoring, Rishi Sunak, savings glut, secular stagnation, shareholder value, social distancing, structural adjustment programs, too big to fail, universal basic income, unorthodox policies, Washington Consensus, yield curve

The economy is too complex a system to be subject to successful central planning. Any well-intentioned bureaucratic interventions would have unintended consequences that would be more likely to decrease efficiency than bolster it. Public ownership of or public support for private firms, meanwhile, interferes with the Schumpetarian forces of creative destruction that provide the basis of capitalism’s dynamism, according to right-wing economists. Subsidies or cheap loans for businesses producing environmentally sustainable products or researching new technologies would remove any incentive these firms might have to use their resources efficiently. Corporate governance would suffer as these firms became subject to corruption and clientelism owing to their increasingly close relationships with state actors.


pages: 399 words: 155,913

The Right to Earn a Living: Economic Freedom and the Law by Timothy Sandefur

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, American ideology, barriers to entry, big-box store, Cass Sunstein, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, Edward Glaeser, housing crisis, independent contractor, joint-stock company, Joseph Schumpeter, minimum wage unemployment, positional goods, price stability, profit motive, race to the bottom, Ralph Nader, RAND corporation, rent control, Robert Bork, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, The Wealth of Nations by Adam Smith, trade route, transaction costs, Upton Sinclair, urban renewal, wealth creators

They can choose to go into another business instead or to find a niche market wherein they can specialize. This is admittedly disruptive to the entrepreneurs and workers who work for the less efficient firms and who, when those firms fail, find themselves temporarily unemployed and must obtain new jobs or new skills. This is the process that economist Joseph Schumpeter famously called “creative destruction.” Although these economic readjustments may be difficult for workers, the result will be greater economic efficiency and more wealth for everyone, including those who were formerly unemployed.10 In the 1930s, the creative nature of this dynamism was not widely respected, and intellectuals professing a doctrine of “rational” economic planning by government assailed the basic concepts of supply and demand, claiming that government control over the economy would eliminate the alleged inefficiencies of capitalism, equalize income among citizens, and organize economic activity with precision.11 This planning was generally characterized as “reform” and as a way to protect small-scale producers and family farmers from unfair competition by powerful industries, but the reality was quite different: the new economic planning systems stifled entrepreneurship and innovation and worsened the Great Depression.

Roger Pilon, “Corporations and Rights: On Treating Corporate People Justly,” Georgia Law Review 13 (1979): 1297. 58. Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819). 59. Charles River Bridge v. Warren Bridge, 36 U.S. (11 Pet.) 420 (1837). 60. Ibid. at 545–46. 61. Ibid. at 548. 62. Ibid. at 549. 63. Ibid. at 552–53. 64. Stanley Kutler, Privilege and Creative Destruction: The Charles River Bridge Case (New York: W. W. Norton, 1978), p. 94. 65. Ibid., pp. 94–95. 66. Ibid., p. 137. 301 Notes for Pages 31–40 67. William H. Page, “Ideological Conflict and the Origins of Antitrust Policy,” Tulane Law Review 66 (1991): 31. 68. Kelo v. New London, 545 U.S. 469 (2005). 69.

Coryell, 40–41 Cornwell, Jo Ann, 147–48 corporation, evolution, xvi, 17 general incorporation laws, 28–29 monopolistic corporate charters, 27–29 17th and 18th century, 26–29 19th century, 27–31, 48–49 see also monopoly, evolution corporations archaic vision of, 31–37 benefits of, 36–37 corporate charters, 27–31, 70–75 corporate privileges, 33–35 as creatures of the state, 29, 32–33 definition changes, 26–29, 37 Friedman on corporate social responsibility, 35 marriage analogy, 29 as monopolies, 29–31 as “persons,” 34–35 pooled resources, 35, 36 present-day antitrust laws, 50–55 protection from social legislation, 5–6 stakeholder theory and stakeholders, 35–36 see also monopolies Court of Federal Claims, raisin case and, 168–69 Craigmiles v. Giles, 151–53, 159 creative destruction, 126 creative faculty, aspect of humanity, 3 creative works, freedom of expression, 194–95 Crescent City Livestock Landing and Slaughterhouse Company, 42, 73 criminal law maxim (innocent until proven guilty), 130, 274 Curtis, Michael Kent, 288 DaimlerChrysler Corp. v. Cuno, 179–82 dairy industry regulation. see milk production and sales Danaher, John, 226 Danbury Hatters’ Case. see Loewe v.


pages: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

"World Economic Forum" Davos, 23andMe, Abraham Maslow, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon credits, carbon footprint, carbon tax, Cesare Marchetti: Marchetti’s constant, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, Cornelius Vanderbilt, cotton gin, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Easter island, Edward Glaeser, Edward Jenner, electricity market, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, flying shuttle, Flynn Effect, food miles, Ford Model T, Garrett Hardin, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, hedonic treadmill, Herbert Marcuse, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, Jevons paradox, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, Kickstarter, knowledge worker, Kula ring, Large Hadron Collider, Mark Zuckerberg, Medieval Warm Period, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, ocean acidification, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, plutocrats, Ponzi scheme, precautionary principle, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Robert Solow, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, Thales and the olive presses, Thales of Miletus, the long tail, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, Tragedy of the Commons, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, Vilfredo Pareto, wage slave, working poor, working-age population, world market for maybe five computers, Y2K, Yogi Berra, zero-sum game

It was Joseph Schumpeter who pointed out that the competition which keeps a businessman awake at night is not that from his rivals cutting prices, but that of entrepreneurs making his product obsolete. As Kodak and Fuji slugged it out for dominance in the 35mm film industry in the 1990s, digital photography began to extinguish the entire market for analogue film – as analogue records and analogue video cassettes had gone before. Creative destruction, Schumpeter called it. His point was that there is just as much creation going on as destruction – that the growth of digital photography would create as many jobs in the long run as were lost in analogue, or that the savings pocketed by a Wal-Mart customer are soon spent on other things, leading to the opening of new stores to service those new demands.

This catallaxy will not go smoothly, or without resistance. Natural and unnatural disasters will still happen. Governments will bail out big corporations and big bureaucracies, hand them special favours such as subsidies or carbon rations and regulate them in such a way as to create barriers to entry, slowing down creative destruction. Chiefs, priests, thieves, financiers, consultants and others will appear on all sides, feeding off the surplus generated by exchange and specialisation, diverting the life-blood of the catallaxy into their own reactionary lives. It happened in the past. Empires bought stability at the price of creating a parasitic court; monotheistic religions bought social cohesion at the price of a parasitic priestly class; nationalism bought power at the expense of a parasitic military; socialism bought equality at the price of a parasitic bureaucracy; capitalism bought efficiency at the price of parasitic financiers.

Abbasids 161, 178 Abelard, Peter 358 aborigines (Australian): division of labour 62, 63, 76; farming 127; technological regress 78–84; trade 90–91, 92 abortion, compulsory 203 Abu Hureyra 127 Acapulco 184 accounting systems 160, 168, 196 Accra 189 Acemoglu, Daron 321 Ache people 61 Acheulean tools 48–9, 50, 275, 373 Achuar people 87 acid rain 280, 281, 304–6, 329, 339 acidification of oceans 280, 340–41 Adams, Henry 289 Aden 177 Adenauer, Konrad 289 Aegean sea 168, 170–71 Afghanistan 14, 208–9, 315, 353 Africa: agriculture 145, 148, 154–5, 326; AIDS epidemic 14, 307–8, 316, 319, 320, 322; colonialism 319–20, 321–2; demographic transition 210, 316, 328; economic growth 315, 326–8, 332, 347; international aid 317–19, 322, 328; lawlessness 293, 320; life expectancy 14, 316, 422; per capita income 14, 315, 317, 320; poverty 314–17, 319–20, 322, 325–6, 327–8; prehistoric 52–5, 65–6, 83, 123, 350; property rights 320, 321, 323–5; trade 187–8, 320, 322–3, 325, 326, 327–8; see also individual countries African-Americans 108 agricultural employment: decline in 42–3; hardships of 13, 219–20, 285–6 agriculture: early development of 122–30, 135–9, 352, 387, 388; fertilisers, development of 135, 139–41, 142, 146, 147, 337; genetically modified (GM) crops 28, 32, 148, 151–6, 283, 358; hybrids, development of 141–2, 146, 153; and trade 123, 126, 127–33, 159, 163–4; and urbanisation 128, 158–9, 163–4, 215; see also farming; food supply Agta people 61–2 aid, international 28, 141, 154, 203, 317–19, 328 AIDS 8, 14, 307–8, 310, 316, 319, 320, 322, 331, 353 AIG (insurance corporation) 115 air conditioning 17 air pollution 304–5 air travel: costs of 24, 37, 252, 253; speed of 253 aircraft 257, 261, 264, 266 Akkadian empire 161, 164–5 Al-Ghazali 357 Al-Khwarizmi, Muhammad ibn Musa 115 Al-Qaeda 296 Albania 187 Alcoa (corporation) 24 Alexander the Great 169, 171 Alexander, Gary 295 Alexandria 171, 175, 270 Algeria 53, 246, 345 alphabet, invention of 166, 396 Alps 122, 178 altruism 93–4, 97 aluminium 24, 213, 237, 303 Alyawarre aborigines 63 Amalfi 178 Amazon (corporation) 21, 259, 261 Amazonia 76, 138, 145, 250–51 amber 71, 92 ambition 45–6, 351 Ames, Bruce 298–9 Amish people 211 ammonia 140, 146 Amsterdam 115–16, 169, 259, 368 Amsterdam Exchange Bank 251 Anabaptists 211 Anatolia 127, 128, 164, 165, 166, 167 Ancoats, Manchester 214 Andaman islands 66–7, 78 Andes 123, 140, 163 Andrew, Deroi Kwesi 189 Angkor Wat 330 Angola 316 animal welfare 104, 145–6 animals: conservation 324, 339; extinctions 17, 43, 64, 68, 69–70, 243, 293, 302, 338–9; humans’ differences from other 1, 2–4, 6, 56, 58, 64 Annan, Kofi 337 Antarctica 334 anti-corporatism 110–111, 114 anti-slavery 104, 105–6, 214 antibiotics 6, 258, 271, 307 antimony 213 ants 75–6, 87–8, 192 apartheid 108 apes 56–7, 59–60, 62, 65, 88; see also chimpanzees; orang-utans ‘apocaholics’ 295, 301 Appalachia 239 Apple (corporation) 260, 261, 268 Aquinas, St Thomas 102 Arabia 66, 159, 176, 179 Arabian Sea 174 Arabs 89, 175, 176–7, 180, 209, 357 Aral Sea 240 Arcadia Biosciences (company) 31–2 Archimedes 256 Arctic Ocean 125, 130, 185, 334, 338–9 Argentina 15, 186, 187 Arikamedu 174 Aristotle 115, 250 Arizona 152, 246, 345 Arkwright, Sir Richard 227 Armenians 89 Arnolfini, Giovanni 179 art: cave paintings 2, 68, 73, 76–7; and commerce 115–16; symbolism in 136; as unique human trait 4 Ashur, Assyria 165 Asimov, Isaac 354 Asoka the Great 172–3 aspirin 258 asset price inflation 24, 30 Assyrian empire 161, 165–6, 167 asteroid impacts, risk of 280, 333 astronomy 221, 270, 357 Athabasca tar sands, Canada 238 Athens 115, 170, 171 Atlantic Monthly 293 Atlantic Ocean 125, 170 Attica 171 Augustus, Roman emperor 174 Augustus the Strong, Elector of Saxony 184–5 Australia: climate 127, 241, 300, 334; prehistoric 66, 67, 69–70, 127; trade 187; see also aborigines (Australian); Tasmania Austria 132 Ausubel, Jesse 239, 346, 409 automobiles see cars axes: copper 123, 131, 132, 136, 271; stone 2, 5, 48–9, 50, 51, 71, 81, 90–91, 92, 118–19, 271 Babylon 21, 161, 166, 240, 254, 289 Bacon, Francis 255 bacteria: cross fertilisation 271; and pest control 151; resistance to antibiotics 6, 258, 271, 307; symbiosis 75 Baghdad 115, 177, 178, 357 Baines, Edward 227 Baird, John Logie 38 baking 124, 130 ‘balance of nature’, belief in 250–51 Balazs, Etienne 183 bald eagles 17, 299 Bali 66 Baltic Sea 71, 128–9, 180, 185 Bamako 326 bananas 92, 126, 149, 154, 392 Bangladesh 204, 210, 426 Banks, Sir Joseph 221 Barigaza (Bharuch) 174 barley 32, 124, 151 barrels 176 bartering vii, 56–60, 65, 84, 91–2, 163, 356 Basalla, George 272 Basra 177 battery farming 104, 145–6 BBC 295 beads 53, 70, 71, 73, 81, 93, 162 beef 186, 224, 308; see also cattle bees, killer 280 Beijing 17 Beinhocker, Eric 112 Bell, Alexander Graham 38 Bengal famine (1943) 141 benzene 257 Berlin 299 Berlin, Sir Isaiah 288 Bernard of Clairvaux, St 358 Berners-Lee, Sir Tim 38, 273 Berra, Yogi 354 Besant, Annie 208 Bhutan 25–6 Bible 138, 168, 396 bicycles 248–9, 263, 269–70 bin Laden, Osama 110 biofuels 149, 236, 238, 239, 240–43, 246, 300, 339, 343, 344, 346, 393 Bird, Isabella 197–8 birds: effects of pollution on 17, 299; killed by wind turbines 239, 409; nests 51; sexual differences 64; songbirds 55; see also individual species bireme galleys 167 Birmingham 223 birth control see contraception birth rates: declining 204–212; and food supply 192, 208–9; and industrialisation 202; measurement of 205, 403; population control policies 202–4, 208; pre-industrial societies 135, 137; and television 234; and wealth 200–201, 204, 205–6, 209, 211, 212; see also population growth Black Death 181, 195–6, 197, 380 Black Sea 71, 128, 129, 170, 176, 180 blogging 257 Blombos Cave, South Africa 53, 83 blood circulation, discovery of 258 Blunt, John 29 boat-building 167, 168, 177; see also canoes; ship-building Boers 321, 322 Bohemia 222 Bolivia 315, 324 Bolsheviks 324 Borlaug, Norman 142–3, 146 Borneo 339 Bosch, Carl 140, 412 Botswana 15, 316, 320–22, 326 Bottger, Johann Friedrich 184–5 Boudreaux, Don 21, 214 Boulton, Matthew 221, 256, 413–14 bows and arrows 43, 62, 70, 82, 137, 251, 274 Boxgrove hominids 48, 50 Boyer, Stanley 222, 405 Boyle, Robert 256 Bradlaugh, Charles 208 brain size 3–4, 48–9, 51, 55 Bramah, Joseph 221 Branc, Slovakia 136 Brand, Stewart 154, 189, 205 Brando, Marlon 110 brass 223 Brazil 38, 87, 123, 190, 240, 242, 315, 358 bread 38, 124, 140, 158, 224, 286, 392 bridges, suspension 283 Brin, Sergey 221, 405 Britain: affluence 12, 16, 224–5, 236, 296–7; birth rates 195, 200–201, 206, 208, 227; British exceptionalism 200–202, 221–2; climate change policy 330–31; consumer prices 24, 224–5, 227, 228; copyright system 267; enclosure acts 226, 323, 406; energy use 22, 231–2, 232–3, 342–3, 368, 430; ‘glorious revolution’ (1688) 223; income equality 18–19, 218; industrial revolution 201–2, 216–17, 220–32, 255–6, 258–9; life expectancy 15, 17–18; National Food Service 268; National Health Service 111, 261; parliamentary reform 107; per capita income 16, 218, 227, 285, 404–5; productivity 112; property rights 223, 226, 323–4; state benefits 16; tariffs 185–6, 186–7, 223; see also England; Scotland; Wales British Empire 161, 322 bronze 164, 168, 177 Brosnan, Sarah 59 Brown, Lester 147–8, 281–2, 300–301 Brown, Louise 306 Bruges 179 Brunel, Sir Marc 221 Buddhism 2, 172, 357 Buddle, John 412 Buffett, Warren 106, 268 Bulgaria 320 Burkina Faso 154 Burma 66, 67, 209, 335 Bush, George W. 161 Butler, Eamonn 105, 249 Byblos 167 Byzantium 176, 177, 179 cabbages 298 ‘Caesarism’ 289 Cairo 323 Calcutta 190, 315 Calico Act (1722) 226 Califano, Joseph 202–3 California: agriculture 150; Chumash people 62, 92–3; development of credit card 251, 254; Mojave Desert 69; Silicon Valley 221–2, 224, 257, 258, 259, 268 Cambodia 14, 315 camels 135, 176–7 camera pills 270–71 Cameroon 57 Campania 174, 175 Canaanites 166, 396 Canada 141, 169, 202, 238, 304, 305 Canal du Midi 251 cancer 14, 18, 293, 297–9, 302, 308, 329 Cannae, battle of 170 canning 186, 258 canoes 66, 67, 79, 82 capitalism 23–4, 101–4, 110, 115, 133, 214, 258–62, 291–2, 311; see also corporations; markets ‘Captain Swing’ 283 capuchin monkeys 96–7, 375 Caral, Peru 162–3 carbon dioxide emissions 340–47; absorption of 217; and agriculture 130, 337–8; and biofuels 242; costs of 331; and economic growth 315, 332; and fossil fuels 237, 315; and local sourcing of goods 41–2; taxes 346, 356 Cardwell’s Law 411 Caribbean see West Indies Carnegie, Andrew 23 Carney, Thomas 173 carnivorism 51, 60, 62, 68–9, 147, 156, 241, 376 carrots 153, 156 cars: biofuel for 240, 241; costs of 24, 252; efficiency of 252; future production 282, 355; hybrid 245; invention of 189, 270, 271; pollution from 17, 242; sport-utility vehicles 45 The Rational Optimist 424 Carson, Rachel 152, 297–8 Carter, Jimmy 238 Carthage 169, 170, 173 Cartwright, Edmund 221, 263 Castro, Fidel 187 Catalhoyuk 127 catallaxy 56, 355–9 Catholicism 105, 208, 306 cattle 122, 132, 145, 147, 148, 150, 197, 321, 336; see also beef Caucasus 237 cave paintings 2, 68, 73, 76–7 Cavendish, Henry 221 cement 283 central heating 16, 37 cereals 124–5, 125–6, 130–31, 143–4, 146–7, 158, 163; global harvests 121 Champlain, Samuel 138–9 charcoal 131, 216, 229, 230, 346 charitable giving 92, 105, 106, 295, 318–19, 356 Charles V: king of Spain 30–31; Holy Roman Emperor 184 Charles, Prince of Wales 291, 332 Chauvet Cave, France 2, 68, 73, 76–7 Chernobyl 283, 308, 345, 421 Chicago World Fair (1893) 346 chickens 122–3, 145–6, 147, 148, 408 chickpeas 125 Childe, Gordon 162 children: child labour 104, 188, 218, 220, 292; child molestation 104; childcare 2, 62–3; childhood diseases 310; mortality rates 14, 15, 16, 208–9, 284 Chile 187 chimpanzees 2, 3, 4, 6, 29, 59–60, 87, 88, 97 China: agriculture 123, 126, 148, 152, 220; birth rate 15, 200–201; coal supplies 229–30; Cultural Revolution 14, 201; diet 241; economic growth and industrialisation 17, 109, 180–81, 187, 201, 219, 220, 281–2, 300, 322, 324–5, 328, 358; economic and technological regression 180, 181–2, 193, 229–30, 255, 321, 357–8; energy use 245; income equality 19; innovations 181, 251; life expectancy 15; Longshan culture 397; Maoism 16, 187, 296, 311; Ming empire 117, 181–4, 260, 311; per capita income 15, 180; prehistoric 68, 123, 126; serfdom 181–2; Shang dynasty 166; Song dynasty 180–81; trade 172, 174–5, 177, 179, 183–4, 187, 225, 228 chlorine 296 cholera 40, 310 Chomsky, Noam 291 Christianity 172, 357, 358, 396; see also Catholicism; Church of England; monasteries Christmas 134 Chumash people 62, 92–3 Church of England 194 Churchill, Sir Winston 288 Cicero 173 Cilicia 173 Cisco Systems (corporation) 268 Cistercians 215 civil rights movement 108, 109 Clairvaux Abbey 215 Clark, Colin 146, 227 Clark, Gregory 193, 201, 401, 404 Clarke, Arthur C. 354 climate change 328–47, 426–30; costs of mitigation measures 330–32, 333, 338, 342–4; death rates associated with 335–7; and ecological dynamism 250, 329–30, 335, 339; and economic growth 315, 331–3, 341–3, 347; effects on ecosystems 338–41; and food supply 337–8; and fossil fuels 243, 314, 342, 346, 426; historic 194, 195, 329, 334, 426–7; pessimism about 280, 281, 314–15, 328–9; prehistoric 54, 65, 125, 127, 130, 160, 329, 334, 339, 340, 352; scepticism about 111, 329–30, 426; solutions to 8, 315, 345–7 Clinton, Bill 341 Clippinger, John 99 cloth trade 75, 159, 160, 165, 172, 177, 180, 194, 196, 225, 225–9, 232 clothes: Britain 224, 225, 227; early homo sapiens 71, 73; Inuits 64; metal age 122; Tasmanian natives 78 clothing prices 20, 34, 37, 40, 227, 228 ‘Club of Rome’ 302–3 coal: and economic take-off 201, 202, 213, 214, 216–17; and generation of electricity 233, 237, 239, 240, 304, 344; and industrialisation 229–33, 236, 407; prices 230, 232, 237; supplies 302–3 coal mining 132, 230–31, 237, 239, 257, 343 Coalbrookdale 407 Cobb, Kelly 35 Coca-Cola (corporation) 111, 263 coffee 298–9, 392 Cohen, Mark 135 Cold War 299 collective intelligence 5, 38–9, 46, 56, 83, 350–52, 355–6 Collier, Paul 315, 316–17 colonialism 160, 161, 187, 321–2; see also imperialism Colorado 324 Columbus, Christopher 91, 184 combine harvesters 158, 392 combined-cycle turbines 244, 410 commerce see trade Commoner, Barry 402 communism 106, 336 Compaq (corporation) 259 computer games 273, 292 computers 2, 3, 5, 211, 252, 260, 261, 263–4, 268, 282; computing power costs 24; information storage capacities 276; silicon chips 245, 263, 267–8; software 99, 257, 272–3, 304, 356; Y2K bug 280, 290, 341; see also internet Confucius 2, 181 Congo 14–15, 28, 307, 316 Congreve, Sir William 221 Connelly, Matthew 204 conservation, nature 324, 339; see also wilderness land, expansion of conservatism 109 Constantinople 175, 177 consumer spending, average 39–40 containerisation 113, 253, 386 continental drift 274 contraception 208, 210; coerced 203–4 Cook, Captain James 91 cooking 4, 29, 38, 50, 51, 52, 55, 60–61, 64, 163, 337 copper 122, 123, 131–2, 160, 162, 164, 165, 168, 213, 223, 302, 303 copyright 264, 266–7, 326 coral reefs 250, 339–40, 429–30 Cordoba 177 corn laws 185–6 Cornwall 132 corporations 110–116, 355; research and development budgets 260, 262, 269 Cosmides, Leda 57 Costa Rica 338 cotton 37, 108, 149, 151–2, 162, 163, 171, 172, 202, 225–9, 230, 407; calico 225–6, 232; spinning and weaving 184, 214, 217, 219–20, 227–8, 232, 256, 258, 263, 283 Coughlin, Father Charles 109 Craigslist (website) 273, 356 Crapper, Thomas 38 Crathis river 171 creationists 358 creative destruction 114, 356 credit cards 251, 254 credit crunch (2008) 8–10, 28–9, 31, 100, 102, 316, 355, 399, 411 Cree Indians 62 Crete 167, 169 Crichton, Michael 254 Crick, Francis 412 crime: cyber-crime 99–100, 357; falling rates 106, 201; false convictions 19–20; homicide 14, 20, 85, 88, 106, 118, 201; illegal drugs 106, 186; pessimism about 288, 293 Crimea 171 crocodiles, deaths by 40 Crompton, Samuel 227 Crookes, Sir William 140, 141 cruelty 104, 106, 138–9, 146 crusades 358 Cuba 187, 299 ‘curse of resources’ 31, 320 cyber-crime 99–100, 357 Cyprus 132, 148, 167, 168 Cyrus the Great 169 Dalkon Shield (contraceptive device) 203 Dalton, John 221 Damascus 127 Damerham, Wiltshire 194 Danube, River 128, 132 Darby, Abraham 407 Darfur 302, 353 Dark Ages 164, 175–6, 215 Darwin, Charles 77, 81, 91–2, 105, 116, 350, 415 Darwin, Erasmus 256 Darwinism 5 Davy, Sir Humphry 221, 412 Dawkins, Richard 5, 51 DDT (pesticide) 297–8, 299 de Geer, Louis 184 de Soto, Hernando 323, 324, 325 de Waal, Frans 88 Dean, James 110 decimal system 173, 178 deer 32–3, 122 deflation 24 Defoe, Daniel 224 deforestation, predictions of 304–5, 339 Delhi 189 Dell (corporation) 268 Dell, Michael 264 demographic transition 206–212, 316, 328, 402 Denmark 200, 344, 366; National Academy of Sciences 280 Dennett, Dan 350 dentistry 45 depression (psychological) 8, 156 depressions (economic) 3, 31, 32, 186–7, 192, 289; see also economic crashes deserts, expanding 28, 280 Detroit 315, 355 Dhaka 189 diabetes 156, 274, 306 Diamond, Jared 293–4, 380 diamonds 320, 322 Dickens, Charles 220 Diesel, Rudolf 146 Digital Equipment Corporation 260, 282 digital photography 114, 386 Dimawe, battle of (1852) 321 Diocletian, Roman emperor 175, 184 Diodorus 169 diprotodons 69 discount merchandising 112–14 division of labour: Adam Smith on vii, 80; and catallaxy 56; and fragmented government 172; in insects 75–6, 87–8; and population growth 211; by sex 61–5, 136, 376; and specialisation 7, 33, 38, 46, 61, 76–7, 175; among strangers and enemies 87–9; and trust 100; and urbanisation 164 DNA: forensic use 20; gene transfer 153 dogs 43, 56, 61, 84, 125 Doll, Richard 298 Dolphin, HMS 169 dolphins 3, 87 Domesday Book 215 Doriot, Georges 261 ‘dot-communism’ 356 Dover Castle 197 droughts: modern 241, 300, 334; prehistoric 54, 65, 334 drug crime 106, 186 DuPont (corporation) 31 dyes 167, 225, 257, 263 dynamos 217, 233–4, 271–2, 289 dysentery 157, 353 eagles 17, 239, 299, 409 East India Company 225, 226 Easter Island 380 Easterbrook, Greg 294, 300, 370 Easterlin, Richard 26 Easterly, William 318, 411 eBay (corporation) 21, 99, 100, 114, 115 Ebla, Syria 164 Ebola virus 307 economic booms 9, 29, 216 economic crashes 7–8, 9, 193; credit crunch (2008) 8–10, 28–9, 31, 100, 102, 316, 355, 399, 411; see also depressions (economic) ecosystems, dynamism of 250–51, 303, 410 Ecuador 87 Edinburgh Review 285 Edison, Thomas 234, 246, 272, 412 education: Africa 320; Japan 16; measuring value of 117; and population control 209, 210; universal access 106, 235; women and 209, 210 Edwards, Robert 306 Eemian interglacial period 52–3 Egypt: ancient 161, 166, 167, 170, 171, 192, 193, 197, 270, 334; Mamluk 182; modern 142, 154, 192, 301, 323; prehistoric 44, 45, 125, 126; Roman 174, 175, 178 Ehrenreich, Barbara 291 Ehrlich, Anne 203, 301–2 Ehrlich, Paul 143, 190, 203, 207, 301–2, 303 electric motors 271–2, 283 electricity 233–5, 236, 237, 245–6, 337, 343–4; costs 23; dynamos 217, 233–4, 271–2, 289 elephants 51, 54, 69, 303, 321 Eliot, T.S. 289 email 292 emigration 199–200, 202; see also migrations empathy 94–8 empires, trading 160–61; see also imperialism enclosure acts 226, 323, 406 endocrine disruptors 293 Engels, Friedrich 107–8, 136 England: agriculture 194–6, 215; infant mortality 284; law 118; life expectancy 13, 284; medieval population 194–7; per capita income 196; scientific revolution 255–7; trade 75, 89, 104, 106, 118, 169, 194; see also Britain Enron (corporation) 29, 111, 385 Erie, Lake 17 Erie Canal 139, 283 ethanol 240–42, 300 Ethiopia 14, 316, 319; prehistoric 52, 53, 129 eugenics 288, 329 Euphrates river 127, 158, 161, 167, 177 evolution, biological 5, 6, 7, 49–50, 55–6, 75, 271, 350 Ewald, Paul 309 exchange: etiquette and ritual of 133–4; and innovation 71–2, 76, 119, 167–8, 251, 269–74; and pre-industrial economies 133–4; and property rights 324–5; and rule of law 116, 117–18; and sexual division of labour 65; and specialisation 7, 10, 33, 35, 37–8, 46, 56, 58, 75, 90, 132–3, 350–52, 355, 358–9; and trust 98–100, 103, 104; as unique human trait 56–60; and virtue 100–104; see also bartering; markets; trade executions 104 extinctions 17, 43, 64, 68, 69–70, 243, 293, 302, 338–9 Exxon (corporation) 111, 115 eye colour 129 Ezekiel 167, 168 Facebook (website) 262, 268, 356 factories 160, 214, 218, 219–20, 221, 223, 256, 258–9, 284–5 falcons 299 family formation 195, 209–210, 211, 227 famines: modern 141, 143, 154, 199, 203, 302; pessimism about 280, 281, 284, 290, 300–302, 314; pre-industrial 45, 139, 195, 197 Faraday, Michael 271–2 Fargione, Joseph 242 farming: battery 104, 145–6; free-range 146, 308; intensive 143–9; organic 147, 149–52, 393; slash-and-burn 87, 129, 130; subsidies 188, 328; subsistence 87, 138, 175–6, 189, 192, 199–200; see also agriculture; food supply fascism 289 Fauchart, Emmanuelle 264 fax machines 252 Feering, Essex 195 Fehr, Ernst 94–6 female emancipation 107, 108–9, 209 feminism 109 Ferguson, Adam 1 Ferguson, Niall 85 Fermat’s Last Theorem 275 fermenting 130, 241 Ferranti, Sebastian de 234 Fertile Crescent 126, 251 fertilisation, in-vitro 306 fertilisers 32, 129, 135, 139–41, 142, 143, 145, 146, 147, 148, 149–50, 152, 155, 200, 337 Fibonacci 178 figs 125, 129 filariasis 310 Finland 15, 35, 261 fire, invention of 4, 50, 51, 52, 60, 274 First World War 289, 309 fish, sex-change 280, 293 fish farming 148, 155 fishing 62, 63–4, 71, 78–9, 81–2, 125, 127, 129, 136, 159, 162, 163, 327 Fishman, Charles 113 Flanders 179, 181, 194 flight, powered 257, 261, 264, 266 Flinders Island 81, 84 floods 128, 250, 329, 331, 334, 335, 426 Florence 89, 103, 115, 178 flowers, cut 42, 327, 328 flu, pandemic 28, 145–6, 308–310 Flynn, James 19 Fontaine, Hippolyte 233–4 food aid 28, 141, 154, 203 food miles 41–2, 353, 392; see also local sourcing food preservation 139, 145, 258 food prices 20, 22, 23, 34, 39, 40, 42, 240, 241, 300 food processing 29–30, 60–61, 145; see also baking; cooking food retailing 36, 112, 148, 268; see also supermarkets food sharing 56, 59–60, 64 food supply: and biofuels 240–41, 243, 300; and climate change 337–8; and industrialisation 139, 201–2; pessimism about 280, 281, 284, 290, 300–302; and population growth 139, 141, 143–4, 146–7, 192, 206, 208–9, 300–302 Ford, Ford Maddox 188 Ford, Henry 24, 114, 189, 271 Forester, Jay 303 forests, fears of depletion 304–5, 339 fossil fuels: and ecology 237, 240, 304, 315, 342–3, 345–6; fertilisers 143, 150, 155, 237; and industrialisation 214, 216–17, 229–33, 352; and labour saving 236–7; and productivity 244–5; supplies 216–17, 229–30, 237–8, 245, 302–3; see also charcoal; coal; gas, natural; oil; peat Fourier analysis 283 FOXP2 (gene) 55, 375 fragmentation, political 170–73, 180–81, 184, 185 France: capital markets 259; famine 197; infant mortality 16; population growth 206, 208; revolution 324; trade 184, 186, 222 Franco, Francisco 186 Frank, Robert 95–6 Franken, Al 291 Franklin, Benjamin 107, 256 Franks 176 Fray Bentos 186 free choice 27–8, 107–110, 291–2 free-range farming 146, 308 French Revolution 324 Friedel, Robert 224 Friedman, Milton 111 Friend, Sir Richard 257 Friends of the Earth 154, 155 Fry, Art 261 Fuji (corporation) 114, 386 Fujian, China 89, 183 fur trade 169, 180 futurology 354–5 Gadir (Cadiz) 168–9, 170 Gaelic language 129 Galbraith, J.K. 16 Galdikas, Birute 60 Galilee, Sea of 124 Galileo 115 Gandhi, Indira 203, 204 Gandhi, Sanjay 203–4 Ganges, River 147, 172 gas, natural 235, 236, 237, 240, 302, 303, 337 Gates, Bill 106, 264, 268 GDP per capita (world), increases in 11, 349 Genentech (corporation) 259, 405 General Electric Company 261, 264 General Motors (corporation) 115 generosity 86–7, 94–5 genetic research 54, 151, 265, 306–7, 310, 356, 358 genetically modified (GM) crops 28, 32, 148, 151–6, 283, 358 Genghis Khan 182 Genoa 89, 169, 178, 180 genome sequencing 265 geothermal power 246, 344 Germany: Great Depression (1930s) 31; industrialisation 202; infant mortality 16; Nazism 109, 289; population growth 202; predicted deforestation 304, 305; prehistoric 70, 138; trade 179–80, 187; see also West Germany Ghana 187, 189, 316, 326 Gibraltar, Strait of 180 gift giving 87, 92, 133, 134 Gilbert, Daniel 4 Gilgamesh, King 159 Ginsberg, Allen 110 Gintis, Herb 86 Gladstone, William 237 Glaeser, Edward 190 Glasgow 315 glass 166, 174–5, 177, 259 glass fibre 303 Global Humanitarian Forum 337 global warming see climate change globalisation 290, 358 ‘glorious revolution’ (1688) 223 GM (genetically modified) crops 28, 148, 151–6, 283, 358 goats 122, 126, 144, 145, 197, 320 Goethe, Johann von 104 Goklany, Indur 143–4, 341, 426 gold 165, 177, 303 golden eagles 239, 409 golden toads 338 Goldsmith, Edward 291 Google (corporation) 21, 100, 114, 259, 260, 268, 355 Gore, Al 233, 291 Goths 175 Gott, Richard 294 Gramme, Zénobe Théophile 233–4 Grantham, George 401 gravity, discovery of 258 Gray, John 285, 291 Great Barrier Reef 250 Greece: ancient 115, 128, 161, 170–71, 173–4; modern 186 greenhouse gases 152, 155, 242, 329; see also carbon dioxide emissions Greenland: ice cap 125, 130, 313, 334, 339, 426; Inuits 61; Norse 380 Greenpeace 154, 155, 281, 385 Grottes des Pigeons, Morocco 53 Groves, Leslie 412 Growth is Good for the Poor (World Bank study) 317 guano 139–40, 302 Guatemala 209 Gujarat 162, 174 Gujaratis 89 Gustavus Adolphus, King of Sweden 184 Gutenberg, Johann 184, 253 Guth, Werner 86 habeas corpus 358 Haber, Fritz 140, 412 Hadza people 61, 63, 87 Haiti 14, 301, 315 Halaf people 130 Hall, Charles Martin 24 Halley, Edmond 256 HANPP (human appropriation of net primary productivity) number 144–5 Hanseatic merchants 89, 179–80, 196 Hansen, James 426 hanta virus 307 happiness 25–8, 191 Harappa, Indus valley 161–2 Hardin, Garrett 203 harems 136 Hargreaves, James 227, 256 Harlem, Holland 215–16 Harper’s Weekly 23 Harvey, William 256 hay 214–15, 216, 239, 408–9 Hayek, Friedrich 5, 19, 38, 56, 250, 280, 355 heart disease 18, 156, 295 ‘hedonic treadmill’ 27 height, average human 16, 18 Heller, Michael 265–6 Hellespont 128, 170 Henrich, Joe 77, 377 Henry II, King of England 118 Henry, Joseph 271, 272 Henry, William 221 Heraclitus 251 herbicides 145, 152, 153–4 herding 130–31 Hero of Alexandria 270 Herschel, Sir William 221 Hesiod 292 Hippel, Eric von 273 hippies 26, 110, 175 Hiroshima 283 Hitler, Adolf 16, 184, 296 Hittites 166, 167 HIV/AIDS 8, 14, 307–8, 310, 316, 319, 320, 322, 331, 353 Hiwi people 61 Hobbes, Thomas 96 Hock, Dee 254 Hohle Fels, Germany 70 Holdren, John 203, 207, 311 Holland: agriculture 153; golden age 185, 201, 215–16, 223; horticulture 42; industrialisation 215–16, 226; innovations 264; trade 31, 89, 104, 106, 185, 223, 328 Holy Roman Empire 178, 265–6 Homer 2, 102, 168 Homestead Act (1862) 323 homicide 14, 20, 85, 88, 106, 118, 201 Homo erectus 49, 68, 71, 373 Homo heidelbergensis 49, 50–52, 373 Homo sapiens, emergence of 52–3 Hong Kong 31, 83, 158, 169, 187, 219, 328 Hongwu, Chinese emperor 183 Hood, Leroy 222, 405 Hooke, Robert 256 horses 48, 68, 69, 129, 140, 197, 215, 282, 408–9; shoes and harnesses 176, 215 housing costs 20, 25, 34, 39–40, 234, 368 Hoxha, Enver 187 Hrdy, Sarah 88 Huber, Peter 244, 344 Hueper, Wilhelm 297 Huguenots 184 Huia (birds) 64 human sacrifice 104 Hume, David 96, 103, 104, 170 humour 2 Hunan 177 Hungary 222 Huns 175 hunter-gatherers: consumption and production patterns 29–30, 123; division of labour 61–5, 76, 136; famines 45, 139; limitations of band size 77; modern societies 66–7, 76, 77–8, 80, 87, 135–6, 136–7; nomadism 130; nostalgia for life of 43–5, 135, 137; permanent settlements 128; processing of food 29, 38, 61; technological regress 78–84; trade 72, 77–8, 81, 92–3, 123, 136–7; violence and warfare 27, 44–5, 136, 137 hunting 61–4, 68–70, 125–6, 130, 339 Huron Indians 138–9 hurricanes 329, 335, 337 Hurst, Blake 152 Hutterites 211 Huxley, Aldous 289, 354 hydroelectric power 236, 239, 343, 344, 409 hyenas 43, 50, 54 IBM (corporation) 260, 261, 282 Ibn Khaldun 182 ice ages 52, 127, 329, 335, 340, 388 ice caps 125, 130, 313, 314, 334, 338–9, 426 Iceland 324 Ichaboe island 140 ‘idea-agora’ 262 imitation 4, 5, 6, 50, 77, 80 imperialism 104, 162, 164, 166, 172, 182, 319–20, 357; see also colonialism in-vitro fertilisation 306 income, per capita: and economic freedom 117; equality 18–19, 218–19; increases in 14, 15, 16–17, 218–19, 285, 331–2 India: agriculture 126, 129, 141, 142–3, 147, 151–2, 156, 301; British rule 160; caste system 173; economic growth 187, 358; energy use 245; income equality 19; infant mortality 16; innovations 172–3, 251; Mauryan empire 172–3, 201, 357; mobile phone use 327; population growth 202, 203–4; prehistoric 66, 126, 129; trade 174–5, 175, 179, 186–7, 225, 228, 232; urbanisation 189 Indian Ocean 174, 175 Indonesia 66, 87, 89, 177 Indus river 167 Indus valley civilisation 161–2, 164 industrialisation: and capital investment 258–9; and end of slavery 197, 214; and food production 139, 201–2; and fossil fuels 214, 216–17, 229–33, 352; and innovation 38, 220–24, 227–8; and living standards 217–20, 226–7, 258; pessimistic views of 42, 102–3, 217–18, 284–5; and productivity 227–8, 230–31, 232, 235–6, 244–5; and science 255–8; and trade 224–6; and urbanisation 188, 226–7 infant mortality 14, 15, 16, 208–9, 284 inflation 24, 30, 169, 289 influenza see flu, pandemic Ingleheart, Ronald 27 innovation: and capital investment 258–62, 269; and exchange 71–2, 76, 119, 167–8, 251, 269–74; and government spending programmes 267–9; increasing returns of 248–55, 274–7, 346, 354, 358–9; and industrialisation 38, 220–24, 227–8; and intellectual property 262–7, 269; limitlessness 374–7; and population growth 252; and productivity 227–8; and science 255–8, 412; and specialisation 56, 71–2, 73–4, 76–7, 119, 251; and trade 168, 171 insect-resistant crops 154–5 insecticides 151–2 insects 75–6, 87–8 insulin 156, 274 Intel (corporation) 263, 268 intellectual property 262–7; see also copyright; patents intensive farming 143–9 Intergovernmental Panel on Climate Change (IPCC) 330, 331, 332, 333–4, 338, 342, 347, 425, 426, 427, 428 internal combustion engine 140, 146, 244 International Planned Parenthood Foundation 203 internet: access to 253, 268; blogging 257; and charitable giving 318–19, 356; cyber-crime 99–100, 357; development of 263, 268, 270, 356; email 292; free exchange 105, 272–3, 356; packet switching 263; problem-solving applications 261–2; search engines 245, 256, 267; shopping 37, 99, 107, 261; social networking websites 262, 268, 356; speed of 252, 253; trust among users 99–100, 356; World Wide Web 273, 356 Inuits 44, 61, 64, 126 IPCC (Intergovernmental Panel on Climate Change) 330, 331, 332, 333–4, 338, 342, 347, 349, 425, 426, 427, 428 IQ levels 19 Iran 162 Iraq 31, 158, 161 Ireland 24, 129, 199, 227 iron 166, 167, 169, 181, 184, 223, 229, 230, 302, 407 irradiated food 150–51 irrigation 136, 147–8, 159, 161, 163, 198, 242, 281 Isaac, Glyn 64 Isaiah 102, 168 Islam 176, 357, 358 Israel 53, 69, 124, 148 Israelites 168 Italy: birth rate 208; city states 178–9, 181, 196; fascism 289; Greek settlements 170–71, 173–4; infant mortality 15; innovations 196, 251; mercantilism 89, 103, 178–9, 180, 196; prehistoric 69 ivory 70, 71, 73, 167 Jacob, François 7 Jacobs, Jane 128 Jamaica 149 James II, King 223 Japan: agriculture 197–8; birth rates 212; dictatorship 109; economic development 103, 322, 332; economic and technological regression 193, 197–9, 202; education 16; happiness 27; industrialisation 219; life expectancy 17, 31; trade 31, 183, 184, 187, 197 Jarawa tribe 67 Java 187 jealousy 2, 351 Jebel Sahaba cemeteries, Egypt 44, 45 Jefferson, Thomas 247, 249, 269 Jenner, Edward 221 Jensen, Robert 327 Jericho 127, 138 Jevons, Stanley 213, 237, 245 Jews 89, 108, 177–8, 184 Jigme Singye Wangchuck, King of Bhutan 25–6 Jobs, Steve 221, 264, 405 John, King of England 118 Johnson, Lyndon 202–3 Jones, Rhys 79 Jordan 148, 167 Jordan river 127 Joyce, James 289 justice 19–20, 116, 320, 358 Kalahari desert 44, 61, 76 Kalkadoon aborigines 91 Kanesh, Anatolia 165 Kangaroo Island 81 kangaroos 62, 63, 69–70, 84, 127 Kant, Immanuel 96 Kaplan, Robert 293 Kay, John 184, 227 Kazakhstan 206 Kealey, Terence 172, 255, 411 Kelly, Kevin 356 Kelvin, William Thomson, 1st Baron 412 Kenya 42, 87, 155, 209, 316, 326, 336, 353 Kerala 327 Kerouac, Jack 110 Khoisan people 54, 61, 62, 67, 116, 321 Kim Il Sung 187 King, Gregory 218 Kingdon, Jonathan 67 Kinneret, Lake 124 Klasies River 83 Klein, Naomi 291 Kleiner Perkins Caufield & Byers (venture capitalists) 259 knowledge, increasing returns of 248–50, 274–7 Kodak (corporation) 114, 386 Kohler, Hans-Peter 212 Korea 184, 197, 300; see also North Korea; South Korea Kuhn, Steven 64, 69 kula (exchange system) 134 !


pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

air traffic controllers' union, Alan Greenspan, Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, Bob Noyce, borderless world, British Empire, business cycle, capital controls, classic study, complexity theory, computer age, Computer Lib, computerized trading, content marketing, creative destruction, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, digital capitalism, digital divide, disintermediation, double helix, Douglas Engelbart, Douglas Engelbart, edge city, experimental subject, export processing zone, Fairchild Semiconductor, financial deregulation, financial independence, floating exchange rates, future of work, gentrification, global village, Gunnar Myrdal, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, independent contractor, Induced demand, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, Ivan Sutherland, James Watt: steam engine, job automation, job-hopping, John Markoff, John Perry Barlow, Kanban, knowledge economy, knowledge worker, labor-force participation, laissez-faire capitalism, Leonard Kleinrock, longitudinal study, low skilled workers, manufacturing employment, Marc Andreessen, Marshall McLuhan, means of production, megacity, Menlo Park, military-industrial complex, moral panic, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, Pearl River Delta, peer-to-peer, planetary scale, popular capitalism, popular electronics, post-Fordism, post-industrial society, Post-Keynesian economics, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Recombinant DNA, Robert Gordon, Robert Metcalfe, Robert Solow, seminal paper, Shenzhen special economic zone , Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Strategic Defense Initiative, tacit knowledge, technological determinism, Ted Nelson, the built environment, the medium is the message, the new new thing, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl, vertical integration, work culture , zero-sum game

But it was only in 1964 that IBM, with its 360/370 mainframe computer, came to dominate the computer industry, populated by new (Control Data, Digital), and old (Sperry, Honeywell, Burroughs, NCR) business machines companies. Most of these firms were ailing or had vanished by the 1990s: this is how fast Schumpeterian “creative destruction” has proceeded in the electronics industry. In that ancient age, that is 30 years from the time of writing, the industry organized itself in a well-defined hierarchy of mainframes, minicomputers (in fact, rather bulky machines), and terminals, with some specialty informatics left to the esoteric world of supercomputers (a cross-fertilization of weather forecasting and war games), in which the extraordinary ingenuity of Seymour Cray, in spite of his lack of technological vision, reigned for some time.

The new technological paradigm changed first the scope and dynamics of the industrial economy, creating a global economy and fostering a new wave of competition between existing economic agents as well as between them and a legion of newcomers. This new competition, played out by firms but conditioned by the state, led to substantial technological changes in processes and products that made some firms, some sectors, and some areas more productive. Yet, at the same time, creative destruction did occur in large segments of the economy, also affecting firms, sectors, regions, and countries disproportionately. The net result in the first stage of the informational revolution was thus a mixed blessing for economic progress. Furthermore, the generalization of knowledge-based production and management to the whole realm of economic processes on a global scale requires fundamental social, cultural, and institutional transformations which, if the historical record of other technological revolutions is considered, will take some time.

The network enterprise learns to live within this virtual culture. Any attempt at crystallizing the position in the network as a cultural code in a particular time and space sentences the network to obsolescence, since it becomes too rigid for the variable geometry required by informationalism. The “spirit of informationalism” is the culture of “creative destruction” accelerated to the speed of the optoelectronic circuits that process its signals. Schumpeter meets Weber in the cyberspace of the network enterprise. As for the potential social consequences of this new economic history, the voice of the master resonates with force 100 years later: The modern economic order... is now bound to the technical and economic conditions of machine production which today determine the lives of all individuals who are born into this mechanism, not only those directly concerned with economic acquisition, with irresistible force...


words: 49,604

The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

Alan Greenspan, barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, business cycle, clean water, company town, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, flying shuttle, full employment, George Santayana, global village, Great Leap Forward, hiring and firing, Howard Rheingold, income inequality, informal economy, invention of the sewing machine, invisible hand, Jane Jacobs, Joseph Schumpeter, Kickstarter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Mahbub ul Haq, Marshall McLuhan, mass immigration, McJob, Meghnad Desai, microcredit, moral panic, Neal Stephenson, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pension time bomb, pensions crisis, Robert Solow, Ronald Reagan, Silicon Valley, Snow Crash, spinning jenny, The Death and Life of Great American Cities, the market place, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, Tragedy of the Commons, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

THE WEIGHTLESS WORLD VII xx XXI 1 Invisibility Insecurity Inequality Weightless politics The new geography of government London’s triumph City politics Time is money Notes CHAPTER TWO. WHERE HAVE ALL THE JOBS GONE? 5 7 10 14 17 19 21 22 24 26 The unfairness of unemployment Behind the figures Downsizing blues Creative destruction? Insecurity: in the mind? Notes CHAPTER THREE. WEIGHTLESS WORK 28 31 32 34 36 38 39 Technology and Luddism The trade red herring Is the government to blame? Summary Notes CHAPTER FOUR. NOURISHING THE GRASS ROOTS 39 50 57 61 62 63 The growing third Local economies Local financing The state and the third sector Measuring the social economy The new framework Notes 67 75 78 80 83 85 88 CHAPTER FIVE.

As the MIT economist Paul Krugman sees it, anecdotes and headlines cannot do justice to the full picture — much as reports of plane crashes make us over-estimate the risks of air travel. He writes: ‘The destruction of good jobs by American corporations is just not an important part of what is happening to the American worker ... The people who are doing really badly are those who do not have good jobs and never did’.4 Creative destruction? Turning to fact rather than anecdote, large-scale hiring and firing is simply what happens in Western capitalism (at least outside Japan, although increasingly there too). But we are clearly a lot more worried about it now. One detailed study of job turnover patterns in American manufacturing5 finds that recessions are marked by a sharp increase in average job destruction rates and little change in job creation rates, meaning that job turnover rises during recessions too.


pages: 345 words: 92,849

Equal Is Unfair: America's Misguided Fight Against Income Inequality by Don Watkins, Yaron Brook

3D printing, Affordable Care Act / Obamacare, Apple II, barriers to entry, Berlin Wall, Bernie Madoff, blue-collar work, business process, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, colonial exploitation, Cornelius Vanderbilt, corporate governance, correlation does not imply causation, creative destruction, Credit Default Swap, crony capitalism, David Brooks, deskilling, Edward Glaeser, Elon Musk, en.wikipedia.org, financial deregulation, immigration reform, income inequality, indoor plumbing, inventory management, invisible hand, Isaac Newton, Jeff Bezos, Jony Ive, laissez-faire capitalism, Louis Pasteur, low skilled workers, means of production, minimum wage unemployment, Naomi Klein, new economy, obamacare, Peter Singer: altruism, Peter Thiel, profit motive, rent control, Ronald Reagan, Silicon Valley, Skype, Solyndra, statistical model, Steve Jobs, Steve Wozniak, The Spirit Level, too big to fail, trickle-down economics, Uber for X, urban renewal, War on Poverty, wealth creators, women in the workforce, working poor, zero-sum game

As if that weren’t bad enough, it turns out that the critics’ claims about inequality and mobility are no more reliable than the statistical claims we’ve seen them make about middle-class stagnation. The first problem is that, as inequality critic Timothy Noah concedes, “the peak years of American mobility” were “the latter half of the nineteenth century and the early years of the twentieth, when the American industrial revolution was wreaking maximum creative destruction on what had previously been an agrarian economy.” (Noah also notes that “mobility in [the] postwar era was no match for the mobility enjoyed by the generations of workers who lived during [Horatio] Alger’s lifetime.”)9 And yet this was an era in which there was almost no regulatory-welfare state to speak of, in which taxes were mind-bogglingly low, and in which economic inequality was high.

Under such conditions, it is almost inevitable that inherited wealth will dominate wealth amassed from a lifetime’s labor by a wide margin, and the concentration of capital will attain extremely high levels—levels potentially incompatible with the meritocratic values and principles of social justice fundamental to modern democratic societies.49 Although most economists grant that if r remained greater than g “for an extended period of time,” inequality would grow—all else being equal—they also argue that there are very good reasons to doubt such a scenario, above all because other forces are likely to have a countervailing effect on inequality trends. As economist Deirdre McCloskey explains, Piketty’s argument “is conclusive, so long as its factual assumptions are true: namely, only rich people have capital; human capital doesn’t exist; the rich reinvest their return; they never lose it to sloth or someone else’s creative destruction; [and] inheritance is the main mechanism, not a creativity that raises g for the rest of us just when it results in an r shared by us all.”50 These and numerous other assumptions made by Piketty have been challenged by economists—including several critics of economic inequality. For example, Lawrence Summers, former director of the National Economic Council under President Obama, argues: This rather fatalistic and certainly dismal view of capitalism can be challenged on two levels.


pages: 326 words: 91,559

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy by Nathan Schneider

1960s counterculture, Aaron Swartz, Adam Curtis, Affordable Care Act / Obamacare, Airbnb, altcoin, Amazon Mechanical Turk, antiwork, back-to-the-land, basic income, Berlin Wall, Bernie Sanders, bitcoin, Black Lives Matter, blockchain, Brewster Kahle, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Clayton Christensen, collaborative economy, collective bargaining, commons-based peer production, Community Supported Agriculture, corporate governance, creative destruction, crowdsourcing, cryptocurrency, Debian, degrowth, disruptive innovation, do-ocracy, Donald Knuth, Donald Trump, Edward Snowden, Elon Musk, emotional labour, Ethereum, ethereum blockchain, Evgeny Morozov, Fairphone, Food sovereignty, four colour theorem, future of work, Gabriella Coleman, gentrification, gig economy, Google bus, holacracy, hydraulic fracturing, initial coin offering, intentional community, Internet Archive, Jeff Bezos, Jeremy Corbyn, jimmy wales, John Perry Barlow, joint-stock company, Joseph Schumpeter, Julian Assange, Kevin Roose, Kickstarter, low interest rates, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, mass immigration, means of production, Money creation, multi-sided market, Murray Bookchin, new economy, offshore financial centre, old-boy network, Peter H. Diamandis: Planetary Resources, Pier Paolo Pasolini, post-work, precariat, premature optimization, pre–internet, profit motive, race to the bottom, Richard Florida, Richard Stallman, ride hailing / ride sharing, Rutger Bregman, Salesforce, Sam Altman, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, Silicon Valley, Slavoj Žižek, smart contracts, Steve Bannon, Steve Jobs, Steve Wozniak, Stewart Brand, surveillance capitalism, tech worker, TED Talk, transaction costs, Turing test, Uber and Lyft, uber lyft, underbanked, undersea cable, universal basic income, Upton Sinclair, Vanguard fund, Vitalik Buterin, W. E. B. Du Bois, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, working poor, workplace surveillance , Y Combinator, Y2K, Zipcar

It’s how smartphones have replaced everything from alarm clocks and record collections to asking driving directions from a gas-station attendant. The disrupters can win big. Christensen’s peers credited him with discovering a motive force in contemporary capitalism, a sunny successor to the “creative destruction” that Karl Marx, and then Joseph Schumpeter, observed in the industrial age. Thus we deify serial disrupters like Steve Jobs and Elon Musk. But what about the disrupted—those who endure the effects? In centuries past, among St. Clare’s nuns and the Diggers, among the Rochdale Pioneers and the Knights of Labor, cooperative economies have tended to take hold on the receiving end of economic upheavals.

Wind and I got to know each other in Paris while splitting a stranger’s apartment that we found through Airbnb. It was 2014, and thanks to apps like that, such apps were on the rise in urban centers.12 The internet was making it possible again for people to share resources such as cars, homes, and time—bringing us together, for a price. Capitalism’s creative destruction may have ravaged our communities for centuries with salvos of individualism, competition, and mistrust, but now it was ready to sell the benefits of community back to us on our smartphones. Without owning any guestrooms of its own, Airbnb was by then more valuable than Hyatt; Zipcar, which rents cars by the hour, had been bought by the international car-rental company Avis Budget.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, Big Tech, BRICs, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, currency risk, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, disruptive innovation, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, driverless car, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, financial engineering, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, general purpose technology, gig economy, global supply chain, global value chain, heat death of the universe, hydraulic fracturing, income inequality, independent contractor, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low interest rates, low skilled workers, lump of labour, Lyft, machine translation, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, post-work, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Robert Solow, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, tacit knowledge, TaskRabbit, tech billionaire, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, uber lyft, very high income, warehouse robotics, working-age population

Yet the alternative – to push more people into the labour force to look for work – could exacerbate the problem of weak wage growth, especially for workers with lower skill levels.2 Who benefits from technological and economic change? The riches of high-income market economies are built on a foundation of creative destruction. Over and over, across the last two centuries, people and firms have developed clever new ways of doing things that displaced older ways, and made expendable the workers who practised them. For the benefits of economic change to be reasonably broadly felt, the workers displaced by robots or software must find a new economic niche.

Acemoglu, Daron ageing populations agency, concept of Airbnb Amazon American Medical Association (AMA) anarchism Andreessen, Marc Anglo-Saxon economies Apple the iPhone the iPod artisanal goods and services Atkinson, Anthony Atlanta, Georgia austerity policies automation in car plants fully autonomous trucks of ‘green jobs’ during industrial revolution installation work as resistant to low-pay as check on of menial/routine work self-driving cars and technological deskilling automobiles assembly-line techniques automated car plants and dematerialization early days of car industry fully autonomous trucks self-driving cars baseball Baumol, William Belgium Bernanke, Ben Bezos, Jeff black plague (late Middle Ages) Boston, Massachusetts Brazil BRIC era Bridgewater Associates Britain deindustrialization education in extensions of franchise in financial crisis (2008) Great Exhibition (London 1851) housing wealth in and industrial revolution Labour Party in liberalization in political fractionalization in real wages in social capital in surpassed by US as leading nation wage subsidies in Brontë, Charlotte Brynjolfsson, Erik bubbles, asset-price Buffalo Bill (William Cody) BuzzFeed Cairncross, Frances, The Death of Distance (1997) capital ‘deepening’ infrastructure investment investment in developing world career, concept of cars see automobiles Catalan nationalism Central African Republic central banks Chait, Jonathan Charlotte chemistry, industrial Chicago meat packers in nineteenth-century expansion of World’s Columbia Exposition (1893) China Deng Xiaoping’s reforms economic slow-down in era of rapid growth foreign-exchange reserves ‘green jobs’ in illiberal institutions in inequality in iPod assembly in technological transformation in wage levels in Chorus (content-management system) Christensen, Clayton Cisco cities artisanal goods and services building-supply restrictions growth of and housing costs and industrial revolution and information membership battles in rich/skilled and social capital clerical work climate change Clinton, Hillary Coase, Ronald Columbia University, School of Mines communications technology communism communities of affinity computing app-based companies capability thresholds cloud services cycles of experimentation desktop market disk-drive industry ‘enterprise software’ products exponential progress narrative as general purpose technology hardware and software infrastructure history of ‘Moore’s Law’ and productivity switches transistors vacuum tubes see also digital revolution; software construction industry regulations on Corbyn, Jeremy Corliss steam engine corporate power Cowen, Tyler craft producers Craigslist creative destruction the Crystal Palace, London Dalio, Ray Dallas, Texas debt deindustrialization demand, chronically weak dematerialization Detroit developing economies and capital investment and digital revolution era of rapid growth and industrialization pockets of wealth in and ‘reshoring’ phenomenon and sharp slowdown and social capital see also emerging economies digital revolution and agency and company cultures and developing economies and distance distribution of benefits of dotcom tech boom emergence of and global imbalances and highly skilled few and industrial institutions and information flows investment in social capital niche markets pace of change and paradox of potential productivity and output and secular stagnation start-ups and technological deskilling techno-optimism techno-pessimism as tectonic economic transformation and trading patterns web journalism see also automation; computing; globalization discrimination and exclusion ‘disruption’, phenomenon of distribution of wealth see inequality; redistribution; wealth and income distribution dotcom boom eBay economics, classical The Economist education in emerging economies during industrial revolution racial segregation in USA and scarcity see also university education electricity Ellison, Glenn Ellison, Sara Fisher emerging economies deindustrialization economic growth in education in foreign-exchange reserves growth in global supply chains highly skilled workers in see also developing economies employment and basic income policy cheap labour as boost to and dot.com boom in Europe and financial crisis (2008) ‘green jobs’ low-pay sector minimum wage impact niche markets in public sector ‘reshoring’ phenomenon as rising globally and social contexts and social membership as source of personal identity and structural change trilemma in USA see also labour; wages Engels, Friedrich environmental issues Etsy euro- zone Europe extreme populist politics liberalized economies political fractionalization in European Union Facebook face-recognition technology factors of production land see also capital; labour ‘Factory Asia’ factory work assembly-line techniques during industrial revolution family fascism Federal Reserve financial crisis (2008) financial markets cross-border capital flows in developing economies Finland firms and companies Coase’s work on core competencies culture of dark matter (intangible capital) and dematerialization and ‘disruption’ ‘firm-specific’ knowledge and information flows internal incentive structures pay of top executives shifting boundaries of social capital of and social wealth start-ups Ford, Martin, Rise of the Robots (2015) Ford Motor Company fracking France franchise, electoral Friedman, Milton Fukuyama, Francis Gates, Bill gender discrimination general purpose technologies enormous benefits from exponential progress and skilled labour supporting infrastructure and time lags see also digital revolution Germany ‘gig economy’ Glaeser, Ed global economy growth in supply chains imbalances lack of international cooperation savings glut and social consensus globalization hyperglobalization and secular stagnation and separatist movements Goldman Sachs Google Gordon, Robert Gothenburg, Sweden Great Depression Great Depression (1930s) Great Exhibition, London (1851) Great Recession Great Stagnation Greece ‘green jobs’ growth, economic battle over spoils of boom (1994-2005) and classical economists as consistent in rich countries decline of ‘labour share’ dotcom boom emerging economies gains not flowing to workers and industrial revolution Kaldor’s ‘stylized facts of’ and Keynes during liberal era pie metaphor in post-war period and quality of institutions and rich/elite cities rich-poor nation gap and skilled labour guilds Hansen, Alvin Hayes, Chris, The Twilight of the Elites healthcare and medicine hedge funds and private equity firms Holmes, Oliver Wendell Hong Kong housing in Bay-Area NIMBY campaigns against soaring prices pre-2008 crisis zoning and regulations Houston, Texas Huffington Post human capital Hungary IBM identity, personal immigration and ethno-nationalist separatism and labour markets in Nordic countries and social capital income distribution see inequality; redistribution; wealth and income distribution India Indonesia industrial revolution automation during and economic growth and growth of cities need for better-educated workers and productivity ‘second revolution’ and social change and wages and World’s Fairs inequality and education levels between firms and housing wealth during industrial revolution during liberal era between nations pay of top executives rise of in emerging economies and secular stagnation in Sweden wild contingency of wealth see also rich people; wealth and income distribution inflation in 1970s hyperinflation information technology see computing Intel interest rates International Space Station (ISS) iRobot ISIS Italy Jacksonville, Florida Jacquard, Joseph Marie Japan journalism Kaldor, Nicholas Keynes, John Maynard Kurzweil.


pages: 384 words: 89,250

Made to Break: Technology and Obsolescence in America by Giles Slade

Albert Einstein, Alexey Pajitnov wrote Tetris, American ideology, Apollo Guidance Computer, Apple's 1984 Super Bowl advert, Buckminster Fuller, business cycle, Cass Sunstein, Charles Babbage, Charles Lindbergh, creative destruction, disinformation, Douglas Engelbart, Douglas Engelbart, Dr. Strangelove, Fairchild Semiconductor, Ford Model T, global village, Herman Kahn, housing crisis, indoor plumbing, invention of radio, Jeff Hawkins, John Perry Barlow, Joseph Schumpeter, Lewis Mumford, Marshall McLuhan, Mikhail Gorbachev, more computing power than Apollo, mutually assured destruction, PalmPilot, planned obsolescence, public intellectual, Ralph Nader, rent control, Ronald Reagan, Silicon Valley, Steve Jobs, Strategic Defense Initiative, Suez crisis 1956, the market place, the medium is the message, The Soul of a New Machine, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, unemployed young men, upwardly mobile, Vladimir Vetrov: Farewell Dossier, white picket fence, women in the workforce

Schumpeter was refinin a view of capitalism he had set forth in 1912 in his Theory of Economic Development (a work that would not appear in English translation until 1934).5 Late in 1929, in the wake of Black Tuesday, Schumpeter’s notion of business cycles would provide a shocked and desperate world with insight into economic devastation, and his “creative destruction”would describe forms of obsolescence that might fuel capitalism’s recovery.6 Although Frederick, in his 1928 article, did not credit Schumpeter’s work, J. George’s notion of progressive obsolescence was very similar to the forces of perpetual market change that drove capitalism in Schumpeter’s model: “The fundamental impulse that sets and keeps the capitalist engine in motion,”wrote Schumpeter, “comes from the new consumers’ goods . . . that capitalist enterprise creates . . .

George’s notion of progressive obsolescence was very similar to the forces of perpetual market change that drove capitalism in Schumpeter’s model: “The fundamental impulse that sets and keeps the capitalist engine in motion,”wrote Schumpeter, “comes from the new consumers’ goods . . . that capitalist enterprise creates . . . The same process of industrial mutation—if I may use that biological term— . . . incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about Capitalism.”7 At least one other German-speaking New Yorker understood Schumpeter’s theories suffici ntly to write about them. In January 1928, Paul M. Mazur addressed the Advertising Club of New York on the topic of psychological obsolescence in order to publicize his forthcoming book, American Prosperity: Its Causes and Consequences.


The Internet Trap: How the Digital Economy Builds Monopolies and Undermines Democracy by Matthew Hindman

A Declaration of the Independence of Cyberspace, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, AltaVista, Amazon Web Services, barriers to entry, Benjamin Mako Hill, bounce rate, business logic, Cambridge Analytica, cloud computing, computer vision, creative destruction, crowdsourcing, David Ricardo: comparative advantage, death of newspapers, deep learning, DeepMind, digital divide, discovery of DNA, disinformation, Donald Trump, fake news, fault tolerance, Filter Bubble, Firefox, future of journalism, Ida Tarbell, incognito mode, informal economy, information retrieval, invention of the telescope, Jeff Bezos, John Perry Barlow, John von Neumann, Joseph Schumpeter, lake wobegon effect, large denomination, longitudinal study, loose coupling, machine translation, Marc Andreessen, Mark Zuckerberg, Metcalfe’s law, natural language processing, Netflix Prize, Network effects, New Economic Geography, New Journalism, pattern recognition, peer-to-peer, Pepsi Challenge, performance metric, power law, price discrimination, recommendation engine, Robert Metcalfe, search costs, selection bias, Silicon Valley, Skype, sparse data, speech recognition, Stewart Brand, surveillance capitalism, technoutopianism, Ted Nelson, The Chicago School, the long tail, The Soul of a New Machine, Thomas Malthus, web application, Whole Earth Catalog, Yochai Benkler

Some scholarship has suggested that rich-get-richer effects are the culprit.4 But power law patterns can be produced by many different kinds of rich-getricher loops, and also by some processes that are different altogether.5 84 • Chapter 5 Second, and just as important, how stable are these winners-take-all patterns? The “Waiting for Godot” crowd (chapter 1), and the Silicon Valley advocates of “disruption” and Schumpeterian “creative destruction,” argue that today’s concentration will be short-lived. Even progressive-leaning net neutrality advocates have made similar claims, suggesting that if the internet’s architecture can be kept open, the “natural” tendency toward decentralized audiences will reassert itself. This chapter challenges these claims.

and, 1, 3 auctions, 3, 42, 86, 101 audience reach: attention economy and, 11–14; categories of content and, 165; churn and, 9, 84–85, 88–95, 100–101, 163–64, 167; compounded, 133; Darwinism and, 13, 136, 165–67, 169, 203n9; distribution of, 6, 12–13, 84–85, 88–100, 112, 114, 155, 167–69, 171, 179, 185; evolutionary model and, 164–67; false solutions and, 137–46; growth patterns in, 84, 88, 91, 95–96, 100; headlines and, 13, 32, 36, 38, 107, 147, 149–50, 154–57, 160–61; logarithms and, 88–96, 97, 100, 184–86; methodology and, 184–92; mobile devices and, 2–4, 13, 39, 69, 109, 137, 142–44, 147, 152, 160, 165, 167, 170, 179; nature of internet and, 162–80; news and, 104–18, 121–22, 126–30, 133–39, 142–49, 152, 154, 157–61, 169; overlap and, 67, 76–77, 108, 110; paywalls and, 132, 137–40, 147, 160; public sphere and, 10–11, 13–14, 99, 169; rankings and, 7, 25, 31, 54, 84–96, 100, 110–12, 136, 157, 186; recommendation systems and, 60 (see also recommendation systems); stability and, 165; traffic and, 83–96, 99–101, 104–11, 114–18, 121, 129, 134, 169, 186–89; unique visitors and, 87–88, 106–11, 128, 134 AWS, 153, 168, 203n28 Ayres, Ian, 3 Bagdikian, Benjamin, 171 Bai, Matt, 7 Bankler, Yochai, 12, 170 Banko, Michele, 51 Bank of America, 9 Barlow, John Perry, 162–63, 176 BBC, 32 Beam, Christopher, 35 behavioral targeting, 55–58 Being Digital (Negroponte), 38 Bell, Robert, 44–49 bell curve, 92–93, 95 BellKor, 44–49 Bellman, Steven, 34 Bell Telephone, 16–17 Berners-Lee, Tim, 3 Bezos, Jeff, 72, 139, 147, 150 Bieschke, Eric, 38 BigChaos, 47 BigTable, 21, 23 Bing: attention economy and, 3; economic geography and, 79; Experimentation System and, 28; experiments and, 24–25, 28, 31; market share of, 3, 30–31, 195n63; nature of internet and, 174; news and, 32, 61, 134; page views and, 24; revenue and, 24, 31, 70; tilted playing field and, 24, 28, 30–32 “Bing It On” (Microsoft campaign), 31 black box problem, 52 blogs: attention economy and, 7–9, 13; Darwinism and, 136; economic geography and, 77; methodology and, 189; nature of internet and, 169; news and, 121, 133, 136–37, 155–56, 159; personalization and, Index 45, 50; political, 136; tilted playing field and, 17, 25, 35; Webb and, 45 Boczkowski, Pablo, 70–71 Borg, 21, 23 Boston, 113–14 Bosworth, Andrew, 162 Bowman, Douglas, 25 Box, George, 64 Bradshaw, Samantha, 177 Branch, John, 152 Brand, Stewart, 164 branding, 28–32, 36, 86, 166 Brexit, 58 Brill, Eric, 51 Broadband penetration, 124, 126, 190 browsers, 2, 24–25, 34, 107, 143, 175, 195n63 budget constraints, 72, 181 Buffet, Warren, 102 bundling, 65–67, 76–77, 197n8, 198n10, 198n14 Buzzfeed, 137, 145, 149–51, 159–60, 168 Caffeine, 21, 23 Cambridge Analytica, 40, 58, 59 Campus Network, 35–36 capitalism, 20, 85, 162, 176 Census Bureau, 190 Center for Public Integrity, 140 Chancellor, Joseph, 58 Chandler, Alfred, 20 Chartbeat, 107, 149, 153 Chicago, 113, 141 China, 80, 177–78, 193n5 Christie’s, 42 Chrome, 24–25, 145 churn, 9, 84–85, 88–95, 100–1, 163–64, 167 Chyri, Iris, 130 CineMatch, 43–44, 46, 50 Clauset, Aaron, 184 clickbait, 150 click-through rates, 56–57 cloud computing, 34, 153–54, 168, 203n28 CNN, 9, 32, 39, 72, 107, 159 Colossus, 21, 23 Columbia Journalism Review, 119, 148 Comcast, 172 comment systems, 19 comparative advantage, 62–63, 80, 82 • 227 competition: attention economy and, 1, 3–4, 6, 9, 11, 13, 165–66; bundling and, 67; economic geography and, 64, 67, 74, 78; nature of internet and, 164–70, 173–75; news and, 104, 114–15, 135, 137, 146, 149, 159, 164–70, 173–75; personalization and, 40; political economy and, 40–53, 60; search engines and, 1; social networks and, 35–36; tilted playing field and, 16–17, 21–22, 26–37; traffic and, 83, 86–87, 101 comScore: attention economy and, 10; nature of internet and, 187–88; news and, 104–10, 113, 116, 119–22, 127, 128–29; traffic and, 87, 199n19 concentration: attention economy and, 2–9, 13; dispersion and, 6, 42, 100, 200n23; economic geography and, 63–64, 68, 78, 80–81; forces of, 5–8, 19, 30, 61, 64, 80, 184; lopsided understanding of internet and, 5–8; markets and, 9, 30, 68, 78, 85–88, 99–100, 104, 114–15, 122, 127–30, 171, 184, 199n15; methodology and, 184; nature of internet and, 164, 171–72, 179; news and, 104, 114–15, 122, 126–28, 130, 134; personalization and, 39, 61; revenue and, 2–4, 8, 68, 171, 179; tilted playing field and, 19, 30, 32; traffic and, 7–8, 30, 32, 63, 83–88, 96, 99–101, 104, 122, 171, 199n15 Congress, 104, 141–42 conservatives, 32, 48, 69, 72, 75, 131, 175 consumption: attention economy and, 6, 10; branding and, 28–32, 36, 86, 166; bundling and, 65–67, 76–77, 197n8, 198n10, 198n14; digital content production and, 71–80; economic geography and, 63–68, 70–76, 79; experience goods and, 29–30; methodology and, 181–84; models and, 181–84; nature of internet and, 164–65, 168, 172–75; news and, 110, 113, 122, 125–29, 143, 149; personalization and, 42–43, 50, 57–58; preferences and, 5, 8, 32, 43, 54, 63–65, 69–81, 181–84, 198n41; price discrimination and, 66, 139; switching costs and, 8, 34, 63, 72, 78–79, 164; tilted playing field and, 17, 22–26, 29–34, 37; traffic and, 86; unique visitors and, 87–88, 106–11, 128, 134 cookies, 107 cost per thousand impressions (CPM), 69 court system, 6, 129, 148 creative destruction, 84, 167 228 • Index CSS, 143 CU Community, 35–36 DailyKos, 75 Daily Me, The, 38–39, 61 Daily You, The (Turow), 39 Dallas Morning News, 118 dark fiber, 21 Darwinism, 13, 136, 165–67, 169, 203n9 data centers, 2, 12, 15–16, 20–23, 54 data mining, 59, 135 data packets, 22, 171 “Declaration of the Independence of Cyberspace, A” (Barlow), 162–63 deep learning, 21 DeepMind, 23, 194n24 democracy, 7, 70, 103–4, 163, 175–78, 180 DeNardis, Laura, 171 Department of Justice, 115, 130 Des Moines Register, 136 Detroit, 83 digital content production model, 71–80 Dinosaur Planet, 46–47, 49 disinformation, 177–78 dispersion, 6, 42, 100, 200n23 distribution costs, 12–13, 155, 167–69, 179 diversity: economic geography and, 8, 63–64, 79; methodology and, 189, 191; nature of internet and, 180; news and, 104–5, 115, 118, 129–30, 149; personalization and, 53, 60–61 DNAinfo, 141 Dremel, 27 Duarte, Matias, 27 duopolies, 4, 30, 42, 68, 180 Earl, Jennifer, 169 Easterbrook, Frank, 175 eBay, 3, 26, 39, 42, 86–87, 175 economic geography: advertising and, 3–4, 63, 67–69, 80; agglomeration and, 9, 63, 82–83; aggregation and, 65–67, 76–77; Apple and, 79–80; apps and, 80; auctions and, 3, 42, 86, 101; audience reach and, 87, 104, 106–11, 114–18, 121, 129, 134, 169, 186–89; Bing and, 79; blogs and, 77; bundling and, 65–67, 76–77, 197n8, 198n10, 198n14; comparative advantage and, 62–63, 80; competition and, 64, 67, 74, 78; concentration and, 63–64, 68, 78, 80–81; consumption and, 63–67, 70–76, 79; customers and, 17, 24, 30, 33, 50, 57, 68, 149, 164, 172, 174; digital content production and, 71–80; dispersion and, 6, 42, 100, 200n23; distribution costs and, 12–13, 155, 167–69, 179; diversity and, 8, 63–64, 79; economies of scale and, 63–67, 74, 76, 79, 81; efficiency and, 63, 65, 67–68; Facebook and, 68, 79–80; Google and, 68–69, 79–80; government subsidies and, 133, 137, 140–42; hyperlocal sites and, 68, 77–78, 81, 101–4, 119, 121, 130–37, 164, 180; increasing returns and, 36–37, 63–64, 80–81, 181, 184; international trade and, 5, 62, 80; investment and, 73; journalism and, 78, 81; Krugman and, 6, 62–63, 80; lock-in and, 34–37, 61, 101, 173; long tails and, 8, 70, 84, 184, 199n15; markets and, 63–68, 74–75, 77–78; media preferences and, 69–71; Microsoft and, 65–66; models and, 63–65, 69–81, 198n27, 198n41; Netflix and, 70; networks and, 68–69; news and, 65–80; newspapers and, 65, 68–69, 78; page views and, 24, 87, 106, 108–18, 121, 125–29, 151, 157, 160–61, 188–89, 200n18; paywalls and, 107, 109, 132, 137–40, 147, 160; preferences and, 5, 8, 32, 43, 54, 63–65, 69–81, 181–84, 198n41; profit and, 73–77, 81; protectionism and, 174; quality and, 72–78, 81, 83–84; revenue and, 63, 65–68, 73–75, 79; search costs and, 8, 30, 34, 37, 41–43, 63, 72–74, 168, 181–82; search engines and, 64, 79–81; software and, 65–66; stickiness and, 74; subscriptions and, 65, 67; television and, 66, 70; traffic and, 63, 77–81; video and, 69, 76; Yahoo!


pages: 335 words: 89,924

A History of the World in Seven Cheap Things: A Guide to Capitalism, Nature, and the Future of the Planet by Raj Patel, Jason W. Moore

"World Economic Forum" Davos, agricultural Revolution, Anthropocene, Bartolomé de las Casas, biodiversity loss, British Empire, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon footprint, classic study, clean water, collateralized debt obligation, colonial exploitation, colonial rule, company town, complexity theory, creative destruction, credit crunch, Donald Trump, double entry bookkeeping, energy transition, European colonialism, feminist movement, financial engineering, Food sovereignty, Ford Model T, Frederick Winslow Taylor, full employment, future of work, Glass-Steagall Act, global supply chain, Haber-Bosch Process, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), Joseph Schumpeter, land reform, Lewis Mumford, liberal capitalism, low interest rates, means of production, Medieval Warm Period, megacity, Mercator projection, meta-analysis, microcredit, Naomi Klein, Nixon shock, Occupy movement, peak oil, precariat, scientific management, Scientific racism, seminal paper, sexual politics, sharing economy, source of truth, South Sea Bubble, spinning jenny, strikebreaker, surplus humans, The Theory of the Leisure Class by Thorstein Veblen, too big to fail, trade route, transatlantic slave trade, union organizing, Upton Sinclair, wages for housework, World Values Survey, Yom Kippur War

Today, those frontiers are smaller than ever before, and the volume of capital looking for new investment is greater than ever before. This unprecedented situation explains something of the extraordinary coupling of radical wealth inequality and profound financial instability that now shapes our world. War and violence drip from every pore of this coupling, but this time there’s no meaningful promise of creative destruction—only destruction. This explains not just why it is possible for Goldman Sachs to have its hands in everything but why, at this moment, it’s inevitable that Goldman Sachs is everywhere. From the fifteenth- and late sixteenth-century Genoese financier diaspora to the Amsterdam banking societies that reaped the rewards of Dutch colonialism to the British merchant banks that invested in exploitation at home and abroad to today’s global financial elite, the relationship among states, financiers, and other capitalists has led to the rise and fall of cycles of accumulation.

Madeira crashed in the 1520s and was overtaken by São Tomé in the 1550s, which crashed and was overtaken by Pernambuco in the 1590s, which crashed and was overtaken by Bahia in the 1630s, which crashed and was overtaken by Barbados in the 1680s, which crashed and was overtaken by Jamaica and Haiti in the 1720s–1750s. 57. Bulbeck et al. 1998. 58. Thomas 1997. 59. Dann and Seaton 2001; Spínola et al. 2002. 60. The seminal work on how sugar has transformed the planet is Mintz 1985. 61. Dann and Seaton 2001. 62. This is the unspoken assumption behind Schumpeter’s (1976) description of capitalism’s creative destruction. 63. LaDuke 1994. 64. Le Grange 2012. 65. Barnhill 2005; L. Williams 2012, 95. 66. Levins and Lewontin 1985; Moore 2015. 67. Bull and Maron 2016. 68. Pigou 1920; J.E. Meade 1952. 69. E.g., Martinez-Alier 2014. 70. Goodfriend, Cameron, and Cook 1994. 71. Capitalism has often viewed the work of nature as a “free gift”—a term that appears in Engels’s editing of Marx (1967a, 745).


pages: 98 words: 27,609

The American Dream Is Not Dead: (But Populism Could Kill It) by Michael R. Strain

Bernie Sanders, business cycle, centre right, creative destruction, deindustrialization, Donald Trump, feminist movement, full employment, gig economy, Gini coefficient, income inequality, job automation, labor-force participation, market clearing, market fundamentalism, new economy, opioid epidemic / opioid crisis, public intellectual, Robert Gordon, Ronald Reagan, social intelligence, Steven Pinker, The Rise and Fall of American Growth, Tyler Cowen, upwardly mobile, working poor

DYNAMISM Changes in the types of jobs represented in the middle of the labor market is a reality of economic dynamism. Yes, dynamism has negative effects and accrues to the detriment of some workers. Many new middle jobs will have aspects that are less desirable than the jobs they replaced. But dynamism has an upside as well. It creates new opportunities. Creative destruction destroys—but it also creates. Political and opinion leaders have done an excellent job in recent years of focusing on the negative effects of dynamism, with scant mention of its benefits. We have heard a lot about manufacturing jobs taking a hit. We have heard very little about new opportunities for high-end services and healthcare technicians.


pages: 436 words: 98,538

The Upside of Inequality by Edward Conard

affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Albert Einstein, assortative mating, bank run, Berlin Wall, book value, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Climatic Research Unit, cloud computing, corporate governance, creative destruction, Credit Default Swap, crony capitalism, disruptive innovation, diversified portfolio, Donald Trump, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, full employment, future of work, Gini coefficient, illegal immigration, immigration reform, income inequality, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invention of the telephone, invisible hand, Isaac Newton, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, Kodak vs Instagram, labor-force participation, Larry Ellison, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meta-analysis, new economy, offshore financial centre, paradox of thrift, Paul Samuelson, pushing on a string, quantitative easing, randomized controlled trial, risk-adjusted returns, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, selection bias, Silicon Valley, Simon Kuznets, Snapchat, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, total factor productivity, twin studies, Tyler Cowen, Tyler Cowen: Great Stagnation, University of East Anglia, upwardly mobile, War on Poverty, winner-take-all economy, women in the workforce, working poor, working-age population, zero-sum game

Jon Bakija, Adam Cole, and Bradley T. Heim, “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from the U.S. Tax Return Data,” Working Paper, April 2012, http://web.williams.edu/Economics/wp/BakijaColeHeimJobsIncomeGrowthTopEarners.pdf. 35. Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them (New York: Crown, 2001), 11. First chapter available at: http://itech.fgcu.edu/faculty/bhobbs/Creative%20destruction%20McKinsey%20Report%20CDch1.pdf. 36. Ibid. 37. Michael Moritz, “The Fall and Rise of Technology Juggernauts,” Financial Times, December 4, 2015, https://next.ft.com/content/6b859714-99ba-11e5-9228 -87e603d47bdc#axzz3tJPF7UAb. 38.

Lawrence Summers, “The Future of Work in the Age of the Machine: A Hamilton Project Policy Forum,” National Press Club, February 19, 2015, http://www.hamiltonproject.org/events/the_future_of_work_in_the_age_of_the_machine. 17. Robert McIntyre, Richard Phillips, and Phineas Baxandall, “Offshore Shell Games 2015: The Use of Offshore Tax Havens by Fortune 500 Companies,” Citizens for Tax Justice, 2015, http://ctj.org/pdf/offshoreshell2015.pdf. 18. Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them (New York: Crown, 2001), 13. First chapter available at: http://itech.fgcu.edu/fac ulty/bhobbs/Creative%20destruction%20McKinsey%20Report%20CDch1.pdf. 19. Michael Moritz, “The Fall and Rise of Technology Juggernauts,” Financial Times, December 4, 2015, https://next.ft.com/content/6b859714-99ba-11e5-9228-87e603d47bdc#axzz3tJPF7UAb. 20.


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Origin Story: A Big History of Everything by David Christian

"World Economic Forum" Davos, Albert Einstein, Anthropocene, Arthur Eddington, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Cepheid variable, colonial rule, Colonization of Mars, Columbian Exchange, complexity theory, cosmic microwave background, cosmological constant, creative destruction, cuban missile crisis, dark matter, demographic transition, double helix, Easter island, Edward Lorenz: Chaos theory, Ernest Rutherford, European colonialism, Francisco Pizarro, Haber-Bosch Process, Harvard Computers: women astronomers, Isaac Newton, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, Kim Stanley Robinson, Large Hadron Collider, Late Heavy Bombardment, Marshall McLuhan, microbiome, nuclear winter, Paris climate accords, planetary scale, rising living standards, Search for Extraterrestrial Intelligence, Stephen Hawking, Steven Pinker, Stuart Kauffman, TED Talk, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, trade route, Yogi Berra

But so did the many differences in population densities, technologies, patterns of social and military organization, and even resistance to diseases that had accumulated over many millennia. There were winners and losers, and for the losers, the outcomes could be catastrophic. Like the appearance of the first oxygen atmosphere or the sudden death of the dinosaurs, this was an example of what the Austrian economist Joseph Schumpeter termed creative destruction—the constant, often violent replacement of the old by the new, which Schumpeter saw as the very heart of modern capitalism. Many societies were ruined, and many lives destroyed. But there was creation, too, because the sheer scale of the first global-exchange networks synergized collective learning on a planetary scale, releasing huge flows of information, energy, wealth, and power that would eventually transform human societies throughout the world.

Now that this glossy new world is in motion, can we keep it going with smaller and more delicate energy flows, like the tiny flows, electron by electron, or proton by proton, that are managed by enzymes and that energize living cells? Can we imitate respiration, big life’s delicate, nondisruptive equivalent of fire? The idea of fossil fuels as activation energy suggests something else about today’s world. The turbulent dynamism of recent centuries is typical of all periods of creative destruction. It is the human equivalent of the gravitational energies that create stars. But once the violent energies of creation have done their work, we expect a new and more stable dynamism, as something new takes its seat in the universe. Like our sun, we can perhaps settle into a period of dynamic stability, having crossed a new threshold and built a new world society that preserves the best of the Good Anthropocene.


Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us About Economics and Life by Alan B. Krueger

"Friedman doctrine" OR "shareholder theory", accounting loophole / creative accounting, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, autonomous vehicles, bank run, behavioural economics, Berlin Wall, bitcoin, Bob Geldof, butterfly effect, buy and hold, congestion pricing, creative destruction, crowdsourcing, digital rights, disintermediation, diversified portfolio, Donald Trump, endogenous growth, Gary Kildall, George Akerlof, gig economy, income inequality, independent contractor, index fund, invisible hand, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kickstarter, Larry Ellison, Live Aid, Mark Zuckerberg, Moneyball by Michael Lewis explains big data, moral hazard, Multics, Network effects, obamacare, offshore financial centre, opioid epidemic / opioid crisis, Paul Samuelson, personalized medicine, power law, pre–internet, price discrimination, profit maximization, random walk, recommendation engine, rent-seeking, Richard Thaler, ride hailing / ride sharing, Saturday Night Live, Skype, Steve Jobs, the long tail, The Wealth of Nations by Adam Smith, TikTok, too big to fail, transaction costs, traumatic brain injury, Tyler Cowen, ultimatum game, winner-take-all economy, women in the workforce, Y Combinator, zero-sum game

Seven Keys to Rockonomics In many ways, the music industry is an ideal laboratory for witnessing economics. From the gramophone and phonograph to on-demand streaming, disruption caused by technological change typically occurs first in music. The music business serves as the canary in the coal mine for innovations. Creative destruction in music occurs in real time. Digitization has changed the way that music is produced, promoted, distributed, discovered, and consumed. Musicians, record labels, radio stations, device manufacturers, and fans all respond to the evolving economic incentives embedded in the music business. Businesses in many industries can learn essential lessons for survival and success from the music industry.

Rapid growth of streaming services such as Spotify, Pandora, and Apple Music all but displaced digital downloads. Digital downloads for iPods and other MP3 devices through online services such as iTunes, which seemed revolutionary a decade ago, are now a relic of the past, akin to eight-track tapes and 45s. Economists rarely get to see such creative destruction in real time. It’s as if Darwin was able to observe species evolving before his eyes while he visited the Galápagos Islands. Meanwhile, physical record sales have finally stabilized, albeit at a low level. There is a revival in vinyl record sales to music enthusiasts, and the CD market is propped up for now by customers with older cars purchasing new CDs for their dashboard CD players.13 Streaming is having a revolutionary effect on music sales.


pages: 368 words: 96,825

Bold: How to Go Big, Create Wealth and Impact the World by Peter H. Diamandis, Steven Kotler

3D printing, additive manufacturing, adjacent possible, Airbnb, Amazon Mechanical Turk, Amazon Web Services, Apollo 11, augmented reality, autonomous vehicles, Boston Dynamics, Charles Lindbergh, cloud computing, company town, creative destruction, crowdsourcing, Daniel Kahneman / Amos Tversky, data science, deal flow, deep learning, dematerialisation, deskilling, disruptive innovation, driverless car, Elon Musk, en.wikipedia.org, Exxon Valdez, fail fast, Fairchild Semiconductor, fear of failure, Firefox, Galaxy Zoo, Geoffrey Hinton, Google Glasses, Google Hangouts, gravity well, hype cycle, ImageNet competition, industrial robot, information security, Internet of things, Jeff Bezos, John Harrison: Longitude, John Markoff, Jono Bacon, Just-in-time delivery, Kickstarter, Kodak vs Instagram, Law of Accelerating Returns, Lean Startup, life extension, loss aversion, Louis Pasteur, low earth orbit, Mahatma Gandhi, Marc Andreessen, Mark Zuckerberg, Mars Rover, meta-analysis, microbiome, minimum viable product, move fast and break things, Narrative Science, Netflix Prize, Network effects, Oculus Rift, OpenAI, optical character recognition, packet switching, PageRank, pattern recognition, performance metric, Peter H. Diamandis: Planetary Resources, Peter Thiel, pre–internet, Ray Kurzweil, recommendation engine, Richard Feynman, ride hailing / ride sharing, risk tolerance, rolodex, Scaled Composites, self-driving car, sentiment analysis, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart grid, SpaceShipOne, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Stewart Brand, Stuart Kauffman, superconnector, Susan Wojcicki, synthetic biology, technoutopianism, TED Talk, telepresence, telepresence robot, Turing test, urban renewal, Virgin Galactic, Wayback Machine, web application, X Prize, Y Combinator, zero-sum game

Moore, “Cramming more components onto integrated circuits,” Electronics, April 19, 1965, 4. 10 Ray Kurzweil, “The Law of Accelerating Returns.” 11 Michael J. de la Merced, “Eastman Kodak Files for Bankruptcy,” New York Times, January 19, 2012, http://dealbook.nytimes.com/2012/01/19/eastman-kodak-files-for-bankruptcy/. 12 Chris Anderson, Free: How Today’s Smartest Businesses Profit by Giving Something for Nothing (New York: Hyperion, 2010), 2–3. 13 Elizabeth Palmero, “Google Invests Billions on Satellites to Expand Internet Access,” Scientific American, June 5, 2014. 14 Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—And How to Successfully Transform Them (New York: Crown Business, 2001), 8. 15 Babson Olin School of Business Advertisement, Fast Company, April 2011, 121. 16 Foster and Kaplan, Creative Destruction. 17 Salim Ismail, AI, 2012. 18 Virginia Heffernan, “How We All Learned to Speak Instagram,” Wired, April 2013, http://www.wired.com/2013/04/instagram-2/. 19 Chenda Ngak, “Instagram for Android gets 1 million downloads in first day,” CBS News, April 4, 2012, http://www.cbsnews.com/news/instagram-for-android-gets-1-million-downloads-in-first-day/. 20 Joanna Stern, “Facebook Buys Instagram for $1 Billion,” ABC News, April 27, 2012, http://abcnews.go.com/blogs/technology/2012/04/facebook-buys-instagram-for-1-billion/. 21 Unless otherwise noted, all Ben Kauffman information comes from a series of AIs conducted in 2013. 22 Issie Lapowsky, “Quirky Lands $79 Million in Funding,” Inc., November 13, 2013, http://www.inc.com/issie-lapowsky/quirky-79-million-funding-connected-home.html. 23 AI conducted 2013. 24 Austin Carr, “Inside Airbnb’s Grand Hotel Plans,” Fast Company, April 2014. 25 Serena Saitto and Brad Stone, “Uber Sets Valuation Record of $17 Billion in New Funding,” Bloomberg.com, January 7, 2014.


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Why It's Still Kicking Off Everywhere: The New Global Revolutions by Paul Mason

anti-globalists, back-to-the-land, balance sheet recession, bank run, banking crisis, Berlin Wall, business cycle, capital controls, capitalist realism, centre right, Chekhov's gun, citizen journalism, collapse of Lehman Brothers, collective bargaining, creative destruction, credit crunch, Credit Default Swap, currency manipulation / currency intervention, currency peg, disinformation, do-ocracy, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, foreign exchange controls, Francis Fukuyama: the end of history, full employment, ghettoisation, illegal immigration, informal economy, land tenure, Leo Hollis, low skilled workers, mass immigration, means of production, megacity, Mohammed Bouazizi, Naomi Klein, Network effects, New Journalism, Occupy movement, price stability, quantitative easing, race to the bottom, rising living standards, short selling, Slavoj Žižek, Stewart Brand, strikebreaker, union organizing, We are the 99%, Whole Earth Catalog, WikiLeaks, Winter of Discontent, women in the workforce, working poor, working-age population, young professional

Once the first phase of the crisis was over, parts of the business elite began to breathe easy and tell themselves they’d seen it all before. ‘No one has yet dis-invented the business cycle,’ Rupert Murdoch chuckled, quoting Margaret Thatcher to an invited audience in London in 2010, including numerous beaming members of the Coalition Cabinet. ‘The “gales of creative destruction” still roar mightily from time to time.’1 But this is no mere business cycle, and no ordinary cycle of boom and bust. As the data clearly illustrate, the seeds of the crisis were sown by structural changes. Exhibit One: the average US house price at the peak, in 2006, was double what the historic trend line said it should be, even when compared to every other boom–bust cycle since the war.

P. 127 cellphones 75–76, 133–34 Central Security (Egypt) 9, 11, 17 Challenge of Slums, The (UN) 198–99 Charles, Prince 51–52 Chávez, Hugo 33 China 38, 78, 108, 112, 121, 125; consumption 109; foreign currency reserves 107; monetary policy 123 Chomsky, N. 28–29 Chris (student demonstrator) 48 Cinco, Mena 196–98, 206, 206–9 Citigroup 67 civil disobedience 56 class struggles 131 Clegg, Nick 44 Climate Camp movement 1, 55 Clinton, Hillary 26 collaborative production 139–41 Coming Insurrection, The 189–91 commodity price inflation 120–22, 195 communes 189, 190 Communiqué from an Absent Future 38–39 Communist Manifesto, The (Marx and Engels) 174, 188–89 communists 80 computer gamers 136 Conservative/Liberal Democrat coalition 44 consumption, and self-esteem 80–81 control 148 co-operatives 84 corruption, threat of 177–78, 205 creative destruction 106 credit crisis 106, 109 credit default swaps 99, 107 Critical Legal Thinking website 54 cross-border links 69–70 Cruz, Gloria 204 cultural stereotypes 27 culture: mass 29–30; popular 65, 176; transnational 69; working-class 72; youth 70 culture wars 178–84 currency manipulation 121–22 currency war 122–24 cyber-repression 78 Czechoslovakia 173 Darkness at Noon (Koestler) 128–29 Davies, Nick 148 Davos 17, 111 Dawkins, Richard 75, 150 Day X, 24 November 2010, London 41–42, 46–48 Debord, Guy 42, 46–17, 51 debt, toxic 110–11 default theory 111 deflationary slump 123 Deleuze, Gilles 46, 85 Delius, Frederick 127, 132, 152, 176 democratic counter-revolution 177, 188 demographics of revolt 66, 66–73; Athens, December 2008 uprising 73; students 66–71; the urban poor 70–72 Deptford 57 Detrick, Terry 154, 155–56, 156 devaluation 91, 122–23 @digitalmaverick 1–2 discontent, three tribes 68–69 disillusionment 68–69 disinformation, counteracting 146 disposable income 67 Dodd–Frank Act (USA) 167 @dougald 1 Dubstep Rebellion 48–52; blog 52; the Book Bloc 50–51; casualties 51; Fleet Street photographers 51; graffiti 51; marchers 49; police–student confrontation 50–51 durable authoritarianism 27, 30, 191 Durkheim, Emile 103–4 Dworkin, Ronald 46 eBay 74 e-commerce 81 economic crisis 3; revolutions, 1848 173 economic stagnation 191–92 economic theory 111 Economist, the 25 egoism 132 Egypt: bread prices 11; democratic counter-revolution 177; economic growth 119; economic indicators 119–20; elections, November 2011 177; Gini Index 119; inflation 120–21; opposition movement 10; organized workforce 72; police corruption 11; privatizations 17–18; unemployment 119–120; urban poor 71; working class 19–20 Egyptian revolution, the: the Army and 178; balance sheet 5; bread prices 11; casualties 17; chants 191, 211; counter-revolution 18; Day of Rage, 28 May 15–17; and Facebook 6, 10, 11, 12, 14; freedom 5; immolations 11, 71; Internet switched off 14; medical professions 20–22; military coup 17–19; numbers involved 13; outbreak, 25 January 10–14, 83; police violence 15; questions facing 23–24; Twitter blocked 14; Twitter feeds 13, 14; ultras 16–17; working class 20; on YouTube 11, 14, 15–16; zabbaleen riots 6–10 email 10 emancipated life 143–44 Engels, Friedrich 174, 188–89, 190 @eponymousthing 184 equity withdrawal 114 Estero de San Miguel, Manila 196–99, 205–6, 206–9 Eternal Sunshine of the Spotless Mind, The (film) 29 Eurobonds 113 Eurocrisis, the 111–13 European Central Bank 92, 98, 104, 112 European Financial Stability Facility 92, 104 European Financial Stabilization Facility 113 European monetary union 112, 113 European Union: response to Greek debt crisis 91–92, 96, 98–99, 104; sovereign debt crisis 104 Europe, revolutions, 1848 172 Eurozone 104; debt crisis 91–92, 99, 111–13 Execution of Maximilian (Manet) 53 exploitation 85 Facebook 74; Arab world growth of 135; and the Egyptian revolution 6, 10, 11, 12, 14; establishing connections with 75; ‘We are all Khaled Said’ page 11; and the Iranian revolution 34; and London trade-union demonstration, March 2011 57–58; Middle East usage 135; reciprocity 77; user numbers 135 Farewell to the Working Class (Gorz) 79–80 fatalism 30, 31 feedback loops 187 Feldstein–Horioka paradox 107 Feldstein, Martin 107 Fennimore and Gerda (Delius) 127, 132 First World War 128 Fisher, Mark 30 Flaubert, Gustave 171, 192 Flickr 10, 75 Food Price Index 121 Fordist era 28 Foucault, Michel 46, 84–85 fragmentation 80–81, 82 fragmented power 17 ‘Fragment on Machines’ (Marx) 143–44 France 173; Languedoc, 1848 174, 187; socialism 188; see also Paris freedom 27, 124; of expression 127; individual 127–30; Marx on 141–42; suppression of 131–33 Freeman, Richard 108 free-market economics 92, 188 Friedman, Milton 111 Fukuyama, Francis 30 G20 Summit, 2009 48, 122 Gaddafi, Muammar 25, 31 Gapan City, Philippines 193–96 Gates, Bill 23, 110 gay rights 132 Gaza 37; Israeli invasion of 33 Gaza City 31 Gaza Flotilla, May 2010 55 general intellect, the 144, 145–47 General Motors 39 Germany 113, 191; revolution of 1848 172; wages 108, 112 @Ghonim 13 Giddens, Anthony 31 Gide, André 127 Giffords, Gabrielle 182 Gini Index 119 Gladwell, Malcolm 81–82, 83 global capital flows 107–8 global financial crisis 31, 39, 66–67, 85, 110–11, 115, 191 globalization 69,72, 105, 108, 109, 122, 124, 149, 191 Golkar, Saeid 78 Googlebombs 78 Gorz, André 79–80, 143 graduate with no future, the 66–73, 96–97; disposable income 67; as international sub-class 69; life-arc 67; numbers 70; revolutionary role 72–73; and the urban poor 70–71 Grapes of Wrath, The (Steinbeck) 153, 155, 159, 163, 164 Great Britain: anti-road movement 56; benefit system 113–14; changing forms of protest 54–57; collapse of Labour 113–15; devaluation 123; Education Maintenance Allowance 47; end of winter of discontent 61–62; equity withdrawal 114; European elections, 2009 115; general election, 2010 43; the graduate with no future 96–97; Millbank riot 42–44; non-UK born workers 115; police failures 61; public spending cuts 54–55; radical tactics 54–57; spontaneous horizontalists 44–46; Strategic Security and Defence Review 124; student population 70; UK Uncut actions 54–55; university fees 44, 47, 50, 54; youth 41–42, 44, 53–54; youth unemployment 66 Great Depression, lessons of 123–25 Great Doubling 108 Great Unrest, 1914 175–76 Greece 37, 188; anomic breakdown 103–4; austerity programme 92–93, 102; bailouts 92, 96, 98, 113; cabinet reshuffle 96, 97–98; debt crisis 90, 91–92, 98–99, 112; GDP 91; general election, 2009 91; general strike 99; the left 100; media ownership 87; Medium Term Fiscal Strategy 91; model of capitalism 102; MP resignations 89; Papandreou government falls 96; political legitimacy lost 104; the salariat 101; tax evasion 97; tax revenues 92; tax system 91; see also Athens Greek Communist Party (KKE) 88, 90 Grigoropoulos, Alexandras 32 grime (music) 52 Grossman, Vasily 129 @GSquare86 69 Guindi, Ezzat 9 hackers 35 el-Hamalawy, Hossam, @3arabawy 10, 22, 71 Hardy, Simon 69 Hayek, Friedrich 111, 209 Henderson, Maurice 161–62 Hennawy, Abd El Rahman, @Hennawy89 12–13 Here Comes Everybody (Shirky) 138 Herman, Edward S. 28–29 hidemyass.com 14 hierarchy: erosion of 80–81; informal 83; predictability of 77 higher education market 67 Hill, Joe 176 historical materialism 131 Hogge, Becky 140 homelessness 159–63 Hoon, Geoff 114 Horioka, Charles 107 horizontalism 45, 55, 56, 62, 100 Huffington Post blog 184 human rights 143 Hungary 172 Ian’s Pizza, Madison, Wisconsin 184 Ibrahim, Gigi, @GSquare86 69 ideology 29, 149 immolations 11, 32, 71 impotence, zeitgeist of 29–30 impoverishment 209 Inception (film) 29 India 120–21 Indiana 116–17, 125 indignados, the 88, 100–1, 104 individual: freedom of 127–30; power of the 65, 79; rise of the 127–30 Indorama group 22 industrialization 192 Indymedia 74 inequality 209 inflation 109, 120–21 info-capitalism 148, 211 info-hierarchies 147–52 info-revolution, the 146, 149–50 informal hierarchies 83 information capitalism 145 information management 147 information networks 77 information tools 75 Inkster, Nigel 65 institutional loyalty 68 interest rates 67 International Labour Organization 19–20, 120 International Monetary Fund 92 Internet consciousness 136–38 Internet, the: access in slums 207; Arab world growth 135; and behaviour changes 131; and the Iranian revolution 35; out of reach for some 152; power of 29; shutdowns 14, 78; and the spread of ideas 150–51 investment, and savings 107 Invisible Committee, the 189–91 Iran 25; causes of failure of revolution 36–37; election, 2009 33–34; and the Internet 35; and the Middle East balance of power 178; rooftop poems 36; Twitter Revolution 33–37, 78, 178; on YouTube 34, 35 Iraq 25, 55 Ireland 92, 111, 112, 188 Islam 30, 37 Israel 26, 33, 179–80 Italy 104 Jakarta 33 James, C.


pages: 307 words: 96,543

Tightrope: Americans Reaching for Hope by Nicholas D. Kristof, Sheryl Wudunn

Affordable Care Act / Obamacare, air traffic controllers' union, basic income, benefit corporation, Bernie Sanders, carried interest, correlation does not imply causation, creative destruction, David Brooks, Donald Trump, dumpster diving, Edward Glaeser, Elon Musk, epigenetics, full employment, Home mortgage interest deduction, housing crisis, impulse control, income inequality, Jeff Bezos, job automation, jobless men, knowledge economy, labor-force participation, low skilled workers, mandatory minimum, Martin Wolf, mass incarceration, Mikhail Gorbachev, offshore financial centre, opioid epidemic / opioid crisis, randomized controlled trial, rent control, Robert Shiller, Ronald Reagan, Savings and loan crisis, Shai Danziger, single-payer health, Steven Pinker, The Spirit Level, universal basic income, upwardly mobile, Vanguard fund, War on Poverty, working poor

It is heartbreaking to try to chronicle the suffering of a place you love, and we found it particularly painful to watch the dysfunction in old friends replicated in their children and their children’s children. Yet that is the story of much of working-class America. Yes, economic growth entails change, and “creative destruction” is as necessary as it is inevitable. But creative destruction need not mean the demolition of families for generations. For starters, America doesn’t adequately invest in children, whose potential so often goes unfulfilled. One reflection of the state of the American dream: 76 percent of the white working class expects their children’s lives to be worse than their own.


pages: 104 words: 30,990

The Centrist Manifesto by Charles Wheelan

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, American Society of Civil Engineers: Report Card, Bernie Madoff, Bretton Woods, carbon tax, centre right, clean water, creative destruction, David Brooks, delayed gratification, demand response, high-speed rail, Home mortgage interest deduction, housing crisis, income inequality, invisible hand, obamacare, profit maximization, Ralph Nader, rent-seeking, Report Card for America’s Infrastructure, Ronald Reagan, Ronald Reagan: Tear down this wall, Solyndra, stem cell, the scientific method, transcontinental railway, Walter Mischel

One in five American children currently lives in poverty. That is not defensible. Second, a finely woven safety net provides political lubrication for our engine of prosperity by providing meaningful assistance to those who are run over. Everything good about competition creates social costs too. We have built a successful society based on creative destruction. Capitalism is a constant process of breaking things in order to provide something better. Matthew Slaughter, a Dartmouth economist who worked in the George W. Bush administration, coauthored a seminal article in Foreign Affairs providing an intriguing conservative rationale for more redistribution: give more to the disenfranchised so that they don’t kill our golden goose with pitchforks and make us all worse off.


pages: 100 words: 31,338

After Europe by Ivan Krastev

affirmative action, bank run, Berlin Wall, Brexit referendum, central bank independence, classic study, clean water, conceptual framework, creative destruction, deindustrialization, Donald Trump, eurozone crisis, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, illegal immigration, job automation, mass immigration, meritocracy, moral panic, open borders, post-work, postnationalism / post nation state, public intellectual, Silicon Valley, Slavoj Žižek, The Brussels Effect, too big to fail, Wolfgang Streeck, World Values Survey, Y Combinator

As early as 1994, Edward Luttwak warned that the spread of global capitalism could spark a return of fascism. “It is not necessary to know how to spell gemeinschaft and gesellschaft to recognize the Fascist predisposition engendered by today’s turbocharged capitalism,” he wrote.21 Many now would countenance his view as prescient. The idea of “creative destruction” was at the very heart of our experience with globalization. But if a decade ago we preferred to focus on the “creative,” now the focus is, regrettably, on the “destruction.” Tolerance and civility were long the defining characteristics of the European Union. Today they are often perceived as the EU’s core vulnerabilities.


pages: 827 words: 239,762

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by Duff McDonald

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Albert Einstein, Apollo 13, barriers to entry, Bayesian statistics, Bear Stearns, Bernie Madoff, Bob Noyce, Bonfire of the Vanities, business cycle, business process, butterfly effect, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Clayton Christensen, cloud computing, collateralized debt obligation, collective bargaining, commoditize, compensation consultant, corporate governance, corporate raider, corporate social responsibility, creative destruction, deskilling, discounted cash flows, disintermediation, disruptive innovation, Donald Trump, eat what you kill, Fairchild Semiconductor, family office, financial engineering, financial innovation, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, Glass-Steagall Act, global pandemic, Gordon Gekko, hiring and firing, Ida Tarbell, impact investing, income inequality, invisible hand, Jeff Bezos, job-hopping, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kickstarter, Kōnosuke Matsushita, London Whale, Long Term Capital Management, market fundamentalism, Menlo Park, Michael Milken, new economy, obamacare, oil shock, pattern recognition, performance metric, Pershing Square Capital Management, Peter Thiel, planned obsolescence, plutocrats, profit maximization, profit motive, pushing on a string, Ralph Nader, Ralph Waldo Emerson, RAND corporation, random walk, rent-seeking, Ronald Coase, Ronald Reagan, Sam Altman, Sand Hill Road, Saturday Night Live, scientific management, shareholder value, Sheryl Sandberg, Silicon Valley, Skype, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Steve Jurvetson, survivorship bias, TED Talk, The Nature of the Firm, the scientific method, Thorstein Veblen, Tragedy of the Commons, union organizing, urban renewal, vertical integration, Vilfredo Pareto, War on Poverty, William Shockley: the traitorous eight, women in the workforce, Y Combinator

For the next fifteen years, the article was the most requested reprint from HBR. Fans of cutthroat capitalism love to quote Joseph Schumpeter on creative destruction. Less known are concerns he voiced in his 1942 work, Capitalism, Socialism, and Democracy, in which he worried that by giving control of the modern corporation to salaried managers, the people who would then be at the economy’s steering wheel would no longer have any incentive to innovate and generate new wealth (that is, creative destruction) but instead be focused on minimizing risk to maximize personal job security.16 And when they weren’t overly focused on their own money, they were overly focused on the corporation’s money, at the expense of paying attention to product management.

But the journal was shuttered in 1932 due to a lack of funding and clarity as to its ultimate mission.1 A successor, Business History Review, wasn’t founded until 1954. Another pre-Chandler effort at business history at Harvard was its Research Center in Entrepreneurial History, a joint effort between Arthur Cole, the School’s librarian, the economist Joseph Schumpeter (the man who coined the term creative destruction), Edwin Gay, and others. Active for just a single decade, from 1948 to 1958, the center helped solidify one of Western capitalism’s main tenets—that the ongoing destruction of individual businesses and fortunes was the price of a better life for all. HBS remains firmly of the opinion that the general prosperity produced by the “capitalist engine” far outweighs the wreckage it leaves behind.

See also Harvard Business School; specific schools business ethics, 59, 88, 94, 260, 261, 298, 336, 564; Burke study, 527; conflict-of-interest policies, 404, 520; consulting vs. advocacy, 406; Drexel scandal, 380–81, 431; Fortune 500 companies, criminal violations by, 434; in HBS curriculum, 260, 336–37, 428–29, 431–41, 457–58; insider trading and, 380, 431, 512; Jensen and erosion of, 380–83; Marriott debt manipulation, 402; Material Service bribing, 345–46; MBAs and lapses, 437; Protestant ethic and, 432; Satyam Computer Services fraud, 408–9, 521; Shad as SEC chair and gift to HBS, 430–32, 436–37; Skilling and Enron, 437–38, 512–24; Vioxx scandal, 106–7; Wetlaufer scandal, 303–5; what it encompasses, 429–30 Business Healers, The (Higdon), 512 business history, 243–53 Business History Review, 243 Business Looks at the Unforeseen (Donham), 102 Business Policy text, 259, 260 “Business Responsibilities in an Uncertain World” (David), 143 Business Roundtable, 191, 388–89, 487 business statistics, 38, 91, 93, 104, 115, 116, 118, 138, 213, 215, 216, 265, 273 BusinessWeek, 127, 207, 268, 297, 439, 455, 502, 513, 564, 568; business school rankings, 493; cover story on HBS, 493–94 Butt, Charles, 531 Byrne, John, 265, 267, 268, 273, 330, 493, 557 Cabot, Philip, 108–10, 152 Cabrera, Ángel, 551 Cahill, John, 531 Caldwell, Philip, 106, 128, 179 Callahan, David, 168, 169, 173, 357 Calvino, Italo, 307 Campbell, Robert, 106 campus (of HBS), 63, 66–75; Aldrich Hall, 51, 71, 142; Anderson Bridge, 453; Anderson House, 155; architecture, 69, 71, 74; Arthur Rock Center, 320; Baker bequest, 67–68, 69, 71, 73; Baker Hall renamed, 532; Baker Library, 69, 71–73, 132; Building Committee of the Faculty and, 66; Carpenter Hall, 136; corporate partnerships, 402; discontinuation of all non-School use, 453; IBM and, 155; insularity, 392–93, 453; interfaith chapel, 74; Kresge Hall, 402; Kress bequest, 73; Morgan Hall, 69, 71, 74, 132; mosaic from Antioch, 74; opulence of, 530; renovations, 458–59; Ruth Mulan Chu Chao Center, 155, 533; Soldiers Field, 176, 453; Straus Hall, 104; Tata Hall, 155; University Hall, 121; vehicles banned, 459; World War II and, 136–37 “Can Business Schools Humanize Leadership?” (Petriglieri), 311 Can Ethics be Taught? (Piper et al), 403, 437 Capital Cities/ABC, 163, 169, 171 Capital in the Twenty-First Century (Piketty), 281, 540 capitalism, 2, 4, 5, 6, 10, 17, 184, 384; belief system, 59; communist threat, 143, 184; creative destruction, 243, 348; efficient-market hypothesis, 411; ethics and, 261, 432; free market and, 43, 57; HBS as the West Point of Capitalism, 135–39; investor capitalism, 366–67, 387; laissez-faire, 131; managerial capitalism, 132, 144, 247, 250; morality of, 566; power equals money in, 369; profit motive, 432; Research Center in Entrepreneurial History and, 243; shareholder capitalism, 6, 298, 315, 360–64, 366, 576; trade-offs, 281; trans-national capitalist class, 8 Capitalism, Socialism, and Democracy (Schumpeter), 348 Carnegie, Andrew, 23, 28 Carnegie, Rod, 209 Carnegie’s Graduate School of Industrial Administration (GSIA), 214, 215, 220, 221, 225, 226, 228, 260, 297, 343, 451; Kaplan at, 443 Caro, Robert, 480–81 Carr, Nick, 303, 304, 305–6 Carroll, Thomas, 106, 220, 231, 289 Carter, Edward, 96 Carter, Graydon, 472 Carter, Jimmy, 354 Carter, John, 468 Case, Everett Needham, 234 case method, 3, 5, 6, 11, 27, 45, 46–53, 91, 92, 211, 212, 221–22, 225, 226, 277–84, 455; Associates funding, 104, 195; Bales and, 6; benefits, 52–53, 202–3, 277–78, 394, 470; bias for action, 51–52, 291; Bok’s criticism, 336, 338, 339; Bower’s defense, 206, 338–39; businesses asking to be studied, 58; Butcher Polish case, 333; casebooks, 99; casebooks, revenues from, 278, 279, 283; cases for SCMP, 326; case study hero, 107, 171, 280, 312, 436, 527; choices for study, Associates and, 106; Christensen and, 279; class section system and, 394; computerizing of cases, 155–56; Copeland-Cherington experiment and, 48–49; corporate sponsors and, 284, 520–21, 522; costs, 58, 63, 278; departure from (2010), 565–66; Dimon and Murphy on, 51; Elberse’s bestselling studies, 556; Enron cases, 281, 519, 522; ethics cases, 436; faculty development and, 46; failure to link actions to societal concerns, 51; Ford Foundation and, 278; Gay and, 27, 30, 47–48, 52; HBS vs. other schools, 397; international companies, 255; invention of, 47–53; JetBlue Airways study, 284; Johnson & Johnson cases, 527; judgment-based theory and, 5; Krasnow case, 333; Marine Basic School compared to, 50; Marriott case, 402; National Cranberry Cooperative case, 283; McNair on, 48–49; Merck, Vioxx scandal, and, 106–7; Mintzberg as critic, 483–89; negatives, 195, 280–82, 286–87; number of cases taught, 53; other schools using, 228–29, 279, 283; Raiffa and, 215–17; rationale for vs. reality of, 396–99; research and, 355, 455; SASB study, 562; skills taught by, 176–77; social aspect of, 394–98; Socratic method and, 49, 64, 394; Staples cases, 333; teaching ethics and, 429; teaching strategy and, 260; translations, 231, 255; weakness of, 51; World War II and, 137 Case Method at the Harvard Business School, The (McNair and Hersum, eds.), 279 Case Method of Teaching Human Relations and Administration, The (Andrews), 279 Cash, James, 409–10 Castle, John, 322, 468 Catchings, Waddill, 122 Caufield, Frank, 120, 127, 322 Caust, Len, 344 Caves, Richard, 412 Celler-Kefauver Act of 1950, 193 Central and Eastern European Teachers Program, 232 Central Intelligence Agency (CIA), 162, 187, 230, 231, 254 “CEO Incentives” (Jensen and Murphy), 371 C.


pages: 113 words: 36,039

The Shipwrecked Mind: On Political Reaction by Mark Lilla

Berlin Wall, Charlie Hebdo massacre, classic study, coherent worldview, creative destruction, George Santayana, Herbert Marcuse, illegal immigration, Isaac Newton, liberation theology, Silicon Valley, South China Sea, urban planning, women in the workforce

Individual Jews, on the other hand, live as links in a chain of generations running backward and forward; their rebirth happens communally as they procreate, as they guard memory of the past, and as they internalize their spiritual existence. A slightly chauvinistic tone enters The Star now and again as Rosenzweig contrasts the psychological and social harmony of Jewish life with the self-alienation at the root of Christianity’s creative destruction. In the end, though, he sees them as complementary ways of life, each fulfilling a function in the economy of redemption. By complementarity Rosenzweig did not mean that, in order to be itself, Judaism somehow needs Christianity; it does not. But the world, it seems, does. As early as 1913, not long after his aborted conversion to Christianity, Rosenzweig expressed the view that Judaism “leaves the work in the world to the church and recognizes the church as the salvation for all heathens in all time.”


pages: 378 words: 110,518

Postcapitalism: A Guide to Our Future by Paul Mason

air traffic controllers' union, Alan Greenspan, Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Bletchley Park, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, business process, butterfly effect, call centre, capital controls, carbon tax, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, commons-based peer production, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, disinformation, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, false flag, financial engineering, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, fulfillment center, full employment, future of work, game design, Glass-Steagall Act, green new deal, guns versus butter model, Herbert Marcuse, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Perry Barlow, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, late capitalism, low interest rates, low skilled workers, market clearing, means of production, Metcalfe's law, microservices, middle-income trap, Money creation, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, power law, precariat, precautionary principle, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, scientific management, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, technological determinism, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, Twitter Arab Spring, union organizing, universal basic income, urban decay, urban planning, vertical integration, Vilfredo Pareto, wages for housework, WikiLeaks, women in the workforce, Yochai Benkler

Instead he argued: ‘Innovation is the outstanding fact in the economic history of capitalist society and … is largely responsible for most of what we would at first sight attribute to other factors.’22 He then supplied a detailed history of each of Kondratieff’s waves as an innovation cycle: the first is triggered by the invention of the factory system in the 1780s, the second driven by railways from 1842, the third by a cluster of innovations we now call the Second Industrial Revolution, in the 1880s and 90s.23 Schumpeter took Kondratieff’s wave-theory and made it highly attractive to capitalists: in his version the entrepreneur and the innovator drive each new cycle. Conversely, periods of breakdown are the result of innovation becoming exhausted, and capital being hoarded in the finance system. For Schumpeter, crisis is a necessary feature of the capitalist system, in that it promotes the ‘creative destruction’ of old and inefficient models. And though Kondratieff was largely forgotten, Schumpeter’s work has lived on as a kind of religious insight: a techno-determinist account of boom and bust that mainstream economists can turn to at times of crisis, when their normative beliefs fail. The most prominent modern follower of Schumpeter, Carlota Perez, has used the tech-driven theory to urge policymakers to give state support to info-tech, biotech and green energy – with the promise of a new ‘golden age’ to follow sometime in the 2020s, once the next wave takes off.

Networks are bad at memory; they are designed so that memory and activity sit in two different parts of the machine. Hierarchies were good at remembering – so working out how to retain and process lessons will be critical. The solution may be as simple as adding a recording and storing function to all activities, from the coffee shop to the state. Neoliberalism, with its love of creative destruction, was happy to dispense with the memory function – from Tony Blair’s ‘sofa’ decision-making to the tearing up of old corporate structures, nobody wanted to leave a paper trail. In the end, all we’re trying to do is move as much of human activity as possible into a phase where the labour that’s necessary to support very rich and complex human life on the planet falls, and the amount of free time grows.


pages: 410 words: 106,931

Age of Anger: A History of the Present by Pankaj Mishra

anti-communist, Asian financial crisis, Ayatollah Khomeini, Berlin Wall, Boeing 747, Brexit referendum, British Empire, classic study, colonial rule, continuation of politics by other means, creative destruction, Donald Trump, Edward Snowden, Evgeny Morozov, Fall of the Berlin Wall, Fellow of the Royal Society, Francis Fukuyama: the end of history, George Santayana, global village, Great Leap Forward, Gunnar Myrdal, informal economy, invisible hand, liberal capitalism, Mahatma Gandhi, Marshall McLuhan, Martin Wolf, mass immigration, Nelson Mandela, Oklahoma City bombing, Peter Thiel, Philip Mirowski, planetary scale, plutocrats, power law, precariat, public intellectual, Republic of Letters, Scientific racism, Silicon Valley, Silicon Valley billionaire, smart cities, Snapchat, stem cell, technological solutionism, the scientific method, The Wealth of Nations by Adam Smith, Timothy McVeigh, trade route, traveling salesman, urban planning, Vilfredo Pareto, wage slave, women in the workforce, zero-sum game

As liberal democracy tottered under the weight of mass politics, and global capitalism suffered its first major recession, mass manipulators emerged to clarify that, as Hugo von Hofmannsthal wrote, ‘politics is magic’ and ‘he who knows how to summon the forces from the deep, him will they follow’. * * * This militant secession from a civilization premised on gradual progress under liberal-democrat trustees – a civilization felt as outrageously false and enfeebling – now rages far beyond Europe; and it is marked by a broader, deeper and more volatile desire for creative destruction, even as the fierce headwinds of globalization uproot many landmarks of politics and society. In retrospect, Gabriele D’Annunzio’s revolt in Fiume crystallized many themes of our own global ferment as well as those of his spiritually agitated epoch: the ambiguous emancipation of the human will, the challenges and perils of individuality, the yearning for re-enchantment, flight from boredom, demented utopianism, the politics of direct action, self-surrender to large movements with stringent rules and charismatic leaders, and the cult of redemptive violence.

Napoleon imperialism invasion/occupation of Germany nostalgia for era of secular universalist project ‘narcissism of small difference’ nation states implosions of in Africa/Middle East legacy of imperialism nineteenth-century rise of postcolonial nation-building ideologies rise of in Africa and Asia social democracy in post-WW2 era nationalism Arab Chinese cult of sacrifice and martyrdom cultural economic and emphasis on duties English fin de siècle fin de siècle celebration of violence/virility French German invention of concept Italian Khomeinism Mazzini’s non-European disciples messianic fantasy of redemption and glory nineteenth-century adaptations worldwide poet-prophets post-9/11 toxic nationalists post-Cold War resurgence of in post-colonial states present-day as product of men of letters religiosity of sentiment ‘rise again’ rhetoric and Rousseau and twentieth-century world wars us-versus-them/demonization of ‘other’ white nationalists in USA see also Hindu nationalism Nazism Hindu nationalist admiration for Nechaev, Sergei negative solidarity concept Nehru, Jawaharlal neo-liberalism axioms of autonomy and interest-seeking conflation of free enterprise with freedom crony-capitalist regimes New York Review of Books Newsweek Newton, Isaac Niebuhr, Reinhold Nietzsche, Friedrich death of God on development on French Revolution the last men and Napoleon nihilism rejection of German nationalism and ressentiment superman idea and Voltaire-Rousseau battle and Wagner will to power concept nihilism see also anarchism Nordau, Max, Degeneration (1892) North Korea Northern Ireland Norway, Breivik massacre in (2011) Novalis Obama, Barack oil industry Oklahoma City bombing (1995) Oriani, Alfredo Orlando massacre (2016) Ortega y Gasset, José, The Revolt of the Masses (1930) Orwell, George, Nienteen Eighty-Four (1949) Ottoman Empire Polish émigrés in revival of Ottomanism Paine, Thomas Pakistan Pal, Bipin Chandra Palestinian militant groups Papini, Giovanni Pareto, Vilfredo Pascal, Blaise Patel, Vallabhbhai Paul, Saint Paxton, Joseph Paz, Octavio, The Labyrinth of Solitude (1950) Pea, Enrico Perovskaya, Sofia Peter the Great Petöfi, Sándor Philippines philosophes material comfort and hedonism as not democratic notion of self-expansion patronage of autocrats and religion as shapers of society trahison des clercs philosophy German phrenology Pol Pot’s Year Zero Poland partition in late eighteenth century present-day nationalism in uprising (1831) Polanyi, Karl, The Great Transformation (1944) Pope, Alexander popular culture Posivitism post-colonial states autocratic modernizers in see also individual countries brutal police/intelligence states growth of ressentiment in insurgencies since mid twentieth century and Islam and Naipaul’s ‘mimic men’ nation-building ideologies post-Cold War period Western inspired national emulation and ‘Western Model’ progress, Enlightenment/modern notions of assumed spread eastwards era of US hegemony and fin de siècle thinkers and First World War as fundamentalist creed in West as globalized fantasy post-Cold War and Marxist universal utopia and nineteenth-century French literature notion of self-expansion and the philosophes present-day constraints/doubts and reason religion of secular progress Rousseau rejects and Russian literature and Social Darwinism ‘propaganda by the deed’ Proudhon, Pierre-Joseph Prussia defeat at Jena-Auerstädt Franco-Prussian war (1871) Frederick II pseudo-science public sphere Pushkin, Alexander The Bronze Horseman (1836) Eugene Onegin Imitations of the Quran (1824) Putin, Vladimir al-Qaeda Qutb, Sayyid racism after Brexit vote Californian Chinese Exclusion Act (1882) institutionalization of by colonialism Islamophobia in late nineteenth century scapegoats and invented enemies scientific on social media white supremacists worldwide upsurge of see also anti-Semitism radicalism and militancy, historical as conjoined with globalization ‘decade of regicide’ (1890s) emergence in nineteenth century influence of Nietzsche local defences of autonomy martyrdom, sacrifice and death and mass migration in nineteenth-century Russia politics of flamboyant gestures pre-1848 conspirators and insurgents and quests for transcendence revolts in Spanish American colonies revolts of 1820s revolutionary period (1830) revolutionary period (1848–9) and rise of mass air travel shared aspirations across movements in space between elites and masses spread of socialism see also anarchism; ressentiment; terrorism radicalism and militancy, present-day Bakunin as forebear of craving for unlimited despotism eruption of ‘global civil war’ identity as neither stable nor coherent nineteenth/early twentieth-century antecedents and paradox of individual freedom social backgrounds and urbanization violence as end in itself volatile desire for creative destruction see also ISIS (Islamic State of Iraq and Syria); Islamism, Radical; ressentiment; terrorism Rai, Lala Lajpat Ramdev, Baba Reagan, Ronald reason and cult of progress fantasy of a rationally organized world and French Revolution and philosophes’ support of despots and principle of equality theoretical rationalism and triumphs of capitalist imperialism see also individual, liberal universalist ideal of Reclus, Élisée Red Brigade in Italy refugees religious faith and French Revolution ideal of transcendence and nationalist sentiment in nineteenth-century Germany pseudo-religions in 1815–48 period see also individual faiths and religions Renan, Ernest Republican Party, US ressentiment alienated young man of promise in Austria-Hungary characteristics of in colonial India and conflicted/contradictory identity as default metaphysics of modern world disaffected educated classes and Dostoyevsky German Romantics growth of in post-colonial states and jingoism and Kierkegaard and mimetic desire and ‘narcissism of small difference’ and Nazism and Nietzsche and political spectrum present-day and Rousseau in Russian literature Max Scheler’s theory ‘superfluous’ groups/people ‘superfluous’ men in Russian fiction in unified Germany in unified Italy unsatisfied fantasies of consumerism white male Rhodes, Cecil Rice, Condoleezza Rida, Rashid right-wing extremism Rimbaud, Arthur Robespierre, Maximilien Roca, Mateo Morral Roman Empire Romantics see also German Romantics Roof, Dylann Roosevelt, Theodore Rostow, W.


Capitalism, Alone: The Future of the System That Rules the World by Branko Milanovic

affirmative action, Asian financial crisis, assortative mating, barriers to entry, basic income, Berlin Wall, bilateral investment treaty, Black Swan, Branko Milanovic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, colonial rule, corporate governance, creative destruction, crony capitalism, deindustrialization, dematerialisation, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, ghettoisation, gig economy, Gini coefficient, global supply chain, global value chain, Great Leap Forward, high net worth, household responsibility system, income inequality, income per capita, invention of the wheel, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, low skilled workers, Lyft, means of production, new economy, offshore financial centre, Paul Samuelson, plutocrats, post-materialism, purchasing power parity, remote working, rent-seeking, ride hailing / ride sharing, Robert Solow, Silicon Valley, single-payer health, special economic zone, Tax Reform Act of 1986, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, uber lyft, universal basic income, Vilfredo Pareto, Washington Consensus, women in the workforce, working-age population, Xiaogang Anhui farmers

Bai, Hsieh, and Song (2014, 3) argue that decentralized local “crony capitalism” in China plays a role similar to the one that a multiplicity of European states played in the rise of capitalism: local administrations protect their own champions, but they cannot prevent other local administrations from favoring their own, perhaps more efficient, crony capitalists. Thus, cronyism joined with interlocal competition plays the role of Schumpeterian creative destruction. We should not naïvely believe that the rankings of government transparency (based on “expert surveys” of perceived corruption) that place northern European countries on top mean that this kind of transparency can be easily applied elsewhere in the world, or that populations of other countries aspire to that level of “cleanliness” in government.

See also Soviet Union Saint-Simon, Henri de, 210 Salanié, Bernard, 39 Samuelson, Paul, 15 Sapio, Flora, 93 Sarkozy, Nicolas, 58 Say, Jean-Baptiste, 199–200 Schularick, Moritz, 31–32 Schumpeter, Joseph: on bright side of capitalism, 176; definition of capitalism and, 12; definitions of democracy and polyarchy, 119; on ethical imperialism, 126; on function of capitalist, 23; on income inequality, 40; on reasons for outbreak of war, 72 Schumpeterian creative destruction, 120 Seabright, Paul, 85 Self-employment income, 233 Shaffer, Mark, 85 Singapore, political capitalism in, 96, 97 Skill premium: increasing, 21; mass education and reduction in, 43 Skin in the Game (Taleb), 182, 240n33 Smith, Adam, 9; on bright side of capitalism, 176, 177, 178; on citizenship, 159; on coordinating interests of capitalists, 210; on dark side of capitalism, 178; on equality in wealth and power and preservation of peace, 214; on function of capitalist, 22–23; hypercommercialization and “invisible hand” and, 227–229; on keeping capital investment close, 148; on mobility of persons and stock, 241n38; on Navigation Act, 114, 248n45; on rebalancing of economic power, 1, 2; tripartite classification of classes and, 17 Smithian “natural” path of development of capitalism, 113–115 Social contract, capitalist behavior and tacit, 179–180, 254n9 Social-democratic capitalism, 13–14, 215; liberal meritocratic capitalism differentiated from, 20 Social effects, of universal basic income, 204–205 Social evolution, 68 Social good, social vices used for, 227–229 Socialism, 216, 221–222; clarification of term, 69 Socialist economies, 69; performance of capitalist economies vs., 84–87 Socialization within capitalist system, 4 Social policies, liberal meritocratic capitalism and new, 42–55; addressing twenty-first income inequality, 42–50; welfare state in era of globalization, 50–55 Social revolutions in Third World, 79–82 Social separatism, system of, 52 Social stability, migrants and, 147 Social transfers, attempting to redress inequality and, 44, 45, 46 Socioeconomic systems, laws governing rise and decline, 68–69 Söderberg, Daniel, 51, 203 Solow, Robert, 25 Song, Zheng (Michael), 120 Song China, merchants and central government in, 105, 115 Soviet Union: “export” of economic and political system, 113; failure of communism in, 83; household surveys in, 232.


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Don't Be Evil: How Big Tech Betrayed Its Founding Principles--And All of US by Rana Foroohar

"Susan Fowler" uber, "World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Alan Greenspan, algorithmic bias, algorithmic management, AltaVista, Andy Rubin, autonomous vehicles, banking crisis, barriers to entry, behavioural economics, Bernie Madoff, Bernie Sanders, Big Tech, bitcoin, Black Lives Matter, book scanning, Brewster Kahle, Burning Man, call centre, Cambridge Analytica, cashless society, clean tech, cloud computing, cognitive dissonance, Colonization of Mars, computer age, corporate governance, creative destruction, Credit Default Swap, cryptocurrency, data is the new oil, data science, deal flow, death of newspapers, decentralized internet, Deng Xiaoping, digital divide, digital rights, disinformation, disintermediation, don't be evil, Donald Trump, drone strike, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Etonian, Evgeny Morozov, fake news, Filter Bubble, financial engineering, future of work, Future Shock, game design, gig economy, global supply chain, Gordon Gekko, Great Leap Forward, greed is good, income inequality, independent contractor, informal economy, information asymmetry, intangible asset, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, junk bonds, Kenneth Rogoff, life extension, light touch regulation, low interest rates, Lyft, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Menlo Park, military-industrial complex, move fast and break things, Network effects, new economy, offshore financial centre, PageRank, patent troll, Paul Volcker talking about ATMs, paypal mafia, Peter Thiel, pets.com, price discrimination, profit maximization, race to the bottom, recommendation engine, ride hailing / ride sharing, Robert Bork, Sand Hill Road, search engine result page, self-driving car, shareholder value, sharing economy, Sheryl Sandberg, Shoshana Zuboff, side hustle, Sidewalk Labs, Silicon Valley, Silicon Valley startup, smart cities, Snapchat, SoftBank, South China Sea, sovereign wealth fund, Steve Bannon, Steve Jobs, Steven Levy, stock buybacks, subscription business, supply-chain management, surveillance capitalism, TaskRabbit, tech billionaire, tech worker, TED Talk, Telecommunications Act of 1996, The Chicago School, the long tail, the new new thing, Tim Cook: Apple, too big to fail, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, Upton Sinclair, warehouse robotics, WeWork, WikiLeaks, zero-sum game

Algorithmic Disruption of Work Management by algorithm—which has become a fact of life not just for taxi drivers but for any number of other workers, from Starbucks baristas who can’t count on a predictable weekly schedule to delivery people who have their contracts terminated if they don’t want to take jobs in certain areas at certain times—may be new, but its by-products are typical of what technology has historically done to labor. From English textile workers to travel agents, new technology destroys job categories as fast as it creates them. History has shown that in the end technology is always a net job creator; the question is how long the creative destruction lasts. Today it seems to be happening faster than our political and social systems can handle it. The depth and breadth of change being effected by the gig economy is unprecedented, and while the sheer number of workers that labor solely in the gig economy relative to the traditional economy isn’t yet as high as some academics once predicted it would be,12 the changes are still happening in nearly every industry, across pretty much every geography.

Of course, it’s possible that China could be at a turning point—much will be revealed in the next few years about which country’s digital strategy will work best. But one thing is certain: America will be able to capitalize on its own historical strengths only if U.S. companies are able to compete and innovate on an even playing field, and exploit the advantages of the free market system, which are its decentralization and possibility for creative destruction and innovation from all sorts of companies—big, medium-sized, and small alike. Unfortunately, as we’ve learned throughout this book, that’s less and less the case. Big Tech in both the United States and China has become ever more monopolistic, creating large and relatively closed-off systems that attempt to control “talent and resources on breakthroughs that will remain mostly ‘in house,’ ” as Lee puts it in his book AI Superpowers.


pages: 419 words: 109,241

A World Without Work: Technology, Automation, and How We Should Respond by Daniel Susskind

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Airbnb, Albert Einstein, algorithmic trading, AlphaGo, artificial general intelligence, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, Big Tech, blue-collar work, Boston Dynamics, British Empire, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, computer age, computer vision, computerized trading, creative destruction, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, Demis Hassabis, demographic transition, deskilling, disruptive innovation, Donald Trump, Douglas Hofstadter, driverless car, drone strike, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, financial innovation, flying shuttle, Ford Model T, fulfillment center, future of work, gig economy, Gini coefficient, Google Glasses, Gödel, Escher, Bach, Hans Moravec, income inequality, income per capita, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Hargreaves, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kenneth Arrow, Kevin Roose, Khan Academy, Kickstarter, Larry Ellison, low skilled workers, lump of labour, machine translation, Marc Andreessen, Mark Zuckerberg, means of production, Metcalfe’s law, natural language processing, Neil Armstrong, Network effects, Nick Bostrom, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, pink-collar, precariat, purchasing power parity, Ray Kurzweil, ride hailing / ride sharing, road to serfdom, Robert Gordon, Sam Altman, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, social intelligence, software is eating the world, sovereign wealth fund, spinning jenny, Stephen Hawking, Steve Jobs, strong AI, tacit knowledge, technological solutionism, TED Talk, telemarketer, The Future of Employment, The Rise and Fall of American Growth, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Travis Kalanick, Turing test, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, wealth creators, working poor, working-age population, Y Combinator

Schumpeter was not troubled by concerns that monopolies might entrench themselves and lower welfare. Economists who worry about “nothing but high prices and restrictions of output” are missing the bigger picture, he said: economic dominance by any company is not a permanent state of affairs. In time, today’s monopolies will be blown away by the “perennial gale of creative destruction.” New ones will inevitably take their place, but only temporarily, for they, too, would eventually be broken up by the same storms.23 These are the intellectual origins of the idea of “disruptive innovation,” so popular today among management theorists and strategy consultants. And Schumpeter was right: time and again, companies that seemed to be permanent fixtures of economic life have faded away.

Michael Cox, “Schumpeter in His Own Words,” Federal Reserve Bank of Dallas: Economic Insights 6, no. 3 (2001): 5. 23.  Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (London: Routledge, 2005). 24.  Mark J. Perry, “Fortune 500 Firms 1955 v. 2017: Only 60 Remain, Thanks to the Creative Destruction That Fuels Economic Prosperity,” AEIdeas, 13 October 2017. 25.  See Ariel Ezrachi and Maurice Stucke, Virtual Competition: The Promise and Perils of the Algorithm-Driven Economy (Cambridge, MA: Harvard University Press, 2016), chaps. 5–8. 26.  Emilio Calvano, Giacomo Calzolari, Vincenzo Denicolò, and Sergio Pastorello, “Artificial Intelligence, Algorithmic Pricing, and Collusion,” Vox CEPR Policy Portal, 3 February 2019, available at https://voxeu.org/ (accessed February 2019). 27.  


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Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

"there is no alternative" (TINA), Adam Curtis, Alan Greenspan, Alvin Roth, An Inconvenient Truth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, bond market vigilante , bread and circuses, Bretton Woods, Brownian motion, business cycle, capital controls, carbon credits, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, democratizing finance, disinformation, do-ocracy, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, Flash crash, full employment, George Akerlof, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kickstarter, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Phillips curve, Ponzi scheme, Post-Keynesian economics, precariat, prediction markets, price mechanism, profit motive, public intellectual, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, savings glut, school choice, sealed-bid auction, search costs, Silicon Valley, South Sea Bubble, Steven Levy, subprime mortgage crisis, tail risk, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, tontine, too big to fail, transaction costs, Tyler Cowen, vertical integration, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor

Its founder, Kalle Lasn, has asserted, “What we’re trying to do is pioneer a new form of social activism using all the power of the mass media to sell ideas rather than products”; its website proclaims, “The purpose of life is not to find yourself, but to lose yourself.”5 More neoliberal sentiments would be hard to find. The website also has a set of pages devoted to economics; under the rubric “Meet the Mavericks” it profiled Paul Samuelson, George Akerlof, Joseph Stiglitz, and Herman Daly. Kalle Lasn Associates has also published an anti-textbook entitled Meme Wars: The Creative Destruction of Neoclassical Economics which contains contributions by George Akerlof and Joseph Stiglitz. At least the graphics were radical. Similar ideas were promoted in the curiously titled Occupy Handbook, which included chapters by Raghuram Rajan, Tyler Cowen, Martin Wolf, David Graeber, Jeffrey Sachs, and Robert Shiller.6 Besotted by the millenarian idea of starting anew, and lacking any sense of the history of protest and political organization, both neoliberals and neoclassical economists rapidly addled whatever political curiosity and radical inclinations that the well-intentioned protestors might have had.

Money that might have been used productively to alter the energy infrastructure instead gets pumped into yet another set of speculative financial instruments, leading to bubbles, distortions of capital flows, and all the usual symptoms of financialization.26 So “cap-and-trade” does not work at ameliorating global warming, primarily because it was never really intended to do so. But as that intentional consequence becomes clear, it gets displaced by the long-game neoliberal solution. The final neoliberal fallback is geoengineering, which derives from the core neoliberal doctrine that entrepreneurs, unleashed to exploit acts of creative destruction, will eventually innovate market solutions to address dire economic problems. This is the whiz-bang futuristic science fiction side of neoliberalism, which appeals to male adolescents and Silicon Valley entrepreneurs almost as much as do the novels of Ayn Rand. Geoengineering is a portmanteau term covering a range of intentional large-scale manipulations of the earth’s climate, often proposed to counteract existing man-made climate change, such as global warming.

“Once Greece Goes . . . ,” London Review of Books 33 (July 14, 2011): 3–7. Lane, Jan-Erik. New Public Management (London: Routledge, 2000). Langley, Paul. The Everyday Life of Global Finance: Saving and Borrowing in Anglo-America (Oxford: Oxford University Press, 2008). Lasn, Kalle. Meme Wars: The Creative Destruction of Neoclassical Economics. London: Penguin, 2012. Latsis, Spiro, ed. Method and Appraisal in Economics (Cambridge, U.K.: Cambridge University Press, 1976). Laux, Christian, and Christian Leuz. 2010. “Did Fair-Value Accounting Contribute to the Financial Crisis?” Journal of Economic Perspectives 24 (2010): 93–118.


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Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Alan Greenspan, Albert Einstein, algorithmic trading, Andy Kessler, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, BRICs, British Empire, business cycle, buy the rumour, sell the news, capital asset pricing model, carbon credits, Carl Icahn, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, Daniel Kahneman / Amos Tversky, deal flow, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Dr. Strangelove, Dutch auction, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial engineering, financial independence, financial innovation, financial thriller, fixed income, foreign exchange controls, full employment, Glass-Steagall Act, global reserve currency, Goldman Sachs: Vampire Squid, Goodhart's law, Gordon Gekko, greed is good, Greenspan put, happiness index / gross national happiness, haute cuisine, Herman Kahn, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", job automation, Johann Wolfgang von Goethe, John Bogle, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Market Wizards by Jack D. Schwager, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Michael Milken, Mikhail Gorbachev, Milgram experiment, military-industrial complex, Minsky moment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, Phillips curve, planned obsolescence, plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, Reminiscences of a Stock Operator, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk free rate, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, short squeeze, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, stock buybacks, survivorship bias, tail risk, Teledyne, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, two and twenty, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

Although he got on well with the Austrian personally, and thought Hayek’s 1944 The Road to Serfdom was “a grand book,” Keynes was unpersuaded, concluding: “what rubbish his theory is.”5 Joseph Schumpeter’s worldview was shaped by his role as Austria’s minister of finance, paying off debts incurred in the collapse of central European financial institutions. Intending to be the world’s greatest economist, lover, and horseman, the colorful, thrice-married Austrian acknowledged only having to work at his horsemanship. Capitalism’s strength, Schumpeter argued, was creative destruction, where economic incentives encouraged entrepreneurs to develop new ideas to take advantage of profit opportunities, sweeping away old defunct businesses and processes. The destruction was the inevitable and unavoidable cost of a vibrant system that renewed itself periodically. Schumpeter saw the Great Depression as part of the adjustment that would wipe out unsustainable debts and poor investments, allowing economic renewal.

They must...translate concrete risks into quantities of abstract risk...the crisis of value measurement is expressed in the first instance in markets for financial instruments, like derivatives...it is at root a classic case of a crisis of value measurement, caused by collapses in value brought on by over-accumulation, falling profits, and unsustainable build-ups in fictitious capitals.39 Economist Jagdish Bhagwati contrasted the “destructive creation” of financial innovation and the “creative destruction” of industrial innovation in the real economy. The promise of derivatives was the measurement and management of risk. In 2009, Alan Greenspan, once an ardent advocate of all things derivative, elliptically noted: “A Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivatives markets.

See also fees cutting, 60 leveraged buyouts (LBO), 148-149 loans, 188 Cotton Candy, 268 Cotton, Charles Caleb, 282 Coulter, James, 154, 318 Council of Economic, 129 Council on Foreign Relations, 347 counterfeit money, 28. See also money Countrywide Financial, 183-184, 195, 328 cov-lite (covenant light) loans, 155 Coxey march of unemployed men (1894), 26 CQF (certificate in quantitative finance), 309 Cramer, Jim, 92, 96, 338, 340, 343 creative destruction, 103 credit. See also debt global credit process, 88 market-based, 269 ratings, 282 risk, 74, 223 scores, 70, 181 standby lines of, 281 supply of, 273 credit cards, 71-72 credit default swaps (CDSs), 173, 232, 237 credit money, 25. See also money Credit Opportunities fund, 256 Credit Opportunities II fund, 256 Credit Suisse, 134 Credit Suisse First Boston, 79 CreditSights, 283 Crimson Tide, 312 crises, financial preparation for, 264-278 Crisis of Global Capitalism, The, 327 crowded trades, 250 Cruise, Tom, 153 Cullen, Michael, 208 cultures banks, 311-312 money, 20 Cummings, Elijah, 245 currencies, 124 currency accumulators, 217 gold, 26.


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The Age of Surveillance Capitalism by Shoshana Zuboff

"World Economic Forum" Davos, algorithmic bias, Amazon Web Services, Andrew Keen, augmented reality, autonomous vehicles, barriers to entry, Bartolomé de las Casas, behavioural economics, Berlin Wall, Big Tech, bitcoin, blockchain, blue-collar work, book scanning, Broken windows theory, California gold rush, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, citizen journalism, Citizen Lab, classic study, cloud computing, collective bargaining, Computer Numeric Control, computer vision, connected car, context collapse, corporate governance, corporate personhood, creative destruction, cryptocurrency, data science, deep learning, digital capitalism, disinformation, dogs of the Dow, don't be evil, Donald Trump, Dr. Strangelove, driverless car, Easter island, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, Evgeny Morozov, facts on the ground, fake news, Ford Model T, Ford paid five dollars a day, future of work, game design, gamification, Google Earth, Google Glasses, Google X / Alphabet X, Herman Kahn, hive mind, Ian Bogost, impulse control, income inequality, information security, Internet of things, invention of the printing press, invisible hand, Jean Tirole, job automation, Johann Wolfgang von Goethe, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Kevin Roose, knowledge economy, Lewis Mumford, linked data, longitudinal study, low skilled workers, Mark Zuckerberg, market bubble, means of production, multi-sided market, Naomi Klein, natural language processing, Network effects, new economy, Occupy movement, off grid, off-the-grid, PageRank, Panopticon Jeremy Bentham, pattern recognition, Paul Buchheit, performance metric, Philip Mirowski, precision agriculture, price mechanism, profit maximization, profit motive, public intellectual, recommendation engine, refrigerator car, RFID, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Mercer, Salesforce, Second Machine Age, self-driving car, sentiment analysis, shareholder value, Sheryl Sandberg, Shoshana Zuboff, Sidewalk Labs, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, slashdot, smart cities, Snapchat, social contagion, social distancing, social graph, social web, software as a service, speech recognition, statistical model, Steve Bannon, Steve Jobs, Steven Levy, structural adjustment programs, surveillance capitalism, technological determinism, TED Talk, The Future of Employment, The Wealth of Nations by Adam Smith, Tim Cook: Apple, two-sided market, union organizing, vertical integration, Watson beat the top human players on Jeopardy!, winner-take-all economy, Wolfgang Streeck, work culture , Yochai Benkler, you are the product

These developments reflect the simple truth that genuine economic reformation takes time and that the internet world, its investors and shareholders, were and are in a hurry. The credo of digital innovation quickly turned to the language of disruption and an obsession with speed, its campaigns conducted under the flag of “creative destruction.” That famous, fateful phrase coined by evolutionary economist Joseph Schumpeter was seized upon as a way to legitimate what Silicon Valley euphemistically calls “permissionless innovation.”77 Destruction rhetoric promoted what I think of as a “boys and their toys” theory of history, as if the winning hand in capitalism is about blowing things up with new technologies.

Schumpeter insisted that this evolutionary mechanism is triggered by new consumer needs, and alignment with those needs is the discipline that drives sustainable mutation: “The capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses.”78 If a mutation is to be reliably sustained, its new aims and practices must be translated into new institutional forms: “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.” Note that Schumpeter says “creates,” not “destroys.” As an example of mutation, Schumpeter cites “the stages of organizational development from the craft shop to the factory to a complex corporation like U.S. Steel.…”79 Schumpeter understood creative destruction as one unfortunate by-product of a long and complex process of creative sustainable change. “Capitalism,” he wrote, “creates and destroys.” Schumpeter was adamant on this point: “Creative response shapes the whole course of subsequent events and their ‘long-run’ outcome.… Creative response changes social and economic situations for good.… This is why creative response is an essential element in the historical process: No deterministic credo avails against this.”80 Finally, and contrary to the rhetoric of Silicon Valley and its worship of speed, Schumpeter argued that genuine mutation demands patience: “We are dealing with a process whose every element takes considerable time in revealing its true features and ultimate effects.… We must judge its performance over time, as it unfolds through decades or centuries.”81 The significance of a “mutation” in Schumpeter’s reckoning implies a high threshold, one that is crossed in time through the serious work of inventing new institutional forms embedded in the new needs of new people.

Aleecia M. McDonald and Lorrie Faith Cranor, “The Cost of Reading Privacy Policies,” Journal of Policy for the Information Society, 4, no. 3 (2008), http://hdl.handle.net/1811/72839. 76. Kim, Wrap Contracts, 70–72. 77. For an example of this rhetoric, see Tom Hayes, “America Needs a Department of ‘Creative Destruction,’” Huffington Post, October 27, 2011, https://www.huffingtonpost.com/tom-hayes/america-needs-a-departmen_b_1033573.html. 78. Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper Perennial Modern Classics, 2008), 68. 79. Schumpeter, Capitalism, 83. 80. Joseph A. Schumpeter, The Economics and Sociology of Capitalism, ed.


pages: 437 words: 115,594

The Great Surge: The Ascent of the Developing World by Steven Radelet

Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, biodiversity loss, Boeing 747, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, creative destruction, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, export processing zone, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, land reform, low interest rates, low skilled workers, M-Pesa, megacity, middle-income trap, Mikhail Gorbachev, Nelson Mandela, off grid, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Robert Solow, Second Machine Age, secular stagnation, Shenzhen special economic zone , Sheryl Sandberg, Simon Kuznets, South China Sea, special economic zone, standardized shipping container, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, three-masted sailing ship, trade route, women in the workforce, working poor

Under the current heavily state-controlled economy, property rights and contract law remain limited and weak, undermining long-term incentives for innovation and risk taking and weakening future growth prospects. Old and inefficient companies (and banks) are allowed to remain operational, limiting the room for “creative destruction”—the great Austrian economist Joseph Schumpeter’s term for how dynamic economies are constantly rebuilt, with new, more innovative, and more efficient businesses replacing the old. Feedback loops from citizens and business leaders to government leaders weaken over time as officials focus on maintaining power and control.

Henry), 97 Cairo, 206, 216 California, 281 call centers, 56, 178, 262 Cambodia, 11, 36, 106, 114, 159 camels, 152 Cameroon, 281 Canada, 47, 210, 231 Cape Town, University of, 247 capitalism, 122, 146, 147–48, 149, 156, 162, 163, 250, 264, 303 in Asia, 155–57 Capital in the Twenty-First Century (Piketty), 68–69 capital markets, 164 carbon dioxide, 278, 282 carbon emissions, 297 Cardoso, Fernando, 186–87 Caribbean, 36 Carnation Revolution, 105 Carothers, Thomas, 112 Case Studies in Global Health, 214 cash transfer programs, 38 cassava, 171, 215 Castro, Fidel, 100, 144 Catholicism, 120–21, 123 cattle plague, 215 CD4 cell count, 175 Ceauşescu, Nicolae, 143 Center for Global Development, 298 Center for Systemic Peace, 107 Centers for Disease Control and Prevention (CDC), US, 210 Central Africa, 205 Central African Republic, 49, 50, 222 Central America: crime in, 264 megacities in, 277 wars in, 81, 141 Central Asia, 36, 141, 147 Central Bank, Gambia, 190 Central Military Commission, 134 Chad: child mortality in, 84 health improvements in, 93 as landlocked, 205 war in, 145 Chandy, Laurence, 42, 243–44 Chavez, Hugo, 113 Chen, Shaohua, 27, 29 Chernenko, Konstantin, 134 Chernobyl nuclear power plant, 134 childbirth, 74, 75–82 child mortality, 24, 72–96, 74, 85, 93, 246 Chile, 47, 127 coup in, 100 democracy in, 104, 123 growth in, 6, 7, 45, 128, 147 individual leadership in, 187 life expectancy in, 78 malaria in, 210 Pinochet’s rule in, 107–8, 122, 141, 143–44 trade encouraged by, 155 Chiluba, Frederick, 133 China, ix–x, 3, 7, 20, 22, 106, 126, 144, 203, 292, 298, 300 authoritarian capitalism in, 147, 265–66 Coca-Cola in, 46 in confrontations with neighbors, 273 demand in, 53 demographic dividend in, 236 and dictatorships, 222 emigration from, 284 exploration by, 151–53 exports from, 154 future of, 234, 249–52 growth in, 6, 8–9, 15, 17, 21, 35–36, 45, 50, 62, 71, 125, 128, 147, 154, 201, 232, 233, 235–37, 242, 269 health in, 201 income in, 201 individual leadership in, 187 inequality in, 66, 69–70 infrastructure financing in, 259–60 innovation and technology in, 154–55, 302 market reforms in, 35, 102, 134–35, 192 natural capital in, 63 opening of, 5 per capital income in, 153 pollution in, 62 poverty reduction in, 201, 244 savings and investment in, 235 slowdown in growth of, 235–37, 249, 255, 257, 293 universities in, 247 US relationship with, 298–99 cholera, 77 Chun Doo-hwan, 99 Churchill, Winston, 97 civil liberties, 99, 199 civil rights, 112 civil servants, 102 civil war, 7 in Africa, 12 decline in, 115–16, 116 Civil War, US, 142 Clemens, Michael, 225 climate change, 4, 9, 19, 21, 63, 233, 234, 256, 272–73, 278, 281–84, 285–86, 296–97, 301, 305 coal, 44, 53, 278 Coca-Cola, 46, 159 cocoa, 163, 189 Cold War, 4, 7, 11, 16, 44, 52, 81, 100, 103, 115, 116, 131, 135, 144, 145, 146, 150, 156, 183, 184, 214, 223 Collier, Paul, 14–15, 118, 188, 202, 205, 213, 217, 227, 292, 303 Collins, Daryl, 32, 33–34 Collor de Mello, Fernando, 186 Colombia, 22, 237 data entry firms in, 178 universities in, 247 colonialism, 43–44, 52, 140, 147, 148, 149, 156 and independence, 140–43 of Indonesia, 136–40 Columbus, Christopher, 152 Coming Anarchy, The (Kaplan), 11 Commission on Growth and Development, 86, 165–66, 188 commodities, 53–57, 55, 163 Communism, 4, 11, 124, 125, 135, 139, 143, 146, 147, 149, 150, 184, 250 demise of, 16, 183 Communist Party, China, 123, 138, 250 Communist Party, Indonesia, 138 Communist Party, Soviet, 133, 138 comprehensive capital, 62–63 conflict, see violence Confucianism, 122 Congo, 114, 144, 185, 213, 243, 285 child mortality in, 84 civil war in, 181, 206 coup in, 100 education in, 190 lack of growth in, 50 war in, 81 Congress, US, 298 construction, 37, 45 consumption, 40–41, 40 Contingent Reserve Arrangement, 259 contract enforcement, 261 Converse, Nathan, 198 copper, 53 corn, 162, 281 corruption, 112, 261, 264 in Brazil, 186 in Thailand, 254 in US, 142 Costa Rica, 18, 58, 159 aid to, 223 as democracy, 7, 98, 123 growth in, 50 costume jewelry, 56 Côte d’Ivoire, 163, 263 cotton, 25 creative destruction, 249 Cuba, 22, 141, 145 and democracy, 248 dictatorship in, 100, 106, 144 Cultural Revolution, 35, 128, 153, 185 currencies, and resource curse, 206 Cuyamel Fruit Company, 97–98 Czechoslovakia, 143 protests in, 134 Velvet Revolution in, 103 Czech Republic, 184 da Gama, Vasco, 152 dairy products, 280 Darfur, 8, 10, 206 Dasgupta, Partha, 62–63 data entry firms, 178 Davies, Sally, 267 DDT, 212 Deaton, Angus, 89, 213 debts, 11, 193 in Africa, 12 deficits, 101 dehydration, 94, 173 de Klerk, F.


pages: 482 words: 117,962

Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan

Admiral Zheng, agricultural Revolution, barriers to entry, Berlin Wall, Branko Milanovic, British Empire, conceptual framework, creative destruction, demographic transition, Deng Xiaoping, endogenous growth, failed state, Fall of the Berlin Wall, Gini coefficient, global pandemic, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, language acquisition, Lao Tzu, life extension, longitudinal study, low skilled workers, low-wage service sector, machine readable, Malacca Straits, mass immigration, microcredit, Nelson Mandela, Network effects, new economy, New Urbanism, old age dependency ratio, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, selection bias, Silicon Valley, Silicon Valley startup, Skype, social distancing, spice trade, trade route, transaction costs, transatlantic slave trade, women in the workforce, working-age population

The development of modern capitalism between the nineteenth and twentieth centuries generated newly disruptive “push” and “pull” factors that launched millions of migrants from villages to cities, from hinterlands to coastal regions, and from port cities across oceans. People were often compelled or coerced to move under circumstances that were not of their own choosing. The movement of people was central to the process of “creative destruction” that revolutionized the economic and political structure of the world, binding humanity into an integrated (though uneven) global economy. THE AGE OF EXPLORATiON Gunpowder Expeditions Only decades after the Ming rulers terminated Zhang He's great voyages, the increasingly lucrative seafaring trade from Europe helped to fund exploratory journeys across the Atlantic.

As has been mentioned already, in low-and middle-income countries, economic development typically promotes migration.76 The process of economic transformation into an industrial economy displaces traditional livelihoods in favor of large-scale production through the process Joseph Schumpeter called “creative destruction”: The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers, goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.77 The incorporation of developing countries into the global economy, rather than halting migration, can stimulate movement through the disruptive process of social and economic reorganization.


pages: 410 words: 114,005

Black Box Thinking: Why Most People Never Learn From Their Mistakes--But Some Do by Matthew Syed

Abraham Wald, Airbus A320, Alfred Russel Wallace, Arthur Eddington, Atul Gawande, Black Swan, Boeing 747, British Empire, call centre, Captain Sullenberger Hudson, Checklist Manifesto, cognitive bias, cognitive dissonance, conceptual framework, corporate governance, creative destruction, credit crunch, crew resource management, deliberate practice, double helix, epigenetics, fail fast, fear of failure, flying shuttle, fundamental attribution error, Great Leap Forward, Gregor Mendel, Henri Poincaré, hindsight bias, Isaac Newton, iterative process, James Dyson, James Hargreaves, James Watt: steam engine, Johannes Kepler, Joseph Schumpeter, Kickstarter, Lean Startup, luminiferous ether, mandatory minimum, meta-analysis, minimum viable product, publication bias, quantitative easing, randomized controlled trial, selection bias, seminal paper, Shai Danziger, Silicon Valley, six sigma, spinning jenny, Steve Jobs, the scientific method, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Toyota Production System, US Airways Flight 1549, Wall-E, Yom Kippur War

The failure of companies in a free market, then, is not a defect of the system, or an unfortunate by-product of competition; rather, it is an indispensable aspect of any evolutionary process. According to one economist, 10 percent of American companies go bankrupt every year.4 The economist Joseph Schumpeter called this “creative destruction.” Now, compare this with centrally planned economies, where there are almost no failures at all. Companies are protected from failure by subsidy. The state is protected from failure by the printing press, which can inflate its way out of trouble. At first, this may look like an enlightened way to go about solving the problems of economic production, distribution, and exchange.

., 73, 93, 111–12, 117 business blame and, 225–31 evolutionary, 129–31 mindset and, 259–61 randomized control trials (RCTs) and, 184–86 cadet training, at West Point, 261–63 Callace, Leonard, 69 Cameron, Julia, 200 Campbell, Alastair, 94 Campbell Collaboration, 164 Capello, Fabio, 135–36 Capital One, 185–86 capital punishment, 76 Carnot, Nicolas Léonard Sadi, 132 Catmull, Ed, 207, 208–9, 210 centrally planned economies, 130, 284 Chabris, Christopher, 117 Chapanis, Alphonse, 19 charities, 147–49 checklists, 30, 39, 53, 59 Chicago Convention, 224–25 China, 110, 271–72 Christianity, 279–80 Clinical Human Factors Group, 60, 293 clinical trials, 14 Clinton, Bill, 187 close crop planting, 110 closed loops, 13–14, 29–30, 58, 165 criminal justice system and, 66, 67 Iraq War decisions and, 93 justice system and, 85 randomized control trials (RCTs) and, 154–59 science and, 44 Cobley, Dan, 185 cognitive dissonance, 74–77, 86–107 ambiguity of failure and, 87 blame and, 231 confirmation bias and, 101–3 denial and, 74 disposition effect and, 101 economic forecasting and, 94–97 external versus internal deception and, 87, 88 health care and, 87–90, 103–7 initiation experiment and, 75–76, 86–87 Iraq War and, 90–94 justification and, 88–89, 90, 97–99 Lord’s capital punishment research project findings and, 76 reputation or influence of individual and, 98–100 responses to, 74 self-deception, 110–11 self-esteem and, 75–76 war, 278 wrongful convictions and, 79–83 collapsible stroller, 195, 199 Collins, Jim, 144, 204, 205, 206 communication, 28–29, 30, 39, 59 Communism, 108, 109, 110 complexity, 11 confirmation, 44 confirmation bias, 101–3, 280 connectivity, 199, 204 Connelly, Peter (Baby P case), 236–38, 239 Connelly, Tracey, 236 Conner, Aimee, 40 Convicting the Innocent and State Indemnity for Errors of Criminal Justice (Borchard), 67 Cook, Linda, 69 Corporate Creativity (Robinson & Stern), 179 counterfactual, 90n, 155, 157, 162, 165, 174, 175 court of criminal appeal, 67 cover-ups, 12–13, 88–89 Cowell, Andy, 182 Crandall, Bob, 179 creationism, 42–43 creative destruction, 130 Creativity, Inc. (Catmull), 207 creativity and innovation, 182–213 as act of synthesis, 199 brainstorming and, 196–97 connectivity and, 199, 204 as context-dependent, 201–2 discipline and, 205–6 dissent and criticize approach to, 197, 200–201, 207, 209 Dyson on creative process, 192–95, 196, 198, 202 education system and, 211–12 environments conducive to, 200–201 and multiples, 201–2 at Pixar, 207–10 as response to problem, 195–200 Crew Resource Management, 30, 39 Criminal Cases Review Commission, UK, 117 criminal justice system, 65–71, 114–21, 282 parole decisions and, 118–19 randomized control trials (RCTs), lack of, 158 reforms and, 115–17, 118–21 Scared Straight program and, 150–54, 159–67 trial by jury and, 118, 119 wrongful convictions (See wrongful convictions) criticism, in creative process, 197, 207, 209 cults, 71–73, 74 culture, 11, 13 aviation and, 20, 25–27, 58 of blame (See blame) health care and, 16, 49–50, 53, 54–55, 57, 58–59, 105–6 of openness, 229–31, 234–35 cumulative selection/adaptation, 128–29, 130, 292 Cuneus, Andreas, 201 cycling, 171–73, 178, 179 Daily Beast, 166 Danziger, Shai, 118–19 Darwin, Charles, 201 data, 37 Dattner, Ben, 233 Dawkins, Richard, 128–29 deception, 87, 88 decision making, 11 Deep Blue, 134 Dekker, Sidney, 13, 227, 239 deliberate practice, 47 denial cognitive dissonance, as response to, 74 failure and, 18, 71 in prosecutorial responses to exonerating DNA evidence, 78–83 Diehl, Alan, 27, 28, 29, 30 Disch, Joanne, 10 discipline, 205–6 disclosure, 16, 25–26, 88–89 disposition effect, 101, 264 dissent and debate, in creative process, 197, 200–201, 207, 209 Divine, Jamie, 184 DNA evidence, 68–71, 77, 79–83, 84, 120 dogmatic tradition, 277, 278 Dorman, R.


Human Frontiers: The Future of Big Ideas in an Age of Small Thinking by Michael Bhaskar

"Margaret Hamilton" Apollo, 3D printing, additive manufacturing, AI winter, Albert Einstein, algorithmic trading, AlphaGo, Anthropocene, artificial general intelligence, augmented reality, autonomous vehicles, backpropagation, barriers to entry, basic income, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Big Tech, Bletchley Park, blockchain, Boeing 747, brain emulation, Brexit referendum, call centre, carbon tax, charter city, citizen journalism, Claude Shannon: information theory, Clayton Christensen, clean tech, clean water, cognitive load, Columbian Exchange, coronavirus, cosmic microwave background, COVID-19, creative destruction, CRISPR, crony capitalism, cyber-physical system, dark matter, David Graeber, deep learning, DeepMind, deindustrialization, dematerialisation, Demis Hassabis, demographic dividend, Deng Xiaoping, deplatforming, discovery of penicillin, disruptive innovation, Donald Trump, double entry bookkeeping, Easter island, Edward Jenner, Edward Lorenz: Chaos theory, Elon Musk, en.wikipedia.org, endogenous growth, energy security, energy transition, epigenetics, Eratosthenes, Ernest Rutherford, Eroom's law, fail fast, false flag, Fellow of the Royal Society, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, germ theory of disease, glass ceiling, global pandemic, Goodhart's law, Google Glasses, Google X / Alphabet X, GPT-3, Haber-Bosch Process, hedonic treadmill, Herman Kahn, Higgs boson, hive mind, hype cycle, Hyperloop, Ignaz Semmelweis: hand washing, Innovator's Dilemma, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of the printing press, invention of the steam engine, invention of the telegraph, invisible hand, Isaac Newton, ITER tokamak, James Watt: steam engine, James Webb Space Telescope, Jeff Bezos, jimmy wales, job automation, Johannes Kepler, John von Neumann, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Large Hadron Collider, liberation theology, lockdown, lone genius, loss aversion, Louis Pasteur, Mark Zuckerberg, Martin Wolf, megacity, megastructure, Menlo Park, Minecraft, minimum viable product, mittelstand, Modern Monetary Theory, Mont Pelerin Society, Murray Gell-Mann, Mustafa Suleyman, natural language processing, Neal Stephenson, nuclear winter, nudge unit, oil shale / tar sands, open economy, OpenAI, opioid epidemic / opioid crisis, PageRank, patent troll, Peter Thiel, plutocrats, post scarcity, post-truth, precautionary principle, public intellectual, publish or perish, purchasing power parity, quantum entanglement, Ray Kurzweil, remote working, rent-seeking, Republic of Letters, Richard Feynman, Robert Gordon, Robert Solow, secular stagnation, shareholder value, Silicon Valley, Silicon Valley ideology, Simon Kuznets, skunkworks, Slavoj Žižek, sovereign wealth fund, spinning jenny, statistical model, stem cell, Steve Jobs, Stuart Kauffman, synthetic biology, techlash, TED Talk, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, TikTok, total factor productivity, transcontinental railway, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, uranium enrichment, We wanted flying cars, instead we got 140 characters, When a measure becomes a target, X Prize, Y Combinator

If having an idea was simply a matter of sitting in a room, none of this would matter. But it's not. Bringing an idea into the world, whether launching a new cancer treatment or publishing a book, requires resources. And resources is another word for money. It was assumed that unshackling markets and entrepreneurs would lead to an orgy of creative destruction. In fact, as we saw in Chapter 3, the results have been tepid. As the economy was subsumed into a kind of quasi-financial sector, new barriers arose: sunk costs and warped incentives project far into the future. As society became addicted to easy returns, quick-fix attitudes and beliefs ate into social and institutional structures.

Measured as a proportion of internal cash flow, returns to shareholders are six times higher than the 1970s.26 S&P 500 companies alone have trillions in cash, splurging a record $800 billion on share buybacks, almost $500 billion on dividends, while Apple and Alphabet alone sit on hundreds of billions.27 All this epic hoarding of cash is described as ‘precautionary’.28 If capitalism used to be about owner-managers taking risks to create new breakthrough businesses, the interwoven, highly intermediated ‘gray’ structure of modern equity markets is the opposite. It's not that business doesn't have the money to radically change the world; it's that managers and institutional owners neither need nor are incentivised to do so. In other words, modern business practice stifles the very creative destruction that was meant to be the productive essence of capitalism. Demographic effects play another role – research argues that the presence of more older people in the population translates into more concentrated and older companies, which in turns drags down dynamism.29 As the population ages, pension funds accumulate more and more of the economy; they don't want disruption, they want reliable income.


pages: 451 words: 115,720

Green Tyranny: Exposing the Totalitarian Roots of the Climate Industrial Complex by Rupert Darwall

1960s counterculture, active measures, Affordable Care Act / Obamacare, Albert Einstein, Bakken shale, Berlin Wall, Bernie Sanders, California energy crisis, carbon credits, carbon footprint, centre right, clean tech, collapse of Lehman Brothers, creative destruction, decarbonisation, deindustrialization, dematerialisation, disinformation, Donald Trump, electricity market, Elon Musk, energy security, energy transition, facts on the ground, Fall of the Berlin Wall, Garrett Hardin, gigafactory, Gunnar Myrdal, Herbert Marcuse, hydraulic fracturing, Intergovernmental Panel on Climate Change (IPCC), invisible hand, it's over 9,000, James Watt: steam engine, John Elkington, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, liberal capitalism, market design, means of production, megaproject, Mikhail Gorbachev, mittelstand, Murray Bookchin, Neil Armstrong, nuclear winter, obamacare, oil shale / tar sands, Paris climate accords, Peace of Westphalia, peak oil, plutocrats, postindustrial economy, precautionary principle, pre–internet, recommendation engine, renewable energy transition, rent-seeking, road to serfdom, rolling blackouts, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley billionaire, Solyndra, Strategic Defense Initiative, subprime mortgage crisis, tech baron, tech billionaire, The Wealth of Nations by Adam Smith, Tragedy of the Commons, women in the workforce, young professional

Beginning in the 1960s, business leaders and opinion formers embraced environmentalist tenets. Environmentalism became the fuel for the engine of capitalism’s self-destruction. It was in America that Schumpeter wrote Capitalism, Socialism and Democracy. Best known for his description of capitalism as a “perennial gale of creative destruction,” this was a prelude to the book’s most audacious claim: Capitalism would decay into socialism not, as Marx believed, because it would fail economically but through its very success.7 Schumpeter’s analysis of capitalism’s demise has two blades. The first is a class-based analysis of the atrophying of the entrepreneurial function.

RWE, the second largest, received a windfall of about $6.4 billion in the first three years of the ETS.29 From their peak in January 2008, the three quoted utilities saw their share prices capitulate before the Energiewende machine of destruction.* By August 2015, the share price of EnBW had lost 59.5 percent of its value, e.on had fallen by 70.2 percent, and RWE by 84.7 percent. Over the same period, the DAX 30 index of German blue-chip companies had risen by 39.2 percent.30 This was not a market-driven, Schumpeterian gale of creative destruction. When markets destroy older businesses, it’s because newer ones come along offering customers newer and better products and lower prices. By contrast, the Energiewende value destruction was entirely driven by the state. Its scale was immense. In the seven years from December 2007, the three quoted utility companies saw €68.9 billion of shareholder value destroyed.


pages: 356 words: 116,083

For Profit: A History of Corporations by William Magnuson

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Airbnb, bank run, banks create money, barriers to entry, Bear Stearns, Big Tech, Black Lives Matter, blockchain, Bonfire of the Vanities, bread and circuses, buy low sell high, carbon tax, carried interest, collective bargaining, Cornelius Vanderbilt, corporate raider, creative destruction, disinformation, Donald Trump, double entry bookkeeping, Exxon Valdez, fake news, financial engineering, financial innovation, Ford Model T, Ford paid five dollars a day, Frederick Winslow Taylor, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Ida Tarbell, Intergovernmental Panel on Climate Change (IPCC), invisible hand, joint-stock company, joint-stock limited liability company, junk bonds, Mark Zuckerberg, Menlo Park, Michael Milken, move fast and break things, Peter Thiel, power law, price discrimination, profit maximization, profit motive, race to the bottom, Ralph Waldo Emerson, randomized controlled trial, ride hailing / ride sharing, scientific management, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, slashdot, Snapchat, South Sea Bubble, spice trade, Steven Levy, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tim Cook: Apple, too big to fail, trade route, transcontinental railway, union organizing, work culture , Y Combinator, Yom Kippur War, zero-sum game

And they spend fifty minutes on Facebook. The only leisure activity that outranks Facebook scrolling is watching television (the average American spends two hours and forty-nine minutes a day in front of the tube).1 For a corporation that represents the culmination of hundreds of years of creative destruction, Facebook has a surprisingly friendly face. For many of its employees, the day begins with a free pickup by one of the company’s luxury vans that shuttle back and forth between San Francisco and Facebook’s Menlo Park headquarters or perhaps with a trip on one of the company’s ferries sailing across San Francisco Bay.

In 1965, the average CEO was paid twenty times more than the average worker; today, they are paid almost three hundred times as much as their workers. KKR executives reaped salaries of hundreds of millions of dollars a year, even while their companies were laying off thousands of employees. This is not creative destruction; it is simply destruction. Directors and officers must recognize that they have a social duty to protect workers and promote their interests, even when doing so may dent corporate profits. Again, there is room for disagreement about what precisely fairness requires. Treating workers fairly does not mean paying them all the same.


pages: 141 words: 40,979

The Little Book That Builds Wealth: The Knockout Formula for Finding Great Investments by Pat Dorsey

Airbus A320, barriers to entry, book value, business process, call centre, carbon tax, creative destruction, credit crunch, discounted cash flows, intangible asset, John Bogle, knowledge worker, late fees, low cost airline, Network effects, pets.com, price anchoring, risk tolerance, risk/return, rolodex, search costs, shareholder value, Stewart Brand

Big-picture, abstract concepts went in one ear and out the other unless I could hang those ideas on concrete examples. I studied a lot of political science in graduate school, and although I slogged through the great political thinkers like Max Weber, Karl Marx, and Émile Durkheim, I can’t say I enjoyed them (aside from Joseph “creative destruction” Schumpeter, of course). By contrast, I loved reading books that took diverse bits of evidence and teased out a unifying theme or theory from the ground up. I’ve never really connected the dots before, but it was in hindsight a good prelude to a career as a bottom-up fundamental securities analyst.


pages: 134 words: 41,085

The Wake-Up Call: Why the Pandemic Has Exposed the Weakness of the West, and How to Fix It by John Micklethwait, Adrian Wooldridge

Admiral Zheng, Affordable Care Act / Obamacare, air traffic controllers' union, Alan Greenspan, basic income, battle of ideas, Berlin Wall, Bernie Sanders, bike sharing, Black Lives Matter, Boris Johnson, carbon tax, carried interest, cashless society, central bank independence, contact tracing, contact tracing app, Corn Laws, coronavirus, COVID-19, creative destruction, David Ricardo: comparative advantage, defund the police, Deng Xiaoping, Dominic Cummings, Donald Trump, Etonian, failed state, Fall of the Berlin Wall, Future Shock, George Floyd, global pandemic, Internet of things, invisible hand, it's over 9,000, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jeremy Corbyn, Jones Act, knowledge economy, laissez-faire capitalism, Les Trente Glorieuses, lockdown, McMansion, military-industrial complex, night-watchman state, offshore financial centre, oil shock, Panopticon Jeremy Bentham, Parkinson's law, pensions crisis, QR code, rent control, Rishi Sunak, road to serfdom, Ronald Reagan, school vouchers, Shoshana Zuboff, Silicon Valley, smart cities, social distancing, Steve Bannon, surveillance capitalism, TED Talk, trade route, Tyler Cowen, universal basic income, Washington Consensus

If the current test is about security, the next one will be about liberty. That is a battle that the democracies of the world need to win together, and they will do so much more easily if they line up behind a common vision of freedom. THE ALARM CLOCK The secret of the West’s success over the past four hundred years is its appetite for creative destruction: just when everything looks hopeless, it succeeds in regenerating itself. Look at the changes wrought by the Roosevelts in the Gilded Age and the Great Depression. Having almost destroyed itself during the Second World War, Europe became the continent of les trentes glorieuses and wirtschaftswunder.


pages: 394 words: 124,743

Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry by Steven Rattner

activist fund / activist shareholder / activist investor, affirmative action, Alan Greenspan, bank run, banking crisis, Bear Stearns, business cycle, Carl Icahn, centre right, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, creative destruction, credit crunch, David Brooks, David Ricardo: comparative advantage, declining real wages, Ford Model T, friendly fire, hiring and firing, income inequality, Joseph Schumpeter, low skilled workers, McMansion, Mikhail Gorbachev, moral hazard, Ronald Reagan, Saturday Night Live, shareholder value, subprime mortgage crisis, supply-chain management, too big to fail

Of course, history sides with free trade. Countries, states, and regions had all seen it help their economies successfully evolve. When I lived in Britain thirty years ago, coal and steel were major industries. Today they are essentially gone, and yet Britain is far more prosperous now than it was then. This process of "creative destruction," famously articulated by Joseph Schumpeter, has also been, in fact, the engine of economic development for the older parts of the Northeast, where I've lived nearly all my life. Take Long Island City, a section of Queens just across the East River from Manhattan. Well into the twentieth century, the area was a center of American manufacturing, home to industrial businesses that made chewing gum, pianos, batteries, glass, chemicals, and many other products.

Those enterprises, and the jobs that went with them, moved west long ago. Farther up the East Side, a large structure housing several big-box retailers such as Target and Costco recently opened for business on the site of Washburn Wire, the last true industrial business in all of Manhattan. Trumpeting creative destruction is easy until your own business or community gets in the way of it. The evolutionary process that worked so well for New York City has to date been a formula for extinction for Detroit and Buffalo and many other hard-hit cities. But as Diana Farrell said in the context of rescuing Chrysler, we need to be careful about how many "old jobs" we try to preserve if global competitive dynamics have overtaken them.


pages: 421 words: 125,417

Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

agricultural Revolution, air freight, Anthropocene, back-to-the-land, biodiversity loss, British Empire, business process, carbon credits, carbon footprint, carbon tax, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, creative destruction, demographic transition, Diane Coyle, digital divide, Edward Glaeser, energy security, failed state, Garrett Hardin, Gini coefficient, global pandemic, Global Witness, Haber-Bosch Process, impact investing, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, low skilled workers, mass immigration, microcredit, ocean acidification, oil shale / tar sands, old age dependency ratio, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, Tragedy of the Commons, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population, zoonotic diseases

Economist and political theorist Joseph Schumpeter developed the very influential theory of creative destruction in the 1940s, according to which economic success inherently requires the failure of some sectors in order to make room for the rise of new leading sectors. New ideas are constantly entering the market, jostling with old ones, and often defeating them; the weakest workers, businesses, and industries lose in this process. Economic growth and development are thus inherently painful for the victims of creative destruction. In some interpretations, a social safety net would slow the turnover from lagging to leading sectors, and frustrate the returns on entrepreneurship and innovation.


pages: 402 words: 126,835

The Job: The Future of Work in the Modern Era by Ellen Ruppel Shell

"Friedman doctrine" OR "shareholder theory", 3D printing, Abraham Maslow, affirmative action, Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, AlphaGo, Amazon Mechanical Turk, basic income, Baxter: Rethink Robotics, big-box store, blue-collar work, Buckminster Fuller, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, company town, computer vision, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, data science, deskilling, digital divide, disruptive innovation, do what you love, Donald Trump, Downton Abbey, Elon Musk, emotional labour, Erik Brynjolfsson, factory automation, follow your passion, Frederick Winslow Taylor, future of work, game design, gamification, gentrification, glass ceiling, Glass-Steagall Act, hiring and firing, human-factors engineering, immigration reform, income inequality, independent contractor, industrial research laboratory, industrial robot, invisible hand, It's morning again in America, Jeff Bezos, Jessica Bruder, job automation, job satisfaction, John Elkington, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, low skilled workers, Lyft, manufacturing employment, Marc Andreessen, Mark Zuckerberg, means of production, move fast and break things, new economy, Norbert Wiener, obamacare, offshore financial centre, Paul Samuelson, precariat, Quicken Loans, Ralph Waldo Emerson, risk tolerance, Robert Gordon, Robert Shiller, Rodney Brooks, Ronald Reagan, scientific management, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, Steve Jobs, stock buybacks, TED Talk, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, Thomas L Friedman, Thorstein Veblen, Tim Cook: Apple, Uber and Lyft, uber lyft, universal basic income, urban renewal, Wayback Machine, WeWork, white picket fence, working poor, workplace surveillance , Y Combinator, young professional, zero-sum game

The very term business hero has a distinctly American ring. And by hero, we generally mean “innovator,” regardless of what that innovation foretells for our futures, both individually and as a nation. For the question remains, innovation of what and for whom? Harvard economist Joseph Schumpeter coined the phrase creative destruction to describe the process by which innovation creates new technologies, businesses, and jobs at the cost of the old. The classic example of this is the aforementioned automobile—the innovation of the car brought untold numbers of new opportunities for factory workers, managers, administrators, engineers, designers, marketers, and salespeople, while killing off old opportunities for blacksmiths, harness makers, and others.

In Capitalism, Socialism, and Democracy (1942) he wrote, “The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.” Schumpeter’s argument that new, innovative firms drove the bulk of job growth galvinized economic thinking, as did the work of David L. Birch, a business consultant and researcher at the Massachusetts Institute of Technology. In a slim, fifty-two-page report, The Job Generation Process, published in 1979, Birch estimated that only 15 percent of new jobs were created by established firms with five hundred or more employees and that six of ten jobs were generated by firms with twenty or fewer employees, most of these newly established firms.


pages: 540 words: 119,731

Samsung Rising: The Inside Story of the South Korean Giant That Set Out to Beat Apple and Conquer Tech by Geoffrey Cain

Andy Rubin, Apple's 1984 Super Bowl advert, Asian financial crisis, autonomous vehicles, Berlin Wall, business intelligence, cloud computing, corporate governance, creative destruction, don't be evil, Donald Trump, double helix, Dynabook, Elon Musk, Fairchild Semiconductor, fake news, fear of failure, Hacker News, independent contractor, Internet of things, John Markoff, Jony Ive, Kickstarter, Mahatma Gandhi, Mark Zuckerberg, megacity, Mikhail Gorbachev, Nelson Mandela, patent troll, Pepsi Challenge, rolodex, Russell Brand, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, Superbowl ad, Tim Cook: Apple, Tony Fadell, too big to fail, WikiLeaks, wikimedia commons

In 2007 Gawker named him one of “New York’s worst bosses.” Newsweek wrote that he made employees do push-ups in front of clients. “But, in his favor,” a reader wrote to Gawker, “when he’s not pretending to kiss the ass of insipid rich, famous and powerful, he shows a refreshing contempt for authority and takes an anarchistic delight in creative destruction.” Recalled Pete Skarzynski, former senior vice president for sales and marketing at Samsung, “Not all of his ideas are good, but there’s a ton of ideas.” He once charged Pepsi $1 million for a document that connected its circular blue-and-red logo to the Mona Lisa, the Parthenon, and Hinduism.

Four years after the death of Sony’s visionary co-founder, Akio Morita, in 1999, Japanese firms were afflicted by the scourge of complacency and “Not Invented Here” syndrome, as management expert Chang Sea-jin, a business professor at the National University of Singapore, put it. Their aging workforces clung to obsolete technologies that they had invented two to three decades earlier. Too comfortable with their own success, they were unwilling to engage in acts of “creative destruction” and start afresh. It mirrored Samsung chairman Lee’s prophecy of “perpetual crisis.” In 2003 Sony president Kunitake Ando asked “for a report on what Samsung is doing every week.” Its CEO, Nobuyuki Idei, admitted that Sony’s revenues and profits were tumbling, forcing him to slash jobs and shut down plants.


pages: 521 words: 118,183

The Wires of War: Technology and the Global Struggle for Power by Jacob Helberg

"World Economic Forum" Davos, 2021 United States Capitol attack, A Declaration of the Independence of Cyberspace, active measures, Affordable Care Act / Obamacare, air gap, Airbnb, algorithmic management, augmented reality, autonomous vehicles, Berlin Wall, Bernie Sanders, Big Tech, bike sharing, Black Lives Matter, blockchain, Boris Johnson, Brexit referendum, cable laying ship, call centre, Cambridge Analytica, Cass Sunstein, cloud computing, coronavirus, COVID-19, creative destruction, crisis actor, data is the new oil, data science, decentralized internet, deep learning, deepfake, deglobalization, deindustrialization, Deng Xiaoping, deplatforming, digital nomad, disinformation, don't be evil, Donald Trump, dual-use technology, Edward Snowden, Elon Musk, en.wikipedia.org, end-to-end encryption, fail fast, fake news, Filter Bubble, Francis Fukuyama: the end of history, geopolitical risk, glass ceiling, global pandemic, global supply chain, Google bus, Google Chrome, GPT-3, green new deal, information security, Internet of things, Jeff Bezos, Jeffrey Epstein, John Markoff, John Perry Barlow, knowledge economy, Larry Ellison, lockdown, Loma Prieta earthquake, low earth orbit, low skilled workers, Lyft, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mary Meeker, Mikhail Gorbachev, military-industrial complex, Mohammed Bouazizi, move fast and break things, Nate Silver, natural language processing, Network effects, new economy, one-China policy, open economy, OpenAI, Parler "social media", Peter Thiel, QAnon, QR code, race to the bottom, Ralph Nader, RAND corporation, reshoring, ride hailing / ride sharing, Ronald Reagan, Russian election interference, Salesforce, Sam Altman, satellite internet, self-driving car, Sheryl Sandberg, side project, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, smart grid, SoftBank, Solyndra, South China Sea, SpaceX Starlink, Steve Jobs, Steven Levy, Stuxnet, supply-chain attack, Susan Wojcicki, tech worker, techlash, technoutopianism, TikTok, Tim Cook: Apple, trade route, TSMC, Twitter Arab Spring, uber lyft, undersea cable, Unsafe at Any Speed, Valery Gerasimov, vertical integration, Wargames Reagan, Westphalian system, white picket fence, WikiLeaks, Y Combinator, zero-sum game

Department of Justice, October 20, 2020, https://www.justice.gov/opa/pr/justice-department-sues-monopolist-google-violating-antitrust-laws. 84 “FTC Sues Facebook for Illegal Monopolization,” Federal Trade Commission, December 9, 2020, https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-illegal-monopolization. 85 Mark J. Perry, “Only 52 US companies have been on the Fortune 500 since 1955, thanks to the creative destruction that fuels economic prosperity,” American Enterprise Institute, May 22, 2019, https://www.aei.org/carpe-diem/only-52-us-companies-have-been-on-the-fortune-500-since-1955-thanks-to-the-creative-destruction-that-fuels-economic-prosperity/. 86 Kia Kokalitcheva, “This is the latest $1 billion tech company to IPO,” Fortune, May 20, 2015, https://fortune.com/2015/05/20/shopify-ipo-pricing/. 87 Y Charts, Shopify Market Cap, https://ycharts.com/companies/SHOP/market_cap. 88 “Mark Zuckerberg Opening Statement Transcript Antitrust Hearing July 29,” Rev, July 29, 2020, https://www.rev.com/blog/transcripts/mark-zuckerberg-opening-statement-transcript-antitrust-hearing-july-29. 89 Tom Wheeler, “Digital competition with China starts with competition at home,” Brookings Institution, April 2020, https://www.brookings.edu/research/digital-competition-with-china-starts-with-competition-at-home/. 90 “US Venture Capital Investment Surpasses $130 Billion in 2019 for Second Consecutive Year,” PitchBook, January 14, 2020, https://pitchbook.com/media/press-releases/us-venture-capital-investment-surpasses-130-billion-in-2019-for-second-consecutive-year. 91 “2020 Global Startup Outlook,” Silicon Valley Bank, https://www.svb.com/globalassets/library/uploadedfiles/content/trends_and_insights/reports/startup_outlook_report/suo_global_report_2020-final.pdf. 92 Mark Zuckerberg, “Hearing Before the United States House of Representatives,” Subcommittee on Antitrust, Commercial, and Administrative Law, July 29, 2020, https://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-116-JU05-Wstate-ZuckerbergM-20200729.pdf. 93 Jeff Desjardins, “China’s home-grown tech giants are dominating their US competitors,” Business Insider, February 7, 2018, https://www.businessinsider.com/chinas-home-grown-tech-giants-are-dominating-their-us-competitors-2018-2. 94 Tugba Sabanoglu, “Global market share of Amazon 2020, by region,” Statista, December 1, 2020, https://www.statista.com/statistics/1183515/amazon-market-share-region-worldwide/. 95 Arjun Kharpal, “China’s Tencent is now bigger than Facebook after adding around $200 billion to its value this year,” CNBC, July 29, 2020, https://www.cnbc.com/2020/07/29/tencent-is-now-bigger-than-facebook-after-shares-surged-this-year.html. 96 Ganesh Sitaraman, “Too Big to Prevail: The National Security Case for Breaking Up Big Tech,” Foreign Affairs, March 2020, https://www.foreignaffairs.com/articles/2020-02-10/too-big-prevail. 97 “Asymmetric Competition: A Strategy for China & Technology,” China Strategy Group, https://assets.documentcloud.org/documents/20463382/final-memo-china-strategy-group-axios-1.pdf. 98 “IREX Ukraine public service announcement for the Citizen Media Literacy Project (Ukrainian),” YouTube, February 26, 2016, https://www.youtube.com/watch?


pages: 172 words: 46,104

Television Is the New Television: The Unexpected Triumph of Old Media in the Digital Age by Michael Wolff

activist fund / activist shareholder / activist investor, AOL-Time Warner, barriers to entry, Carl Icahn, commoditize, creative destruction, digital divide, disintermediation, Golden age of television, Great Leap Forward, hiring and firing, Joseph Schumpeter, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Michael Milken, Sheryl Sandberg, Silicon Valley, SoftBank, Steve Jobs, Susan Wojcicki, telemarketer, the medium is the message, vertical integration, zero-sum game

There was, even, a kind of slack-jawed response—perhaps not least of all because Hollywood power is not used to being challenged—to the certainty, impatience, and what rather seemed like the advanced intelligence of the tech side. Very quickly it all seemed something like a math class mixing slow students with advanced ones. Morris began the day gamely recalling his college economics and Joseph Schumpeter and creative destruction and the need to come to terms with how great transformations happen—how to manage destruction. He drew a triangle on a whiteboard, with one point for tech, one point for talent, one point for media companies. We are all in this together, he said confidently. When that did not get an obvious assent, he changed it into a kind of exhortation: “Are we all in this together?”


pages: 675 words: 141,667

Open Standards and the Digital Age: History, Ideology, and Networks (Cambridge Studies in the Emergence of Global Enterprise) by Andrew L. Russell

Aaron Swartz, American ideology, animal electricity, barriers to entry, borderless world, Californian Ideology, Charles Babbage, Chelsea Manning, Compatible Time-Sharing System, computer age, Computer Lib, creative destruction, digital divide, disruptive innovation, Donald Davies, Dr. Strangelove, Edward Snowden, Evgeny Morozov, Frederick Winslow Taylor, Hacker Ethic, Herbert Marcuse, Howard Rheingold, Hush-A-Phone, interchangeable parts, invisible hand, Ivan Sutherland, John Markoff, John Perry Barlow, Joseph Schumpeter, Leonard Kleinrock, Lewis Mumford, means of production, Menlo Park, Network effects, new economy, Norbert Wiener, open economy, OSI model, packet switching, pre–internet, radical decentralization, RAND corporation, RFC: Request For Comment, Richard Stallman, Ronald Coase, Ronald Reagan, scientific management, Silicon Valley, Steve Crocker, Steven Levy, Stewart Brand, systems thinking, technological determinism, technoutopianism, Ted Nelson, The Nature of the Firm, Thomas L Friedman, Thorstein Veblen, transaction costs, vertical integration, web of trust, work culture

It is a challenge to the status quo.”11 The philosopher Gerald Raunig, picking up on Foucault’s notion of critique as a response to existing conditions, suggested that it might also be the foundation of a more productive act: “At the same time,” he argued in 2008, “critique also means re-composition [and] invention.”12 In this view, critique is much more than a process of criticizing, belittling, or tearing down; it is also a process of creating, promoting, and building anew. Accordingly, the concept of critique in cultural theory can come to share common ground with Joseph Schumpeter’s notion of “creative destruction” in economic theory: both concepts emphasize that creativity and innovation do not occur in a vacuum, but rather respond in an active and at times aggressive way to that which already exists.13 Throughout this book, I extend this line of inquiry to study acts of critique (and, in many cases, creative destruction) that were advanced by telephone and computer engineers. In some cases, these engineers offered explicit critiques – clear remarks on existing political, market, and technical issues – in private meetings, conference presentations, and written publications.


pages: 493 words: 132,290

Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates, and High-Finance Carnivores by Greg Palast

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", anti-communist, back-to-the-land, bank run, Berlin Wall, Bernie Madoff, British Empire, capital asset pricing model, capital controls, centre right, Chelsea Manning, classic study, clean water, collateralized debt obligation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, disinformation, Donald Trump, energy security, Exxon Valdez, Glass-Steagall Act, invisible hand, junk bonds, means of production, Myron Scholes, Nelson Mandela, offshore financial centre, Pepto Bismol, random walk, Ronald Reagan, sensible shoes, Seymour Hersh, transfer pricing, uranium enrichment, Washington Consensus, Yogi Berra

The bubbly pundit was so excited by the prospect that Greece would now have to “cut public sector pay, freeze benefits, slash jobs, abolish a range of welfare entitlements, and take the ax to programs such as school building and road maintenance” that you feared he would soil his underpants before the courier delivered his fresh ones.26 Friedman ticked off with relish: 20 percent wage cuts, social security slashed by 10 percent, retirement age increased by four years, and massive cuts in government spending. While incomes fell, the national value-added sales tax would rise by four percentage points. Friedman was thrilled. A follower of the proto-fascist philosopher Schumpeter, who coined the phrase “creative destruction,” Friedman applauded this creative demolition of the Greek economy. The flames and mass unemployment, the permanent reduction of wages, said Friedman, would bring about a “revolution,” a “regeneration” of Greece. And, of course, the post-fire fire sale of national assets. Prime Minister Papandreou did not throw his feta in Friedman’s face.

In fact, the Euro treaty requires governments to cut budgets in the middle of a depression, which is like having a rule that makes you drink water while drowning. It’s cruel, and it’s supposed to be cruel, which no government may reverse. It works like a strict gold standard, which, as Mr. “Creative Destruction” Schumpeter put it, “imposes restrictions upon governments or bureaucracies that are much more powerful than is parliamentary criticism. It is both the badge and the guarantee of bourgeois freedom, of freedom not simply of the bourgeois interest, but of freedom in the bourgeois sense.” I don’t know what that means, but I know I don’t like the sound of it.


pages: 742 words: 137,937

The Future of the Professions: How Technology Will Transform the Work of Human Experts by Richard Susskind, Daniel Susskind

23andMe, 3D printing, Abraham Maslow, additive manufacturing, AI winter, Albert Einstein, Amazon Mechanical Turk, Amazon Robotics, Amazon Web Services, Andrew Keen, Atul Gawande, Automated Insights, autonomous vehicles, Big bang: deregulation of the City of London, big data - Walmart - Pop Tarts, Bill Joy: nanobots, Blue Ocean Strategy, business process, business process outsourcing, Cass Sunstein, Checklist Manifesto, Clapham omnibus, Clayton Christensen, clean water, cloud computing, commoditize, computer age, Computer Numeric Control, computer vision, Computing Machinery and Intelligence, conceptual framework, corporate governance, creative destruction, crowdsourcing, Daniel Kahneman / Amos Tversky, data science, death of newspapers, disintermediation, Douglas Hofstadter, driverless car, en.wikipedia.org, Erik Brynjolfsson, Evgeny Morozov, Filter Bubble, full employment, future of work, Garrett Hardin, Google Glasses, Google X / Alphabet X, Hacker Ethic, industrial robot, informal economy, information retrieval, interchangeable parts, Internet of things, Isaac Newton, James Hargreaves, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, knowledge economy, Large Hadron Collider, lifelogging, lump of labour, machine translation, Marshall McLuhan, Metcalfe’s law, Narrative Science, natural language processing, Network effects, Nick Bostrom, optical character recognition, Paul Samuelson, personalized medicine, planned obsolescence, pre–internet, Ray Kurzweil, Richard Feynman, Second Machine Age, self-driving car, semantic web, Shoshana Zuboff, Skype, social web, speech recognition, spinning jenny, strong AI, supply-chain management, Susan Wojcicki, tacit knowledge, TED Talk, telepresence, The Future of Employment, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tragedy of the Commons, transaction costs, Turing test, Two Sigma, warehouse robotics, Watson beat the top human players on Jeopardy!, WikiLeaks, world market for maybe five computers, Yochai Benkler, young professional

(2010), and The Future of Law. 10 See Clayton Christensen, The Innovator’s Dilemma (1997), and Jill Lepore, ‘The Disruption Machine’, New Yorker, 23 June 2014. 11 See e.g. Clayton Christensen and Henry Eyring, The Innovative University (2011). 12 Joseph Schumpeter describes the process of ‘creative destruction’ in Capitalism, Socialism and Democracy (1994), foreshadowing this contemporary literature. See part II, ch. VII. 13 See e.g. <http://www.data.gov> for the USA, <http://data.gov.uk> for the UK, and <http://www.data.go.jp> for Japan. 14 Erik Brynjolfsson and Andrew McAfee, The Second Machine Age (2014), ch. 12. 15 Most notably, the Sarbanes–Oxley Act of 2002 (enacted 30 July 2002), known also as the ‘Public Company Accounting Reform and Investor Protection Act’.

Tejaswi, Mini Joseph, ‘Accenture to Hire Aggressively in India’, The Times of India, 18 July 2012 <www.timesofindia.indiatimes.com> (accessed 8 March 2015). Thompson, Derek, ‘The Facebook Effect on the News’, Atlantic, 12 Feb. 2014 <http://www.theatlantic.com> (27 March 2015). The Times, ‘Doctor, Doctor?’, leader in The Times, 22 Aug. 2014. Topol, Eric, The Creative Destruction of Medicine (New York: Basic Books, 2012). Topol, Eric, The Patient Will See You Now (New York: Basic Books, 2015). Trefis Team, ‘eBay: The Year 2013 in Review’, 26 Dec. 2013 <http://www.forbes.com/sites/greatspeculations/2013/12/26/ebay-the-year-2013-in-review/> (accessed 24 March 2015).


pages: 519 words: 136,708

Vertical: The City From Satellites to Bunkers by Stephen Graham

1960s counterculture, Anthropocene, Bandra-Worli Sea Link, Berlin Wall, Boris Johnson, Buckminster Fuller, Buy land – they’re not making it any more, Chelsea Manning, commodity super cycle, creative destruction, Crossrail, deindustrialization, digital capitalism, digital divide, digital map, Dr. Strangelove, drone strike, Edward Glaeser, Edward Snowden, Elisha Otis, energy security, Frank Gehry, gentrification, ghettoisation, Google Earth, Gunnar Myrdal, high net worth, housing crisis, Howard Zinn, illegal immigration, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, late capitalism, Leo Hollis, Lewis Mumford, low earth orbit, mass immigration, means of production, megacity, megaproject, megastructure, military-industrial complex, moral panic, mutually assured destruction, new economy, New Urbanism, no-fly zone, nuclear winter, oil shale / tar sands, planetary scale, plutocrats, post-industrial society, Project Plowshare, rent control, Richard Florida, Right to Buy, Ronald Reagan, security theater, Skype, South China Sea, space junk, Strategic Defense Initiative, the built environment, The Death and Life of Great American Cities, trickle-down economics, urban decay, urban planning, urban renewal, urban sprawl, vertical integration, Virgin Galactic, white flight, WikiLeaks, William Langewiesche

Right across the island, huge engineering works and earthworks were necessary to erase Manhattan’s naturally hilly landscape by gnawing away at the uplands and using the material thus created to fill in the lowlands and valleys. Manhattan is not naturally flat – indeed, its name was coined by the island’s original inhabitants, the Lenni Lenape nation and means ‘island of many hills’. Like everything else in this apogee of modernity, Manhattan’s flatness was manufactured through wild cycles of speculation and creative destruction.9 Like all major ‘world cities’, in fact, New York can be viewed as a ‘geological hot spot’ – a crucial node in the historic and contemporary human manufacture of local, regional, national and international geology. As an indicator of the ‘geologic turn’ under way in the arts, social sciences and humanities, New York’s Smudge Studio have published a guidebook illustrating how the city is a geologic force of truly global importance within the contemporary Anthropocene period.

Murray, City of Extremes: The Spatial Politics of Johannesburg, Durham, NC: Duke University Press, 2011. 17See Andrew Nikiforuk, Tar Sands: Dirty Oil and the Future of a Continent, Vancouver: Greystone Books, 2010. 18See Julia Fox, ‘Mountaintop Removal in West Virginia: An Environmental Sacrifice Zone’, Organization and Environment 12:2, 1999, pp. 163–83. 19‘E-Waste up a Third by 2017: UN’, Melbourne Age, 17 December 2013. 20Edgeworth, ‘Archaeological Stratigraphy’. 21Ibid. 22Max Page, The Creative Destruction of Manhattan, 1900–1940, Chicago: University of Chicago Press, 2001. 23Peter Del Tredici, ‘The Flora of the Future’, Places Journal, April 2014, available at placesjournal.org. 24Anne-Marie Cantwell and Diana diZerega Wall, Unearthing Gotham: The Archaeology of New York City, New Haven, Conn.: Yale University Press, 2003, p. 234. 25Quoted in Alex Marshall, Beneath the Metropolis: The Secret Lives of Cities, New York: Carroll & Graf, 2006, p. 56. 26Maja Gori, ‘The Stones of Contention: The Role of Archaeological Heritage in the Israeli–Palestinian Conflict’, Archaeologies 9:1, 2013, p. 223. 27Eyal Weizman, ‘The Politics of Verticality: Excavating Sacredness’, Open Democracy, 28 April 2002, available at opendemocracy.net. 28Cited in Gori, ‘Stones of Contention’, p. 226. 29Weizman, ‘Politics of Verticality’. 30See Chiara De Cesari, ‘Hebron, or Heritage as Technology of Life’, Jerusalem Quarterly 41, 2010, pp. 6–28. 31Scott Kirsch, Proving Grounds: Project Plowshare and the Unrealized Dream of Nuclear Earthmoving, New York: Rutgers University Press, 2005. 32See Brian Hudson, Cities on the Shore: The Urban Littoral Frontier, London: Pinter, 1996. 33Réné Kolman, ‘New Land in the Water: Economically and Socially, Land Reclamation Pays’, Terra et Aqua 128, September 2012. 34Lizette Alvarez, ‘Where Sand Is Gold, the Reserves Are Running Dry’, New York Times, 24 August 2013. 35Sand is also necessary to produce glass, the concrete used in vertical construction, and in high-tech industries. 36Joshua Comaroff, ‘Built on Sand: Singapore and the New State of Risk’, Harvard Design Magazine 39, 2014, p. 138. 37Peduzzi, ‘Sand, Rarer Than One Thinks’. 38Maria Franke, ‘When One Country’s Land Gain Is Another Country’s Land Loss’, Working Paper No. 36, Institute for International Political Economy, Berlin, 2014, available at ideas.repec.org. 39Comaroff, ‘Built on Sand’. 40See Denis Deletrac’s 2012 documentary at sand-wars.com. 41See Fazlin Abdullah and Goh Ann Tat, ‘The Dirty Business of Sand: Sand Dredging in Cambodia’, Lee Kuan Yew School of Public Policy, National University of Singapore, 2012, available at http://lkyspp.nus.edu.sg. 42The $60 billion debt the project created for the developer, Dubai World, was a major reason that forced Dubai to go to its rich Emirati neighbour, Abu Dhabi, for a $10 billion bailout in 2008. 43Adam Luck, ‘How Dubai’s $14bn Dream to Build The World Is Falling Apart’, Daily Mail, 11 April 2010. 44Mark Jackson and Veronica Della Dora, ‘“Dreams So Big Only the Sea Can Hold Them”: Man-Made Islands as Cultural Icons, Travelling Visions, and Anxious Spaces’, Environment and Planning A 41:9, 2009, p. 2092. 45Jacks and della Dora ‘“Dreams so big only the sea can hold them” ‘, p. 2088. 46Dia Saleh, ‘Bahrain: An Island without Sea’, Arteast, Fall 2013, available at arteeast.org. 47Martin Lukacs, ‘New, Privatized African City Heralds Climate Apartheid’, Guardian, 21 January 2014. 48Asian Maritime Transparency Initiative, Mischief Reef, January 2015, at amti.csis.org/mischief-reef/. 49See John Burt, ‘The Environmental Costs of Coastal Urbanization in the Arabian Gulf’, City 18:6, 2014, pp. 760–70; Paul Erftemeijer et al., ‘Environmental Impacts of Dredging and Other Sediment Disturbances on Corals: A Review’, Marine Pollution Bulletin 64:9, 2012, pp. 1737–65. 50‘No Place to Land: Loss of Natural Habitats Threatens Migratory Birds Globally’, New York: United Nations Environment Programme, 2011. 51Susan Strasser, Waste and Want: A Social History of Trash, New York: Macmillan, 1999, p. 15. 52Cinzia Scarpino, ‘Ground Zero/Fresh Kills: Cataloguing Ruins, Garbage, and Memory’, Altre Modernità, 2011, pp. 237–53. 53Daniel Hoornweg and Perinaz Bhada-Tata, ‘What a Waste: A Global Review’, Urban Development Series 2012, no. 15, Washington, DC: World Bank, March 2012. 54Thelma Gutierrez and George Webster, ‘Trash City: Inside America’s Largest Landfill Site’, CNN, Atlanta, 2012. 55See Rodney Harrison and John Schofield, After Modernity: Archaeological Approaches to the Contemporary Past, Oxford: Oxford University Press, 2010. 56Quoted in Thelma Gutierrez ‘Trash City: Inside America’s Largest Landfill Site’, available at cnn.com, 28 April 2012. 57‘Street Children, India’, 2006, available at gvnet.com. 58Dave Petley, ‘Garbage Dump Landslides’, American Geophysical Union Blog, 22 June 2008, available at blogs.agu.org. 59Quoted in Petley, ‘Garbage Dump Landslides’. 60Karl Mathiesen, ‘Is the Shenzhen Landslide the First of Many More?’


pages: 483 words: 141,836

Red-Blooded Risk: The Secret History of Wall Street by Aaron Brown, Eric Kim

Abraham Wald, activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, Asian financial crisis, Atul Gawande, backtesting, Basel III, Bayesian statistics, Bear Stearns, beat the dealer, Benoit Mandelbrot, Bernie Madoff, Black Swan, book value, business cycle, capital asset pricing model, carbon tax, central bank independence, Checklist Manifesto, corporate governance, creative destruction, credit crunch, Credit Default Swap, currency risk, disintermediation, distributed generation, diversification, diversified portfolio, Edward Thorp, Emanuel Derman, Eugene Fama: efficient market hypothesis, experimental subject, fail fast, fear index, financial engineering, financial innovation, global macro, illegal immigration, implied volatility, independent contractor, index fund, John Bogle, junk bonds, Long Term Capital Management, loss aversion, low interest rates, managed futures, margin call, market clearing, market fundamentalism, market microstructure, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, natural language processing, open economy, Pierre-Simon Laplace, power law, pre–internet, proprietary trading, quantitative trading / quantitative finance, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, shareholder value, Sharpe ratio, special drawing rights, statistical arbitrage, stochastic volatility, stock buybacks, stocks for the long run, tail risk, The Myth of the Rational Market, Thomas Bayes, too big to fail, transaction costs, value at risk, yield curve

Everyone who made money selling at the peak quietly counts their gains, while everyone who lost money buying at the peak complains that they have been defrauded, and an army of opportunists immediately arises to demand compensation from whatever unpopular group is convenient. In fact, many things are better after the bubble than before. Leaps of progress require disruption, and bubbles are the flip side of creative destruction—a sort of uninspired construction, to coin a phrase. There are costs to a bubble as well; pain inflicted on losers probably exceeds the pleasure experienced by winners, and who wins and who loses is often decided unfairly. Economic resources will be wasted. My point is that bubbles are not all bad, not that they’re good.

And, of course, regulators could stop bailing people out. Everyone hates bailouts because they are expensive and create moral hazard; that is, they encourage people to rely on the government to save them rather than taking precautions themselves. But there’s something even worse about them. They destroy the healthy process of evolution and creative destruction. They clog up the financial system with weeds that should have been extinct years ago. Those weeds choke off resources for valuable innovations. Instead of survival of the fittest, we have survival of the biggest and, because regulations are always intensely conservative, survival of the fittest for the nineteenth century.


pages: 442 words: 130,526

The Billionaire Raj: A Journey Through India's New Gilded Age by James Crabtree

"World Economic Forum" Davos, accounting loophole / creative accounting, Asian financial crisis, behavioural economics, Big bang: deregulation of the City of London, Branko Milanovic, business climate, call centre, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial rule, commodity super cycle, Cornelius Vanderbilt, corporate raider, creative destruction, crony capitalism, Daniel Kahneman / Amos Tversky, Deng Xiaoping, Donald Trump, facts on the ground, failed state, fake news, Francis Fukuyama: the end of history, global supply chain, Gunnar Myrdal, income inequality, informal economy, Joseph Schumpeter, land bank, liberal capitalism, Mahatma Gandhi, McMansion, megacity, Meghnad Desai, middle-income trap, New Urbanism, offshore financial centre, open economy, Parag Khanna, Pearl River Delta, plutocrats, Ponzi scheme, post-truth, public intellectual, quantitative easing, rent-seeking, Rubik’s Cube, Shenzhen special economic zone , Silicon Valley, Simon Kuznets, smart cities, special economic zone, spectrum auction, tech billionaire, The Great Moderation, Thomas L Friedman, transaction costs, trickle-down economics, vertical integration, Washington Consensus, WikiLeaks, yellow journalism, young professional

In their own eras all were pilloried as corrupt and avaricious. Over time, all have gradually been rehabilitated as masters of new technology and pioneers of industrial change rather than robber barons—the embodiment of what economist Joseph Schumpeter would later call “the perennial gale of creative destruction.”45 In time Ambani and his fellow Bollygarchs may come to be viewed in this way too, as the murkier details of their methods fade but the scale of their achievements remains. Yet behind this boldness there was also an unmistakable sense of fear. Ambani built his reputation above all on “execution,” meaning his ability to construct complex industrial projects quickly and cheaply.

Under the old socialist system, companies were unable to enter new markets, either because private players were banned or because complex licenses protected incumbents. Liberalization changed that. But now, in a host of sectors—power, steel, construction, aviation, and even banking itself—capital was stuck inside struggling enterprises. India had moved from “socialism with restricted entry to capitalism without any hope of exit,” as Subramanian put it. Creative destruction was not being allowed to work. The system was stuck. Mild-mannered by temperament, Rajan was an odd figure to try and break all this open. His was an establishment background: although he did not know it as a child, his father was one of India’s most senior spies, and a founding member of the equivalent of America’s Central Intelligence Agency, or Britain’s MI6.


pages: 452 words: 134,502

Hacking Politics: How Geeks, Progressives, the Tea Party, Gamers, Anarchists and Suits Teamed Up to Defeat SOPA and Save the Internet by David Moon, Patrick Ruffini, David Segal, Aaron Swartz, Lawrence Lessig, Cory Doctorow, Zoe Lofgren, Jamie Laurie, Ron Paul, Mike Masnick, Kim Dotcom, Tiffiniy Cheng, Alexis Ohanian, Nicole Powers, Josh Levy

4chan, Aaron Swartz, Adam Curtis, Affordable Care Act / Obamacare, Airbnb, Bernie Sanders, Big Tech, Burning Man, call centre, Cass Sunstein, Chelsea Manning, collective bargaining, creative destruction, crony capitalism, crowdsourcing, digital rights, disinformation, don't be evil, dual-use technology, facts on the ground, Firefox, Free Software Foundation, Hacker News, hive mind, hockey-stick growth, immigration reform, informal economy, jimmy wales, John Perry Barlow, Julian Assange, Kickstarter, liquidity trap, lolcat, machine readable, Mark Zuckerberg, obamacare, Occupy movement, offshore financial centre, Overton Window, peer-to-peer, plutocrats, power law, prisoner's dilemma, radical decentralization, rent-seeking, Silicon Valley, Skype, Streisand effect, technoutopianism, The future is already here, WikiLeaks, Y Combinator, Yochai Benkler

It’s not hard to see why many don’t trust the government to help solve our economic problems, but the government’s current failings don’t mean that a near government-less society would yield better outcomes. Secondly: During my time spent with the tech community I’ve heard many stirring soliloquies about Creative Destruction and the benefits that would flow to all humankind—new efficiencies, consumer surplus—were we to institute unfettered, no-holds-barred capitalism and just let ‘er rip. But to engage in such paeans to capitalism is to recognize—and specifically lionize—the most brutal structural aspects thereof.

The combination of low costs, cheap capital and relatively free access to markets has created an unprecedented era of decentralized, emergent, start-up innovation. By creating novel new services and dramatically reducing the cost of existing services, that innovation has unlocked value for consumers that they are now redeploying in other new services. But at the same time, that process, the classic creative destruction of free market capitalism, has created new challenges for incumbent industrial companies. For the last 130 years the economy has been dominated by firms structured as bureaucratic hierarchies. That model worked well to mass produce products for mass consumption, but the inefficiency of communicating customer needs up through the hierarchy and management decisions back down, and the natural tendency of any organization to protect its current organization structure makes it difficult if not impossible for bureaucratic hierarchies to innovate as quickly as the emerging network-based model of decentralized innovation.


pages: 464 words: 139,088

The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, classic study, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial engineering, financial innovation, financial intermediation, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Glass-Steagall Act, Great Leap Forward, Hyman Minsky, inflation targeting, invisible hand, Japanese asset price bubble, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, lateral thinking, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, no-fly zone, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Solow, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, The Rise and Fall of American Growth, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

The issue can never be resolved, for the simple reason that in a world of radical uncertainty it is impossible to know what the future holds and therefore whether or not any particular valuation is rational, only whether it seems to embody a wise or a foolish judgement. Stock prices move around because investors are trying to cope with an unknowable future. Their judgements about future profits can be highly unstable. This instability is fundamental to a capitalist economy. The Austrian economist Joseph Schumpeter coined the phrase ‘creative destruction’ for the way a capitalist economy promotes investment in new ideas and ventures, undermining investments in earlier undertakings.44 Sometimes the message from the markets provides a helpful signal to businesses about when and in what directions to invest. On other occasions, the message tells us about the psychological nervousness, or even panic, among investors.

Abe, Shinzo, 363 ABN Amro, 118 Acheson, Dean, 368 Ahmed, Liaquat, The Lords of Finance, 158 AIG, 142, 162 alchemy, financial, 5, 8, 10, 40, 50, 91, 191–2, 257, 261, 263–5, 367, 369; illusion of liquidity, 149–55, 253–5; maturity and risk transformation, 104–15, 117–19, 250–1, 254–5; pawnbroker for all seasons (PFAS) approach, 270–81, 288, 368 Ardant, Henri, 219 Arrow, Kenneth, 79–80, 295 Asian financial crisis (1990s), 28, 349, 350 Asian Infrastructure Investment Bank, 349–50 Australia, 74, 259, 275, 348 Austria, 340, 341 Austro-Hungarian Empire, 216 Bagehot, Walter, 212, 218, 335; Lombard Street (1873), 94–5, 114–15, 188, 189, 190, 191–2, 202, 208, 251, 269 Bank for International Settlements, 31, 255, 276, 324 Bank of America, 103–4, 257 Bank of England, 169, 217, 275, 280, 320–1; Bank Charter Act (1844), 160, 198; during crisis, 36, 37–8, 64, 65, 76, 118, 181–3, 184, 205, 206; Financial Policy Committee, 173; garden at, 73–4; gold reserves, 74, 75, 77, 198; governors of, 6, 12–13, 52–3, 175–6, 178; granting of independence to (1997), 7, 166, 186; history of, 92, 94, 156–7, 159, 160, 180–1, 186, 188–201, 206, 335; inflation targeting policy, 7, 167, 170, 322; Monetary Policy Committee (MPC), 173, 329–31; as Old Lady of Threadneedle Street, 75; weather vane on roof, 181 bank runs, 37–8, 93, 105–8, 187–92, 253–4, 262 Bankia (Spanish bank), 257–8 banking sector: balance sheets, 31, 103–4; capital requirements, 137–9, 255–6, 258, 280; commercial and investment separation, 23, 98, 256, 257; creation of money by, 8, 59–63, 86–7, 91, 161, 253, 263; as dangerous and fragile, 8, 23, 33, 34, 36–7, 91–2, 105, 111, 119, 323–4; deposit insurance, 62, 107–8, 137, 254–5, 328; European universal banks, 23–4; and ‘good collateral’, 188, 190, 202–3, 207, 269; history of, 4–5, 18–19, 59–60, 94–5, 187–202, 206–7; implicit taxpayer subsidy for, 96–7, 107, 116–17, 191–2, 207, 254–5, 263–4, 265–6, 267–8, 269–71, 277; interconnected functions of, 95–6, 111–12, 114–15; levels of equity finance, 103, 105, 109, 112, 137–9, 173, 202, 254–9, 263, 268, 280, 368 see also leverage ratios (total assets to equity capital); liquidity support stigma, 205–7; misconduct scandals, 91, 100, 118, 151, 256; narrow and wide banks, 263–5, 266–7, 279; political influence of, 3, 6, 288–9; recapitalisation of (October 2008), 37–8, 201; taxpayer bailouts during crisis, 4, 38, 41, 43, 93, 94, 106, 118, 162, 243, 247, 261, 267–8; ‘too important to fail’ (TITF), 96–7, 99, 116–17, 118, 254–5, 263–4, 279–80; vast expansion of, 23–4, 31–3, 92–4, 95, 96–9, 115–18; visibility of, 92–3, 94; see also alchemy, financial; central banks; liquidity; regulation Banque de France, 159 Barclays, 95 Barings Bank, 137, 193 ‘behavioural economics’, 132–4, 308, 310 Belgium, 201, 216, 340 Benes, Jaromir, 262 Bergsten, Fred, 234 Berlusconi, Silvio, 225 Bernanke, Ben, 28, 44, 91, 158, 175–6, 183, 188, 287 bills of exchange, 197–8, 199 bitcoins, 282–3 Black, Joseph, 56 Blackett, Basil, 195–6 Blair, Tony, 186 Blakey, Robert, The Political Pilgrim’s Progress (1839), 251–3 Blinder, Alan, 164 BNP Paribas, 35 Brazil, 38 Brecht, Bertolt, The Threepenny Opera (1928), 88, 93 Bremer, Paul, 241 Bretton Woods system, 20–1, 350, 352 British Empire, 216, 217 Bryan, William Jennings, 76, 86–7 Buffett, Warren, 102, 143 building societies, 98 Bunyan, John, Pilgrim’s Progress (1678), 251 Cabaret (film, 1972), 52, 83 Cambodia, 246 Cambridge University, 12, 83, 292–3, 302 Campbell, Mrs Patrick, 220 Campbell-Geddes, Sir Eric, 346 Canada, 116, 167, 170 capitalism, 2, 5, 8, 16–21, 42, 155, 366; as best way to create wealth, 17, 365–6, 369; and end of Cold War, 26–7, 365; money and banking as Achilles heel, 5, 16–17, 23–6, 32–9, 40–1, 50, 369–70; Schumpeter’s ‘creative destruction’, 152; see also market economy Carlyle, Thomas, 16 Carney, Mark, 176 Caruana, Jaime, 324 central banks, 156–9; accountability and transparency, 158, 168, 169–70, 175–6, 178–80, 186, 208; and ‘constrained discretion’, 169–70, 186; creation of ‘emergency money’, 48, 65–6, 71, 86, 172, 182–3, 189, 196–7, 201–7, 247, 275; during crisis, 36–9, 64, 65, 76, 113, 118, 158, 159, 162, 181–4, 205, 206, 335; and disequilibrium, 46–7, 171–2, 175, 208, 329–32; exclusive right to issue paper money, 160, 165, 283; and expectations, 28, 176–8, 304; forecasting by, 179–80, 304–5; future of, 207–10; gold reserves, 74–5, 77, 198; history of, 159–60, 161–2, 180–1; independence of, 5–6, 7, 22, 71, 165–7, 169–70, 185–6, 209–10, 357; industry of private sector watchers, 178; integrated policy framework, 187, 208–9, 288; as ‘lenders of last resort’ (LOLR), 94–5, 109–10, 163, 187–97, 202–7, 208, 259, 268, 269–70, 274–5, 288; and ‘macro-prudential policies’, 173–5, 187; monetary policy rules, 168–9; and money supply, 63, 65–6, 76, 86–7, 162, 163, 180–4, 192, 196–201; pawnbroker for all seasons (PFAS) approach, 270–81, 288, 368; in post-crisis period, 43–4, 63, 76, 162–3, 168–9, 173, 175, 179–80, 183–6; printing of electronic money by, 43, 52, 359; proper role of, 163, 172, 174–5, 287; and swap agreements, 353; see also Bank of England; European Central Bank (ECB); Federal Reserve central planning, 20, 27, 141 Chiang Mai Initiative, 349 ‘Chicago Plan’ (1933), 261–4, 268, 273, 274, 277–8 China, 2–3, 22, 34, 77, 306, 322, 338, 357, 362–3, 364; banking sector, 92, 93; export-led growth strategy, 27–8, 319, 321, 323–4, 356; falling growth rates, 43–4, 324, 363; medieval, 57, 68, 74; one child policy in, 28; problems in financial system, 43–4, 337, 362–3; savings levels in, 27–8, 29, 34; trade surpluses in, 27–8, 46, 49, 319, 321, 329, 364 Chou Enlai, 2 Churchill, Winston, 211, 366 Citigroup, 90, 99, 257 Clark, Kenneth, 193 Clinton, President Bill, 157 Cobbett, William, 71–2 Cochrane, John, 262 Coinage Act, US (1792), 215 Cold War, 26–7, 68, 81–2, 350, 365 Colley, Linda, 213–14 communism, 19, 20, 27 Confucius, 10 Cunliffe, Lord, 178, 193 currencies: break-up of sterling area, 216; dollarisation, 70, 246, 287; ‘fiat’, 57, 283; during government crises, 68–9; monetary unions, 212–18, 238–49 see also European Monetary Union (EMU, euro area); optimal currency areas, 212–13, 215, 217, 248; ‘sterlingisation’ and Scotland, 244–7, 248; US dollar-gold link abandoned (1971), 73; virtual/digital, 282–3; see also exchange rates cybercrime, 282 Cyprus, 363–4 Czech Republic, 216 Debreu, Gerard, 79–80, 295 debt, 140; bailouts as not only response, 343–4; as consequence not cause of crisis, 324–5; forgiveness, 339–40, 346–7; haircut on pledged collateral, 203, 204, 266, 269, 271–2, 275, 277–8, 280; household, 23, 31, 33–4, 35; importance of for real economy, 265–6; as likely trigger for future crisis, 337–8; and low interest rates, 337; quantitative controls on credit, 173, 174–5; rise in external imbalances, 22–3, 24–5, 27–31, 33–4, 45–7, 48–9, 236, 306–7, 319–24, 329–30, 338, 364; and rising asset prices, 23, 24, 31–2; role of collateral, 266–7, 269–81; see also sovereign debt decolonisation process, 215 deflation, 66, 76, 159, 164, 165 demand, aggregate: ‘asymmetric shocks’ to, 213; disequilibrium, 45–9, 316, 319–24, 325–7, 329–32, 335, 358–9; in EMU, 221, 222–3, 229, 230, 236; during Great Stability, 319–24; and Keynesianism, 5, 20, 41, 293, 294–302, 315–16, 325–6, 327, 356; and monetary policy, 30, 41–9, 167, 184–5, 212–13, 221, 229–31, 291–2, 294–302, 319–24, 329–32, 335, 358; nature of, 45, 325; pessimism over future levels, 356, 357–60; price and wage rigidities, 167; and radical uncertainty, 316; rebalancing of, 357, 362–3, 364; saving as source of future demand, 11, 46, 84–5, 185, 325–6, 356; as weak post-crisis, 38–9, 41–2, 44–5, 184–5, 291–2, 337, 350, 356–60 democracy, 26–7, 168, 174, 210, 222, 318, 348, 351; and euro area crisis, 224–5, 231, 234–5, 237–8, 344; and paper money, 68, 77; rise of non-mainstream parties in Europe, 234–5, 238, 344, 352 demographic factors, 354, 355, 362 Denmark, 216–17, 335 derivative instruments, 32–3, 35–6, 90, 93–4, 97–8, 100, 101, 117, 141–5; desert island parable, 145–8 Dickens, Charles, 1, 13–14, 233 disequilibrium: and aggregate demand, 45–9, 316, 319–24, 325–7, 329–32, 335, 358–9; alternative strategies for pre-crisis period, 328–33; and central banks, 11–12, 46–7, 171–2, 175, 208, 329–32; continuing, 42, 45–8, 49, 171–2, 291, 334–5, 347, 353, 356–70; coordinated move to new equilibrium, 347, 357, 359–65; definition of, 8–9; euro area at heart of, 248, 337; and exchange rates, 319, 322–3, 329, 331, 364; high- and low-saving countries (external imbalances), 22–3, 24–5, 27–31, 33–4, 45–7, 48–9, 236, 307, 319–24, 329–30, 338, 364; in internal saving and spending, 45–8, 49, 313–16, 319–21, 324, 325–6, 329–30, 356; and ‘New Keynesian’ models, 306; the next crisis, 334–5, 336–8, 353, 370; and paradox of policy, 48, 326, 328, 333, 357, 358; and stability heuristic, 312–14, 319–21, 323, 331, 332; suggested reform programme, 359–65 division of labour (specialisation), 18, 54–5 Doha Round, 361 Domesday Book, 54, 85 dotcom crash, 35 ‘double coincidence of wants’, 55, 80, 82 Douglas, Paul, 262 Draghi, Mario, 225, 227, 228 Dyson, Ben, 262 econometric modelling, 90, 125, 305–6 economic growth: conventional analysis, 44–5, 47; as low since crisis, 11, 43–4, 290–2, 293, 324, 348, 353–7; origins of, 17–21; pessimism over future levels, 353–7; in pre-crisis period, 329, 330–1, 351–2; slowing of in China, 43–4, 324, 362; stability in post-war period, 317–18 economic history, 4–5, 15–21, 54–62, 67–77, 107–9, 158–62, 180–1, 206–7, 215–17, 317–18; 1797 crisis in UK, 75; 1907 crisis in US, 159, 161, 196, 197, 198, 201; 1914 crisis, 192–201, 206, 307, 368; 1920-1 depression, 326–7; 1931 crisis, 41; ‘Black Monday’ (19 October 1987), 149; Finnish and Swedish crises (early 1990s), 279; German hyperinflation (early 1920s), 52, 68, 69, 86, 158–9, 190; Latin American debt crisis (1980s), 339; London banking crises (1825-66), 92, 188–90, 191–2, 198, 201; panic of 1792 in US, 188; see also Great Depression (early 1930s) The Economist magazine, 108–9 economists, 78–80, 128–31, 132–4, 212, 311; 1960s evolution of macroeconomics, 12, 16; forecasting models, 3–4, 7, 122–3, 179–80, 208, 305–6; Keynes on, 158, 289; see also Keynesian economics; neoclassical economics Ecuador, 246, 287 Egypt, ancient, 56, 72 Eliot, T.S., Four Quartets, 120, 290 emerging economies, 39, 43, 337, 338, 361; export-led growth strategy, 27–8, 30, 34, 319, 321, 324, 349, 356; new institutions in Asia, 349–50; savings levels in, 22–3, 27–8, 29, 30; ‘uphill’ flows of capital from, 30–1, 40, 319; US dollar reserves, 28, 34, 349 ‘emotional finance’ theory, 133–4 Engels, Friedrich, 19 Enron, 117 equity finance, 36, 102, 103, 140, 141, 143, 266, 280; and ‘bail-inable’ bonds, 112; in banking sector, 103, 105, 109, 112, 137–9, 173, 202, 254–9, 263, 268, 280, 368 see also leverage ratios (total assets to equity capital); and limited liability, 107, 108, 109 European Central Bank (ECB), 137, 162, 166, 232, 339; and euro area crisis, 203–4, 218, 224–5, 227–8, 229, 231, 322; and political decisions, 218, 224–5, 227–8, 231–2, 235, 344; sovereign debt purchases, 162, 190, 227–8, 231 European Monetary Union (EMU, euro area), 62, 217–38, 337–40, 342–9, 363–4; creditor and debtor split, 49, 222–3, 230–1, 232–7, 338, 339–40, 342–4, 363–4; crisis in (from 2009), 138, 203–4, 218, 223–31, 237–8, 276, 338, 339–40, 3512, 368; disillusionment with, 234–5, 236, 238, 3444; divergences in competitiveness, 221–3, 228, 231, 232–3, 234; fiscal union proposals (2015), 344; at heart of world disequilibrium, 248, 337; inflation, 70, 221–2, 232, 237; interest rate, 221–2, 232, 237, 335; launch of (1999), 22, 24–5, 218, 221, 306; main lessons from, 237; and political union issues, 218, 220, 235, 237–8, 248–9, 344, 348–9; ‘progress through crisis’ doctrine, 234; prospects for, 232–3, 345–6; sovereign debt in, 162, 190, 224, 226–8, 229–31, 258, 338, 339–40, 342–4; transfer union proposal, 224, 230, 231, 233, 234, 235, 237, 344; unemployment in, 45, 226, 228, 229–30, 232, 234, 345; value of euro, 43, 228–9, 231, 232, 322 European Stability Mechanism (ESM), 228 European Union, 40, 235–6, 237–8, 247, 248–9, 348–9; no-bailout clause in Treaty (Article 125), 228, 235–6; Stability and Growth Pact (SGP), 235, 236 Exchange Rate Mechanism (ERM), 219, 220 exchange rates: and disequilibrium, 319, 322–3, 329, 331, 364; and EMU, 222, 228–9, 338–9, 363–4; exchange controls, 21, 339; fixed, 20–1, 22–3, 24–5, 72–3, 75–6, 339, 352, 353, 361; floating, 21, 338, 353, 361–2; and ‘gold standard’, 72–3, 75–6; risk of ‘currency wars’, 348; and wage/price changes, 213 Federal Deposit Insurance Corporation (FDIC), 62, 137, 328 Federal Open Market Committee, 179 Federal Reserve, 45, 65, 74, 137, 157–8, 162, 168–70, 175, 178–9, 320; in 1920s/30s, 192, 326–7, 328, 349; during crisis, 39, 76, 107, 113, 183, 184; discount window, 206; dual mandate of, 167–8; opening of (1914), 60, 62, 159–60, 194–5, 196, 197 Ferrer, Gaspar, 193 Field, Alexander, 355 Financial Conduct Authority, UK, 260 financial crises, 11–12, 34; and demand for liquidity, 65–6, 76–7, 86, 106, 110, 119, 148, 182, 187–92, 194, 201–7, 253–4, 367; differing causes of, 307, 316–17, 327–8; frequency of, 2, 4, 20, 92, 111, 316–17; and ‘gold standard’, 75, 165, 195; and Minsky’s theory, 307–8, 323; narrative revision downturns, 328, 332–3, 356, 357, 58–9, 364; the next crisis, 334–5, 336–8, 353, 370; as test beds for new ideas, 49–50; see also economic history financial crisis (from 2007): articles and books, 1–2, 6; central banks during, 36–9, 64, 65, 76, 113, 118, 158, 159, 162, 181–4, 205, 206, 335; desire to blame individuals, 3, 89–90; effects on ordinary citizens, 6, 13, 41; the Great Panic, 37–8; interest rates during, 150–1, 181, 335; LIBOR during, 150–1; liquidity crisis (2007-8), 35–8, 64–5, 76, 110; money supply during, 181–3; parallels with earlier events, 90–2, 193; post-crisis output gap, 42, 291, 337; short-term Keynesian response, 39, 41, 48, 118–19, 326, 328, 356; ‘small’ event precipitating, 34–5, 323; unanswered questions, 39–43; underlying causes, 16–17, 24–5, 26–39, 40, 307, 319–26, 328; weak recovery from, 43–4, 48, 291–2, 293, 324, 337, 355, 364, 366 financial markets, 64–5, 113, 117–18, 141–5, 149, 184, 199–200, 314–15; basic financial contracts, 140–1; desert island parable, 145–8; and radical uncertainty, 140, 143, 144–5, 149–55; ‘real-time’ trading, 153–4, 284; see also derivative instruments; financial products and instruments; trading, financial financial products and instruments, 24, 35–6, 64, 99–100, 114, 117, 136–7, 258, 278, 288; see also derivative instruments Finland, 159, 279 First World War, 88–9, 153, 164, 178, 200–2, 307; financial crisis on outbreak of, 192–201; reparations after, 340–2, 343, 345–6 fiscal policy, 45, 184, 347–8, 352, 358; and Keynesianism, 78, 181, 292, 300, 356; in monetary unions, 222–3, 235; short-term stimulus during crisis, 39, 118–19, 356 Fisher, Irving, 163, 261 fractional reserve banking, 261 France, 93, 201, 216, 219, 221, 236, 248, 348, 364; and euro area crisis, 228–9, 231, 236, 322; occupation of Ruhr (1923), 340; overseas territories during WW2, 242; revolutionary period, 68, 75, 159 Franklin, Benjamin, 58, 127 Friedman, Milton, 78, 130, 163, 182, 192, 262, 328 Fuld, Dick, 89 futures contracts, 142, 240–1, 295–6 G20 group, 39, 255, 256, 351 G7 group, 37–8, 351 Garrett, Scott, 168–9 Geithner, Timothy, 267 George, Eddie, 176, 330 Germany, 93, 161, 162, 184, 219, 322, 341, 357; Bundesbank, 166, 219, 228, 232; and EMU, 219–22, 224, 227, 228, 230, 231–2, 234–6, 248, 338, 340, 342–3, 345; export-led growth strategy, 222, 319, 363–4; hyperinflation (early 1920s), 52, 68, 69, 86, 158–9, 190; Notgeld in, 201–2, 287; reunification, 219, 342; trade surpluses in, 46, 49, 222, 236, 319, 321, 356, 363–4; WW1 reparations, 340–2, 343, 346 Gibbon, Edward, 63, 164 Gigerenzer, Professor Gerd, 123, 135 Gillray, James, 75 global economy, 349–54, 361; capital flows, 20–1, 22, 28, 29, 30–1, 40, 319, 323; rise in external imbalances, 22–3, 24–5, 27–31, 33–4, 45–7, 48–9, 236, 307, 319–24, 329–30, 338, 364; see also currencies; exchange rates; trade surpluses and deficits Goethe, Johann Wolfgang von, Faust, 85–6 ‘gold standard’, 72–3, 75–6, 86, 165, 195, 200–1, 216–17, 348, 352 Goldman Sachs, 98, 109, 123, 257 Goodwin, Fred, 37, 89 Grant, James, 327 Great Depression (early 1930s), 5, 16, 20, 158, 160, 226, 348, 355; dramatic effect on politics and economics, 41; Friedman and Schwartz on, 78, 192, 328; and ‘gold standard’, 73, 76; US banking crisis during, 90–1, 108, 116, 201 Great Recession (from 2008), 6, 38–9, 163, 290–2, 326 Great Stability (or Great Moderation), 6, 22, 45–7, 71, 162, 208, 305, 313–14, 318–24, 325–6; alternative strategies for pre-crisis period, 328–33; monetary policies during, 22, 25, 46–7, 315 Greece, 216, 221, 222, 225–31, 338–40, 364; agreement with creditors (13 July 2015), 230–1, 346; crisis in euro area, 223–4, 225–7, 229, 230–1, 236, 258, 338–40; debt restructured (2012), 226–7, 229, 236, 339, 343–4, 346; national referendum (July 2015), 230; sovereign debt, 224, 226–7, 339–40, 342–4, 346–7; Syriza led government, 229, 235 Greenspan, Alan, 157–8, 164, 175, 317 Gulf War, First (1991), 238 Hahn, Frank, 79 Halifax Bank of Scotland (HBoS), 37, 118, 206, 243 Halley, Edmund, 122 Hamilton, Alexander, 188, 202, 215 Hankey, Thomas, 191–2 Hansen, Alvin, Full Recovery or Stagnation?


pages: 479 words: 140,421

Vanishing New York by Jeremiah Moss

activist lawyer, back-to-the-city movement, Bernie Sanders, big-box store, Black Lives Matter, Bonfire of the Vanities, bread and circuses, Broken windows theory, complexity theory, creative destruction, David Brooks, deindustrialization, Donald Trump, East Village, food desert, gentrification, global pandemic, housing crisis, illegal immigration, invisible hand, Jane Jacobs, junk bonds, late capitalism, Lewis Mumford, market fundamentalism, Mason jar, McMansion, means of production, megaproject, military-industrial complex, mirror neurons, Naomi Klein, neoliberal agenda, New Economic Geography, new economy, New Urbanism, Occupy movement, place-making, plutocrats, Potemkin village, RAND corporation, rent control, rent stabilization, Richard Florida, Ronald Reagan, Skype, starchitect, the built environment, The Death and Life of Great American Cities, the High Line, The Spirit Level, trickle-down economics, urban decay, urban renewal, W. E. B. Du Bois, white flight, young professional

The Invention of Brownstone Brooklyn: Gentrification and the Search for Authenticity in Postwar New York. New York: Oxford University Press, 2012. Page, Max. The City’s End: Two Centuries of Fantasies, Fears, and Premonitions of New York’s Destruction. New Haven, CT: Yale University Press, 2010. ———. The Creative Destruction of Manhattan. Chicago: University of Chicago Press, 2001. Patterson, Clayton, ed. Resistance: A Radical Social and Political History of the Lower East Side. New York: Seven Stories Press, 2011. Rhodes-Pitts, Sharifa. Harlem Is Nowhere. New York: Back Bay Books, 2013. Rieder, Jonathan. Canarsie: The Jews and Italians of Brooklyn Against Liberalism.

Rosenbaum, “Nixon Tapes At Key Time Now Drawing Scant Interest,” New York Times, December 14, 2003. 74Ehrlichman on the War on Drugs, from Dan Baum, “Legalize It All,” Harper’s, April 2016. 75On RAND and rational choice, see Alex Abella, Soldiers of Reason: The RAND Corporation and the Rise of the American Empire (New York: Houghton Mifflin Harcourt, 2008). 75–76“Irredeemable rookeries” speech by Robert Moses, found in Max Page, Creative Destruction of Manhattan (Chicago: University of Chicago Press, 2001), noted as typescript of speech by Robert Moses at the Commodore Hotel, November 14, 1956, Municipal Reference Library, vertical files, “NYC Slums.” 78Roger Starr, “Making New York Smaller,” New York Times Magazine, November 14, 1976. 78Rita Koenig, “Mr.


pages: 168 words: 50,647

The End of Jobs: Money, Meaning and Freedom Without the 9-To-5 by Taylor Pearson

Airbnb, barriers to entry, Ben Horowitz, Black Swan, call centre, cloud computing, commoditize, content marketing, creative destruction, David Heinemeier Hansson, drop ship, Elon Musk, en.wikipedia.org, Frederick Winslow Taylor, future of work, Google Hangouts, Hacker Conference 1984, Kaizen: continuous improvement, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, loss aversion, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, market fragmentation, means of production, Oculus Rift, passive income, passive investing, Peter Thiel, power law, remote working, Ronald Reagan: Tear down this wall, scientific management, sharing economy, side hustle, side project, Silicon Valley, Skype, software as a service, software is eating the world, Startup school, Steve Jobs, Steve Wozniak, Stewart Brand, systems thinking, TED Talk, telemarketer, the long tail, Thomas Malthus, Uber and Lyft, uber lyft, unpaid internship, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog

To hear more from Andrew about the lifestyle and business possibilities enabled by the eCommerce drop shipping model and why individuals with hard skills and ambition has more opportunity than ever and why those without are screwed, download his interview at http://taylorpearson.me/eoj 34. http://www.innosight.com/innovation-resources/strategy-innovation/upload/creative-destruction-whips-through-corporate-america_final2012.pdf Chapter 9 35. http://www.softwarebyrob.com/ and http://www.startupsfortherestofus.com/ 36. To hear Rob’s fully story of how he left his path towards CEO of a $500 million company to move into running his own business, download his interview at http://taylorpearson.me/eoj 37.


pages: 170 words: 49,193

The People vs Tech: How the Internet Is Killing Democracy (And How We Save It) by Jamie Bartlett

Ada Lovelace, Airbnb, AlphaGo, Amazon Mechanical Turk, Andrew Keen, autonomous vehicles, barriers to entry, basic income, Bernie Sanders, Big Tech, bitcoin, Black Lives Matter, blockchain, Boris Johnson, Californian Ideology, Cambridge Analytica, central bank independence, Chelsea Manning, cloud computing, computer vision, creative destruction, cryptocurrency, Daniel Kahneman / Amos Tversky, data science, deep learning, DeepMind, disinformation, Dominic Cummings, Donald Trump, driverless car, Edward Snowden, Elon Musk, Evgeny Morozov, fake news, Filter Bubble, future of work, general purpose technology, gig economy, global village, Google bus, Hans Moravec, hive mind, Howard Rheingold, information retrieval, initial coin offering, Internet of things, Jeff Bezos, Jeremy Corbyn, job automation, John Gilmore, John Maynard Keynes: technological unemployment, John Perry Barlow, Julian Assange, manufacturing employment, Mark Zuckerberg, Marshall McLuhan, Menlo Park, meta-analysis, mittelstand, move fast and break things, Network effects, Nicholas Carr, Nick Bostrom, off grid, Panopticon Jeremy Bentham, payday loans, Peter Thiel, post-truth, prediction markets, QR code, ransomware, Ray Kurzweil, recommendation engine, Renaissance Technologies, ride hailing / ride sharing, Robert Mercer, Ross Ulbricht, Sam Altman, Satoshi Nakamoto, Second Machine Age, sharing economy, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Silicon Valley startup, smart cities, smart contracts, smart meter, Snapchat, Stanford prison experiment, Steve Bannon, Steve Jobs, Steven Levy, strong AI, surveillance capitalism, TaskRabbit, tech worker, technological singularity, technoutopianism, Ted Kaczynski, TED Talk, the long tail, the medium is the message, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, ultimatum game, universal basic income, WikiLeaks, World Values Survey, Y Combinator, you are the product

One morning I witnessed junkies openly shooting up on a busy pavement: it wasn’t yet 9a.m. And, on the same street, techies wearing white earbuds entered the gleaming offices of a company that promises to let you ‘belong anywhere’. Epilogue: Universal Basic Income At some point all this creative destruction becomes bad even for the winners. No one wants to live in a world comprising a handful of trillionaires and hordes of unemployed or extremely poorly paid people – not even the trillionaires. A growing number of people are proposing a bold new idea to deal with this. In 2017 I interviewed Sam Altman, the president of Y Combinator, the most important fund in Silicon Valley for tech start-ups.


pages: 140 words: 91,067

Money, Real Quick: The Story of M-PESA by Tonny K. Omwansa, Nicholas P. Sullivan, The Guardian

Blue Ocean Strategy, BRICs, business process, business process outsourcing, call centre, cashless society, cloud computing, creative destruction, crowdsourcing, delayed gratification, dematerialisation, democratizing finance, digital divide, disruptive innovation, end-to-end encryption, financial exclusion, financial innovation, financial intermediation, income per capita, Kibera, Kickstarter, M-Pesa, microcredit, mobile money, Network effects, new economy, reserve currency, Salesforce, Silicon Valley, software as a service, tontine, transaction costs

ACKNOWLEDGEMENTS ******ebook converter DEMO Watermarks******* Introduction Changing Lives: Innovation, Disruption and Transformation “Mobile phone technology has in a few years of its existence demonstrated how financial inclusion can be leapfrogged on a major scale and in a short time span using appropriate technological platforms.”- Njungunua Ndung’u, Governor, Central Bank of Kenya “A world first, M-PESA is indeed a disruptive, leapfrog idea. A continuation of Professor Schumpeter’s creative destruction with a Kenyan face.” - David Mataen, Columnist, The Daily Nation Two-and-a-half billion adults in the world don’t have bank accounts, but about half of these unbanked have mobile phones. Many of those phones are being used to, send, receive and save money. People who first used a phone five or 10 years ago and never had a bank account are now transferring money by phone.


pages: 1,014 words: 237,531

Escape From Rome: The Failure of Empire and the Road to Prosperity by Walter Scheidel

agricultural Revolution, barriers to entry, British Empire, classic study, colonial rule, conceptual framework, creative destruction, currency manipulation / currency intervention, dark matter, disruptive innovation, Easter island, Eratosthenes, European colonialism, financial innovation, financial intermediation, flying shuttle, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Johann Wolfgang von Goethe, Johannes Kepler, joint-stock company, Joseph Schumpeter, knowledge economy, low interest rates, mandelbrot fractal, means of production, Multics, Network effects, out of africa, Peace of Westphalia, peer-to-peer lending, plutocrats, principal–agent problem, purchasing power parity, rent-seeking, Republic of Letters, secular stagnation, South China Sea, spinning jenny, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, trade route, transaction costs, vertical integration, zero-sum game

This feedback mechanism rendered these developmental dynamics self-sustaining as well as self-reinforcing, promoting a circle that was vicious in its relentless violence and (eventually) virtuous in terms of economic outcomes. It also prepared the ground for transformative breakthroughs, for Schumpeterian growth through creative destruction of established orders and techniques. Britain’s peculiar mix of parliamentary bargaining, mercantilist protectionism, overseas expansion, naval power, and technological progress was merely the proverbial tip of a much bigger iceberg of European experimentation and adaptation. Contrast this massively simplified outline of the dynamics of productive competitiveness with a different but equally ideal-typical scenario, in which a region of subcontinental proportions is dominated by a single (“monopolistic”) super-state.

Only under the Song and after the mid-nineteenth century did serious external or internal threats impel fiscal intensification.190 In the late imperial period in particular, neo-Confucian agrarian paternalism and low fiscal intakes degraded the state’s infrastructural capacity to lows that “limited potential for economic growth along Schumpeterian lines”—growth born of creative destruction of established practices—in favor of less sustainable Smithian growth driven by market expansion, intensification, and specialization of labor. Weak fiscal institutions also “left little scope for the state to promote economic development,” not least because consumption-focused welfare schemes such as granaries absorbed civilian funds.191 Low state capacity and rampant corruption conspired to weaken de facto protection of industrial and commercial property rights.

Part V shows that this is true no matter which factors—institutions, overseas resources, science and technology, or values—we choose to prioritize. This does not mean that these outcomes were themselves a foregone conclusion. My survey merely suggests that they could not just as readily have occurred elsewhere. If European styles of polycentrism were essential and foundational to the creative destruction that spawned modernity, the (Second) Great Divergence and the Industrial Revolution(s) were unlikely to take place in Asia or Africa. And even Europe—Latin, Western, or otherwise—is far too broad a concept: we may take a step further in concluding with Robert Allen that “there was only one route to the twentieth century—and it traversed northern Britain.”85 Given current and entirely justified sensibilities about Eurocentrism, I ought to stress that this observation does not seek to essentialize certain features as “Western European,” let alone “British.”


Britannia Unchained: Global Lessons for Growth and Prosperity by Kwasi Kwarteng, Priti Patel, Dominic Raab, Chris Skidmore, Elizabeth Truss

Airbnb, banking crisis, Carmen Reinhart, central bank independence, clockwatching, creative destruction, Credit Default Swap, demographic dividend, Edward Glaeser, eurozone crisis, fail fast, fear of failure, financial engineering, glass ceiling, informal economy, James Dyson, Kenneth Rogoff, knowledge economy, long peace, margin call, Mark Zuckerberg, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, Neil Kinnock, new economy, North Sea oil, oil shock, open economy, paypal mafia, pension reform, price stability, profit motive, Ronald Reagan, Sand Hill Road, Silicon Valley, Stanford marshmallow experiment, Steve Jobs, Suez crisis 1956, tech worker, Walter Mischel, wealth creators, Winter of Discontent, working-age population, Yom Kippur War

Or, paradoxically, perhaps it is desirable to see more patents rejected, since innovation can be measured by the number of attempts that fail, as well as those that succeed. Returning to Isenberg, he suggests that ‘hyperentrepreneurial’ countries see a great deal of early failures. These failures demonstrate where opportunities may or may not exist. It is a form of creative destruction that has much to recommend it. Isenberg’s point is that policy-makers should not treat low failure rates as a sign of success, rather there should be a great number of 96 Britannia Unchained success and failures alike – though naturally with a clear emphasis on the former. Patents in the US are expensive – both in terms of money and time.


pages: 196 words: 53,627

Let Them In: The Case for Open Borders by Jason L. Riley

affirmative action, business cycle, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, desegregation, Garrett Hardin, guest worker program, hiring and firing, illegal immigration, immigration reform, income inequality, labor-force participation, longitudinal study, low skilled workers, mass immigration, open borders, open immigration, RAND corporation, Ronald Reagan, school choice, Silicon Valley, trade liberalization, Tyler Cowen, W. E. B. Du Bois, War on Poverty, working poor, working-age population, zero-sum game

Bringing the Jobs Home: How the Left Created the Outsourcing Crisis—and How We Can Fix It. Sentinel, 2004. Caplan, Bryan. The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Princeton University Press, 2007. Chavez, Linda. Out of the Barrio: Toward a New Politics of Hispanic Assimilation. Basic Books, 1991. Cowen, Tyler. Creative Destruction: How Globalization Is Changing the World’s Cultures. Princeton University Press, 2002. Daniels, Roger. Coming to America: A History of Immigration and Ethnicity in American Life. 2nd ed. Perennial, 2002. ———. Guarding the Golden Door. Hill and Wang, 2004. Friedman, Milton. Capitalism and Freedom.


pages: 218 words: 44,364

The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations by Ori Brafman, Rod A. Beckstrom

Atahualpa, barriers to entry, Burning Man, creative destruction, disintermediation, experimental economics, Firefox, Francisco Pizarro, jimmy wales, Kibera, Lao Tzu, Network effects, peer-to-peer, pez dispenser, shareholder value, Silicon Valley, Skype, The Wisdom of Crowds, union organizing

Want to download a song? Sure, why not. Want to create a piece of software? Go for it. Want to write an article for Wikipedia? Be our guest. Want to create a Web site featuring your cat? Go right ahead. Want to drive a twenty-foot giraffe car? That's great! Starfish systems are wonderful incubators for creative, destructive, innovative, or crazy ideas. Anything goes. Good ideas will attract more people, and in a circle they'll execute the plan. Institute order and rigid structure, and while you may achieve standardization, you'll also squelch creativity. Where creativity is valuable, learning to accept chaos is a must.


pages: 197 words: 53,831

Investing to Save the Planet: How Your Money Can Make a Difference by Alice Ross

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, An Inconvenient Truth, barriers to entry, British Empire, carbon footprint, carbon tax, circular economy, clean tech, clean water, coronavirus, corporate governance, COVID-19, creative destruction, decarbonisation, diversification, Elon Musk, energy transition, Extinction Rebellion, family office, food miles, Future Shock, global pandemic, Goldman Sachs: Vampire Squid, green transition, Greta Thunberg, high net worth, hiring and firing, impact investing, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, lockdown, low interest rates, Lyft, off grid, oil shock, passive investing, Peter Thiel, plant based meat, precision agriculture, risk tolerance, risk/return, sharing economy, Silicon Valley, social distancing, sovereign wealth fund, TED Talk, Tragedy of the Commons, uber lyft, William MacAskill

On the one hand, companies might try to be more resilient for future shocks and governments could prioritise green recovery programmes, but on the other, people could be desperate to get back to normal and won’t have the financial resources to worry about the long-term climate crisis. But he is inclined to view the massive behavioural shifts as an opportunity: ‘I tend to believe this is a period in which we will see accelerated creative destruction with winner and loser effects. I think you’ll see the smart money and talent moving to where the future seems to be.’ The divestment debate outside of equities So far, much of our discussion has focused on divesting from equities. But a growing number of investors think that divestment has far more effect if it takes place in other asset classes, like bonds.


pages: 621 words: 157,263

How to Change the World: Reflections on Marx and Marxism by Eric Hobsbawm

anti-communist, banking crisis, battle of ideas, Berlin Wall, British Empire, continuation of politics by other means, creative destruction, currency manipulation / currency intervention, deindustrialization, discovery of the americas, experimental subject, Fall of the Berlin Wall, full employment, Gunnar Myrdal, Herbert Marcuse, labour market flexibility, liberal capitalism, market fundamentalism, mass immigration, means of production, new economy, public intellectual, Simon Kuznets, Thorstein Veblen, Upton Sinclair, upwardly mobile, Vilfredo Pareto, zero-sum game

The second is the analysis of the mechanism of capitalist growth by generating internal ‘contradictions’ – endless bouts of tensions and temporary resolutions, growth leading to crisis and change, all producing economic concentration in an increasingly globalised economy. Mao dreamed of a society constantly renewed by unceasing revolution; capitalism has realised this project by historical change through what Schumpeter (following Marx) called unending ‘creative destruction’. Marx believed that this process would eventually lead – it would have to lead – to an enormously concentrated economy – which is exactly what Attali meant when he said in a recent interview that the number of people who decide what happens in it is of the order of 1,000, or at most 10,000.

., 207 International, Seventh World Carlyle, Thomas, 28 Congress Carpenter, Edward, 246 Communist League, 22, 50, 60, 64, Cassidy, John, 385 101–3, 109 Castro, Fidel, 356 Communist Manifesto, 5, 22, 36–8, 40, 55, Caudwell, Christopher, 292–3 59, 61, 101–20, 146, 352 Cavour, Count, 71, 318 and communist parties, 108–9 Chamson, André, 282 and interdependence of nations, 73–4 Chaplin, Charlie, 266 and labour movements, 399, 403–4 Charlemagne, 166 language and vocabulary, 107–8 Chartism and Chartists, 42, 78, 95, prefaces, 103–4 97–8, 108 publication, 103–6, 178–9, 185, Chayanov, Alexander, 358 192, 194 Chervenkov, Vulko, 310 and revolutions of 1848, 102–3, 107 Chile, 270, 327 rhetorical style, 110 China, 4, 125, 138, 173, 332, 344, 370, communist parties, 4, 191, 261–2, 386, 411 307–8, 329, 361, 366 Cultural Revolution, 351, 357 American, 106, 410 Japanese invasion, 269, 271 British, 106, 262, 266–7, 291, 410 and Marx–Engels corpus, 191, French, 218, 282–3, 288, 290, 308, 193–4 371, 388, 410 split with USSR, 191, 350, 356 inter-war and post-war, 407, 411 Christianity, 352, 377 Italian, 193, 279, 308, 314–15, 317, Churchill, Winston, 272, 280, 311, 401 326, 335–7, 384, 388, 410, 415 cities, medieval, 145, 147, 149, 153, Soviet, 106, 335, 350 155, 157, 165, 169 Spanish, 383 City College, New York, 280 Third World, 355 458 Index communist regimes, 8, 345–6, 350–2, democracy, 31, 43, 51–2, 72, 84–5, 119, 357–8, 386 345, 406 collapse of, 386, 393, 397 ‘new’ or ‘people’s’, 304, 306, 309–11 Comte, Auguste, 208, 241, 243, 245, Denis, Hector, 226 390 Denmark, 409 concentration camps, 268 Descartes, René, 205 Condition of the Working Class in England, de-Stalinisation, 174, 315, 348, 350 The, 89–100, 177–9 Destrée, Jules, 226, 251 Condorcet, Marquis de, 20 Deutsche Londoner Zeitung, 102 Confucius, 19 Deutsch-Französische Jahrbücher, 177 Congresses of Cultural Freedom, 393 Deville, Gabriel, 181 Considérant, Victor, 46 Dézamy, Théodore, 23 Constantinople, 77 Di Vittorio, Giuseppe, 317 cooperative movements, 46, 83–4 Dialectics of Nature, 187, 238, 291, 294 Coutinho, Carlos Nelson, 334 Die Neue Zeit, 105, 123, 127, 182, 239, Crane, Walter, 246, 250 244, 248, 255 ‘creative destruction’, 14 Dietzgen, Joseph, 221 credit reform, 36 Dimitrov, Georgi, 284, 310 Critique of Hegel’s Philosophy of Law, 194 Dirac, Paul, 294 Critique of Political Economy, 48, 127, Disraeli, Benjamin, 228 141–2, 178 dissidents, 351–2 preface (introduction), 123, 128–9, Dobb, Maurice H., 158, 353–4 135–6, 147, 150, 168, 182, 319 Dos Passos, John, 265, 276 Critique of the Gotha Programme, 8, 47, 58, Dostoyevsky, Fyodor, 248, 252 179, 193 Dreiser, Theodore, 266, 276 Croatia, 235 Dreyfus affair, 224, 300 Croce, Benedetto, 213, 232, 316 Ducpétiaux, Edouard, 42, 91 Cromwell, Oliver, 412 Dühring, Eugen, 202 Crosland, Anthony, 10 Durkheim, Emile, 11, 228, 242, 390 Crusades, 205, 297 Dutch Republic, 345 Cuba, 270, 351, 356–7 Cubists, 256 East Berlin, 123, 185, 190 Cunningham, Archdeacon, 203, 205 Eastern Question, 82 Curie, Marie, 238 Eckstein, Gustav, 230 Czechoslovakia, 125, 269, 328, 359, Economic Doctrines of Karl Marx, 181 407 Economic-Philosophical Manuscripts of Czechs, 75, 82, 228 1844, 127, 186 economics Darwin, Charles, 5, 212, 219, 347 Austrian school, 229 Darwinism, 211–12, 238, 284, 293, Chicago school, 413 352 and Marxism, 237, 239–41, 372–5, Das Kapital, see Capital 380, 384, 389 Dashnaks, 235 Wisconsin school, 240 Dawson, W.H., 202 Edgeworth, Francis Ysidro, 209 Day-Lewis, Cecil, 279 education, 12, 33, 222, 228, 277–8, De Amicis, Edmondo, 231 281, 286, 349, 360–1, 363–7, Deborin, Abram, 288 373, 390 Debray, Régis, 395 Eekhoud, Georges, 251 Debreczen, 77 Egypt, ancient, 137, 170 Declaration of the Rights of Man, 102 Ehrenberg, R., 243 decolonisation, 352, 357 18th Br umaire of Louis Bonaparte, The, 70, Della Volpe, Galvano, 366 178–9, 316, 326, 341 459 How to Change the World Einstein, Albert, 5, 238, 291, 294 feudalism, 55, 138–40, 143–4, 146–52, Eisenstein, Sergei, 265 155–60, 164–9, 171–3, 204 electrical industry, 9 and the Third World, 353–6 Elementarbücher des Kommunismus, 106 Feuerbach, Ludwig, 34, 40 Ellis, Havelock, 246 Finland, 407, 409 Ely, Richard, 202, 220, 240 Fiori, G., 315, 337 Enfantin, Barthélémy Prosper, 28 First International, 3–4, 50, 73, 80, Engels, Frederick 103, 178 biography, 287 Flanders, 145 his communism, 97 Flint, Robert, 205–6, 208 and Communist Manifesto, 101–20 folk music, 281 and Condition of the Working Class, Formen, see under Grundrisse 89–100 Forster, E.M., 221 corpus of works, 176–96, 385 Foster, Rev.


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All the Money in the World by Peter W. Bernstein

Albert Einstein, anti-communist, AOL-Time Warner, Bear Stearns, Berlin Wall, Bill Gates: Altair 8800, book value, call centre, Carl Icahn, Charles Lindbergh, clean tech, Cornelius Vanderbilt, corporate governance, corporate raider, creative destruction, currency peg, David Brooks, Donald Trump, estate planning, Fairchild Semiconductor, family office, financial engineering, financial innovation, George Gilder, high net worth, invisible hand, Irwin Jacobs: Qualcomm, Jeff Bezos, job automation, job-hopping, John Markoff, junk bonds, Larry Ellison, Long Term Capital Management, Marc Andreessen, Martin Wolf, Maui Hawaii, means of production, mega-rich, Menlo Park, Michael Milken, Mikhail Gorbachev, new economy, Norman Mailer, PageRank, Peter Singer: altruism, pez dispenser, popular electronics, Quicken Loans, Renaissance Technologies, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Sand Hill Road, school vouchers, Search for Extraterrestrial Intelligence, shareholder value, short squeeze, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, SoftBank, stem cell, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, tech baron, tech billionaire, Teledyne, the new new thing, Thorstein Veblen, too big to fail, traveling salesman, urban planning, wealth creators, William Shockley: the traitorous eight, women in the workforce

He started a new company, PeopleSoft, which grew to be the second-largest database company in the world before Oracle acquired it. Duffield says that he also found the West Coast liberating. It was “Try something different, it is okay to be different, and take risks,” he says. The Valley has always been a turbulent place that thrives on creative destruction of a kind not found on the East Coast. Multibillion-dollar companies suddenly appear as a result of some seemingly esoteric research project—and then just as quickly are destroyed within a few years by a new development. Only half of the top forty42 high-tech firms of 1982 were still in business in 2002; more than half of the Valley’s present top forty high-tech firms hadn’t even been founded in 1982.

In 1990, however, News Corporation owed: Epstein, The Big Picture, p. 64. 50. Murdoch’s News Corporation: Owen Gibson, “Internet Means End for Media Barons, Says Murdoch,” The Guardian, Mar. 14, 2006, reports Murdoch’s declaration of “a second age of discovery” created by the Internet. Murdoch also said he’d underestimated the power of the Web—“a creative, destructive technology” still “in its infancy yet breaking and remaking everything in its path.” 51. “humiliating”: Sumner Redstone on The Charlie Rose Show, Oct. 4, 2006. 52. “To find something comparable”: Spencer Reiss, “His Space,” Wired, July 2006. 53. His goal, Murdoch says now: Peter Kafka, “Blue Sky,” Forbes, Feb. 12, 2007. 54.


pages: 559 words: 157,112

Dealers of Lightning by Michael A. Hiltzik

Apple II, Apple's 1984 Super Bowl advert, beat the dealer, Bill Atkinson, Bill Duvall, Bill Gates: Altair 8800, Boeing 747, business cycle, Charles Babbage, computer age, creative destruction, Douglas Engelbart, Dynabook, Edward Thorp, El Camino Real, Fairchild Semiconductor, financial engineering, index card, Ivan Sutherland, Jeff Rulifson, John Markoff, Joseph Schumpeter, L Peter Deutsch, luminiferous ether, Marshall McLuhan, Menlo Park, military-industrial complex, Multics, oil shock, popular electronics, reality distortion field, Robert Metcalfe, Ronald Reagan, Silicon Valley, speech recognition, Steve Ballmer, Steve Crocker, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, the medium is the message, The Soul of a New Machine, Vannevar Bush, Whole Earth Catalog, zero-sum game

Young and agile, it was in a perfect position to build suitable factories and a computer-oriented sales force from the ground up—just as Xerox had been when it chose to commercialize another innovative and suspect technology, fifteen years earlier. In fact, the two companies’ relationship perfectly illustrates the “creative destruction” model of industrial evolution proposed by Joseph Schumpeter in the 1930s, in which entrepreneurial opportunists snatch markets away from their ana-chronistic precursors. Computers, moreover, did not lend themselves to the pricing regime that many considered Xerox’s most important invention: leasing the copiers and charging customers by the page.

., 149, 399internal conflict and, 372–73 Sierra and, 306 VLSI and, xvi, 300, 304–11 Cookie Monster, Alto and, xv, xxii–xxiii, 81, 198, 231, 233 Copiers, 36, 347, 348, 393 Eastman Kodak and, 259, 269 IBM and, xiv, 56, 259 Japan and, 259, 313, 394 Moses and, 268–69 1970s and, 55–56pricing regime of, 392–93size of Xerox and, 392–93 Xerox Model 914 and, 22, 35, 55–56, 256, 274 Xerox Model 3100 and, 312–13 Xerox Model 7000 and, 138, 142, 143 Xerox Model 9000 and, 143–44 Core memories, 110–11 Cost analysis, 390 “Cramming More Components onto Integrated Circuits” (Moore), 89 Creative destruction model, Schumpeter and, 392 Crocker, Steve, 185 Culbertson, Dave, 361 Currie, Rigdon, 19, 99–100, 103, 104, 255–56 Curry, Jim, 54, 231 Dandelion, 252–53 Data General, 184 Data processing, 100–103 Data Processing Financial and General, 74 Dealer, 145–50, 182, 281, 308, 382 Deep Blue, 296 Defense Advanced Research Projects Agency, 48, see also ARPA Desktop metaphor, Star and, 364 Desktop publishing, 194–210 Bravo and, 194–95, 198–201, 208–9, 210, 227, 283, 310, 373 Gypsy and, xv, 194–95, 207–10, 223 See also VLSI Dessauer, John H., 22, 23, 133, 350 Deutsch, Barbara, 146 Deutsch, L.


pages: 661 words: 156,009

Your Computer Is on Fire by Thomas S. Mullaney, Benjamin Peters, Mar Hicks, Kavita Philip

"Susan Fowler" uber, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, A Declaration of the Independence of Cyberspace, affirmative action, Airbnb, algorithmic bias, AlphaGo, AltaVista, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, An Inconvenient Truth, Asilomar, autonomous vehicles, Big Tech, bitcoin, Bletchley Park, blockchain, Boeing 737 MAX, book value, British Empire, business cycle, business process, Californian Ideology, call centre, Cambridge Analytica, carbon footprint, Charles Babbage, cloud computing, collective bargaining, computer age, computer vision, connected car, corporate governance, corporate social responsibility, COVID-19, creative destruction, cryptocurrency, dark matter, data science, Dennis Ritchie, deskilling, digital divide, digital map, don't be evil, Donald Davies, Donald Trump, Edward Snowden, en.wikipedia.org, European colonialism, fake news, financial innovation, Ford Model T, fulfillment center, game design, gentrification, George Floyd, glass ceiling, global pandemic, global supply chain, Grace Hopper, hiring and firing, IBM and the Holocaust, industrial robot, informal economy, Internet Archive, Internet of things, Jeff Bezos, job automation, John Perry Barlow, Julian Assange, Ken Thompson, Kevin Kelly, Kickstarter, knowledge economy, Landlord’s Game, Lewis Mumford, low-wage service sector, M-Pesa, Mark Zuckerberg, mass incarceration, Menlo Park, meta-analysis, mobile money, moral panic, move fast and break things, Multics, mutually assured destruction, natural language processing, Neal Stephenson, new economy, Norbert Wiener, off-the-grid, old-boy network, On the Economy of Machinery and Manufactures, One Laptop per Child (OLPC), packet switching, pattern recognition, Paul Graham, pink-collar, pneumatic tube, postindustrial economy, profit motive, public intellectual, QWERTY keyboard, Ray Kurzweil, Reflections on Trusting Trust, Report Card for America’s Infrastructure, Salesforce, sentiment analysis, Sheryl Sandberg, Silicon Valley, Silicon Valley ideology, smart cities, Snapchat, speech recognition, SQL injection, statistical model, Steve Jobs, Stewart Brand, tacit knowledge, tech worker, techlash, technoutopianism, telepresence, the built environment, the map is not the territory, Thomas L Friedman, TikTok, Triangle Shirtwaist Factory, undersea cable, union organizing, vertical integration, warehouse robotics, WikiLeaks, wikimedia commons, women in the workforce, Y2K

No matter the problem, it seems, a chorus of techno-utopian voices is always at the ready to offer up “solutions” that, remarkably enough, typically involve the same strategies (and personnel) as those that helped give rise to the crisis in the first place. We can always code our way out, we are assured. We can make, bootstrap, and science the shit out of this. A largely unreflective rush to automating immense sectors of the labor economy out of existence? Creative destruction. Widely documented gender, class, and ethnoracial inequalities across the IT labor force? A pipeline problem. Camera “blink detection” technology repeatedly flagging users of Asian descent with the prompt “Did Someone Blink?”2 A bug, not a feature. Google’s image-recognition algorithm tagging the faces of African-American individuals with the word “gorillas”?

., 71 Class bias, 4–6, 88, 136, 161–162, 174, 184, 265 capitalist, 171 dominant, 180–181, 190 equality, 80, 86t exposure, 301–302 India, 299, 302–303, 308 investor, 53 lower, 162 management, 142 Marxist, 171–173 meritocracy, 138, 150 middle, 73, 80, 86, 139, 241 technocratic, 21 upper, 300- 302 upper-middle, 18 working, 79, 141–142, 288, 301, 309 Cloud definition, 33–34 and electricity, 33–34, 44 enables other industries, 46 as factory, 7, 35–36, 42–43, 45–46, 321 and infrastructure, 33–35 kilowatt-hours required, 34 physical, 31–32, 34, 44–46 supply chain, 45 Code Arabic, 191 Assembly, 275, 277, 281, 286 Black Girls Code, 255, 263 breaking, 138–139 (Colossus) Code.org, 253, 255, 259 Code2040, 255, 260 Coding, Girls Who Code, 253, 255, 263 cultural, 302 digital, 284, 289 dress, 145, 164–165, 298 education, 6 empire, 76 #YesWeCode, 253, 264–266 HLL (high-level language), 275, 277–278, 284, 290 Hour of Code, 253, 263–264 is law, 126 platforms, 321 robotics, 201, 203, 205 social media, 59 source, 273–292 passim (see also Source code) switching, 184, 190 typing, 188, 351 writers, 24, 145, 256–259, 262–267, 300, 381 Yes We Code, 255 Code.org, 253, 255, 259 Code2040, 255, 260 Coding, Girls Who Code, 253, 255, 263 Cold War, 137, 152, 169 computer networks, 75–76, 83–84 network economy, 87 technology, 17–18, 94, 137 typewriter, 227 Collision detection, 242–243 Colonialism, 19, 91, 93, 105, 109, 245 cable networks, 93, 99, 101 colonization, 186, 378 digital, 331 Europe, 110, 147–148, 343 internet, 111, 129 language as, 186–188 metaphors, 94 stereotypes, 96, 102, 104 technocolonialist, 103–104 Colossus, 17, 139, 143 Comcast, 35 Commercial content moderation (CCM), 56–58, 62, 66, 122 Commodity computational services, 33 Common sense, 73, 96 Communications Decency Act, 60–61 Compaq, 318 Complex scripts, 188, 222, 344–345, 350 CompuServe, 320, 325 Computer anthropomorphized (see Robots) conservative force, 15 control and power, 23 critiques of, 5 men, 142 utility, 35, 320 humans as, 43, 140, 384 Computer science, 18, 58, 66, 112, 367 artificial intelligence, 58, 66 education, 256, 263 Thompson hack, 275, 291 women in, 254 Computing, 135–155 passim artificial intelligence, 56 Britain and, 21, 138, 148–152 Chinese, 350–351, 353–354 and class, 142–143 cloud, 78, 87 companies, 13, 18–19 devices, 40–41, 45 education, 368 and empire, 147–148 environment, 382 global, 350, 377 hacking, 289–291 history of, 7, 17, 35, 38, 43, 46, 137, 153–154 Latin alphabet, 357 masculinity, 263 management, 23 manufacturing, 39 media, 4–8, 377–380 meritocracy narratives, 137, 153–154, 381 networks, 77, 199, 320–321 personal, 354 power, 328 software, 318 typing and, 220, 226, 337, 339, 341, 344 underrepresented groups and, 253, 255–256, 264, 266 and women, 17, 43, 135, 139–142, 144–147 Concorde, 145, 146f Congress, 11–12, 82, 154 Content antisemitic, 265 app, 319, 321 child abuse, 118–119, 122, 125 commercial content moderation (CCM), 56–58, 62, 66, 122 filtering, 57 illegal, 62 internet, 317, 319 moderation, 54–57, 123, 126, 380–382 moderators, 5, 380–382 review, 121, 128–130 social media, 59, 61–63, 66, 232, 321, 329–331 terrorism, 57, 66, 130 violent, 117 web, 317 Contractor, 35, 53, 56, 266 CorelDraw, 298 COVID-19, 14, 20, 377 Cox, Chris, 61 Creating Your Community, 266 Creative destruction, 4 Crisis, 4, 6, 16, 21, 150, 235, 297, 383–384 Covid-19, 20 identity, 58–60 point, 13 Y2K, 104 CSNET, 81 Cybernetics, 75, 78–80, 83, 86, 86t, 88 cyberneticist, 77, 81–82 Cyberpunk, 100–101, 107, 110 Cybersyn, 75, 79–80, 85, 86t CyberTipline, 125 Dalton gang, 287–289 DARPA (Defense Advanced Research Projects Agency), 383 Dartmouth College, 235 Data biased, 66, 205 due process, 206 objective, 205 processing, 38, 40–41, 119, 206, 300 socially constructed, 205 value-neutral, 372 Data broker Salesforce, 87 SAS, 87 Data entry, 5, 104, 150, 367 David, Paul, 337–338, 351, 353, 357–358 Davies, Donald, 83 Death, 15, 120, 186, 371, 373, 379 Covid-19, 12 gaming, 233–234, 236 life-or-, 6, 206, 266 technology and dying well, 378 Decolonization, 91, 104, 111–112 Deep Blue, 7 De Kosnik, Benjamin, 108–109, 110 Dell, 318 Delphi, 290 Democratic Republic of Congo, 45 Denmark, 44, 128–129 de Prony, Gaspard, 39–40 Design values, 73–76, 84–88 American, 81–84 Chilean, 79–81 Soviet, 77–78 state, 75, 78, 80, 83, 86, 86t Devanagari, 339, 342, 344, 350, 354 Developing world, 93, 103, 105, 180, 325, 330–332 Devi, Poonam, 304 Diamond, Jared, 338, 351, 353, 357–358 Difference Engine, 40 Digital coding, 284, 289 colonialism, 91, 93–94, 103, 331 computers, 38, 41, 138 connectivity, 379 economies, 13, 22, 29, 31, 33, 35, 45, 145 forensic work, 123, 126, 128, 354 future, 101 gaming, 241 imperialism, 186–187, 191 inclusion, 303 infrastructures, 126, 151, 155 invisibility, 98, 100, 204 labor, 6, 147, 101, 354 materiality, 5 networks, 83 platforms, 66, 118, 199, 201 politics and, 110, 112 predigital, 96–97, 152 revolution, 29, 32 surveillance state, 119, 130 technology, 40, 64, 123–124, 200, 382 vigilantism, 120 Disability, 12, 15, 160 Disasters, 11–15, 19–20, 22–24, 54, 204, 338, 364 Discrimination.


Lifespan: Why We Age—and Why We Don't Have To by David A. Sinclair, Matthew D. Laplante

Albert Einstein, Albert Michelson, Anthropocene, anti-communist, Any sufficiently advanced technology is indistinguishable from magic, Atul Gawande, basic income, Berlin Wall, Bernie Sanders, biofilm, Biosphere 2, blockchain, British Empire, caloric restriction, caloric restriction, carbon footprint, Charles Babbage, Claude Shannon: information theory, clean water, creative destruction, CRISPR, dark matter, dematerialisation, discovery of DNA, double helix, Drosophila, Easter island, Edward Jenner, en.wikipedia.org, epigenetics, experimental subject, Fall of the Berlin Wall, Fellow of the Royal Society, global pandemic, Grace Hopper, helicopter parent, income inequality, invention of the telephone, Isaac Newton, John Snow's cholera map, Kevin Kelly, Khan Academy, labor-force participation, life extension, Louis Pasteur, McMansion, Menlo Park, meta-analysis, microbiome, mouse model, mutually assured destruction, Paul Samuelson, personalized medicine, phenotype, Philippa Foot, placebo effect, plutocrats, power law, quantum entanglement, randomized controlled trial, Richard Feynman, ride hailing / ride sharing, self-driving car, seminal paper, Skype, stem cell, Stephen Hawking, Steven Pinker, TED Talk, the scientific method, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Tim Cook: Apple, Tragedy of the Commons, trolley problem, union organizing, universal basic income, WeWork, women in the workforce, zero-sum game

After the closure of the last coal-fired power station in the state in 2016, investors built Sundrop Farms on the barren coast, then hired 175 people who had recently become unemployed.45 The farm uses free energy from the sun and seawater to make 180 Olympic-sized swimming pools’ worth of freshwater per year, an effort that in the past would have burned a million gallons of diesel fuel. Today, 33 thousand pounds of fresh organic tomatoes are shipped each year from the port where coal used to come in. Sundrop is an example of a Schumpeterian “gale of creative destruction,” the type of technological paradigm shift we will need to usher in the age of longevity and prosperity. For this to happen, we need more visionary scientists, engineers, and investors. We need more smart legislation to speed, not impede, the adoption of Earth-saving technologies. This will free up money and human capital that are currently wasted.

., “Computer Keyboard Interaction as an Indicator of Early Parkinson’s Disease,” Nature Scientific Reports 6 (October 5, 2016): 34468, https://www.nature.com/articles/srep34468. 26. For a more detailed account of what’s just around the corner, this book is well worth the read: E. Topol, The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care, Kindle edition (New York: Basic Books, 2011). 27. I am an investor in and former member of the board of InsideTracker, a Segterra company based in Massachusetts, http://www.insidetracker.com/. I have invested in and advise the company, and I am an inventor on a patent application filed to calculate biological age based on markers that are known to change with age. 28.


The State and the Stork: The Population Debate and Policy Making in US History by Derek S. Hoff

affirmative action, Alan Greenspan, Alfred Russel Wallace, back-to-the-land, British Empire, business cycle, classic study, clean water, creative destruction, David Ricardo: comparative advantage, demographic transition, desegregation, Edward Glaeser, feminist movement, full employment, garden city movement, Garrett Hardin, George Gilder, Gregor Mendel, Gunnar Myrdal, guns versus butter model, Herman Kahn, immigration reform, income inequality, income per capita, invisible hand, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, Joseph Schumpeter, labor-force participation, Lewis Mumford, manufacturing employment, mass immigration, New Economic Geography, new economy, old age dependency ratio, open immigration, Paul Samuelson, peak oil, pensions crisis, profit motive, public intellectual, Ralph Waldo Emerson, road to serfdom, Robert Solow, Ronald Reagan, scientific management, Scientific racism, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, trickle-down economics, urban planning, urban sprawl, W. E. B. Du Bois, wage slave, War on Poverty, white flight, zero-sum game

This volume is a compendium of Turner’s essays; Turner debuted “The Significance of the Frontier in American History” as a paper at the 1893 American Historical Association meetings. 5. Joseph Spengler, “Population Doctrines in the United States,” Journal of Political Economy 41 (October 1933): 663. 6. Thomas K. McCraw, Prophet of Innovation: Joseph Schumpeter and Creative Destruction (Cambridge, Mass.: Belknap Press of Harvard University Press, 2007), 44. Also see R. D. Collison Black, A. W. Coats, and Craufurd D. W. Goodwin, eds., The Marginal Revolution in Economics: Interpretation and Evaluation (Durham: Duke University Press, 1973). 7. For an original and accessible statement of marginalism, try John Bates Clark, The Philosophy of Wealth: Economic Principles Newly Formulated (1886; reprint of 2d, 1887 ed., New York: Augustus M.

By the mid 1930s, longrun explanations of the Depression focusing on endogenous and institutional factors (e.g., excessive industrial concentration) had been superseded by analyses focused on exogenous factors of economic development. For example, Harvard economist Joseph Schumpeter, famous for theorizing capitalism’s tendency toward “creative destruction,” emphasized the long-term cycles or “waves” of an economy. The stagnationists stressed the exogenous factors of geography, population, and technology; they shared Schumpeter’s pessimism about the pace of innovation but emphasized declining investment based on declining population growth. Keynes’s The General Theory of Employment, Interest and Money (New York: Harcourt, Brace, 1936), did not highlight demography.


pages: 225 words: 55,458

Back to School: Why Everyone Deserves a Second Chance at Education by Mike Rose

blue-collar work, centre right, confounding variable, creative destruction, delayed gratification, digital divide, George Santayana, income inequality, MITM: man-in-the-middle, moral panic, new economy, Ronald Reagan, The Bell Curve by Richard Herrnstein and Charles Murray, the built environment, urban renewal, War on Poverty

How well are we preparing students from a broad sweep of backgrounds for life after high school, and how adequate are the programs we have in place to remedy the failures of K–12 education? How robust is our belief in the ability of the common person, and what opportunities do we provide to realize that ability? Given the nature of Western capitalism, what mechanisms are there to compensate for boom and bust economic cycles, for “creative destruction,” for globalization? Do we have an adequate social safety net, and how effective are we at providing people a second chance? How open and welcoming are our core institutions—such as postsecondary education—and how adaptable? 9 I N T RO D U C T I O N The problem is that these second-chance institutions are not living up to their promise, and the current political climate poses threats to their improvement and, in some cases, to their continued existence.


pages: 210 words: 56,667

The Misfit Economy: Lessons in Creativity From Pirates, Hackers, Gangsters and Other Informal Entrepreneurs by Alexa Clay, Kyra Maya Phillips

"World Economic Forum" Davos, Aaron Swartz, Airbnb, Alfred Russel Wallace, Apollo 11, Berlin Wall, Burning Man, collaborative consumption, conceptual framework, cotton gin, creative destruction, different worldview, digital rights, disruptive innovation, double helix, fear of failure, Gabriella Coleman, game design, Hacker Ethic, Howard Rheingold, informal economy, intentional community, invention of the steam engine, James Watt: steam engine, Joseph Schumpeter, Kickstarter, lone genius, Mark Zuckerberg, mass incarceration, megacity, Neil Armstrong, Occupy movement, off-the-grid, peer-to-peer rental, Ronald Reagan, Rosa Parks, sharing economy, Silicon Valley, Steve Jobs, Steven Levy, Stewart Brand, subscription business, supply-chain management, union organizing, Whole Earth Catalog, Whole Earth Review, work culture , Zipcar

The pharmaceutical industry had its heyday in the eighties and nineties, with blockbuster drugs like Lipitor, Plavix, and Zoloft. Some in the industry have faced competition from generics and been forced to slash internal R&D. If we listened to Joseph Schumpeter, the economist and political scientist, we’d allow the forces of “creative destruction”—the process of destroying an old economic order and the emergence of a new one—to have their way. DAVID BERDISH IS A DEVOUT Catholic and a third-generation autoworker at Ford Motor Company. He worked at the company for thirty-one years before recently retiring. His grandfather, a prominent labor organizer and founding member of UAW Local 600, a union that represented the largest Ford plants, was at the infamous Battle of the Overpass, where United Auto Worker union organizers were beaten by Ford henchmen.


pages: 196 words: 57,974

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

affirmative action, AOL-Time Warner, barriers to entry, Bear Stearns, Bonfire of the Vanities, book value, borderless world, business process, Carl Icahn, Charles Lindbergh, classic study, company town, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, Fairchild Semiconductor, financial engineering, Great Leap Forward, hiring and firing, Ida Tarbell, industrial cluster, invisible hand, James Watt: steam engine, John Perry Barlow, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, junk bonds, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, Michael Milken, military-industrial complex, mittelstand, new economy, North Sea oil, pneumatic tube, race to the bottom, railway mania, Ronald Coase, scientific management, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, Triangle Shirtwaist Factory, tulip mania, wage slave, William Shockley: the traitorous eight

Previously, those transactions, if they had happened at all, would have involved thousands of intermediaries. The other way in which Silicon Valley changed the company was by pioneering an alternative form of corporate life. Some of its companies, such as Hewlett-Packard and Intel, lasted for decades, but the Valley epitomized the idea of “creative destruction.” An unusual amount of the Valley’s growth came from gazelle companies—firms whose sales had grown by at least 20 percent in each of the previous four years. It also tolerated failure and even treachery to an unusual degree. Many would argue that its real birth date was not 1938 but the moment in 1957 when the so-called “traitorous eight” walked out of Shockley Laboratories to found Fairchild Semiconductor, which in turn spawned Intel and another thirty-six firms.


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Making the Future: The Unipolar Imperial Moment by Noam Chomsky

Alan Greenspan, Albert Einstein, Berlin Wall, Bretton Woods, British Empire, capital controls, collective bargaining, corporate governance, corporate personhood, creative destruction, deindustrialization, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Frank Gehry, full employment, Glass-Steagall Act, Howard Zinn, Joseph Schumpeter, kremlinology, liberation theology, Long Term Capital Management, market fundamentalism, Mikhail Gorbachev, Nelson Mandela, no-fly zone, Occupy movement, oil shale / tar sands, precariat, public intellectual, RAND corporation, Robert Solow, Ronald Reagan, Seymour Hersh, structural adjustment programs, The Great Moderation, too big to fail, uranium enrichment, Washington Consensus, WikiLeaks, working poor

In short, President Obama’s programs were “a giveaway to Wall Street executives” and a blow in the solar plexus to their defenseless victims. The outcome should surprise only those who insist on hopeless naïveté about the design and implementation of policy, particularly when economic power is highly concentrated and state capitalism has entered into a new stage of “creative destruction,” to borrow Joseph Schumpeter’s famous phrase, but with a twist: creative in ways to enrich and empower the rich and powerful, while the rest are free to survive as they may, while celebrating Loyalty and Law Day. The Revenge Killing of Osama Bin Laden June 1, 2011 The May 1 [2011] U.S. attack on Osama bin Laden’s compound violated multiple elementary norms of international law, beginning with the invasion of Pakistani territory.


pages: 207 words: 63,071

My Start-Up Life: What A by Ben Casnocha, Marc Benioff

affirmative action, Albert Einstein, barriers to entry, Bonfire of the Vanities, business process, call centre, coherent worldview, creative destruction, David Brooks, David Sedaris, Do you want to sell sugared water for the rest of your life?, don't be evil, fear of failure, hiring and firing, independent contractor, index fund, informal economy, Jeff Bezos, Joan Didion, Lao Tzu, Larry Ellison, Marc Benioff, Menlo Park, open immigration, Paul Graham, place-making, public intellectual, Ralph Waldo Emerson, Salesforce, Sand Hill Road, side project, Silicon Valley, social intelligence, SoftBank, Steve Jobs, Steven Pinker, superconnector, technology bubble, traffic fines, Tyler Cowen, Year of Magical Thinking

by William Poundstone The Four Obsessions of an Extraordinary Executive, by Patrick Lencioni The Entrepreneur’s Guide to Business Law, by Constance Bagley Good to Great, by Jim Collins On Becoming a Leader, by Warren Bennis 179 180 APPENDIX C Information Rules, by Carl Shapiro and Hal Varian eBoys, by Randal Stross Fooled by Randomness, by Nassim Nicholas Taleb Compassionate Capitalism, by Marc Benioff Love Is the Killer App, by Tim Sanders Globalization The World Is Flat, by Tom Friedman Creative Destruction, by Tyler Cowen Globaloney, by Michael Veseth Money Makes the World Go Round, by Barbara Garson How “American” Is Globalization? by William Marling Intellectual Life The Blank Slate, by Steven Pinker The Presentation of Self in Everyday Life, by Erving Goffman Reflections by an Affirmative Action Baby, by Stephen Carter Integrity, by Stephen Carter The Accidental Asian, by Eric Liu Mind Wide Open, by Steven Johnson Socrates Café, by Chris Phillips Self-Renewal, by John Gardner Public Intellectuals, by Richard Posner Psychology Influence: The Psychology of Persuasion, by Robert Cialdini Flow, by Mihaly Csikszentmihalyi Man’s Search for Meaning, by Viktor Frankl Biography/Memoir My Life, by Bill Clinton This Boy’s Life, by Tobias Wolff Swimming Across, by Andy Grove All Over But the Shoutin’, by Rick Bragg Personal History, by Katherine Graham Emerson: Mind on Fire, by Robert Richardson In an Uncertain World, by Robert Rubin The Year of Magical Thinking, by Joan Didion Religion End of Faith, by Sam Harris The Universe in a Single Atom, by the Dalai Lama APPENDIX C The World’s Religions, by Huston Smith The Bhagavad-Gita Plan B: Further Thoughts on Faith, by Anne Lamott Under the Banner of Heaven, by Jon Krakauer Politics/Current Affairs Ghost Wars, by Steve Coll Running the World, by David Rothkopf Founding Brothers, by Joseph Ellis A Conflict of Visions, by Thomas Sowell Going Nucular, by Geoffrey Nunberg America at the Crossroads, by Francis Fukuyama Holidays in Hell, by P.


Phil Thornton by The Great Economists Ten Economists whose thinking changed the way we live-FT Publishing International (2014)

Alan Greenspan, availability heuristic, behavioural economics, Berlin Wall, bitcoin, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, Cass Sunstein, choice architecture, cognitive bias, collapse of Lehman Brothers, Corn Laws, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, double helix, endogenous growth, endowment effect, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, fixed income, Ford Model T, full employment, hindsight bias, income inequality, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kenneth Arrow, Kenneth Rogoff, Kickstarter, liquidity trap, loss aversion, mass immigration, means of production, mental accounting, Myron Scholes, paradox of thrift, Pareto efficiency, Paul Samuelson, Post-Keynesian economics, price mechanism, pushing on a string, quantitative easing, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, school vouchers, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Toyota Production System, trade route, transaction costs, unorthodox policies, Vilfredo Pareto, women in the workforce

Science plays a role in the final two elements: a universal development of society’s productive forces on the basis of science, technology and automation; and a cultivation of needs on the basis of science and education. The vision can be summed up as one of communal production where the value of the work is measured by its quality rather than the hours worked, money is a tool for 2. J.E. Elliott, ‘Marx’s Grundrisse: Vision of Capitalism’s Creative Destruction’, Journal of Post Keynesian Economics, Vol. 1(2) (Winter 1978–79), pp. 148–69. Chapter 3 • Karl Marx61 exchange value, and the resulting increase in free time allows each individual to develop in their own way. This is hardly an operational model for running a socialist economy but shows how, in Marx’s view, communism would supersede capitalism in a dynamic process similar to the one that saw feudalism give way to capitalism by building on trends established beforehand.


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Trust: The Social Virtue and the Creation of Prosperity by Francis Fukuyama

Alvin Toffler, barriers to entry, Berlin Wall, blue-collar work, business climate, business cycle, capital controls, classic study, collective bargaining, corporate governance, corporate raider, creative destruction, deindustrialization, Deng Xiaoping, deskilling, double entry bookkeeping, equal pay for equal work, European colonialism, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, Glass-Steagall Act, global village, Gunnar Myrdal, hiring and firing, industrial robot, Jane Jacobs, job satisfaction, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kanban, Kenneth Arrow, land reform, liberal capitalism, liberation theology, low skilled workers, manufacturing employment, mittelstand, price mechanism, profit maximization, RAND corporation, rent-seeking, Ronald Coase, scientific management, Silicon Valley, Steve Jobs, Steve Wozniak, The Death and Life of Great American Cities, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, transfer pricing, traveling salesman, union organizing, vertical integration, W. E. B. Du Bois

But the reverse side of the coin is a much higher degree of vertical enterprise solidarity in Japan, which is why we correctly think of Japan as more group oriented than Britain. This kind of vertical group solidarity would appear to be more conducive to economic growth than its horizontal alternative. Clearly social solidarity is not always beneficial from the standpoint of economic well-being. In Schumpeter’s phrase, capitalism is a process of “creative destruction,” in which older, economically harmful or inefficient organizations have to be modified or eliminated and new ones created in their place. Economic progress demands the constant substitution of one kind of group for the other. Traditional sociability can be said to be loyalty to older, long-established social groups.

Subjective personal judgments are replaced by impersonal bureaucratic rules, which, like job control unionism, are less effective and more costly to implement. The causes of the growth of American individualism at the expense of community are numerous. A primary one is capitalism itself.10 Modern capitalism is, as Joseph Schumpeter explained, a process of continual “creative destruction.” As the technological frontier moves outward, markets expand, and new forms of organization emerge. In the process, older forms of social solidarity are ruthlessly crushed underfoot. The original industrial revolution destroyed guilds, townships, extended families, cottage industries, and peasant communities.


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How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World and Everything in It by Arthur Herman

British Empire, California gold rush, classic study, creative destruction, do-ocracy, Edward Jenner, financial independence, gentleman farmer, global village, invisible hand, Isaac Newton, James Watt: steam engine, Joan Didion, joint-stock company, laissez-faire capitalism, land tenure, mass immigration, means of production, new economy, New Urbanism, North Sea oil, oil shale / tar sands, Republic of Letters, Robert Mercer, spinning jenny, The Wealth of Nations by Adam Smith, tontine, transcontinental railway, trickle-down economics, urban planning, urban renewal, vertical integration, working poor

Already, in 1747, Kames recognized what Adam Smith and later economists would confirm. More than any other stage of society, the commercial stage represents the greatest change from the past. This progress comes at a price: the overturning of almost everything that came before, in laws, in forms of government, even in manners and morals. Capitalism’s innate capacity for creative destruction would fascinate Kames’s followers, including Adam Smith, who would witness its awesome power in the Lowlands and Highlands of their own day. III The four-stage theory, which Kames revised and refined in his Sketches on the History of Man when he was nearly eighty, would live on after him.

The average Jacobite wanted to return to a community that was stable and harmonious, two qualities that eighteenth-century Britain notoriously seemed to lack. He extolled the virtues of a rural-based society and the authority of a traditional landowning class. He detested the new rising competitive capitalist society, with its getting and spending, its greedy merchants and vulgar upstarts, its contempt for the old rules, its creative destruction, as much as any Marxist. And like the Marxist, he cared deeply about “justice,” which in his mind meant inferiors willingly obeying their superiors: tenants obeying their landlords, the middle class obeying the nobility, the people obeying the king and the Church. In England, and in much of the Scottish Lowlands by 1745, this longing for the security of a stable, hierarchical social order was largely, even self-consciously, a matter of nostalgia.


pages: 1,239 words: 163,625

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated by Gautam Baid

Abraham Maslow, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Albert Einstein, Alvin Toffler, Andrei Shleifer, asset allocation, Atul Gawande, availability heuristic, backtesting, barriers to entry, beat the dealer, Benoit Mandelbrot, Bernie Madoff, bitcoin, Black Swan, book value, business process, buy and hold, Cal Newport, Cass Sunstein, Checklist Manifesto, Clayton Christensen, cognitive dissonance, collapse of Lehman Brothers, commoditize, corporate governance, correlation does not imply causation, creative destruction, cryptocurrency, Daniel Kahneman / Amos Tversky, deep learning, delayed gratification, deliberate practice, discounted cash flows, disintermediation, disruptive innovation, Dissolution of the Soviet Union, diversification, diversified portfolio, dividend-yielding stocks, do what you love, Dunning–Kruger effect, Edward Thorp, Elon Musk, equity risk premium, Everything should be made as simple as possible, fear index, financial independence, financial innovation, fixed income, follow your passion, framing effect, George Santayana, Hans Rosling, hedonic treadmill, Henry Singleton, hindsight bias, Hyman Minsky, index fund, intangible asset, invention of the wheel, invisible hand, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, Jeff Bezos, John Bogle, Joseph Schumpeter, junk bonds, Kaizen: continuous improvement, Kickstarter, knowledge economy, Lao Tzu, Long Term Capital Management, loss aversion, Louis Pasteur, low interest rates, Mahatma Gandhi, mandelbrot fractal, margin call, Mark Zuckerberg, Market Wizards by Jack D. Schwager, Masayoshi Son, mental accounting, Milgram experiment, moral hazard, Nate Silver, Network effects, Nicholas Carr, offshore financial centre, oil shock, passive income, passive investing, pattern recognition, Peter Thiel, Ponzi scheme, power law, price anchoring, quantitative trading / quantitative finance, Ralph Waldo Emerson, Ray Kurzweil, Reminiscences of a Stock Operator, reserve currency, Richard Feynman, Richard Thaler, risk free rate, risk-adjusted returns, Robert Shiller, Savings and loan crisis, search costs, shareholder value, six sigma, software as a service, software is eating the world, South Sea Bubble, special economic zone, Stanford marshmallow experiment, Steve Jobs, Steven Levy, Steven Pinker, stocks for the long run, subscription business, sunk-cost fallacy, systems thinking, tail risk, Teledyne, the market place, The Signal and the Noise by Nate Silver, The Wisdom of Crowds, time value of money, transaction costs, tulip mania, Upton Sinclair, Walter Mischel, wealth creators, Yogi Berra, zero-sum game

It provides anyone with a brokerage account and some patience cheap access to the productive power of a business (or an entire market economy, if investing in a total market index fund). 2. Maturity. Stocks are meant to be perpetual and do not have an obvious maturity date. Businesses are going concerns, which means they are intended to last forever. Creative destruction, however, has ensured that few companies in history have been able to survive forever. In fact, most companies have extinguished their stock well before infinity. But the timing of these events can never be known in advance with certainty. So, although businesses exist under the assumption of operating forever, the reality is that their stocks have uncertain maturity dates. 3.

Fewer than 12 percent of the Fortune 500 companies in 1955 were still on the list sixty-two years later in 2017, and 88 percent of the companies in 1955 had either gone bankrupt or had merged with (or were acquired by) another firm. If they still exist, they have fallen from the top Fortune 500 companies (as ranked by total revenues).7 This is Joseph Schumpeter’s “creative destruction” at its very best. The market places a heavy weight on certainty. Stocks with the promise of years of predictable earnings growth tend to go into a long period of overvaluation, until such time that they are no longer able to grow earnings in a steady manner. Predictability of long-term growth matters more to the market than the absolute rate of near-term growth, so a stock that promises to grow earnings at 50 percent for the next couple of years, with no clarity thereafter, is given a lower valuation multiple by the market than a stock that has slower but highly predictable growth for a much longer period.


pages: 281 words: 71,242

World Without Mind: The Existential Threat of Big Tech by Franklin Foer

artificial general intelligence, back-to-the-land, Berlin Wall, big data - Walmart - Pop Tarts, Big Tech, big-box store, Buckminster Fuller, citizen journalism, Colonization of Mars, computer age, creative destruction, crowdsourcing, data is the new oil, data science, deep learning, DeepMind, don't be evil, Donald Trump, Double Irish / Dutch Sandwich, Douglas Engelbart, driverless car, Edward Snowden, Electric Kool-Aid Acid Test, Elon Musk, Evgeny Morozov, Fall of the Berlin Wall, Filter Bubble, Geoffrey Hinton, global village, Google Glasses, Haight Ashbury, hive mind, income inequality, intangible asset, Jeff Bezos, job automation, John Markoff, Kevin Kelly, knowledge economy, Law of Accelerating Returns, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, move fast and break things, new economy, New Journalism, Norbert Wiener, off-the-grid, offshore financial centre, PageRank, Peace of Westphalia, Peter Thiel, planetary scale, Ray Kurzweil, scientific management, self-driving car, Silicon Valley, Singularitarianism, software is eating the world, Steve Jobs, Steven Levy, Stewart Brand, strong AI, supply-chain management, TED Talk, the medium is the message, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas L Friedman, Thorstein Veblen, Upton Sinclair, Vernor Vinge, vertical integration, We are as Gods, Whole Earth Catalog, yellow journalism

The giants were too hobbled, too fearful of antagonizing Justice Department lawyers, to seize control of the Internet at the crucial moment of opportunity. It was a stroke of serendipitous timing, as well as shrewd bureaucratic planning. The Internet wasn’t captured by a single firm. These conditions gave rise to a glorious festival of creative destruction. New companies rose and then fell, innovation exploded in all directions, inaccessible troves of knowledge were instantly available, a consumer’s Arcadia emerged. It was widely assumed that the history of business settled into a new pattern, what boosters called the New Economy. Firms would never achieve long-lasting dominance in the era of the Internet.


pages: 221 words: 64,080

Different: Escaping the Competitive Herd by Youngme Moon

AltaVista, Atul Gawande, business cycle, commoditize, creative destruction, hedonic treadmill, Richard Feynman, Saturday Night Live, selection bias, The Wisdom of Crowds, Thorstein Veblen, young professional

It’s harder stil to come up with a market-disrupting strategy that generates positive returns for both customers and shareholders. Again, I recognize this. And yet while the term “disruption” typical y suggests a destruction or violation of what exists, the idea brands that I’l be introducing you to have somehow managed to produce a creative destructive; they have somehow managed to become rebels with a cause. What this means is that these are brands that are creating even as they are destroying. They are constructing even as they are disrupting. And in the process, they are attempting to bring to life a counterfactual, which, if you think about it, is either crazy or quixotic or both.


pages: 239 words: 56,531

The Secret War Between Downloading and Uploading: Tales of the Computer as Culture Machine by Peter Lunenfeld

Albert Einstein, Andrew Keen, anti-globalists, Apple II, Berlin Wall, British Empire, Brownian motion, Buckminster Fuller, Burning Man, business cycle, business logic, butterfly effect, Charles Babbage, computer age, Computing Machinery and Intelligence, creative destruction, crowdsourcing, cuban missile crisis, Dissolution of the Soviet Union, don't be evil, Douglas Engelbart, Douglas Engelbart, Dynabook, East Village, Edward Lorenz: Chaos theory, Fairchild Semiconductor, Fall of the Berlin Wall, folksonomy, Francis Fukuyama: the end of history, Frank Gehry, Free Software Foundation, Grace Hopper, gravity well, Guggenheim Bilbao, Herman Kahn, Honoré de Balzac, Howard Rheingold, Ian Bogost, invention of movable type, Isaac Newton, Ivan Sutherland, Jacquard loom, Jane Jacobs, Jeff Bezos, John Markoff, John von Neumann, Jon Ronson, Kickstarter, Mark Zuckerberg, Marshall McLuhan, Mercator projection, Metcalfe’s law, Mother of all demos, mutually assured destruction, Neal Stephenson, Nelson Mandela, Network effects, new economy, Norbert Wiener, PageRank, pattern recognition, peer-to-peer, planetary scale, plutocrats, post-materialism, Potemkin village, RFID, Richard Feynman, Richard Stallman, Robert Metcalfe, Robert X Cringely, Schrödinger's Cat, Search for Extraterrestrial Intelligence, seminal paper, SETI@home, Silicon Valley, Skype, social bookmarking, social software, spaced repetition, Steve Ballmer, Steve Jobs, Steve Wozniak, technological determinism, Ted Nelson, the built environment, the Cathedral and the Bazaar, The Death and Life of Great American Cities, the medium is the message, Thomas L Friedman, Turing machine, Turing test, urban planning, urban renewal, Vannevar Bush, walkable city, Watson beat the top human players on Jeopardy!, William Shockley: the traitorous eight

In fact, there were probably similar off-brand items available at both VDNX and the Pico Swap Mart. As for the third floor of the former Sears, it was simply closed off by more of the chain-link fencing. Since that time, it has been torn down and rebuilt as a mall anchored by a home improvement superstore, awaiting the next stage of capitalism’s creative destruction. Mutants and Modernists Close to two decades of teaching and interacting with artists and designers has prompted me to think that design should now be seen as an expanded discipline. As a bonus, design as meta- or even megadesign can help to address the vision deficit that the 89/11 period has saddled us with.


pages: 272 words: 64,626

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs by Andy Kessler

23andMe, Abraham Maslow, Alan Greenspan, Andy Kessler, bank run, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bob Noyce, bread and circuses, British Empire, business cycle, business process, California gold rush, carbon credits, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, commoditize, computer age, Cornelius Vanderbilt, creative destruction, disintermediation, Douglas Engelbart, Dutch auction, Eugene Fama: efficient market hypothesis, fiat currency, Firefox, Fractional reserve banking, George Gilder, Gordon Gekko, greed is good, income inequality, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kickstarter, knowledge economy, knowledge worker, Larry Ellison, libertarian paternalism, low skilled workers, Mark Zuckerberg, McMansion, Michael Milken, Money creation, Netflix Prize, packet switching, personalized medicine, pets.com, prediction markets, pre–internet, profit motive, race to the bottom, Richard Thaler, risk tolerance, risk-adjusted returns, Silicon Valley, six sigma, Skype, social graph, Steve Jobs, The Wealth of Nations by Adam Smith, transcontinental railway, transfer pricing, vertical integration, wealth creators, Yogi Berra

The stock market allocates precious capital to companies it thinks can maximize profits and starves those that can’t. In other words, the stock market is democracy’s half-evil henchman, whose tool is the size of the carrot, not the use of the stick. The tenets of capitalism’s great economists, from Adam Smith’s Invisible Hand to Joseph Schumpeter’s Creative Destruction and Gordon Gekko’s Greed Is Good, are all powerful concepts, but it’s profits and the stock market that carry out the dirty work. No Five-Year Plans. All men are created equal, but a few of you need to be canned and retrained so progress can happen again. New industries get funded and start hiring again.


Work in the Future The Automation Revolution-Palgrave MacMillan (2019) by Robert Skidelsky Nan Craig

3D printing, Airbnb, algorithmic trading, AlphaGo, Alvin Toffler, Amazon Web Services, anti-work, antiwork, artificial general intelligence, asset light, autonomous vehicles, basic income, behavioural economics, business cycle, cloud computing, collective bargaining, Computing Machinery and Intelligence, correlation does not imply causation, creative destruction, data is the new oil, data science, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, Demis Hassabis, deskilling, disintermediation, do what you love, Donald Trump, driverless car, Erik Brynjolfsson, fake news, feminist movement, Ford Model T, Frederick Winslow Taylor, future of work, Future Shock, general purpose technology, gig economy, global supply chain, income inequality, independent contractor, informal economy, Internet of things, Jarndyce and Jarndyce, Jarndyce and Jarndyce, job automation, job polarisation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, knowledge economy, Loebner Prize, low skilled workers, Lyft, Mark Zuckerberg, means of production, moral panic, Network effects, new economy, Nick Bostrom, off grid, pattern recognition, post-work, Ronald Coase, scientific management, Second Machine Age, self-driving car, sharing economy, SoftBank, Steve Jobs, strong AI, tacit knowledge, technological determinism, technoutopianism, TED Talk, The Chicago School, The Future of Employment, the market place, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, Turing test, Uber for X, uber lyft, universal basic income, wealth creators, working poor

For example, Acemoglu and Robinson (2012) have shown that inclusive institutions benefiting large parts of society have also been central drivers of technological change. Schumpeter (1911) highlighted the important role of social institutions in explaining differences across societies in “entrepreneurial spirit” and their ability to drive processes of creative destruction. Moreover, “smart” apprenticeship institutions enforce high-quality training in broad competences of an occupation, craftsmanship and high status of craftspeople in society (Nübler 2014). Socially shared belief systems such as cultures, ideologies, religion or philosophies determine the nature of such institutions and therfore, changing institutions for higher innovation capabilities also requires a change in these belief systems.


pages: 603 words: 182,826

Owning the Earth: The Transforming History of Land Ownership by Andro Linklater

agricultural Revolution, Alan Greenspan, anti-communist, Anton Chekhov, Ayatollah Khomeini, Bear Stearns, Big bang: deregulation of the City of London, British Empire, business cycle, colonial rule, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, electricity market, facts on the ground, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, full employment, Gini coefficient, Glass-Steagall Act, Google Earth, Great Leap Forward, income inequality, invisible hand, James Hargreaves, James Watt: steam engine, John Perry Barlow, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kibera, Kickstarter, land reform, land tenure, light touch regulation, market clearing, means of production, megacity, Mikhail Gorbachev, Mohammed Bouazizi, Monkeys Reject Unequal Pay, mortgage debt, Northern Rock, Peace of Westphalia, Pearl River Delta, plutocrats, Ponzi scheme, profit motive, quantitative easing, Ralph Waldo Emerson, refrigerator car, Right to Buy, road to serfdom, Robert Shiller, Ronald Reagan, spinning jenny, Suez canal 1869, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, three-masted sailing ship, too big to fail, trade route, transatlantic slave trade, transcontinental railway, ultimatum game, wage slave, WikiLeaks, wikimedia commons, working poor

Among the host of fertile ideas that Schumpeter planted in the economic garden, two stood out: the belief that a capitalist economy was subject to uncontrollable cycles of expansion and contraction, and that these upheavals allowed innovative entrepreneurs to overthrow outmoded methods and technologies in a process Schumpeter termed “creative destruction.” His 1930s Harvard economics class should not have been surprised, therefore, when the professor declared in his heavily accented English, “Chentlemen! A depression iss for capitalism like a good cold douche.” Not only was the 1929 financial crash a natural corrective to the inflationary decade before it, but the business cycle and entrepreneurial activity would in time naturally take advantage of the availability of cheaper goods and labor to bring about economic recovery.

With its aristocratic agenda excised, however, Hayek’s thesis looked like a return to eighteenth-century laissez-faire economics. The market was expected to take care of itself, and the crisis of overproduction would be sidelined by a combination of supply-side economics to stimulate consumption, an aggressive takeover culture to reduce competition, and the business cycle’s creative destruction of weaklings. In effect, an Austrian cuckoo had laid its egg in the private property nest. The difference was not immediately apparent during the postwar years. Social democratic governments in Europe and Scandinavia developed more or less planned economies that nineteenth-century Prussian economists would have recognized, nationalizing strategic industries such as railroads and steel production, and providing universal health care systems, old-age pensions, and social care.


pages: 733 words: 179,391

Adaptive Markets: Financial Evolution at the Speed of Thought by Andrew W. Lo

Alan Greenspan, Albert Einstein, Alfred Russel Wallace, algorithmic trading, Andrei Shleifer, Arthur Eddington, Asian financial crisis, asset allocation, asset-backed security, backtesting, bank run, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, bitcoin, Bob Litterman, Bonfire of the Vanities, bonus culture, break the buck, Brexit referendum, Brownian motion, business cycle, business process, butterfly effect, buy and hold, capital asset pricing model, Captain Sullenberger Hudson, carbon tax, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, confounding variable, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Daniel Kahneman / Amos Tversky, delayed gratification, democratizing finance, Diane Coyle, diversification, diversified portfolio, do well by doing good, double helix, easy for humans, difficult for computers, equity risk premium, Ernest Rutherford, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, financial intermediation, fixed income, Flash crash, Fractional reserve banking, framing effect, Glass-Steagall Act, global macro, Gordon Gekko, greed is good, Hans Rosling, Henri Poincaré, high net worth, housing crisis, incomplete markets, index fund, information security, interest rate derivative, invention of the telegraph, Isaac Newton, it's over 9,000, James Watt: steam engine, Jeff Hawkins, Jim Simons, job satisfaction, John Bogle, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, language acquisition, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, Louis Pasteur, mandelbrot fractal, margin call, Mark Zuckerberg, market fundamentalism, martingale, megaproject, merger arbitrage, meta-analysis, Milgram experiment, mirror neurons, money market fund, moral hazard, Myron Scholes, Neil Armstrong, Nick Leeson, old-boy network, One Laptop per Child (OLPC), out of africa, p-value, PalmPilot, paper trading, passive investing, Paul Lévy, Paul Samuelson, Paul Volcker talking about ATMs, Phillips curve, Ponzi scheme, predatory finance, prediction markets, price discovery process, profit maximization, profit motive, proprietary trading, public intellectual, quantitative hedge fund, quantitative trading / quantitative finance, RAND corporation, random walk, randomized controlled trial, Renaissance Technologies, Richard Feynman, Richard Feynman: Challenger O-ring, risk tolerance, Robert Shiller, Robert Solow, Sam Peltzman, Savings and loan crisis, seminal paper, Shai Danziger, short selling, sovereign wealth fund, Stanford marshmallow experiment, Stanford prison experiment, statistical arbitrage, Steven Pinker, stochastic process, stocks for the long run, subprime mortgage crisis, survivorship bias, systematic bias, Thales and the olive presses, The Great Moderation, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Triangle Shirtwaist Factory, ultimatum game, uptick rule, Upton Sinclair, US Airways Flight 1549, Walter Mischel, Watson beat the top human players on Jeopardy!, WikiLeaks, Yogi Berra, zero-sum game

As a result, many economic thinkers in Europe found themselves reacting to Marxist ideas, even if they disdained Marxist politics. The great champion of entrepreneurship, Joseph Schumpeter, took the Marxist idea of capital periodically destroying itself and spun it in a positive sense, calling it “creative destruction,” the necessary evolutionary innovation for the next phase of the capitalist system.39 Schumpeter’s ideas were taken even further by Sidney Winter and Richard Nelson, who applied natural selection to industrial organization and growth theory, finding this might explain changes in economic productivity and industrial structure.40 Other figures rejected Marxist thought entirely, but realized that the static approach of efficient markets was incomplete.

., 309–310 Cohn, Alain, 352–353 Cold War, 52 collateralized debt obligations (CDOs), 298, 299, 343 Collier, Paul, 412 Colossal Failure of Common Sense, A (McDonald and Robinson), 317–318 commercial banks, 293, 301, 308, 335, 371 commodities trading, 20, 34 Commodity Futures Trading Commission (CFTC), 359, 360, 377 common law, 372 competition, 3, 153, 168, 214, 217 complexity, 217, 278, 361–364, 372, 374 computational biochemistry, 240 computerized axial tomography (CAT), 78, 102 confirmation bias, 305–306 confounding variables, 139 congenital analgesia, 378 Congo Free State, 412 consilience, 215 Consolidated Supervised Entities, 306 contrarian strategy, 290, 316, 325 controlled experiments, 47, 139 Cook, William, 236 cooperation, 164–165, 168, 214, 336, 340 Coppersmith, Don, 239 core, in networks, 374–376 corn, 28–29, 30 corpus callosum, 113–114 Cortana, 396 cortex, 81, 130; anterior cingulate, 86, 105; prefrontal, see prefrontal cortex cortisol, 81 Cosmides, Leda, 173, 174 cost-benefit analysis, 104, 119, 121–122, 169, 316 Cost Matters Hypothesis, 265, 397 Cotzias, George, 88 Countrywide Financial, 325 coupling, 321–322, 361, 372–374 creative destruction, 219 credit default swaps (CDSs), 298, 300, 379, 407 credit rating agencies, 301 Crick, Francis, 137, 144, 401 Cronqvist, Henrik, 161 crowded trades, 291–292, 293 crowdfunding, 356 cryptography, 238–239, 385 currency trading, 12–16, 24, 38 D. E. Shaw & Co., 236–241, 277, 284, 293 D.


Global Governance and Financial Crises by Meghnad Desai, Yahia Said

Asian financial crisis, bank run, banking crisis, Bretton Woods, business cycle, capital controls, central bank independence, corporate governance, creative destruction, credit crunch, crony capitalism, currency peg, deglobalization, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, floating exchange rates, frictionless, frictionless market, German hyperinflation, information asymmetry, Japanese asset price bubble, knowledge economy, liberal capitalism, liberal world order, Long Term Capital Management, low interest rates, market bubble, Meghnad Desai, Mexican peso crisis / tequila crisis, moral hazard, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Post-Keynesian economics, price mechanism, price stability, Real Time Gross Settlement, rent-seeking, short selling, special drawing rights, structural adjustment programs, Tobin tax, transaction costs, Washington Consensus

Austrian political economists have always seen the economy in broader institutional terms and have emphasised the necessarily imperfect nature of knowledge and the importance therefore of the market as a discovery process. They have therefore tended to deploy a much richer account of the capitalist economy and its vicissitudes. Capitalism develops through creative destruction of technologies, occupations, patterns of organisation and geographical location and, therefore, necessarily unevenly and erratically. There are bound to be major dislocations and crises; indeed crises are a signal that major adjustments need to be undertaken in order to create the conditions for further expansion.


pages: 246 words: 74,341

Financial Fiasco: How America's Infatuation With Homeownership and Easy Money Created the Economic Crisis by Johan Norberg

accounting loophole / creative accounting, Alan Greenspan, bank run, banking crisis, Bear Stearns, Bernie Madoff, Black Monday: stock market crash in 1987, Black Swan, business cycle, capital controls, central bank independence, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Brooks, diversification, financial deregulation, financial innovation, Greenspan put, helicopter parent, Home mortgage interest deduction, housing crisis, Howard Zinn, Hyman Minsky, Isaac Newton, Joseph Schumpeter, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, Mexican peso crisis / tequila crisis, millennium bug, money market fund, moral hazard, mortgage tax deduction, Naomi Klein, National Debt Clock, new economy, Northern Rock, Own Your Own Home, precautionary principle, price stability, Ronald Reagan, savings glut, short selling, Silicon Valley, South Sea Bubble, The Wealth of Nations by Adam Smith, too big to fail

It will still not survive unless it creates something that is valued more highly than the raw materials, components, ideas, capital, and labor from which it is made. And it will die even if nobody understands what happened. Politicians who distribute pork they cannot afford are reelected; butcher shops that sell pork they cannot afford go bankrupt. That is why the Austrian economist Joseph Schumpeter identified creative destruction as the core of capitalism. Competition from other companies and free choice for customers entail that less good operations are constantly being eliminated so that resources go instead to more promising business concepts and operations. Many people today see the recession as a crisis for capitalism.


pages: 260 words: 77,007

Are You Smart Enough to Work at Google?: Trick Questions, Zen-Like Riddles, Insanely Difficult Puzzles, and Other Devious Interviewing Techniques You ... Know to Get a Job Anywhere in the New Economy by William Poundstone

affirmative action, Albert Einstein, big-box store, Buckminster Fuller, car-free, cloud computing, creative destruction, digital rights, en.wikipedia.org, full text search, hiring and firing, How many piano tuners are there in Chicago?, index card, Isaac Newton, Johannes Kepler, John von Neumann, lateral thinking, loss aversion, mental accounting, Monty Hall problem, new economy, off-the-grid, Paul Erdős, RAND corporation, random walk, Richard Feynman, rolodex, Rubik’s Cube, Silicon Valley, Silicon Valley startup, sorting algorithm, Steve Ballmer, Steve Jobs, The Spirit Level, Tony Hsieh, why are manhole covers round?, William Shockley: the traitorous eight

“We’re trying to accomplish something.” Embedded in today’s culture of interviewing is a similar tone of skepticism. It’s a skepticism about established job descriptions, organization charts, industries, and even human relationships. Our ever-growing communications networks are engines of creative destruction, with the power to create and destroy business plans. It’s an axiom that everything will be completely different in five years. There will be new rules, new ways of making money, new ways of living. This frantic ethos has employers deprecating fixed skills and fixed qualifications in favor of the seductive concept of mental flexibility.


pages: 255 words: 75,172

Sleeping Giant: How the New Working Class Will Transform America by Tamara Draut

affirmative action, Affordable Care Act / Obamacare, always be closing, American ideology, antiwork, battle of ideas, big-box store, Black Lives Matter, blue-collar work, collective bargaining, creative destruction, David Brooks, declining real wages, deindustrialization, desegregation, Detroit bankruptcy, Donald Trump, Edward Glaeser, ending welfare as we know it, Ferguson, Missouri, financial deregulation, full employment, gentrification, immigration reform, income inequality, independent contractor, invisible hand, job satisfaction, knowledge economy, knowledge worker, low skilled workers, machine readable, mass incarceration, minimum wage unemployment, mortgage tax deduction, new economy, obamacare, occupational segregation, payday loans, pink-collar, plutocrats, Powell Memorandum, profit motive, public intellectual, race to the bottom, Ralph Nader, rent-seeking, rising living standards, Ronald Reagan, shared worldview, stock buybacks, TED Talk, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, trickle-down economics, union organizing, upwardly mobile, War on Poverty, white flight, women in the workforce, young professional

These jobs are the giant amoeba of the American labor market, swallowing and engulfing more and more of our workers in a huge blob of low-paying work. This reality is not reflected in TED talks, swanky ideas summits, or other intellectually elite venues where rumination about the knowledge economy, entrepreneurship, and creative destruction are de rigueur. But make no mistake, it is the economy of our present and our future. Table 1. The Largest Jobs in the Bargain-Basement Economy (2012) Source: U.S. Department of Labor, U.S. Bureau of Labor Statistics, Table 1.4, Occupations with the Most Job Growth, 2012 and Projected 2022, at http://www.bls.gov/emp/ep_table_104.htm and Occupational Outlook Handbook at http://www.bls.gov/ooh/.


pages: 280 words: 73,420

Crapshoot Investing: How Tech-Savvy Traders and Clueless Regulators Turned the Stock Market Into a Casino by Jim McTague

Alan Greenspan, algorithmic trading, automated trading system, Bear Stearns, Bernie Madoff, Bernie Sanders, Black Monday: stock market crash in 1987, Bretton Woods, buttonwood tree, buy and hold, computerized trading, corporate raider, creative destruction, credit crunch, Credit Default Swap, financial innovation, fixed income, Flash crash, High speed trading, housing crisis, index arbitrage, junk bonds, locking in a profit, Long Term Capital Management, machine readable, margin call, market bubble, market fragmentation, market fundamentalism, Myron Scholes, naked short selling, Nixon triggered the end of the Bretton Woods system, pattern recognition, Ponzi scheme, proprietary trading, quantitative trading / quantitative finance, Renaissance Technologies, Ronald Reagan, Sergey Aleynikov, short selling, Small Order Execution System, statistical arbitrage, technology bubble, transaction costs, uptick rule, Vanguard fund, Y2K

Progress always posed a threat to some corner of the economy. During the nineteenth century in Great Britain, textile artisans known as the Luddites attempted to protect their manual, home-based spinning industry by burning factories that used mechanized looms to produce bolts of cloth in greater volume and at a much lower cost. The same dynamic of creative destruction was at work on Wall Street, where computers proved they could trade faster and smarter than humans. Most of the high-frequency traders hoped the controversy would blow over so they could concentrate exclusively on making money. And there was considerable money to be made. One high-frequency trader revealed that his proprietary trading firm made an annual return of 300% merely buying and selling stocks in short time frames over the course of each day.


pages: 325 words: 73,035

Who's Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life by Richard Florida

Abraham Maslow, active measures, assortative mating, back-to-the-city movement, barriers to entry, big-box store, blue-collar work, borderless world, BRICs, business climate, Celebration, Florida, correlation coefficient, creative destruction, dark matter, David Brooks, David Ricardo: comparative advantage, deindustrialization, demographic transition, edge city, Edward Glaeser, epigenetics, extreme commuting, financial engineering, gentrification, Geoffrey West, Santa Fe Institute, happiness index / gross national happiness, high net worth, income inequality, industrial cluster, invention of the telegraph, Jane Jacobs, job satisfaction, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, megacity, new economy, New Urbanism, Peter Calthorpe, place-making, post-work, power law, Richard Florida, risk tolerance, Robert Gordon, Robert Shiller, Seaside, Florida, Silicon Valley, Silicon Valley startup, superstar cities, The Death and Life of Great American Cities, the strength of weak ties, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tyler Cowen, urban planning, World Values Survey, young professional

., 1817). 4 Joseph Schumpeter, Theory of Economic Development, Harvard University Press, 1934 (1st ed., 1911); Schumpeter, Capitalism, Socialism, and Democracy, Harper, 1975 (1st ed., 1942). Thomas McCraw has written an illuminating biography of Schumpeter, Prophet of Innovation: Joseph Schumpeter and Creative Destruction, Belknap, 2007. 5 Bill Steigerwald, “City Views: Urban Studies Legend Jane Jacobs on Gentrification, the New Urbanism, and Her Legacy,” Reason, June 2001. 6 See the discussion of Jacobs’s ideas in David Ellerman, “Jane Jacobs on Development,” Oxford Development Studies, December 4, 2004, pp. 507-521. 7 Geoffrey West et al., “Growth, Innovation, Scaling, and the Pace of Life in Cities,” Proceedings of the National Academy of Sciences, April 24, 2007, pp. 7301-7306. 8 Robert Axtell and Richard Florida, “Emergent Cities: Micro-foundations of Zipf’s Law,” March 2006.


pages: 330 words: 77,729

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

Albert Einstein, banking crisis, behavioural economics, Berlin Wall, Bretton Woods, business climate, business cycle, creative destruction, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, foreign exchange controls, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, liberation theology, liquidity trap, low interest rates, means of production, Meghnad Desai, microcredit, minimum wage unemployment, money market fund, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, Tragedy of the Commons, unorthodox policies, Vilfredo Pareto, zero-sum game

It is hard to measure in an age of money market funds, short-term CDs, overnight loans, and Eurodollars. Notwithstanding theoretical support for a monetary rule, central bankers have largely focused on "inflation targeting," that is, price stabilization and interest rate manipulation, as a preferable method. The Shadow of Marx and the Creative Destruction of Socialism The Herculean efforts of Milton Friedman, Friedrich Hayek, and other libertarian economists were not the only reason neoclassical economics has made a stupendous comeback. The other reason is the collapse of Marxist-inspired Soviet communism and the socialist central planning model in the early 1990s.


pages: 249 words: 73,731

Car Guys vs. Bean Counters: The Battle for the Soul of American Business by Bob Lutz

An Inconvenient Truth, corporate governance, creative destruction, currency manipulation / currency intervention, flex fuel, Ford Model T, medical malpractice, Ponzi scheme, profit maximization, Ralph Nader, scientific management, shareholder value, Steve Jobs, Toyota Production System, transfer pricing, Unsafe at Any Speed, upwardly mobile, value engineering

He left with some trepidation: having read my first book, Guts, he had grave worries that this “opinionated swashbuckler” (a title long ago bestowed on me by the head of human resources at Ford) would dismantle or seriously modify the carefully crafted, predictable, reliable, and seemingly risk-free process that was turning out one terminally dull passenger car and crossover after another. Actually,Tom’s fears were well-founded, but I like to think of what I subsequently did as “creative destruction.” Soon, I became immersed in GM’s brands and their future products. I was scheduled for lengthy meetings with the brand teams led by very smart young men and women, all equipped with big brains and sterling academic credentials. Significantly, I was not allowed to look at the products until I had been subjected to seemingly endless presentations on the quintessential character of, say, Buick or Saturn.


pages: 249 words: 79,740

The Next Decade: Where We've Been . . . And Where We're Going by George Friedman

airport security, Ayatollah Khomeini, Bear Stearns, Berlin Wall, British Empire, business cycle, continuation of politics by other means, creative destruction, Deng Xiaoping, facts on the ground, Fall of the Berlin Wall, full employment, hydraulic fracturing, illegal immigration, It's morning again in America, low interest rates, military-industrial complex, Monroe Doctrine, Ronald Reagan, Savings and loan crisis, South China Sea, Suez crisis 1956

Whatever the regulatory regime might be, the United States needs to buy and sell, lend and borrow, be invested in and invest, with a global reach. One quarter of the world’s economy can’t flourish in isolation, nor can the consequences of interaction be confined to pure economics. The American economy is built on technological and organizational innovation, up to and including what the economist Joseph A. Schumpeter called “creative destruction”: the process by which the economy continually destroys and rebuilds itself, largely through the advance of disruptive technologies. When American economic culture touches other countries, those affected have the choice of adapting or being submerged. Computers, for example, along with the companies organized around them, have had profoundly disruptive consequences on cultural life throughout the world, from Bangalore to Ireland.


pages: 271 words: 77,448

Humans Are Underrated: What High Achievers Know That Brilliant Machines Never Will by Geoff Colvin

Ada Lovelace, autonomous vehicles, Baxter: Rethink Robotics, behavioural economics, Black Swan, call centre, capital asset pricing model, commoditize, computer age, corporate governance, creative destruction, deskilling, driverless car, en.wikipedia.org, flying shuttle, Freestyle chess, future of work, Google Glasses, Grace Hopper, Hans Moravec, industrial cluster, industrial robot, interchangeable parts, job automation, knowledge worker, low skilled workers, Marc Andreessen, meta-analysis, Narrative Science, new economy, rising living standards, self-driving car, sentiment analysis, Silicon Valley, Skype, social intelligence, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, theory of mind, Tim Cook: Apple, transaction costs, Tyler Cowen

“Technology over time will reduce demand for jobs. . . . Twenty years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.” But isn’t all this garment rending and teeth gnashing just the usual worry over the endless cycle of creative destruction, as new industries displace old ones? You can’t earn a subsistence income with the skills of making slide rules, and that’s not a problem because you can earn a better income doing something else. But the analogy isn’t valid. You can’t earn a living by making slide rules because nobody wants them anymore.


pages: 373 words: 80,248

Empire of Illusion: The End of Literacy and the Triumph of Spectacle by Chris Hedges

Albert Einstein, AOL-Time Warner, Ayatollah Khomeini, Bear Stearns, Cal Newport, clean water, collective bargaining, corporate governance, creative destruction, Credit Default Swap, Glass-Steagall Act, haute couture, Herbert Marcuse, Honoré de Balzac, Howard Zinn, illegal immigration, income inequality, Joseph Schumpeter, Naomi Klein, offshore financial centre, Plato's cave, power law, Ralph Nader, Ronald Reagan, scientific management, Seymour Hersh, single-payer health, social intelligence, statistical model, uranium enrichment

The government—the only institution citizens have that is big enough and powerful enough to protect their rights—is becoming weaker, more anemic, and increasingly unable to help the mass of Americans who are embarking on a period of deprivation and suffering unseen in this country since the 1930s. Creative destruction, Joseph Schumpeter understood, is the essential fact about unfettered capitalism. “You are going to see the biggest waste, fraud, and abuse in American history,” Ralph Nader told me when I asked about the bailouts. “Not only is it wrongly directed, not only does it deal with the perpetrators instead of the people who were victimized, but they don’t have a delivery system of any honesty and efficiency.


pages: 192

Kicking Awaythe Ladder by Ha-Joon Chang

Asian financial crisis, business cycle, central bank independence, classic study, clean water, colonial rule, Corn Laws, corporate governance, creative destruction, David Ricardo: comparative advantage, fear of failure, income inequality, income per capita, joint-stock company, joint-stock limited liability company, land bank, land reform, liberal world order, moral hazard, open economy, purchasing power parity, rent-seeking, scientific management, short selling, Simon Kuznets, tacit knowledge, The Wealth of Nations by Adam Smith, trade liberalization, Washington Consensus

., The Legacy of the Golden Age - The 1960s and Their Economic Consequences, London, Routledge. 1953, 'The Credit Mobilier and the Economic Development of Europe', Journal of Political Economy, vol. 61, no. 6. Cameron, R, 1993, A Concise Economic History of the World, 2nd ed., Oxford, Oxford University Press. Carr, R, 1980, Modern Spain, 1875-1980, Oxford, Oxford University Press. Carruthers, B, 2000, 'Institutionalising Creative Destruction: Predictable and Transparent Bankruptcy Law in the Wake of the East Asian Financial Crisis', a paper presented at the UNRISD (United Nations Research Institute for Social Development) conference, 'Neoliberalism and Institutional Reform in East Asia', 12-13 May 2000, Bangkok, Thailand. Carruthers, B and Halliday, T , 1998, Rescuing Business - The Making of Corporate Bankruptcy Law in England and the United States, Oxford, Oxford University Press.


pages: 253 words: 79,214

The Money Machine: How the City Works by Philip Coggan

activist fund / activist shareholder / activist investor, algorithmic trading, asset-backed security, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, bond market vigilante , bonus culture, Bretton Woods, call centre, capital controls, carried interest, central bank independence, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, disintermediation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, endowment effect, financial deregulation, financial independence, floating exchange rates, foreign exchange controls, Glass-Steagall Act, guns versus butter model, Hyman Minsky, index fund, intangible asset, interest rate swap, inverted yield curve, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", joint-stock company, junk bonds, labour market flexibility, large denomination, London Interbank Offered Rate, Long Term Capital Management, low interest rates, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, negative equity, Nick Leeson, Northern Rock, pattern recognition, proprietary trading, purchasing power parity, quantitative easing, reserve currency, Right to Buy, Ronald Reagan, shareholder value, South Sea Bubble, sovereign wealth fund, technology bubble, time value of money, too big to fail, tulip mania, Washington Consensus, yield curve, zero-coupon bond

It is, in any case, inevitable that the private sector will be able to pay more than the regulators and will attract people who will find ways around the rules. People like to speculate; even Sir Isaac Newton lost money in the South Sea Bubble. Without speculation, Britain would be a far less vibrant society. Fewer new businesses would be started and new products invented. Busts are a price worth paying, the creative destruction that allows an economy to start anew. But the 2007–9 bust is a severe test of that thesis. Bibliography Margaret Allen, A Guide to Insurance (Pan, 1982) Al Alletzhauser, The House of Nomura (Bloomsbury, 1990) A. D. Bain, The Control of the Money Supply, 3rd edn (Penguin, 1980) Lloyd Banksen and Michael Lee, Euronotes (Euromoney, 1985) George G.


pages: 273 words: 76,786

Explore Everything by Bradley Garrett

airport security, Burning Man, call centre, creative destruction, Crossrail, deindustrialization, double helix, Dr. Strangelove, dumpster diving, failed state, Gabriella Coleman, gentrification, Google Earth, Hacker Ethic, Jane Jacobs, Julian Assange, late capitalism, megacity, New Urbanism, Occupy movement, off-the-grid, place-making, shareholder value, Stephen Fry, the built environment, The Death and Life of Great American Cities, urban planning, white flight, WikiLeaks

HACKING THE NEW WORLD 1 Bill McGraw, ‘Life in the Ruins of Detroit’, History Workshop Journal 63: 1 (2007). 2 Yves Marchand and Romain Meffre, The Ruins of Detroit (London: Steidl, 2010). 3 Nate Millington, ‘Post-Industrial Imaginaries: Nature, Representation and Ruin in Detroit, Michigan’, International Journal of Urban and Regional Research 37: 1 (January 2013); Yablonsky, ‘Artist in Residence’, New York Times, 2010. 4 John Patrick Leary, ‘Detroitism’, Guernica, 15 January 2011. 5 Mary Louise Pratt, Imperial Eyes: Travel Writing and Transculturation (London: Routledge, 1992). 6 Yusoff, ‘Visualizing Antarctica’, p. 225. 7 Imre Szeman and Maria Whiteman, ‘The Big Picture: On the Politics of Contemporary Photography’, Third Text 23: 5 (2009), quoted in Crang, ‘Tristes Entropique’. 8 McCormack ‘Thinking-Spaces’, p. 3. 9 Leary, ‘Detroitism’. 10 Kevin Hetherington, ‘Spatial Textures: Place, Touch, and Praesentia’, Environment and Planning A 35: 11 (1937). 11 Jacques Rancière, ‘Notes on the Photographic Image’, Radical Philosophy 156 (July/August 2009), p. 8. 12 Ninjalicious, ‘Chicago Tunnel Company’, Infiltration 12. 13 High and Lewis, Corporate Wasteland. 14 McRae, ‘Play City Life’, p. 78. 15 Merleau-Ponty, Phenomenology of Perception. 16 Brick, Subterranean Twin Cities, p. 7. 17 ‘Action Squad’, at actionsquad.org. 18 Adam Burke, ‘Sucked Into the Tunnels Beneath Las Vegas’, National Public Radio, 4 December 2008. 19 Matthew O’Brien, Beneath the Neon: Life and Death in the Tunnels of Las Vegas (Las Vegas, NV: Huntington Press, 2007). 20 Matthew O’Brien, ‘Shine a Light’, at beneaththeneon.com/shine-a-light.asp. 21 Jacki Lyden, ‘Into the Tunnels: Exploring the Underside of NYC’, National Public Radio, 2 January 2011. See also Jennifer Toth, The Mole People: Life in the Tunnels beneath New York City (Chicago, IL: Chicago Review Press, 1993). 22 Lackman, ‘New French Hacker-Artist Underground’. 23 David Harvey, ‘Neoliberalism as Creative Destruction’, Annals of the American Academy of Political and Social Science 610 (2007), p. 1. 24 Andy C. Pratt, ‘Creative Cities: The Cultural Industries and the Creative Class’, Geografiska Annaler: Series B, Human Geography 90: 2 (June 2008). 25 Tim Edensor, Industrial Ruins: Space, Aesthetics, and Materiality (Oxford: Berg, 2005), p. 4. 26 Jeffrey S.


pages: 491 words: 77,650

Humans as a Service: The Promise and Perils of Work in the Gig Economy by Jeremias Prassl

3D printing, Affordable Care Act / Obamacare, Airbnb, algorithmic management, Amazon Mechanical Turk, Andrei Shleifer, asset light, autonomous vehicles, barriers to entry, call centre, cashless society, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, death from overwork, Didi Chuxing, disruptive innovation, Donald Trump, driverless car, Erik Brynjolfsson, full employment, future of work, George Akerlof, gig economy, global supply chain, Greyball, hiring and firing, income inequality, independent contractor, information asymmetry, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Roose, Kickstarter, low skilled workers, Lyft, machine readable, Mahatma Gandhi, Mark Zuckerberg, market friction, means of production, moral hazard, Network effects, new economy, obamacare, pattern recognition, platform as a service, Productivity paradox, race to the bottom, regulatory arbitrage, remote working, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Rosa Parks, scientific management, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Simon Singh, software as a service, Steve Jobs, TaskRabbit, TechCrunch disrupt, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, transaction costs, transportation-network company, Travis Kalanick, two tier labour market, two-sided market, Uber and Lyft, Uber for X, uber lyft, union organizing, warehouse automation, work culture , working-age population

If anything, the insolvency of platforms that cannot sustain their activities once they have to bear the true cost of their services will benefit others in the long run, as resources are reallocated to more efficient businesses. The demise of rogue operators opens up space and consumer demand for new start-ups— Schumpeter’s creative destruction at work. Following the steps outlined in the previous chapter to bring gig-econ- omy work back into the scope of employment law will turn out to benefit everyone: workers, consumers, taxpayers—and even markets at large. Employ- ment classification cuts off rogue operators’ regulatory arbitrage opportun- ities, and will force platforms to enter into genuine competition on matching and product quality.


Genentech The Beginnings of Biotech (Synthesis) -University Of Chicago Press (2011) by Sally Smith Hughes

Albert Einstein, Asilomar, Asilomar Conference on Recombinant DNA, barriers to entry, creative destruction, full employment, industrial research laboratory, invention of the wheel, Joseph Schumpeter, mass immigration, Menlo Park, power law, prudent man rule, Recombinant DNA, risk tolerance, Ronald Reagan, Sand Hill Road, Silicon Valley

Then came an economic downturn with only twenty-two formed in 1983. Bud 1993, 193. 121 Yoxen 1983, 49. 122 Shapin defines the scientific entrepreneur “as one who is both a qualified scientist and, like all commercial entrepreneurs, a risk taker.” Shapin, 2008, 210. 123 For the notion applied to biotechnology of “creative destruction” fueling innovation and progress as popularized by economist Joseph Schumpeter, see McKelvey 1996, 4–6; and Orsenigo 1989, 4–5. EPILOGUE 1 2 3 4 Rathmann oral history, 2003, 16, 36. Penhoet oral history, 1998, 110. Quoted in U.S. Congress 1988, 128. Quoted in Susan Brenner, “Genentech: Life under a Microscope,” Inc., May 1981, 62–68. 5 Kenney 1986, 4. 6 Gurin and Pfund 1980, 542.


pages: 434 words: 77,974

Mastering Blockchain: Unlocking the Power of Cryptocurrencies and Smart Contracts by Lorne Lantz, Daniel Cawrey

air gap, altcoin, Amazon Web Services, barriers to entry, bitcoin, blockchain, business logic, business process, call centre, capital controls, cloud computing, corporate governance, creative destruction, cross-border payments, cryptocurrency, currency peg, disinformation, disintermediation, distributed ledger, Dogecoin, Ethereum, ethereum blockchain, fault tolerance, fiat currency, Firefox, global reserve currency, information security, initial coin offering, Internet of things, Kubernetes, litecoin, low interest rates, Lyft, machine readable, margin call, MITM: man-in-the-middle, multilevel marketing, Network effects, offshore financial centre, OSI model, packet switching, peer-to-peer, Ponzi scheme, prediction markets, QR code, ransomware, regulatory arbitrage, rent-seeking, reserve currency, Robinhood: mobile stock trading app, Ross Ulbricht, Satoshi Nakamoto, Silicon Valley, Skype, smart contracts, software as a service, Steve Wozniak, tulip mania, uber lyft, unbanked and underbanked, underbanked, Vitalik Buterin, web application, WebSocket, WikiLeaks

The following are some of the companies involved, and their roles: Payments: PayU Technology: Facebook, FarFetch, Lyft, Spotify, Uber Telecom: Iliad Blockchain: Anchorage, BisonTrails, Coinbase, Xapo Venture capital: Andreessen Horowitz, Breakthrough Initiatives, Union Square Ventures, Ribbit Capital, Thrive Capital Nonprofits: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking Borrowing from Existing Blockchains The Libra Association intends to create an entirely new payments system on the internet by using a proof-of-stake consensus Byzantine fault-tolerant algorithm developed by VMware, known as HotStuff. The association’s members will be the validators of the system.


pages: 823 words: 206,070

The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Big bang: deregulation of the City of London, bilateral investment treaty, book value, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, Carmen Reinhart, central bank independence, classic study, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, democratizing finance, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, military-industrial complex, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, proprietary trading, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, scientific management, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, stock buybacks, structural adjustment programs, subprime mortgage crisis, Tax Reform Act of 1986, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, vertical integration, very high income, Washington Consensus, We are all Keynesians now, Works Progress Administration, zero-coupon bond, zero-sum game

We need systems that can handle failure because until the system is safe for failure, we will not be able to count on success.”50 Those at the pinnacle of the American state clearly shared Paul Volcker’s view that both the volatility embedded in the globalization of finance and the US global role in containing the crises this produced were “a price we pay for the enormous advantages, the indispensable advantages, of open and competitive financial markets. It’s part and parcel of the process of ‘creative destruction.’”51 Even as they bore responsibility for managing crises, they were determined that such changes as were introduced to the regulatory “architecture” of international financial markets should not get in the way of the “indispensable advantages” the markets offered for making more and more of the world capitalist.

All this helps to explain why, in spite of the weaknesses of particular companies, and even of entire sectors that had previously been especially important in the US economy, the proponents of free trade and financial liberalization had the confidence to stress that the positive effects of “creative destruction” would ultimately outweigh the negative. Four specific transformations were especially important in this restructuring of the economy and social relations in the US, each with particular implications for the making of global capitalism. The first of these was the relationship between industry and finance.


pages: 275 words: 84,980

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives) by David Birch

"World Economic Forum" Davos, agricultural Revolution, Airbnb, Alan Greenspan, bank run, banks create money, bitcoin, blockchain, Bretton Woods, British Empire, Broken windows theory, Burning Man, business cycle, capital controls, cashless society, Clayton Christensen, clockwork universe, creative destruction, credit crunch, cross-border payments, cross-subsidies, crowdsourcing, cryptocurrency, David Graeber, dematerialisation, Diane Coyle, disruptive innovation, distributed ledger, Dogecoin, double entry bookkeeping, Ethereum, ethereum blockchain, facts on the ground, fake news, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, index card, informal economy, Internet of things, invention of the printing press, invention of the telegraph, invention of the telephone, invisible hand, Irish bank strikes, Isaac Newton, Jane Jacobs, Kenneth Rogoff, knowledge economy, Kuwabatake Sanjuro: assassination market, land bank, large denomination, low interest rates, M-Pesa, market clearing, market fundamentalism, Marshall McLuhan, Martin Wolf, mobile money, Money creation, money: store of value / unit of account / medium of exchange, new economy, Northern Rock, Pingit, prediction markets, price stability, QR code, quantitative easing, railway mania, Ralph Waldo Emerson, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social graph, special drawing rights, Suez canal 1869, technoutopianism, The future is already here, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, wage slave, Washington Consensus, wikimedia commons

The management consultants McKinsey say that payments accounted for approximately half of US payment industry revenues in 2011, so if payments are to be provided by non-banks in the future, banks are going to have to work hard to develop alternative revenue sources. One of these sources might well be services relating to identity management and authentication (but that’s a topic for another book!). New technology, new regulation and new business models hint at the potential for a wave of creative destruction – different entities providing different functions all previously put under the heading of banks and money – as the inexorable unbundling of financial services continues. This is not a bad thing. Companies The issue of private company money was intriguingly explored by the famous lateral thinker Edward de Bono, who set out his thoughts in a pamphlet for the London-based think tank the Centre for the Study of Financial Innovation back in the early 1990s.


pages: 322 words: 84,752

Pax Technica: How the Internet of Things May Set Us Free or Lock Us Up by Philip N. Howard

Aaron Swartz, Affordable Care Act / Obamacare, Berlin Wall, bitcoin, blood diamond, Bretton Woods, Brian Krebs, British Empire, butter production in bangladesh, call centre, Chelsea Manning, citizen journalism, Citizen Lab, clean water, cloud computing, corporate social responsibility, creative destruction, crowdsourcing, digital map, Edward Snowden, en.wikipedia.org, Evgeny Morozov, failed state, Fall of the Berlin Wall, feminist movement, Filter Bubble, Firefox, Francis Fukuyama: the end of history, Google Earth, Hacker News, Howard Rheingold, income inequality, informal economy, information security, Internet of things, John Perry Barlow, Julian Assange, Kibera, Kickstarter, land reform, M-Pesa, Marshall McLuhan, megacity, Mikhail Gorbachev, mobile money, Mohammed Bouazizi, national security letter, Nelson Mandela, Network effects, obamacare, Occupy movement, off-the-grid, packet switching, pension reform, prediction markets, sentiment analysis, Silicon Valley, Skype, spectrum auction, statistical model, Stuxnet, Tactical Technology Collective, technological determinism, trade route, Twitter Arab Spring, undersea cable, uranium enrichment, WikiLeaks, zero day

prid=20131001_01. 28. Luke Harding, “WikiLeaks Cables: Russian Government ‘Using Mafia for Its Dirty Work,’” Guardian, December 1, 2010, accessed September 30, 2014, http://www.theguardian.com/world/2010/dec/01/wikileaks-cable-spain-russian-mafia. 29. Homi Kharas and Andrew Rogerson, Horizon 2025: Creative Destruction in the Aid Industry (London: Overseas Development Institute, July 2012), accessed September 30, 2014, http://www.aidmonitor.org.np/reports/horizon%202012.pdf. 30. “Where Life Is Cheap and Talk Is Loose,” Economist, March 17, 2011, accessed September 30, 2014, http://www.economist.com/node/18396240. 31.


pages: 394 words: 85,734

The Global Minotaur by Yanis Varoufakis, Paul Mason

active measures, Alan Greenspan, AOL-Time Warner, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, business climate, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, correlation coefficient, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, debt deflation, declining real wages, deindustrialization, Easter island, endogenous growth, eurozone crisis, financial engineering, financial innovation, first-past-the-post, full employment, Glass-Steagall Act, Great Leap Forward, guns versus butter model, Hyman Minsky, industrial robot, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, light touch regulation, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market fundamentalism, Mexican peso crisis / tequila crisis, military-industrial complex, Money creation, money market fund, mortgage debt, Myron Scholes, negative equity, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, paper trading, Paul Samuelson, planetary scale, post-oil, price stability, quantitative easing, reserve currency, rising living standards, Ronald Reagan, special economic zone, Steve Jobs, structural adjustment programs, Suez crisis 1956, systematic trading, too big to fail, trickle-down economics, urban renewal, War on Poverty, WikiLeaks, Yom Kippur War

Quite impressively, it reacted creatively to adversity, turning undesirable developments into a stream of welcome unintended consequences. We have already seen how the Korean War was exploited to shore up the Global Plan’s Far Eastern flank. So, when the United States dragged itself into the Vietnam War, a similar wave of ‘creative destruction’ was on the cards. Though it is a gross understatement to suggest that its prosecution did not go according to the original plan, the Vietnam War’s silver lining is visible to anyone who has ever visited South East Asia. Korea, Thailand, Malaysia and Singapore grew fast and in a manner that confounded the pessimism of those who predicted that underdeveloped nations would find it hard to embark upon the road of capital accumulation necessary to drag them out of abject poverty.


pages: 278 words: 82,069

Meltdown: How Greed and Corruption Shattered Our Financial System and How We Can Recover by Katrina Vanden Heuvel, William Greider

Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Bretton Woods, business cycle, buy and hold, capital controls, carried interest, central bank independence, centre right, collateralized debt obligation, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, declining real wages, deindustrialization, Exxon Valdez, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, full employment, Glass-Steagall Act, green new deal, guns versus butter model, housing crisis, Howard Zinn, Hyman Minsky, income inequality, information asymmetry, It's morning again in America, John Meriwether, junk bonds, kremlinology, Long Term Capital Management, low interest rates, margin call, market bubble, market fundamentalism, McMansion, Michael Milken, Minsky moment, money market fund, mortgage debt, Naomi Klein, new economy, Nixon triggered the end of the Bretton Woods system, offshore financial centre, payday loans, pets.com, plutocrats, Ponzi scheme, price stability, pushing on a string, race to the bottom, Ralph Nader, rent control, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, sovereign wealth fund, structural adjustment programs, subprime mortgage crisis, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, wage slave, Washington Consensus, women in the workforce, working poor, Y2K

They were horrified by the greed and inhumanity of industrial capitalism but also wished to keep their distance from Socialists and the struggling labor movement. Rubin is a “nice guy”—even adversaries say so—and I suspect he feels similar tensions. He sincerely would like to work things out—find some kind of reasonable balance—but without interrupting the creative destruction under way in the global system. The big difference separating him from the Progressives is that Rubin and his investment-banking colleagues are men of capital. At Goldman Sachs, Rubin was doing major deals in Mexico before he came to Washington to push NAFTA and balanced budgets. At Citigroup he travels to Beijing and Shanghai, promoting client interests.


pages: 282 words: 79,176

Pro Git by Scott Chacon

Chris Wanstrath, continuous integration, creative destruction, Debian, distributed revision control, GnuPG, pull request, revision control, systems thinking

Furthermore, many of these systems deal pretty well with having several remote repositories they can work with, so you can collaborate with different groups of people in different ways simultaneously within the same project. This allows you to set up several types of workflows that aren’t possible in centralized systems, such as hierarchical models. A Short History of Git As with many great things in life, Git began with a bit of creative destruction and fiery controversy. The Linux kernel is an open source software project of fairly large scope. For most of the lifetime of the Linux kernel maintenance (1991–2002), changes to the software were passed around as patches and archived files. In 2002, the Linux kernel project began using a proprietary DVCS system called BitKeeper.


pages: 258 words: 83,303

Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization by Jeff Rubin

addicted to oil, air freight, banking crisis, Bear Stearns, big-box store, BRICs, business cycle, carbon footprint, carbon tax, collateralized debt obligation, collective bargaining, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, energy security, food miles, Ford Model T, hydrogen economy, illegal immigration, immigration reform, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, Jevons paradox, Just-in-time delivery, low interest rates, market clearing, megacity, megaproject, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit maximization, reserve currency, South Sea Bubble, subprime mortgage crisis, the market place, The Wealth of Nations by Adam Smith, trade liberalization, work culture , zero-sum game

From overturning the previous administration’s blanket approvals for offshore drilling, to promising to force coal utilities to pay for their emissions, to allowing individual states like California to enforce their own automotive efficiency standards, Obama has signalled a sea change is at hand. Bankruptcy and collapse in Detroit or in similar industries in other sectors and other countries doesn’t mean that the factories will disappear or that the engineers or workers will suddenly forget how to do what they were trained to do. A little “creative destruction” might be just what is called for. Although we will be increasingly energy-constrained in the future, it is not as though we are going to stop building things—even cars—and there will be people around who know how to go about it. If the players in today’s market can’t figure out where to go from here, the next generation of innovators certainly will.


pages: 329 words: 85,471

The Locavore's Dilemma by Pierre Desrochers, Hiroko Shimizu

air freight, back-to-the-land, biodiversity loss, Biosphere 2, British Empire, Columbian Exchange, Community Supported Agriculture, creative destruction, edge city, Edward Glaeser, food desert, food miles, Food sovereignty, global supply chain, Great Leap Forward, Gregor Mendel, intermodal, invention of agriculture, inventory management, invisible hand, Jane Jacobs, land tenure, megacity, moral hazard, mortgage debt, oil shale / tar sands, oil shock, peak oil, planetary scale, precautionary principle, profit motive, refrigerator car, Steven Pinker, tacit knowledge, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, Tragedy of the Commons, Tyler Cowen, Upton Sinclair, urban sprawl

True, many of these are supplied by small businesses that cater to narrower niches, but the diversity and affordability of products offered by large supermarket chains and “Big Box” retail stores has become truly astounding, even by recent historical standards. 30 For a more detailed examination of this claim that isn’t limited to food offerings, see Tyler Cowen. 2002. Creative Destruction: How Globalization Is Changing the World’s Cultures. Princeton University Press. 31 For a more detailed discussion of the issue, see Susan Fleiss Lowenstein. 1965. “Urban Images of Roman Authors.” Comparative Studies in Society and History 8 (1): 110–123. 32 Virgil. 37 BCE. The Eclogues http://classics.mit.edu/Virgil/eclogue.html. 33 Horace.


pages: 345 words: 84,847

The Runaway Species: How Human Creativity Remakes the World by David Eagleman, Anthony Brandt

active measures, Ada Lovelace, agricultural Revolution, Albert Einstein, Andrew Wiles, Apollo 13, Burning Man, cloud computing, computer age, creative destruction, crowdsourcing, Dava Sobel, deep learning, delayed gratification, Donald Trump, Douglas Hofstadter, en.wikipedia.org, Frank Gehry, Gene Kranz, Google Glasses, Great Leap Forward, haute couture, informal economy, interchangeable parts, Isaac Newton, James Dyson, John Harrison: Longitude, John Markoff, Large Hadron Collider, lone genius, longitudinal study, Menlo Park, microbiome, Netflix Prize, new economy, New Journalism, pets.com, pneumatic tube, QWERTY keyboard, Ray Kurzweil, reversible computing, Richard Feynman, risk tolerance, Scaled Composites, self-driving car, Simon Singh, skeuomorphism, Solyndra, SpaceShipOne, stem cell, Stephen Hawking, Steve Jobs, Stewart Brand, synthetic biology, TED Talk, the scientific method, Watson beat the top human players on Jeopardy!, wikimedia commons, X Prize

As the longest track on the album, the track sent the message that the band that had broken the traditions of 1950s pop music had also seen fit to break their own traditions. As one music critic put it, “For eight minutes of an album officially titled The Beatles, there were no Beatles.”8 The creative destruction of one’s own structures happens not only in art, but in science as well. As one of the world’s preeminent evolutionary biologists, E.O. Wilson had spent decades investigating a puzzle of nature: altruism. If an animal’s defining goal is to pass its genes on to the next generation, what reason could it have to risk its life for another?


pages: 334 words: 82,041

How Did We Get Into This Mess?: Politics, Equality, Nature by George Monbiot

Affordable Care Act / Obamacare, Alfred Russel Wallace, Anthropocene, bank run, bilateral investment treaty, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, creative destruction, credit crunch, David Attenborough, dematerialisation, demographic transition, drone strike, en.wikipedia.org, first-past-the-post, full employment, Gini coefficient, hedonic treadmill, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, invisible hand, land bank, land reform, land value tax, Leo Hollis, market fundamentalism, meta-analysis, Mont Pelerin Society, moral panic, Naomi Klein, Northern Rock, obamacare, oil shale / tar sands, old-boy network, peak oil, place-making, planned obsolescence, plutocrats, profit motive, rent-seeking, rewilding, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, urban sprawl, We are all Keynesians now, wealth creators, World Values Survey

People who don’t pay enough income tax shouldn’t be allowed to vote.18 I see these people as rightwing vanguardists, mobilising first to break and then to capture a political system that is meant to belong to all of us. Like Marxist insurrectionaries, they often talk about smashing things, about ‘creative destruction’, about the breaking of chains and the slipping of leashes.19 But in this case they appear to be trying to free the rich from the constraints of democracy. And at the moment they are winning. 1 October 2012 38 How Did We Get Into This Mess? For the first time, the United Kingdom’s consumer debt now exceeds our gross national product: a new report shows that we owe £1.35 trillion.1 Inspectors in the United States have discovered that 77,000 road bridges are in the same perilous state as the one which collapsed into the Mississippi in August 2007.2 Two years after Hurricane Katrina struck in 2005, 120,000 people from New Orleans were still living in trailer homes and temporary lodgings.3 As runaway climate change approaches, governments refuse to take the necessary action.


pages: 302 words: 84,881

The Digital Party: Political Organisation and Online Democracy by Paolo Gerbaudo

Airbnb, barriers to entry, basic income, Bernie Sanders, bitcoin, Californian Ideology, call centre, Cambridge Analytica, centre right, creative destruction, crowdsourcing, data science, digital capitalism, digital divide, digital rights, disintermediation, disruptive innovation, Donald Trump, Dunbar number, Edward Snowden, end-to-end encryption, Evgeny Morozov, feminist movement, gig economy, industrial robot, Jaron Lanier, Jeff Bezos, Jeremy Corbyn, jimmy wales, Joseph Schumpeter, Mark Zuckerberg, Network effects, Occupy movement, offshore financial centre, oil shock, post-industrial society, precariat, Ralph Waldo Emerson, Richard Florida, Richard Stallman, Ruby on Rails, self-driving car, Silicon Valley, Skype, Slavoj Žižek, smart cities, Snapchat, social web, software studies, Stewart Brand, technological solutionism, technoutopianism, the long tail, Thomas L Friedman, universal basic income, vertical integration, Vilfredo Pareto, WikiLeaks

Richard Florida, for example, highlights that during the Long Depression that started in 1873 there was a peak in patents, and the same may be said about the stagflation of the 1970s that led to the development of industrial robots.98 Furthermore, we know from Joseph Schumpeter that capitalism is characterised by a tendency towards creative destruction,99 in which incumbents in various industries are constantly threatened by the rise of new products and services, and we most clearly see this phenomenon in the so-called ‘disruption’100 posed by new companies, such as Airbnb, Amazon, Uber and Deliveroo, to existing companies. The rise of digital behemoths such as the FAANGs – Facebook, Apple, Amazon, Netflix and Google – has created enormous economic unfairness.


pages: 267 words: 82,580

The Dark Net by Jamie Bartlett

3D printing, 4chan, bitcoin, blockchain, brain emulation, carbon footprint, Cody Wilson, creative destruction, crowdsourcing, cryptocurrency, degrowth, deindustrialization, Edward Snowden, end-to-end encryption, eternal september, Filter Bubble, Francis Fukuyama: the end of history, Free Software Foundation, global village, Google Chrome, Great Leap Forward, Howard Rheingold, Internet of things, invention of writing, Johann Wolfgang von Goethe, John Gilmore, John Perry Barlow, Julian Assange, Kuwabatake Sanjuro: assassination market, Lewis Mumford, life extension, litecoin, longitudinal study, Mark Zuckerberg, Marshall McLuhan, Mondo 2000, moral hazard, moral panic, Nick Bostrom, Occupy movement, pre–internet, printed gun, Ray Kurzweil, rewilding, Ross Ulbricht, Satoshi Nakamoto, Skype, slashdot, synthetic biology, technological singularity, technoutopianism, Ted Kaczynski, TED Talk, The Coming Technological Singularity, Turing test, Vernor Vinge, WikiLeaks, Zimmermann PGP

There are around thirty or so flats, each containing four small rooms, and over 10,000 square metres of former industrial floor space, including a communal dining area and an old abandoned church, which served the spiritual needs of the factory workers who used to live here. The place looks to be in a near-permanent state of creative destruction, cluttered with motorbike engines, half-built bicycles, a row of plasterboard, empty beer bottles, a tractor tyre on its side, a pile of bricks, two 3D printers. I eventually find the hackers’ space towards the back of the complex. It is reached through a large, roofless hall, and up a couple of flights of concrete stairs.


pages: 320 words: 86,372

Mythology of Work: How Capitalism Persists Despite Itself by Peter Fleming

"Friedman doctrine" OR "shareholder theory", 1960s counterculture, anti-work, antiwork, call centre, capitalist realism, carbon tax, clockwatching, commoditize, corporate social responsibility, creative destruction, David Graeber, death from overwork, Etonian, future of work, G4S, Goldman Sachs: Vampire Squid, illegal immigration, Kitchen Debate, late capitalism, Mark Zuckerberg, market bubble, market fundamentalism, means of production, neoliberal agenda, Parkinson's law, post-industrial society, post-work, profit maximization, profit motive, quantitative easing, Results Only Work Environment, scientific management, shareholder value, social intelligence, stock buybacks, The Chicago School, transaction costs, wealth creators, working poor

‘Being Yourself in the Electronic Sweatshop: New Forms of Normative Control’. Human Relations, 64(2): 177–200. Foster, J.B. and McChesney, R. (2012). The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China. New York: Monthly Review Press. Foster, R. and Kaplan, S. (2001). Creative Destruction: Why Companies That Are Built to Last Underperform the Market – And How to Successfully Transform Them. New York: Currency. Foucault, M. (1977). Discipline and Punish: The Birth of the Prison. London: Penguin. Foucault, M. (2001). Fearless Speech. Los Angeles: Semiotext(e). Foucault, M. (2008).


pages: 285 words: 86,174

Twilight of the Elites: America After Meritocracy by Chris Hayes

"Hurricane Katrina" Superdome, "World Economic Forum" Davos, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, barriers to entry, Bear Stearns, Berlin Wall, Bernie Madoff, carried interest, circulation of elites, Climategate, Climatic Research Unit, collapse of Lehman Brothers, collective bargaining, creative destruction, Credit Default Swap, dark matter, David Brooks, David Graeber, deindustrialization, Fall of the Berlin Wall, financial deregulation, fixed income, full employment, George Akerlof, Gunnar Myrdal, hiring and firing, income inequality, Jane Jacobs, jimmy wales, Julian Assange, Kenneth Arrow, Mark Zuckerberg, mass affluent, mass incarceration, means of production, meritocracy, meta-analysis, military-industrial complex, money market fund, moral hazard, Naomi Klein, Nate Silver, peak oil, plutocrats, Ponzi scheme, post-truth, radical decentralization, Ralph Waldo Emerson, rolodex, Savings and loan crisis, The Spirit Level, too big to fail, University of East Anglia, Vilfredo Pareto, We are the 99%, WikiLeaks, women in the workforce

Dwarfs Other Nations’,” New York Times, April 23, 2008. 12 “Skilling thought he was on his way to building a perfect meritocracy”: Kurt Eichenwald, Conspiracy of Fools: A True Story (New York: Broadway Books, 2005), p. 49. 13 “We hire very smart people and we pay them more than they think they are worth”: Executive quoted in Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them (New York: Doubleday, 2001), p. 150. 14 “rank and yank”: For a defense of the ranking process, see Richard C. Grote, Forced Ranking: Making Performance Management Work (Cambridge: Harvard Business Press, 2005), pp. ix–xiii. 15 McKinsey Quarterly singled out the policy in 1997 for playing a large role in Enron’s success: Timothy Bleakley, David S.


pages: 270 words: 79,992

The End of Big: How the Internet Makes David the New Goliath by Nicco Mele

4chan, A Declaration of the Independence of Cyberspace, Airbnb, Amazon Web Services, Andy Carvin, Any sufficiently advanced technology is indistinguishable from magic, Apple's 1984 Super Bowl advert, barriers to entry, Berlin Wall, big-box store, bitcoin, bread and circuses, business climate, call centre, Cass Sunstein, centralized clearinghouse, Chelsea Manning, citizen journalism, cloud computing, collaborative consumption, collaborative editing, commoditize, Computer Lib, creative destruction, crony capitalism, cross-subsidies, crowdsourcing, David Brooks, death of newspapers, disruptive innovation, Donald Trump, Douglas Engelbart, Douglas Engelbart, en.wikipedia.org, Evgeny Morozov, Exxon Valdez, Fall of the Berlin Wall, Filter Bubble, Firefox, global supply chain, Google Chrome, Gordon Gekko, Hacker Ethic, Ian Bogost, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, John Perry Barlow, Julian Assange, Kevin Kelly, Khan Academy, Kickstarter, Lean Startup, lolcat, machine readable, Mark Zuckerberg, military-industrial complex, minimum viable product, Mitch Kapor, Mohammed Bouazizi, Mother of all demos, Narrative Science, new economy, Occupy movement, off-the-grid, old-boy network, One Laptop per Child (OLPC), peer-to-peer, period drama, Peter Thiel, pirate software, public intellectual, publication bias, Robert Metcalfe, Ronald Reagan, Ronald Reagan: Tear down this wall, satellite internet, Seymour Hersh, sharing economy, Silicon Valley, Skype, social web, Steve Jobs, Steve Wozniak, Stewart Brand, Stuxnet, Ted Nelson, Ted Sorensen, Telecommunications Act of 1996, telemarketer, the Cathedral and the Bazaar, the long tail, The Wisdom of Crowds, transaction costs, uranium enrichment, Whole Earth Catalog, WikiLeaks, Zipcar

Many traditional, big institutions are deeply flawed and even corrupt—they deserve to die. Few among us are not frustrated with the culture of influence and money in the two big political parties or disgusted by the behavior of at least one big corporation. Echoing the philosopher Oswald Spengler, isn’t creative destruction, well, creative? Our institutions have in fact failed us. Building a sustainable economy, for instance, that allows us to avert the catastrophic consequences of global warming seems hopeless in the face of big government, big business, and a dozen other big institutions. Ultimately, technological advances provide unprecedented opportunities for us to reshape our future for the better.


pages: 306 words: 85,836

When to Rob a Bank: ...And 131 More Warped Suggestions and Well-Intended Rants by Steven D. Levitt, Stephen J. Dubner

Affordable Care Act / Obamacare, Airbus A320, airport security, augmented reality, barriers to entry, Bear Stearns, behavioural economics, Bernie Madoff, Black Swan, Broken windows theory, Captain Sullenberger Hudson, carbon tax, creative destruction, Daniel Kahneman / Amos Tversky, deliberate practice, feminist movement, food miles, George Akerlof, global pandemic, information asymmetry, invisible hand, loss aversion, mental accounting, Netflix Prize, obamacare, oil shale / tar sands, Pareto efficiency, peak oil, pre–internet, price anchoring, price discrimination, principal–agent problem, profit maximization, Richard Thaler, Sam Peltzman, security theater, sugar pill, Ted Kaczynski, the built environment, The Chicago School, the High Line, Thorstein Veblen, transaction costs, Tyler Cowen, US Airways Flight 1549

Upon entering this fray, a cynic might give our motto contest the following motto: Leftists Whine; Rightists Parry; Bedlam Accomplished Or perhaps this: Dead Split Between Patriots and Hatriots Considering that this blog at least occasionally concerns itself with economics, I was surprised there weren’t more suggestions having to do with free markets, maybe something like . . . Creative Destruction at Its Very Finest In the end, there were so many good, thoughtful, funny, heartfelt, and nasty suggestions that it was self-evidently beyond our ability to just pick a winner. So we narrowed the entries to the following five finalists. Please vote for your choice below, and the motto with the most votes within forty-eight hours will be declared the winner. 1.


pages: 353 words: 81,436

Buying Time: The Delayed Crisis of Democratic Capitalism by Wolfgang Streeck

"there is no alternative" (TINA), "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, air traffic controllers' union, Alan Greenspan, banking crisis, basic income, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collective bargaining, corporate governance, creative destruction, currency risk, David Graeber, deindustrialization, Deng Xiaoping, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial repression, fixed income, full employment, Garrett Hardin, Gini coefficient, Growth in a Time of Debt, income inequality, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, means of production, moral hazard, Myron Scholes, Occupy movement, open borders, open economy, Plutonomy: Buying Luxury, Explaining Global Imbalances, profit maximization, risk tolerance, shareholder value, too big to fail, Tragedy of the Commons, union organizing, winner-take-all economy, Wolfgang Streeck

The problem of the Frankfurt crisis theories of the 1970s was that they did not think capital capable of any strategic purpose, because they treated it as an apparatus rather than an agency, as means of production rather than a class.35 So they had to make their calculations without it. Even for Schumpeter, not to speak of Marx, ‘capital’ had been a constant trouble spot in modern economic society: the source of ‘creative destruction’36 until the socialism of bureaucracy would finally lay it to rest. That was how Weber saw and foresaw it too, and perhaps the peculiar lifelessness of capital in the theory of legitimation crisis goes partly back to him. So there was no way of dealing with what eventually happened in the decades after the end of the long 1960s: that is, when capital proved to be a player instead of a plaything, a predator instead of a working animal, with an urgent need to break free from the cage-like institutional framework of the post-1945 ‘social market economy’.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"World Economic Forum" Davos, Adam Curtis, air traffic controllers' union, Alan Greenspan, AOL-Time Warner, banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, job polarisation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, Larry Ellison, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, low skilled workers, manufacturing employment, market bubble, Martin Wolf, Mary Meeker, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, proprietary trading, Right to Buy, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

Mergers sometimes make sound business sense, while some companies need stronger management. Economies have to evolve and adjust as some companies fail, new ones emerge and the success stories of the past are overtaken by new technological developments and the industries of the future. Innovation is the lifeblood of economic dynamism and inevitably involves some pain or ‘creative destruction’ as the Austrian economist, Joseph Schumpeter, described it in Capitalism, Socialism and Democracy published in 1942. It is a process of change that inevitably brings winners and losers. If the industrial restructuring of the last thirty years had been driven by business innovation aimed at improving productivity and long-run performance, creating new jobs and wealth along the way, the dislocation involved would have been defensible.


pages: 304 words: 80,143

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines by William Davidow, Michael Malone

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, Airbnb, AlphaGo, American Society of Civil Engineers: Report Card, Automated Insights, autonomous vehicles, basic income, benefit corporation, bitcoin, blockchain, blue-collar work, Bob Noyce, business process, call centre, Cambridge Analytica, cashless society, citizen journalism, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, cryptocurrency, deep learning, DeepMind, disintermediation, disruptive innovation, distributed ledger, en.wikipedia.org, Erik Brynjolfsson, fake news, Filter Bubble, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, Geoffrey West, Santa Fe Institute, gig economy, Gini coefficient, high-speed rail, holacracy, Hyperloop, income inequality, industrial robot, Internet of things, invention of agriculture, invention of movable type, invention of the printing press, invisible hand, Jane Jacobs, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, license plate recognition, low interest rates, Lyft, Mark Zuckerberg, mass immigration, Network effects, new economy, peer-to-peer lending, QWERTY keyboard, ransomware, Richard Florida, Robert Gordon, robo advisor, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Simon Kuznets, Skinner box, Snapchat, speech recognition, streetcar suburb, Stuxnet, surveillance capitalism, synthetic biology, TaskRabbit, The Death and Life of Great American Cities, The Rise and Fall of American Growth, the scientific method, trade route, Turing test, two and twenty, Uber and Lyft, uber lyft, universal basic income, uranium enrichment, urban planning, vertical integration, warehouse automation, zero day, zero-sum game, Zipcar

The workers in all these new jobs—the rising middle class—purchased homes, appliances, and clothes, creating still more jobs and more consumers. The virtuous circle this created was classic capitalism in action, and arguably the greatest achievement of the Industrial Revolution. Of course, the internal combustion engine also unleashed the forces of Joseph Schumpeter’s creative destruction. Most notably, the engine replaced the horse. In 1870 there was one horse for every five citizens and 27 percent of farmland was used to grow feed for horses used for transportation.6 According to historian Joel Tarr, “in 1880 New York and Brooklyn were served by 427 blacksmith shops, 249 carriage and wagon enterprises, 262 wheelwright shops, and 290 establishments dealing in saddles and harnesses.”


pages: 308 words: 85,880

How to Fix the Future: Staying Human in the Digital Age by Andrew Keen

"World Economic Forum" Davos, 23andMe, Ada Lovelace, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, AlphaGo, Andrew Keen, Apple's 1984 Super Bowl advert, augmented reality, autonomous vehicles, basic income, Bernie Sanders, Big Tech, bitcoin, Black Swan, blockchain, Brewster Kahle, British Empire, carbon tax, Charles Babbage, computer age, Cornelius Vanderbilt, creative destruction, crowdsourcing, data is the new oil, death from overwork, DeepMind, Demis Hassabis, Didi Chuxing, digital capitalism, digital map, digital rights, disinformation, don't be evil, Donald Trump, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, European colonialism, fake news, Filter Bubble, Firefox, fulfillment center, full employment, future of work, gig economy, global village, income inequality, independent contractor, informal economy, Internet Archive, Internet of things, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jeff Bezos, jimmy wales, job automation, Joi Ito, Kevin Kelly, knowledge economy, Lyft, Marc Andreessen, Marc Benioff, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Mitch Kapor, move fast and break things, Network effects, new economy, Nicholas Carr, Norbert Wiener, OpenAI, Parag Khanna, peer-to-peer, Peter Thiel, plutocrats, post-truth, postindustrial economy, precariat, Ralph Nader, Ray Kurzweil, Recombinant DNA, rent-seeking, ride hailing / ride sharing, Rutger Bregman, Salesforce, Sam Altman, Sand Hill Road, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Silicon Valley startup, Skype, smart cities, Snapchat, social graph, software is eating the world, Stephen Hawking, Steve Jobs, Steve Wozniak, subscription business, surveillance capitalism, Susan Wojcicki, tech baron, tech billionaire, tech worker, technological determinism, technoutopianism, The Future of Employment, the High Line, the new new thing, Thomas L Friedman, Tim Cook: Apple, Travis Kalanick, Triangle Shirtwaist Factory, Uber and Lyft, Uber for X, uber lyft, universal basic income, Unsafe at Any Speed, Upton Sinclair, urban planning, WikiLeaks, winner-take-all economy, Y Combinator, Yogi Berra, Zipcar

In July 2017, Reid Hoffman and his friend Mark Pincus, the cofounder of the online game developer Zynga, introduced a new group to hack the Democratic Party called Win the Future (WTF). Their goal, according to the online tech website Recode, is “to force Democrats to rewire their philosophical core, from their agenda to the way they choose candidates in elections.”20 But WTF puts the cart before the horse. Rather than introducing the Silicon Valley culture of creative destruction into politics, Hoffman and Pincus should be focusing their resources on taking responsibility for the disruptive impact of technology on society. I’ve already suggested that Jeff Bezos should invest some of his stratospheric wealth in figuring out what jobs people will do in an automated future.


pages: 266 words: 80,273

Covid-19: The Pandemic That Never Should Have Happened and How to Stop the Next One by Debora MacKenzie

Anthropocene, anti-globalists, butterfly effect, Citizen Lab, contact tracing, coronavirus, COVID-19, creative destruction, crowdsourcing, dark matter, Donald Trump, European colonialism, gig economy, global supply chain, income inequality, Just-in-time delivery, lockdown, machine translation, megacity, meta-analysis, microcredit, planetary scale, reshoring, social distancing, supply-chain management, TED Talk, uranium enrichment, zoonotic diseases

We must manage our global system with some understanding of how complexity works, taking advantage of the global shock caused by this pandemic to build looser connections, less efficiency, more redundancy, and resilience into global supply chains, economies, and governing structures, even if that is never the cheapest option. If a few connections collapse here and there, complex systems experts suggest it might be more opportunity than disaster: “creative destruction” might let new, more resilient patterns emerge, especially if we rebuild with that in mind. We must grasp that a much worse pandemic can happen, and it could trigger nonlinear effects in our global system that could lead to collapse of local systems or global ones. Some of the world’s smartest scientists say that is what we risk.


pages: 273 words: 83,802

Hostile Environment: How Immigrants Became Scapegoats by Maya Goodfellow

Black Lives Matter, Boris Johnson, British Empire, call centre, collective bargaining, colonial rule, creative destruction, deindustrialization, disinformation, Donald Trump, European colonialism, fake news, falling living standards, G4S, housing crisis, illegal immigration, Jeremy Corbyn, low skilled workers, mass immigration, megacity, moral panic, open borders, open immigration, race to the bottom, Right to Buy, Scientific racism, W. E. B. Du Bois, Winter of Discontent, working poor

Satnam Virdee, Racism, Class and the Racialized Outsider, Basingstoke: Palgrave MacMillan, 2014. 55. Stuart Hall, The Fateful Triangle: Race, Ethnicity Nation, Cambridge, MA: Harvard University Press, 2017, p. 149; Jayati Ghosh, ‘Towards a Policy Framework for Reducing Inequalities’, Development, vol. 56, issue 2, pp. 218–22; David Harvey, ‘Neoliberalism as Creative Destruction’, The ANNALS of the American Academy of Political and Social Science, vol. 610, issue 1, pp. 21–44. As anthropologist Jason Hickel points out, it’s poor countries that are developing rich ones. In 2012 ‘developing’ countries received $1.3 trillion in aid, investment and income, but $3.3 trillion left those same countries to go to the ‘developed’ world in the form of interest payments, investment returns and capital flight.


pages: 296 words: 83,254

After the Gig: How the Sharing Economy Got Hijacked and How to Win It Back by Juliet Schor, William Attwood-Charles, Mehmet Cansoy

1960s counterculture, Airbnb, algorithmic management, Amazon Mechanical Turk, American Legislative Exchange Council, back-to-the-land, barriers to entry, bike sharing, Californian Ideology, carbon footprint, clean tech, collaborative consumption, collaborative economy, Community Supported Agriculture, COVID-19, creative destruction, crowdsourcing, deskilling, driverless car, en.wikipedia.org, financial independence, future of work, gentrification, George Gilder, gig economy, global supply chain, global village, haute cuisine, income inequality, independent contractor, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Jean Tirole, Jeff Bezos, jitney, job satisfaction, John Perry Barlow, John Zimmer (Lyft cofounder), Kevin Kelly, Lyft, Marshall McLuhan, Mason jar, mass incarceration, Mitch Kapor, Network effects, new economy, New Urbanism, Occupy movement, peer-to-peer rental, Post-Keynesian economics, precariat, profit maximization, profit motive, race to the bottom, regulatory arbitrage, rent gap, rent-seeking, ride hailing / ride sharing, Ruby on Rails, selection bias, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, smart cities, social distancing, Stewart Brand, TaskRabbit, technological determinism, technoutopianism, Telecommunications Act of 1996, The Nature of the Firm, the payments system, Tragedy of the Commons, transaction costs, transportation-network company, Travis Kalanick, two-sided market, Uber and Lyft, Uber for X, uber lyft, urban planning, wage slave, walking around money, Whole Earth Catalog, women in the workforce, working poor, Yochai Benkler, Zipcar

In a mere four years (from 2014 through 2017), using language provided by ALEC, Uber and Lyft succeeded in getting forty-two states to pass laws with preemption provisions.34 This deregulation spree included taking away workers’ rights, outlawing employee status for drivers (in thirty-two states), and blocking city-wide minimum wages.35 Although they’ve been most successful in the United States,36 the big companies have also been pursuing a deregulatory strategy in Europe.37 The federal government has also been disinclined to regulate the companies. The Federal Trade Commission convened a workshop in 2015 to discuss the sector. The ensuing report began with an approving nod to Josef Schumpeter’s concept of the “gale of creative destruction” on account of the benefits that these “disruptive” entities will bring to consumers.38 While the FTC did subsequently bring charges against Uber for overstating drivers’ earnings and exposing consumers’ data, it has defined its oversight role narrowly.39 Perhaps most important, it has not strayed from well-worn approaches to conventional companies, meaning that the unique issues raised by digital firms have so far gone unaddressed.


pages: 426 words: 83,128

The Journey of Humanity: The Origins of Wealth and Inequality by Oded Galor

agricultural Revolution, Alfred Russel Wallace, Andrei Shleifer, Apollo 11, Berlin Wall, bioinformatics, colonial rule, Columbian Exchange, conceptual framework, COVID-19, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, deindustrialization, demographic dividend, demographic transition, Donald Trump, double entry bookkeeping, Easter island, European colonialism, Fall of the Berlin Wall, Francisco Pizarro, general purpose technology, germ theory of disease, income per capita, intermodal, invention of agriculture, invention of movable type, invention of the printing press, invention of the telegraph, James Hargreaves, James Watt: steam engine, Joseph-Marie Jacquard, Kenneth Arrow, longitudinal study, loss aversion, Louis Pasteur, means of production, out of africa, phenotype, rent-seeking, rising living standards, Robert Solow, Scramble for Africa, The Death and Life of Great American Cities, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Walter Mischel, Washington Consensus, wikimedia commons, women in the workforce, working-age population, World Values Survey

Acemoglu, Daron, and James A. Robinson, Why Nations Fail: The origins of power, prosperity, and poverty, Crown Books, 2012. Acsádi, György, János Nemeskéri and Kornél Balás, History of human life span and mortality, Budapest: Akadémiai Kiadó, 1970. Aghion, Philippe, and Peter Howitt, ‘A Model of Growth Through Creative Destruction’, Econometrica 60, no. 2 (1992): 323–51. Aidt, Toke S., and Raphaël Franck, ‘Democratization under the Threat of Revolution: Evidence from the Great Reform Act of 1832’, Econometrica 83, no. 2 (2015): 505–47. Aiello, Leslie C., and Peter Wheeler, ‘The expensive-tissue hypothesis: the brain and the digestive system in human and primate evolution’, Current Anthropology 36, no. 2 (1995): 199–221.


pages: 767 words: 208,933

Liberalism at Large: The World According to the Economist by Alex Zevin

"there is no alternative" (TINA), activist fund / activist shareholder / activist investor, affirmative action, Alan Greenspan, anti-communist, Asian financial crisis, bank run, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, business cycle, capital controls, carbon tax, centre right, Chelsea Manning, collective bargaining, Columbine, Corn Laws, corporate governance, corporate social responsibility, creative destruction, credit crunch, David Ricardo: comparative advantage, debt deflation, desegregation, disinformation, disruptive innovation, do well by doing good, Donald Trump, driverless car, Edward Snowden, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, Gini coefficient, Glass-Steagall Act, global supply chain, guns versus butter model, hiring and firing, imperial preference, income inequality, interest rate derivative, invisible hand, It's morning again in America, Jeremy Corbyn, John von Neumann, Joseph Schumpeter, Julian Assange, junk bonds, Khartoum Gordon, land reform, liberal capitalism, liberal world order, light touch regulation, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, means of production, Michael Milken, Mikhail Gorbachev, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, new economy, New Journalism, Nixon triggered the end of the Bretton Woods system, no-fly zone, Norman Macrae, Northern Rock, Occupy movement, Philip Mirowski, plutocrats, post-war consensus, price stability, quantitative easing, race to the bottom, railway mania, rent control, rent-seeking, road to serfdom, Ronald Reagan, Rosa Parks, Seymour Hersh, Snapchat, Socratic dialogue, Steve Bannon, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade liberalization, trade route, unbanked and underbanked, underbanked, unorthodox policies, upwardly mobile, War on Poverty, WikiLeaks, Winter of Discontent, Yom Kippur War, young professional

Treatment of any single issue is limited, outside of special reports, and articles can descend into parody – ‘as if the writer started out knowing that three steps must be taken immediately – then tried to think what those steps should be’.9 Range is accompanied by relentlessness: sucked under the foaming waves, the unfortunate explorer was served up as a fine specimen of the entrepreneurial spirit.10 Yet this strong institutional character, which sees an act of creative destruction in death, is also what makes it unique, preserved as it is by an equally unusual ownership structure designed to ‘let the editor run the paper as though it belonged to him’. In place since 1928, this structure gives the editor power over policy, salaries and employment; and puts between him or her and the board of directors four trustees, who sign off on share transfers and the appointment of chairmen and editors.

To show ‘the human race is, in general, advancing’, they travelled to Brazil where ‘the crapshoot that Bobo resents is helping to change the life of Marcos Andrade’, machine operator at a stamping facility GE had built in Sao Caetano do Sul, who ‘whistles when he hears how much workers in Flint are paid’. The two authors marvelled with him as bathos for Bobo turned to Schumpeterian shrug: ‘the creative destruction continues’.84 Even Thomas Friedman got an earful for his naïve thesis in 1999’s Lexus and the Olive Tree, that globalization was as inevitable as the dawn. ‘Given the carnage it has caused’, they wrote, before adding, ‘(or is said to have caused)’, advancing it would require political leadership.


pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, back-to-the-city movement, basic income, Bernie Sanders, bike sharing, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, gentrification, Gini coefficient, Google bus, high net worth, high-speed rail, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, megaproject, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, off-the-grid, opioid epidemic / opioid crisis, Paul Graham, plutocrats, RAND corporation, rent control, rent-seeking, restrictive zoning, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, SimCity, sovereign wealth fund, streetcar suburb, superstar cities, tech worker, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Tyler Cowen, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

See Edward Glaeser, The Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier (New York: Penguin, 2011); Bruce Katz and Jennifer Bradley, The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy (Washington, DC: Brookings Institution Press, 2013); Benjamin Barber, If Mayors Ruled the World: Dysfunctional Nations, Rising Cities (New Haven, CT: Yale University Press, 2013). 2. The pessimists include the Marxist geographer David Harvey and urban theorist Mike Davis, among others. Harvey wrote: “None of this new development could have occurred without massive population displacements and dispossessions, wave after wave of creative destruction that has taken not only a physical toll but destroyed social solidarities, exaggerated social inequalities, swept aside any pretenses of democratic urban governance, and has increasingly looked to militarized police surveillance and terror as its primary mode of social regulation.” See David Harvey, “The Crisis of Planetary Urbanization,” Post: Notes on Modern and Contemporary Art Around the Globe, Museum of Modern Art, November 18, 2014, http://post.at.moma.org/content_items/520-the-crisis-of-planetary-urbanization; Mike Davis, Planet of Slums (New York: Verso, 2006). 3.


pages: 346 words: 89,180

Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake

23andMe, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Albert Einstein, Alvin Toffler, Andrei Shleifer, bank run, banking crisis, Bernie Sanders, Big Tech, book value, Brexit referendum, business climate, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, cloud computing, cognitive bias, computer age, congestion pricing, corporate governance, corporate raider, correlation does not imply causation, creative destruction, dark matter, Diane Coyle, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, Elon Musk, endogenous growth, Erik Brynjolfsson, everywhere but in the productivity statistics, Fellow of the Royal Society, financial engineering, financial innovation, full employment, fundamental attribution error, future of work, gentrification, gigafactory, Gini coefficient, Hernando de Soto, hiring and firing, income inequality, index card, indoor plumbing, intangible asset, Internet of things, Jane Jacobs, Jaron Lanier, Jeremy Corbyn, job automation, Kanban, Kenneth Arrow, Kickstarter, knowledge economy, knowledge worker, laissez-faire capitalism, liquidity trap, low interest rates, low skilled workers, Marc Andreessen, Mother of all demos, Network effects, new economy, Ocado, open economy, patent troll, paypal mafia, Peter Thiel, pets.com, place-making, post-industrial society, private spaceflight, Productivity paradox, quantitative hedge fund, rent-seeking, revision control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Coase, Sand Hill Road, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, software patent, sovereign wealth fund, spinning jenny, Steve Jobs, sunk-cost fallacy, survivorship bias, tacit knowledge, tech billionaire, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, total factor productivity, TSMC, Tyler Cowen, Tyler Cowen: Great Stagnation, urban planning, Vanguard fund, walkable city, X Prize, zero-sum game

Rather, competition policy should be focused on whether a market is delivering rivalry, for example, allowing new firms or products to be introduced. 3. See https://www.iras.gov.sg/irashome/Schemes/Businesses/Productivity-and-Innovation-Credit-Scheme/#title5. REFERENCES Aghion, Philippe, and Peter Howitt. 1992. “A Model of Growth through Creative Destruction.” Econometrica 60 (2): 323–51. doi:10.2307/2951599. Aghion, Philippe, John Van Reenen, and Luigi Zingales. 2013. “Innovation and Institutional Ownership.” American Economic Review 103 (1): 277–304. doi:10.1257/aer.103.1.277. Allen, Robert C. 1983. “Collective Invention.” Journal of Economic Behavior & Organization 4 (1): 1–24. doi:10.1016/0167-2681(83)90023-9.


pages: 321 words: 92,258

Lift: Fitness Culture, From Naked Greeks and Acrobats to Jazzercise and Ninja Warriors by Daniel Kunitz

barriers to entry, creative destruction, feminist movement, glass ceiling, Islamic Golden Age, mental accounting, Ronald Reagan, Saturday Night Live, scientific management, Upton Sinclair, Works Progress Administration

The doctors emphasize the need for moderate efforts and warn that pushing too hard, lifting heavy weights, or sweating too much can have a deleterious, even fatal, effect. But you have to wonder why they were so twitchy. Did Susruta or Celsus really believe a person was likely to keel over after a set of hill sprints? Again, their apprehensions, I suspect, stem from the creative-destructive aspect of workouts. Fretting over how much strain the body can take or that exercise might do us harm makes a certain amount of sense in an ancient context, when kings actually fought in battles and aristocrats often walked or rode long distances; when, in other words, everyone, even the upper classes, experienced serious physical challenges, and when medical knowledge was scant, if it was available at all.


pages: 291 words: 91,783

Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi

addicted to oil, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Bear Stearns, Bernie Sanders, Bretton Woods, buy and hold, carried interest, classic study, clean water, collateralized debt obligation, collective bargaining, computerized trading, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, desegregation, diversification, diversified portfolio, Donald Trump, financial innovation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, illegal immigration, interest rate swap, laissez-faire capitalism, London Interbank Offered Rate, Long Term Capital Management, margin call, market bubble, medical malpractice, military-industrial complex, money market fund, moral hazard, mortgage debt, Nixon triggered the end of the Bretton Woods system, obamacare, passive investing, Ponzi scheme, prediction markets, proprietary trading, prudent man rule, quantitative easing, reserve currency, Ronald Reagan, Savings and loan crisis, Sergey Aleynikov, short selling, sovereign wealth fund, too big to fail, trickle-down economics, Y2K, Yom Kippur War

When the Russian ruble collapsed around the same time, causing massive losses in emerging markets where investors had foolishly committed giant sums to fledgling economies that were years from real productivity, Greenspan was spooked enough that he announced a surprise rate cut, again bailing out dumb investors by letting them borrow their way out of their mistakes. “That’s what capitalism is supposed to be about—creative destruction,” says Fleckenstein. “People who take too much risk are supposed to fail sometimes.” But instead of letting nature take its course, Greenspan came to the rescue every time some juiced-up band of Wall Street greedheads drove their portfolios into a tree. Greenspan was even dumb enough to take the Y2K scare seriously, flooding the markets with money in anticipation of a systemwide computer malfunction that, of course, never materialized.


pages: 353 words: 91,520

Most Likely to Succeed: Preparing Our Kids for the Innovation Era by Tony Wagner, Ted Dintersmith

affirmative action, Airbnb, Albert Einstein, Bernie Sanders, Clayton Christensen, creative destruction, David Brooks, driverless car, en.wikipedia.org, Frederick Winslow Taylor, future of work, immigration reform, income inequality, index card, Jeff Bezos, jimmy wales, Joi Ito, Khan Academy, Kickstarter, knowledge economy, knowledge worker, language acquisition, low skilled workers, Lyft, Mark Zuckerberg, means of production, new economy, One Laptop per Child (OLPC), pattern recognition, Paul Graham, Peter Thiel, Ponzi scheme, pre–internet, school choice, Silicon Valley, Skype, Steven Pinker, TaskRabbit, TED Talk, the scientific method, two and twenty, uber lyft, unpaid internship, Y Combinator

Many would thrive in an education system focused on life skills instead of college prep. Today, though, our education system says to our kids, “You can either get your college degree or end up with a menial job.” But the reality in America today? Millions of young adults end up with both. As inescapable economic forces lead to the creative destruction of our higher education system, we’ll see the impact as college admissions play a reduced role in shaping our K-12 schools. As long as high school students are measured on criteria like GPA, standardized test scores, and AP courses, anyone trying to change K-12 schools will feel like Don Quixote tilting at ivory windmills.


pages: 282 words: 88,320

Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry by David Robertson, Bill Breen

barriers to entry, Blue Ocean Strategy, business logic, business process, Clayton Christensen, creative destruction, crowdsourcing, Day of the Dead, Dean Kamen, digital divide, disruptive innovation, financial independence, game design, global supply chain, Jeff Bezos, Kickstarter, Mark Zuckerberg, Minecraft, Rubik’s Cube, Silicon Valley, Steve Jobs, subscription business, systems thinking, The Wisdom of Crowds, Wall-E, work culture

Instead of doing all the technological heavy lifting in-house, Majgaard believed in collaborating with the best outside experts when the opportunity warranted it. That strategy proved to be more efficient and, for a time, more sustainable than Darwin’s go-it-alone approach. And so, in 1999, the LEGO Group quietly pulled the plug on Darwin. Its immodest bid to push back against the video game publishers and unleash some creative destruction on conventional toy companies instead hit an evolutionary dead end. Foster open innovation—heed the wisdom of the crowd. In the first years of the past decade, the LEGO Group’s new-business mavens watched as a generation of Web 2.0 companies—YouTube, Facebook, Flickr—tapped into a seemingly bottomless reservoir of creativity by encouraging the masses to contribute to an online product or service.


pages: 351 words: 93,982

Leading From the Emerging Future: From Ego-System to Eco-System Economies by Otto Scharmer, Katrin Kaufer

Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Asian financial crisis, Basel III, behavioural economics, Berlin Wall, Branko Milanovic, cloud computing, collaborative consumption, collapse of Lehman Brothers, colonial rule, Community Supported Agriculture, creative destruction, crowdsourcing, deep learning, dematerialisation, Deng Xiaoping, do what you love, en.wikipedia.org, European colonialism, Fractional reserve banking, Garrett Hardin, Glass-Steagall Act, global supply chain, happiness index / gross national happiness, high net worth, housing crisis, income inequality, income per capita, intentional community, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Johann Wolfgang von Goethe, Joseph Schumpeter, Kickstarter, market bubble, mass immigration, Mikhail Gorbachev, Mohammed Bouazizi, mutually assured destruction, Naomi Klein, new economy, offshore financial centre, Paradox of Choice, peak oil, ride hailing / ride sharing, Ronald Reagan, Silicon Valley, smart grid, Steve Jobs, systems thinking, technology bubble, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Tragedy of the Commons, vertical integration, Washington Consensus, working poor, Zipcar

Capital is an entrepreneurial capacity that propels the economy and drives the transformative process of value creation. Financial capital allows entrepreneurs to take an idea and move it toward action: to hire people, build a product that they envision, and create the infrastructure required to sustain a business. As described by the economist Joseph Schumpeter, this process is “creative destruction.”38 What drives it? In Schumpeter’s view, it is the entrepreneur. Schumpeter thought that capitalism would eventually destroy itself by crowding out entrepreneurs from increasingly bigger and more bureaucratic companies.39 While his view on entrepreneurs rings true to many, there is an even deeper force at work that drives entrepreneurial activity and value creation across all sectors of society.


pages: 400 words: 88,647

Frugal Innovation: How to Do Better With Less by Jaideep Prabhu Navi Radjou

3D printing, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, barriers to entry, Baxter: Rethink Robotics, behavioural economics, benefit corporation, Bretton Woods, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, circular economy, cloud computing, collaborative consumption, collaborative economy, Computer Numeric Control, connected car, corporate social responsibility, creative destruction, crowdsourcing, disruptive innovation, driverless car, Elon Musk, fail fast, financial exclusion, financial innovation, gamification, global supply chain, IKEA effect, income inequality, industrial robot, intangible asset, Internet of things, job satisfaction, Khan Academy, Kickstarter, late fees, Lean Startup, low cost airline, M-Pesa, Mahatma Gandhi, Marc Benioff, megacity, minimum viable product, more computing power than Apollo, new economy, payday loans, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, planned obsolescence, precision agriculture, race to the bottom, reshoring, risk tolerance, Ronald Coase, Salesforce, scientific management, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, six sigma, smart grid, smart meter, software as a service, standardized shipping container, Steve Jobs, supply-chain management, tacit knowledge, TaskRabbit, TED Talk, The Fortune at the Bottom of the Pyramid, the long tail, The Nature of the Firm, Tony Fadell, transaction costs, Travis Kalanick, unbanked and underbanked, underbanked, value engineering, vertical integration, women in the workforce, work culture , X Prize, yield management, Zipcar

Amazon then made and sold consumer electronics such as the Kindle (on which to read its books) and market-research tools such as mTurk, to captive customers. Lastly, it used its server space for cloud computing, which it sells as a service. Given its interest in drones as a mode of product delivery, Amazon might one day expand into travel and transport. Meanwhile, a wave of creative destruction is crashing through the education industry and, by extension, the textbook publishing world. The arrival of MOOCs has threatened higher-education models. Startups such as Coursera, Udacity and EdEx in the US and FutureLearn in the UK are now offering courses on an ever-widening range of subjects to students worldwide.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"there is no alternative" (TINA), "World Economic Forum" Davos, 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, bitcoin, bond market vigilante , Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, digital divide, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial engineering, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, geopolitical risk, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, Great Leap Forward, Greenspan put, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, Kevin Roose, knowledge economy, knowledge worker, Les Trente Glorieuses, light touch regulation, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, middle-income trap, Mikhail Gorbachev, military-industrial complex, Minsky moment, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, PalmPilot, passive income, peak oil, peer-to-peer lending, pension reform, planned obsolescence, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Robert Solow, Ronald Reagan, Russell Brand, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, Stephen Fry, systems thinking, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Weak businesses survive, directing cash flow to cover interest on loans that cannot be repaid but that banks will not write off. With capital tied up, banks reduce lending to productive enterprises, especially small and medium-sized ones, which account for a large portion of economic activity and employment. Firms do not dispose of or restructure underproductive investments. The creative destruction and reallocation of resources necessary to restore the economy does not occur. As French playwright Molière noted, “More men die of their remedies than of their illnesses.”14 Low interest returns and central bank monetary methamphetamine encouraged asset price bubbles, which in turn created conditions for a future financial crisis.


The End of Accounting and the Path Forward for Investors and Managers (Wiley Finance) by Feng Gu

active measures, Affordable Care Act / Obamacare, Alan Greenspan, barriers to entry, book value, business cycle, business process, buy and hold, carbon tax, Claude Shannon: information theory, Clayton Christensen, commoditize, conceptual framework, corporate governance, creative destruction, Daniel Kahneman / Amos Tversky, discounted cash flows, disruptive innovation, diversified portfolio, double entry bookkeeping, Exxon Valdez, financial engineering, financial innovation, fixed income, geopolitical risk, hydraulic fracturing, index fund, information asymmetry, intangible asset, inventory management, Joseph Schumpeter, junk bonds, Kenneth Arrow, knowledge economy, moral hazard, new economy, obamacare, quantitative easing, quantitative trading / quantitative finance, QWERTY keyboard, race to the bottom, risk/return, Robert Shiller, Salesforce, shareholder value, Steve Jobs, tacit knowledge, The Great Moderation, value at risk

[share prices] could climb more than 60%, to $28 per share, by the end of 2016, as cheap imports wane, steel prices firm, and CEO Mario Longhi’s restructuring begins to pay off” (p. 23). 2. See Feng Gu and Baruch Lev, “Overpriced Shares, Ill-Advised Acquisitions, and Goodwill Impairment,” The Accounting Review 86 (2011): 1995–2022. 3. This brings to mind the great economist (“creative destruction”) Joseph Schumpeter: “Success in conducting a business enterprise depends under present conditions much more on the ability to deal with labor leaders, politicians and public officials than it does on business ability . . . Hence, except in the biggest concerns [companies] that can afford to employ specialists of all kinds, leading positions tend to be filled by “fixers” and “trouble shooters” rather than by “production men.”


pages: 372 words: 89,876

The Connected Company by Dave Gray, Thomas Vander Wal

A Pattern Language, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Atul Gawande, Berlin Wall, business cycle, business process, call centre, Clayton Christensen, commoditize, complexity theory, creative destruction, David Heinemeier Hansson, digital rights, disruptive innovation, en.wikipedia.org, factory automation, folksonomy, Googley, index card, industrial cluster, interchangeable parts, inventory management, Jeff Bezos, John Markoff, Kevin Kelly, loose coupling, low cost airline, market design, minimum viable product, more computing power than Apollo, power law, profit maximization, Richard Florida, Ruby on Rails, Salesforce, scientific management, self-driving car, shareholder value, side project, Silicon Valley, skunkworks, software as a service, South of Market, San Francisco, Steve Jobs, Steven Levy, Stewart Brand, subscription business, systems thinking, tacit knowledge, The Wealth of Nations by Adam Smith, Tony Hsieh, Toyota Production System, two-pizza team, Vanguard fund, web application, WikiLeaks, work culture , Zipcar

Bibliography Brokerage and Closure: An Introduction to Social Capital By Ronald S. Burt, Oxford University Press, 2007. Catalyst: How You Can become an Extraordinary Growth Leader By Jeanne Liedtka, Crown Business, 2009. The Cluetrain Manifesto By Rick Levine, Christopher Locke, Doc Searls, David Weinberger, and McKee Jake, 1999. Creative Destruction: Why Companies That are Built to Last Underperform the Market – and How to Successfully Transform Them By Richard Foster and Sarah Kaplan, Broadway Business, 2001. Delivering Happiness: A Path to Profits, Passion and Purpose By Tony Hsieh, Business Plus, 2010. Drive: The Surprising Truth about What Motivates Us By Daniel H.


pages: 346 words: 90,371

Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd, Laurie Macfarlane

agricultural Revolution, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, basic income, book value, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, debt deflation, deindustrialization, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, foreign exchange controls, full employment, garden city movement, George Akerlof, ghettoisation, Gini coefficient, Hernando de Soto, housing crisis, Hyman Minsky, income inequality, information asymmetry, knowledge worker, labour market flexibility, labour mobility, land bank, land reform, land tenure, land value tax, Landlord’s Game, low interest rates, low skilled workers, market bubble, market clearing, Martin Wolf, means of production, Minsky moment, Money creation, money market fund, mortgage debt, negative equity, Network effects, new economy, New Urbanism, Northern Rock, offshore financial centre, Pareto efficiency, place-making, Post-Keynesian economics, price stability, profit maximization, quantitative easing, rent control, rent-seeking, Richard Florida, Right to Buy, rising living standards, risk tolerance, Robert Solow, Second Machine Age, secular stagnation, shareholder value, subprime mortgage crisis, the built environment, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, universal basic income, urban planning, urban sprawl, working poor, working-age population

In all three of the UK’s post-war major property-related banking crises – in the early 1970s, the late 1980s and the crisis of 2007–8 – bank losses and defaults have been linked more to CRE lending and large swings in the prices of CRE assets than domestic mortgage lending (Benford and Burrows, 2013; Milne and Wood, 2014). From one perspective, this is understandable. A feature of a healthy capitalist economy would be that it features risk-taking businesses with insolvencies and hence defaults on commercially owned real estate mortgages being an expected component of the ‘creative destruction’ needed for innovation and productivity growth (Schumpeter, 1975, pp. 82–85). This view has been enshrined in law in the form of the limited liability business owners enjoy. This means that if a firm fails, their own personal wealth and assets cannot be repossessed by creditors, unlike in the case of domestic mortgages (with the US being an exception as noted in the discussion of securitisation above).


pages: 319 words: 89,477

The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion by John Hagel Iii, John Seely Brown

Albert Einstein, Andrew Keen, barriers to entry, Black Swan, business process, call centre, Clayton Christensen, clean tech, cloud computing, commoditize, corporate governance, creative destruction, disruptive innovation, Elon Musk, en.wikipedia.org, future of work, game design, George Gilder, intangible asset, Isaac Newton, job satisfaction, Joi Ito, knowledge economy, knowledge worker, loose coupling, Louis Pasteur, Malcom McLean invented shipping containers, Marc Benioff, Maui Hawaii, medical residency, Network effects, old-boy network, packet switching, pattern recognition, peer-to-peer, pre–internet, profit motive, recommendation engine, Ronald Coase, Salesforce, shareholder value, Silicon Valley, Skype, smart transportation, software as a service, supply-chain management, tacit knowledge, The Nature of the Firm, the new new thing, the strength of weak ties, too big to fail, trade liberalization, transaction costs, TSMC, Yochai Benkler

As a result, the companies most in need of confronting a fundamental reorientation of their firms are precisely the ones most protected from the increasingly dysfunctional consequences of pursuing their traditional quest for scale. In fact, some perverse incentives have set in: Companies are motivated to continue pursuing “scalable efficiency” because this helps to ensure that governments will intervene to protect them against the gales of creative destruction that are gathering force on the horizon. Underlying these performance declines is the fast-moving digital infrastructure that is spreading rapidly throughout the world, reshaping societies as distant as Iran, Ghana, and Myanmar. In the United States, the exponentially advancing price/performance capability of computing, storage, and bandwidth is driving an adoption rate for the digital infrastructure that is two to five times faster than adoption rates were for previous infrastructures, such as electricity and telephone networks.10 As the price/performance ratio goes down, new capabilities emerge faster than before and disruption occurs frequently rather than in isolated episodes.


pages: 273 words: 93,419

Let them eat junk: how capitalism creates hunger and obesity by Robert Albritton

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", Bretton Woods, California gold rush, carbon tax, clean water, collective bargaining, computer age, corporate personhood, creative destruction, deindustrialization, Food sovereignty, Haber-Bosch Process, illegal immigration, immigration reform, invisible hand, joint-stock company, joint-stock limited liability company, Kickstarter, land reform, late capitalism, means of production, military-industrial complex, offshore financial centre, oil shale / tar sands, peak oil, planned obsolescence, price stability, profit maximization, profit motive, South Sea Bubble, the built environment, union organizing, Unsafe at Any Speed, upwardly mobile

Indeed, though problematic to farmers, particularly smaller farmers whose sales often did not cover the costs of production, the treadmills of increasing rates of fertilizer and pesticide usage promised a bright future for the chemical corporate sector. From the point of view of capitalist expansion, the failure of tens of thousands of family farms could simply be viewed as the sort of “creative destruction” required by capitalist progress that always gets rid of the less profitable units of production. Today the food industry, which is the largest industry in the United States, is not only largely capitalist, but also in capitalist fashion is triumphalist in celebrating its high level of productivity.


pages: 534 words: 15,752

The Sushi Economy: Globalization and the Making of a Modern Delicacy by Sasha Issenberg

air freight, Akira Okazaki, anti-communist, barriers to entry, Boeing 747, Bretton Woods, call centre, company town, creative destruction, Deng Xiaoping, Dutch auction, flag carrier, global supply chain, Golden arches theory, haute cuisine, means of production, Nixon shock, Nixon triggered the end of the Bretton Woods system, Saturday Night Live, Silicon Valley, special economic zone, standardized shipping container, telemarketer, trade route, urban renewal

For the company’s first five years, the CEO went to the market at Sendai every day. The difference between the markets in Tokyo and Sendai is like the difference between the cities. Tsukiji is a vast and unnavigably messy farrago of tight streets and hectic crossings, the result of years of constant adjustment combining the spirit of creative destruction and nostalgic neglect. People and businesses are packed almost inhumanely into small stalls. In Sendai, there are far fewer shops—one-fiftieth as many intermediate wholesalers—and to describe their spacious, well-lit areas as “shops” is not, as is the case in Tokyo, euphemism. The avenues running through Sendai’s market are orderly, planned, and wide.


pages: 343 words: 91,080

Uberland: How Algorithms Are Rewriting the Rules of Work by Alex Rosenblat

"Susan Fowler" uber, Affordable Care Act / Obamacare, Airbnb, algorithmic management, Amazon Mechanical Turk, autonomous vehicles, barriers to entry, basic income, big-box store, bike sharing, Black Lives Matter, business logic, call centre, cashless society, Cass Sunstein, choice architecture, cognitive load, collaborative economy, collective bargaining, creative destruction, crowdsourcing, data science, death from overwork, digital divide, disinformation, disruptive innovation, don't be evil, Donald Trump, driverless car, emotional labour, en.wikipedia.org, fake news, future of work, gender pay gap, gig economy, Google Chrome, Greyball, income inequality, independent contractor, information asymmetry, information security, Jaron Lanier, Jessica Bruder, job automation, job satisfaction, Lyft, marginal employment, Mark Zuckerberg, move fast and break things, Network effects, new economy, obamacare, performance metric, Peter Thiel, price discrimination, proprietary trading, Ralph Waldo Emerson, regulatory arbitrage, ride hailing / ride sharing, Salesforce, self-driving car, sharing economy, side hustle, Silicon Valley, Silicon Valley ideology, Skype, social software, SoftBank, stealth mode startup, Steve Jobs, strikebreaker, TaskRabbit, technological determinism, Tim Cook: Apple, transportation-network company, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, union organizing, universal basic income, urban planning, Wolfgang Streeck, work culture , workplace surveillance , Yochai Benkler, Zipcar

In the 2017 spring roundup of Uber’s failings, including the sexual harassment scandals86 that culminated in the departure of Travis Kalanick,87 the company selected Dallas and Dubai as the cities where it planned to launch flying cars in 2020.88 Just a few months after Susan Fowler’s sexual harassment allegations, lawmakers from the Congressional Black Caucus stepped forward to make the case for African American leadership in Uber’s future.89 The earnest hopes of select black lawmakers for technological inclusion in what was quickly becoming a vortex of scandal made sense to me only after I took a moment to think about what Uber represents for the future. A wide spectrum of stakeholders are invested in Uber because it spins in so many different directions and is a force to be reckoned with. Perhaps Uber’s creative destruction will unlock some breakthrough in social inclusion in the future of technology. That glint of possibility is how Uber continues to attract new allies. At a watershed moment between technology and society, civic society leaders who scaled the ladders of opportunity in the Old World still want a piece of the pie.


pages: 292 words: 92,588

The Water Will Come: Rising Seas, Sinking Cities, and the Remaking of the Civilized World by Jeff Goodell

"World Economic Forum" Davos, Airbnb, Anthropocene, carbon footprint, centre right, clean water, climate change refugee, creative destruction, data science, desegregation, Donald Trump, Dr. Strangelove, Elon Musk, failed state, fixed income, Frank Gehry, global pandemic, Google Earth, Higgs boson, illegal immigration, Intergovernmental Panel on Climate Change (IPCC), Large Hadron Collider, megacity, Murano, Venice glass, negative emissions, New Urbanism, ocean acidification, Paris climate accords, Pearl River Delta, Peter Thiel, planetary scale, Ray Kurzweil, Richard Florida, risk tolerance, Ronald Reagan, Silicon Valley, smart cities, South China Sea, space junk, urban planning, urban renewal, wikimedia commons

If the real Venice goes under, you can always visit the fake Venice in Las Vegas. And maybe Miami Beach will be nearly as awesome in virtual reality. (Then again, maybe not.) Perhaps the best we can hope for is that living in a world of quickly rising seas will turn out to be a planetary-scale experiment in creative destruction, one that forces us to abandon a lot of stupid infrastructure and stupid ideas about how to live with water—and how to live with each other—and replace them with something smarter, more durable, more flexible. After all, other than cockroaches, humans are probably the most adaptable creatures on the planet.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, Boston Dynamics, British Empire, business cycle, business intelligence, business process, call centre, carbon tax, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, congestion pricing, corporate governance, cotton gin, creative destruction, crowdsourcing, data science, David Ricardo: comparative advantage, digital map, driverless car, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, Fairchild Semiconductor, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, general purpose technology, global village, GPS: selective availability, Hans Moravec, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, Jevons paradox, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kiva Systems, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), pattern recognition, Paul Samuelson, payday loans, post-work, power law, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Robert Solow, Rodney Brooks, Ronald Reagan, search costs, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, the Cathedral and the Bazaar, the long tail, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Vernor Vinge, warehouse robotics, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

As we discussed at the beginning of the chapter, the earnings of bricklayers will vary a lot less than the winner-take-all earnings of app developers, but that’s not the only difference. Instead of stable market shares, where revenues and income correspond proportionally to differences in talent and effort, competition in winner-take-all markets will be much more unstable and asymmetrical. The great economist Joseph Schumpeter wrote of “creative destruction,” where each innovation not only created value for consumers but also wiped out the previous incumbent. The winners scaled up and dominated their markets, but were in turn vulnerable to the next generation of innovators. Schumpeter’s observation describes markets in software, media, and the Internet much better than traditional markets in manufacturing and services.


pages: 353 words: 91,211

The Shock of the Old: Technology and Global History Since 1900 by David Edgerton

agricultural Revolution, anti-communist, British Empire, Computer Numeric Control, conceptual framework, creative destruction, deglobalization, dematerialisation, desegregation, deskilling, Dr. Strangelove, endogenous growth, Fairchild Semiconductor, Ford Model T, general purpose technology, global village, Great Leap Forward, Haber-Bosch Process, interchangeable parts, knowledge economy, Lewis Mumford, Mahatma Gandhi, manufacturing employment, means of production, megacity, microcredit, Neil Armstrong, new economy, post-Fordism, post-industrial society, Productivity paradox, Ronald Reagan, Silicon Valley, spinning jenny, tacit knowledge, technological determinism, the long tail, Upton Sinclair, urban planning

Davies, Peacefully Working to Conquer the World: Singer Sewing Machines in Foreign Markets, 1854–1920 (London: Arno Press, 1976), p. 140, quoted in Sarah Ross, ‘Dual Purpose: the working life of the domestic sewing machine’, MSc dissertation, Imperial College, London, 2003. 17. Frank P. Godfrey, An International History of the Sewing Machine (London: Robert Hale, 1982), p. 157. 18. Ibid., p. 281. 19. http://www.ibpcosaka.or.jp/network/e_trade_japanesemarket/machinery_industry_goods/sewing96.html. 20. Richard Smith, ‘Creative Destruction: capitalist development and China’s environment’, New Left Review, No. 222 (1997), p. 4. 21. http://reference.allrefer.com/country-guide-study/china/china171.html. 22. I owe this insight to Sarah Ross, ‘Dual Purpose’. 23. Arnold Bauer, Goods, Power, History: Latin America’s Material Culture (Cambridge: Cambridge University Press, 2001), pp. 170–71, f, Paul Doughty, Huaylas: an Andean District in Search of Progress (Ithaca: Cornell University Press, 1968) and Young India, 13 November, 1924 in M.


pages: 344 words: 94,332

The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton, Andrew Scott

"World Economic Forum" Davos, 3D printing, Airbnb, asset light, assortative mating, behavioural economics, carbon footprint, carbon tax, classic study, Clayton Christensen, collapse of Lehman Brothers, creative destruction, crowdsourcing, deep learning, delayed gratification, disruptive innovation, diversification, Downton Abbey, driverless car, Erik Brynjolfsson, falling living standards, financial engineering, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, gender pay gap, gig economy, Google Glasses, indoor plumbing, information retrieval, intangible asset, Isaac Newton, job satisfaction, longitudinal study, low skilled workers, Lyft, Nelson Mandela, Network effects, New Economic Geography, old age dependency ratio, pattern recognition, pension reform, Peter Thiel, Ray Kurzweil, Richard Florida, Richard Thaler, risk free rate, Second Machine Age, sharing economy, Sheryl Sandberg, side project, Silicon Valley, smart cities, Stanford marshmallow experiment, Stephen Hawking, Steve Jobs, tacit knowledge, The Future of Employment, uber lyft, warehouse robotics, women in the workforce, young professional

Across the world there is an upsurge of similar concerns.8 As we stand on the threshold of remarkable technological innovation in the field of robotics and AI,9 will Jane be able to find work over a sixty-year career? This is a question of deep debate and reading the conclusions of some of the participants is salutary. In his thought-provoking analysis, Silicon Valley entrepreneur Martin Ford remarks: ‘The threat to overall employment is that as creative destruction unfolds the destruction will fall primarily on labor-intensive businesses in traditional areas like retail and goods preparation while the creation will generate new businesses and industries that simply don’t hire many people.’10 In the words of MIT professors Erik Brynjolfsson and Andrew McAfee, ‘Computers and other digital advances are doing for mental power … what the steam engine and its descendants did for muscle power’.11 The second half of the chessboard In 1965, Intel’s Geoffrey E.


pages: 304 words: 88,773

The Ghost Map: A Street, an Epidemic and the Hidden Power of Urban Networks. by Steven Johnson

call centre, clean water, correlation does not imply causation, creative destruction, Dean Kamen, digital map, double helix, edge city, Ford Model T, germ theory of disease, global pandemic, Google Earth, independent contractor, Jane Jacobs, John Nash: game theory, John Snow's cholera map, lone genius, Louis Pasteur, mass immigration, megacity, mutually assured destruction, New Urbanism, nuclear winter, pattern recognition, peak oil, side project, Steven Pinker, Stewart Brand, The Death and Life of Great American Cities, the long tail, the scientific method, trade route, unbiased observer, working poor

The microbes don’t care about buildings, because the buildings don’t help them reproduce. So the buildings get to continue standing. It’s the bodies that fall. The buildings have changed nonetheless. Almost every structure that stood on Broad Street in the late summer of 1854 has been replaced by something new—thanks in part to the Luftwaffe, and in part to the creative destruction of booming urban real estate markets. (Even the street names have been altered. Broad Street was renamed Broadwick in 1936.) The pump, of course, is long gone, though a replica with a small plaque stands several blocks from the original site on Broad Street. A block east of where the pump once stood is a sleek glass office building designed by Richard Rogers with exposed piping painted a bold orange; its glassed-in lobby hosts a sleek, perennially crowded sushi restaurant.


pages: 307 words: 88,180

AI Superpowers: China, Silicon Valley, and the New World Order by Kai-Fu Lee

"World Economic Forum" Davos, AI winter, Airbnb, Albert Einstein, algorithmic bias, algorithmic trading, Alignment Problem, AlphaGo, artificial general intelligence, autonomous vehicles, barriers to entry, basic income, bike sharing, business cycle, Cambridge Analytica, cloud computing, commoditize, computer vision, corporate social responsibility, cotton gin, creative destruction, crony capitalism, data science, deep learning, DeepMind, Demis Hassabis, Deng Xiaoping, deskilling, Didi Chuxing, Donald Trump, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, full employment, future of work, general purpose technology, Geoffrey Hinton, gig economy, Google Chrome, Hans Moravec, happiness index / gross national happiness, high-speed rail, if you build it, they will come, ImageNet competition, impact investing, income inequality, informal economy, Internet of things, invention of the telegraph, Jeff Bezos, job automation, John Markoff, Kickstarter, knowledge worker, Lean Startup, low skilled workers, Lyft, machine translation, mandatory minimum, Mark Zuckerberg, Menlo Park, minimum viable product, natural language processing, Neil Armstrong, new economy, Nick Bostrom, OpenAI, pattern recognition, pirate software, profit maximization, QR code, Ray Kurzweil, recommendation engine, ride hailing / ride sharing, risk tolerance, Robert Mercer, Rodney Brooks, Rubik’s Cube, Sam Altman, Second Machine Age, self-driving car, sentiment analysis, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, SoftBank, Solyndra, special economic zone, speech recognition, Stephen Hawking, Steve Jobs, strong AI, TED Talk, The Future of Employment, Travis Kalanick, Uber and Lyft, uber lyft, universal basic income, urban planning, vertical integration, Vision Fund, warehouse robotics, Y Combinator

AI-poor countries will find themselves unable to get a grip on the ladder of economic development, relegated to permanent subservient status. AI-rich countries will amass great wealth but also witness the widespread monopolization of the economy and a labor market divided into economic castes. Make no mistake: this is not just the normal churn of capitalism’s creative destruction, a process that has previously helped lead to a new equilibrium of more jobs, higher wages, and a better quality of life for all. The free market is supposed to be self-correcting, but these self-correcting mechanisms break down in an economy driven by artificial intelligence. Low-cost labor provides no edge over machines, and data-driven monopolies are forever self-reinforcing.


pages: 372 words: 94,153

More From Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources – and What Happens Next by Andrew McAfee

back-to-the-land, Bartolomé de las Casas, Berlin Wall, bitcoin, Blitzscaling, Branko Milanovic, British Empire, Buckminster Fuller, call centre, carbon credits, carbon footprint, carbon tax, Charles Babbage, clean tech, clean water, cloud computing, congestion pricing, Corn Laws, creative destruction, crony capitalism, data science, David Ricardo: comparative advantage, decarbonisation, DeepMind, degrowth, dematerialisation, Demis Hassabis, Deng Xiaoping, do well by doing good, Donald Trump, Edward Glaeser, en.wikipedia.org, energy transition, Erik Brynjolfsson, failed state, fake news, Fall of the Berlin Wall, Garrett Hardin, Great Leap Forward, Haber-Bosch Process, Hans Rosling, humanitarian revolution, hydraulic fracturing, income inequality, indoor plumbing, intangible asset, James Watt: steam engine, Jeff Bezos, job automation, John Snow's cholera map, joint-stock company, Joseph Schumpeter, Khan Academy, Landlord’s Game, Louis Pasteur, Lyft, Marc Andreessen, Marc Benioff, market fundamentalism, means of production, Michael Shellenberger, Mikhail Gorbachev, ocean acidification, oil shale / tar sands, opioid epidemic / opioid crisis, Paul Samuelson, peak oil, precision agriculture, price elasticity of demand, profit maximization, profit motive, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, Salesforce, Scramble for Africa, Second Machine Age, Silicon Valley, Steve Jobs, Steven Pinker, Stewart Brand, Ted Nordhaus, TED Talk, telepresence, The Wealth of Nations by Adam Smith, Thomas Davenport, Thomas Malthus, Thorstein Veblen, total factor productivity, Tragedy of the Commons, Uber and Lyft, uber lyft, Veblen good, War on Poverty, We are as Gods, Whole Earth Catalog, World Values Survey

It’s not necessary to plan this process. In fact, it’s a terrible idea to try to do so. Any central planner will miss many of the actual innovators or actively try to squelch them to protect the status quo of which the planners themselves are a part. This cycle of capitalist, technology-rich “creative destruction” was beautifully described in the middle of the twentieth century by the Austrian economist Joseph Schumpeter. But since the late nineteenth century and the work of Alfred Marshall and William Jevons, we’ve believed that this cycle would cause us to use up more and more of our planet’s resources.


Deep Value by Tobias E. Carlisle

activist fund / activist shareholder / activist investor, Andrei Shleifer, availability heuristic, backtesting, behavioural economics, book value, business cycle, buy and hold, Carl Icahn, corporate governance, corporate raider, creative destruction, Daniel Kahneman / Amos Tversky, discounted cash flows, financial engineering, fixed income, Henry Singleton, intangible asset, John Bogle, joint-stock company, low interest rates, margin call, passive investing, principal–agent problem, Richard Thaler, risk free rate, riskless arbitrage, Robert Shiller, Rory Sutherland, shareholder value, Sharpe ratio, South Sea Bubble, statistical model, Teledyne, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Tim Cook: Apple

Shortly after Graham published Security Analysis in 1934, John Burr Williams published his 1938 masterpiece The Theory of Investment Value in which he described the classic theory of “net present value.”34 On a topic suggested by the great economist Joseph 44 DEEP VALUE Schumpeter—most famous for his description of capitalism as “creative destruction”35—Williams’s thesis closely mirrored Graham’s worldview: a security’s price and its intrinsic value were distinct properties. William’s innovation was that the intrinsic value could be calculated by the present value of its future cash flows. In his 1992 Berkshire Hathaway, Inc. Chairman’s Letter, Buffett described Williams’s theory as it applies to businesses, stocks, and bonds:36 In The Theory of Investment Value, written over 50 years ago, John Burr Williams set forth the equation for value, which we condense here: The value of any stock, bond or business today is determined by the cash inflows and outflows—discounted at an appropriate interest rate—that can be expected to occur during the remaining life of the asset.


pages: 307 words: 88,745

War for Eternity: Inside Bannon's Far-Right Circle of Global Power Brokers by Benjamin R. Teitelbaum

Affordable Care Act / Obamacare, bitcoin, Black Lives Matter, Boris Johnson, Cambridge Analytica, creative destruction, crony capitalism, cryptocurrency, Donald Trump, Etonian, fake news, Francis Fukuyama: the end of history, illegal immigration, Joseph Schumpeter, liberal capitalism, liberal world order, mass immigration, mutually assured destruction, Network effects, public intellectual, Saturday Night Live, school choice, side project, Skype, South China Sea, Steve Bannon, Westphalian system, WikiLeaks

Our internal conflict wouldn’t need to be dealt with militarily or through violence, but it would require destruction, particularly destruction of our public institutions, many of which, Steve believes, are in need of revitalization or, he suggests, being “blown up.” He mentions Joseph Schumpeter’s notion of “creative destruction” and Henri Bergson’s idea of élan vital, in addition to the Traditionalists. “It’s this thing that you have to go through, that you do have to destroy to rebuild.” It sounds like an agenda of chaos. Steve wants to see mass disassembly of our largest governmental agencies, and all this alongside his other agendas of breaking up the European Union and stopping the free international flow of people, goods, and money.


pages: 350 words: 90,898

A World Without Email: Reimagining Work in an Age of Communication Overload by Cal Newport

Cal Newport, call centre, Claude Shannon: information theory, cognitive dissonance, collaborative editing, Compatible Time-Sharing System, computer age, COVID-19, creative destruction, data science, David Heinemeier Hansson, fault tolerance, Ford Model T, Frederick Winslow Taylor, future of work, Garrett Hardin, hive mind, Inbox Zero, interchangeable parts, it's over 9,000, James Watt: steam engine, Jaron Lanier, John Markoff, John Nash: game theory, Joseph Schumpeter, Kanban, Kickstarter, knowledge worker, Marshall McLuhan, Nash equilibrium, passive income, Paul Graham, place-making, pneumatic tube, remote work: asynchronous communication, remote working, Richard Feynman, rolodex, Salesforce, Saturday Night Live, scientific management, Silicon Valley, Silicon Valley startup, Skype, social graph, stealth mode startup, Steve Jobs, supply-chain management, technological determinism, the medium is the message, the scientific method, Tragedy of the Commons, web application, work culture , Y Combinator

Put another way, although the now common tableau of the frantic business executives furiously typing on their phones might seem like the personification of our modern moment, it’s perhaps downright Paleolithic in its origins. Peter Drucker and the Tragedy of the Attention Commons As a child in Austria during the first decades of the twentieth century, Peter Drucker was exposed to some of the foremost economic thinkers of the age, including notables like Joseph Schumpeter of “creative destruction” fame, who attended evening salons held by Drucker’s parents, Adolph and Caroline.29 The intellectual energy of these salons laid the foundation for Drucker’s eventual emergence as one of the most important business thinkers of the modern period; he is widely acknowledged as the “founder of modern management.”30 His career produced thirty-nine books and countless articles before his death in 2005 at the age of ninety-five.


pages: 297 words: 89,292

2034: A Novel of the Next World War by Elliot Ackerman, James Admiral Stavridis

coronavirus, COVID-19, creative destruction, cuban missile crisis, digital map, loose coupling, mutually assured destruction, South China Sea, sovereign wealth fund, undersea cable

And, strangely, he thought of Pappy and the old stories of him staring out through his canopy, scanning the horizon for Japanese fighters, a cigarette dangling from his lip before he’d toss it into the vastness of the Pacific. The city was rushing up toward Wedge. He’d told Admiral Hunt that he didn’t do suicide missions. Yet this didn’t feel like a suicide. It felt necessary. Like an act of creative destruction. He felt like he was the end of something and in being the end he would achieve a beginning. Wind from the broken canopy was on his face. At five hundred feet, he remembered the pack of celebratory Marlboros he’d tucked into his flight suit, in the left chest pocket. Though it was futile, he reached for them.


pages: 314 words: 88,524

American Marxism by Mark R. Levin

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", 2021 United States Capitol attack, affirmative action, American ideology, belling the cat, Bernie Sanders, Big Tech, BIPOC, Black Lives Matter, British Empire, carbon tax, centre right, clean water, collective bargaining, colonial exploitation, conceptual framework, coronavirus, COVID-19, creative destruction, critical race theory, crony capitalism, data science, defund the police, degrowth, deindustrialization, deplatforming, disinformation, Donald Trump, energy security, Food sovereignty, George Floyd, green new deal, Herbert Marcuse, high-speed rail, illegal immigration, income inequality, liberal capitalism, lockdown, Mark Zuckerberg, means of production, Michael Shellenberger, microaggression, New Journalism, open borders, Parler "social media", planned obsolescence, rolling blackouts, Ronald Reagan, school choice, school vouchers, single-payer health, tech billionaire, the market place, urban sprawl, yellow journalism

They lack historical knowledge and vision, which they supplant by, or exchange for, the powers of transformation and change. Intoxicated by the power possible with emerging technologies, inspired by visions that only a deracinated globalist perspective could make attractive, this elite thinks of creative destruction as applied to culture. As winners in what they imagine to be a meritocratic struggle, they can see nothing of an inherited world worth preserving for their very success. The peculiar characteristics of their evolving power have given to our new elite the soul of adolescent art applied to a global canvas.


pages: 146 words: 43,446

The New New Thing: A Silicon Valley Story by Michael Lewis

Alan Greenspan, Albert Einstein, Andy Kessler, Benchmark Capital, business climate, classic study, creative destruction, data acquisition, Fairchild Semiconductor, family office, high net worth, invention of the steam engine, invisible hand, Ivan Sutherland, Jeff Bezos, Larry Ellison, Marc Andreessen, Mary Meeker, Menlo Park, PalmPilot, pre–internet, risk tolerance, Sand Hill Road, Silicon Valley, Silicon Valley startup, tech worker, the new new thing, Thorstein Veblen, wealth creators, Y2K

"Even creating a lower-cost product runs against the grain, because the low-cost products undercut the high-cost, more profitable products." Everyone in a successful company, from the CEO on down, has a stake in whatever the company is currently selling. It does not naturally occur to anyone to find a way to undermine that product. Clark thought he knew how to become the agent of his own creative destruction, and he was prepared to do the deed. He wanted Silicon Graphics to operate in the same self-corrosive spirit. More to the point, he wanted Ed McCracken to operate in this way. But Ed McCracken was not the man to roll the bones on the futurefor which he could hardly be faulted, since as CEO he would get a lot more of the blame for any gamble that went wrong.


Rogue States by Noam Chomsky

"there is no alternative" (TINA), Alan Greenspan, anti-communist, Asian financial crisis, Berlin Wall, Branko Milanovic, Bretton Woods, business cycle, capital controls, classic study, collective bargaining, colonial rule, creative destruction, cuban missile crisis, declining real wages, deskilling, digital capitalism, Edward Snowden, experimental subject, Fall of the Berlin Wall, floating exchange rates, land reform, liberation theology, Mahbub ul Haq, Mikhail Gorbachev, Monroe Doctrine, new economy, Nixon triggered the end of the Bretton Woods system, no-fly zone, oil shock, precautionary principle, public intellectual, RAND corporation, Silicon Valley, strikebreaker, structural adjustment programs, Tobin tax, union organizing, Washington Consensus

Morris Morley and Chris McGillion, Washington Report on the Hemisphere (Council on Hemispheric Affairs), June 3, 1997. 88. Letter, NYT. Feb. 26, 1997. 89. See chap. 1, note 3, in this volume. 90. Resolution proposed to the UN Security Council by the US and other countries. Cited in Denial of Food and Medicine. 91. Richard Smith, “Creative Destruction: Capitalist Development and China’s Environment,” New Left Review 222 (March-April 1997). The record is similar elsewhere in the region. 92. Thomas Friedman, NYT, Jan. 21 and Jan. 23, 1993. 93. Sheila Tefft, CSM, Dec. 22, 1993. Reese Erlich, CSM, Feb. 9, 1994. See note 58. 94. Philip Shenon, NYT, May 15, 1994; Sheila Tefft, Fazlur Rahman, CSM, May 25, 1994; Multinational Monitor, June 1994.


pages: 297 words: 103,910

Free culture: how big media uses technology and the law to lock down culture and control creativity by Lawrence Lessig

Brewster Kahle, Cass Sunstein, content marketing, creative destruction, digital divide, Free Software Foundation, future of journalism, George Akerlof, Innovator's Dilemma, Internet Archive, invention of the printing press, Joi Ito, Kenneth Arrow, Kevin Kelly, knowledge economy, Louis Daguerre, machine readable, new economy, prediction markets, prisoner's dilemma, profit motive, rent-seeking, Richard Florida, Richard Stallman, Ronald Coase, Ronald Reagan, Saturday Night Live, Silicon Valley, software patent, synthetic biology, transaction costs

Christensen, The Innovator's Dilemma: The Revolutionary National Bestseller that Changed the Way We Do Business (Cambridge: Harvard Business School Press, 1997). Christensen acknowledges that the idea was first suggested by Dean Kim Clark. See Kim B. Clark, "The Interaction of Design Hierarchies and Market Concepts in Technological Evolution," Research Policy 14 (1985): 235¬51. For a more recent study, see Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them (New York: Currency/Doubleday, 2001). [151] The Marijuana Policy Project, in February 2003, sought to place ads that directly responded to the Nick and Norm series on stations within the Washington, D.C., area.


pages: 281 words: 95,852

The Googlization of Everything: by Siva Vaidhyanathan

"Friedman doctrine" OR "shareholder theory", 1960s counterculture, activist fund / activist shareholder / activist investor, AltaVista, barriers to entry, Berlin Wall, borderless world, Burning Man, Cass Sunstein, choice architecture, cloud computing, commons-based peer production, computer age, corporate social responsibility, correlation does not imply causation, creative destruction, data acquisition, death of newspapers, digital divide, digital rights, don't be evil, Firefox, Francis Fukuyama: the end of history, full text search, global pandemic, global village, Google Earth, Great Leap Forward, Howard Rheingold, Ian Bogost, independent contractor, informal economy, information retrieval, John Markoff, Joseph Schumpeter, Kevin Kelly, knowledge worker, libertarian paternalism, market fundamentalism, Marshall McLuhan, means of production, Mikhail Gorbachev, moral panic, Naomi Klein, Network effects, new economy, Nicholas Carr, PageRank, Panopticon Jeremy Bentham, pirate software, radical decentralization, Ray Kurzweil, Richard Thaler, Ronald Reagan, side project, Silicon Valley, Silicon Valley ideology, single-payer health, Skype, Social Responsibility of Business Is to Increase Its Profits, social web, Steven Levy, Stewart Brand, technological determinism, technoutopianism, the long tail, The Nature of the Firm, The Structural Transformation of the Public Sphere, Thorstein Veblen, Tyler Cowen, urban decay, web application, Yochai Benkler, zero-sum game

John Tomlinson, Cultural Imperialism: A Critical Introduction (Baltimore, MD: Johns Hopkins University Press, 1991). 57. Steven Feld, “A Sweet Lullaby for World Music,” Public Culture 12, no. 1 ( January 1, 2000): 145–71. 58. David Rothkopf, “Praise of Cultural Imperialism?” Foreign Policy, no. 107 (1997): 38–53. 59. Tyler Cowen, Creative Destruction (Princeton, NJ: Princeton University Press, 2002). 60. Siva Vaidhyanathan, “Remote Control: The Rise of Electronic Cultural Policy,” Annals of the American Academy of Political and Social Science 597 ( January 2005): 122–33; Siva Vaidhyanathan, The Anarchist in the Library: How the Clash between Freedom and Control Is Hacking the Real World and Crashing the System (New York: Basic Books, 2004). 61.


pages: 289 words: 99,936

Digital Dead End: Fighting for Social Justice in the Information Age by Virginia Eubanks

affirmative action, Alvin Toffler, Berlin Wall, call centre, cognitive dissonance, creative destruction, desegregation, digital divide, Fall of the Berlin Wall, future of work, game design, global village, index card, informal economy, invisible hand, Kevin Kelly, knowledge economy, labor-force participation, low-wage service sector, microcredit, new economy, post-industrial society, race to the bottom, rent control, rent stabilization, Shoshana Zuboff, Silicon Valley, social contagion, South of Market, San Francisco, tech worker, telemarketer, Thomas L Friedman, trickle-down economics, union organizing, urban planning, web application, white flight, women in the workforce, work culture , working poor

The new economy, digital technology, and laissez-faire governance do not, in fact, annihilate existing configurations of power, sweeping away the wreckage of the old, leaving a playing field that is clean, smooth, and level. Rather than magically clearing away old structures of inequality in a tide of creative destruction, the information economy is the product of two equally significant forces: increasing macroeconomic instability and comparatively stable, preexisting topographies of social and economic inequality. Rather than being unpredictable or idiosyncratic, the vulnerabilities and risk produced by the information economy display a great deal of continuity with what came before.15 I call this phenomenon volatile continuity.


pages: 364 words: 102,528

An Economist Gets Lunch: New Rules for Everyday Foodies by Tyler Cowen

agricultural Revolution, behavioural economics, big-box store, business climate, carbon footprint, carbon tax, cognitive bias, creative destruction, cross-subsidies, East Village, en.wikipedia.org, food miles, gentrification, guest worker program, haute cuisine, illegal immigration, informal economy, iterative process, mass immigration, oil shale / tar sands, out of africa, pattern recognition, Peter Singer: altruism, price discrimination, refrigerator car, tacit knowledge, The Wealth of Nations by Adam Smith, Tyler Cowen, Tyler Cowen: Great Stagnation, Upton Sinclair, winner-take-all economy, women in the workforce

New Mexico foods are more likely to use fresh green chilies and green tomatillo sauces. Pork is the preferred meat, not beef. Mexican food from California uses more produce, as befits the diversified agriculture of the state. Avocados, sour cream, and Spanish olives are especially common. See Tyler Cowen, Creative Destruction: How Globalization is Changing the World’s Cultures (Princeton: Princeton University Press), 2002, chapter four, for information on the differential spread of television across the United States and Europe. For the figures on working women, see Martha Hahn Sugar, When Mothers Work, Who Pays?


pages: 268 words: 109,447

The Cultural Logic of Computation by David Golumbia

Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, American ideology, Benoit Mandelbrot, Bletchley Park, borderless world, business process, cellular automata, citizen journalism, Claude Shannon: information theory, computer age, Computing Machinery and Intelligence, corporate governance, creative destruction, digital capitalism, digital divide, en.wikipedia.org, finite state, folksonomy, future of work, Google Earth, Howard Zinn, IBM and the Holocaust, iterative process, Jaron Lanier, jimmy wales, John von Neumann, Joseph Schumpeter, late capitalism, Lewis Mumford, machine readable, machine translation, means of production, natural language processing, Norbert Wiener, One Laptop per Child (OLPC), packet switching, RAND corporation, Ray Kurzweil, RFID, Richard Stallman, semantic web, Shoshana Zuboff, Slavoj Žižek, social web, stem cell, Stephen Hawking, Steve Ballmer, Stewart Brand, strong AI, supply-chain management, supply-chain management software, technological determinism, Ted Nelson, telemarketer, The Wisdom of Crowds, theory of mind, Turing machine, Turing test, Vannevar Bush, web application, Yochai Benkler

Cambridge, MA: The MIT Press. Schreibman, Susan, Ray G. Siemens, and John Unsworth, eds. 2001. A Companion to Digital Humanities. Malden, MA: Blackwell Publishing. Scheutz, Matthias, ed. 2002. Computationalism: New Directions. Cambridge, MA: The MIT Press. Schumpeter, Joseph. 1942. The Process of Creative Destruction. London: Unwin. Scott, James C. 1999. Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed. New Haven, CT: Yale University Press. References p 247 Searle, John. 1977. “Reiterating the Differences: A Reply to Jacques Derrida.” Glyph 1, 198–208. ———. 1983. Intentionality: An Essay in the Philosophy of Mind.


pages: 261 words: 103,244

Economists and the Powerful by Norbert Haring, Norbert H. Ring, Niall Douglas

accounting loophole / creative accounting, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, asset allocation, bank run, barriers to entry, Basel III, Bear Stearns, Bernie Madoff, book value, British Empire, buy and hold, central bank independence, collective bargaining, commodity trading advisor, compensation consultant, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, diversified portfolio, financial deregulation, George Akerlof, illegal immigration, income inequality, inflation targeting, information asymmetry, Jean Tirole, job satisfaction, Joseph Schumpeter, Kenneth Arrow, knowledge worker, land bank, law of one price, light touch regulation, Long Term Capital Management, low interest rates, low skilled workers, mandatory minimum, market bubble, market clearing, market fundamentalism, means of production, military-industrial complex, minimum wage unemployment, Money creation, moral hazard, new economy, obamacare, old-boy network, open economy, Pareto efficiency, Paul Samuelson, pension reform, Ponzi scheme, price stability, principal–agent problem, profit maximization, purchasing power parity, Renaissance Technologies, Robert Solow, rolodex, Savings and loan crisis, Sergey Aleynikov, shareholder value, short selling, Steve Jobs, The Chicago School, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tragedy of the Commons, transaction costs, ultimatum game, union organizing, Vilfredo Pareto, working-age population, World Values Survey

There was a pervasive sense of dismay and defeat among the intellectuals THE ECONOMICS OF THE POWERFUL 19 of the West. Support for communism grew and it was considered a very acute challenge for the Western economic model even among leading economists (Amadae 2003). Joseph Schumpeter (1943/2003), famous for describing entrepreneurship as a process of creative destruction, expressed his conviction that “a socialist form of government will inevitably emerge from an equally inevitable decomposition of capitalist society.” Frank Knight of the Chicago School, which later became famous for its uncompromising support of free markets, also expressed serious doubts.


pages: 364 words: 102,225

Instant City: Life and Death in Karachi by Steve Inskeep

battle of ideas, British Empire, call centre, creative destruction, Edward Glaeser, European colonialism, illegal immigration, informal economy, Jane Jacobs, Khyber Pass, Kibera, knowledge economy, Mahatma Gandhi, mass immigration, McMansion, megacity, new economy, New Urbanism, urban planning, urban renewal

Many Hindus believe Shiva is responsible for change, overseeing death and destruction and the ending of bad habits. Shiva works in concert with two other gods: Brahma creates the world, and Vishnu preserves it until the time that Shiva destroys it so that Brahma can start over again. It’s a process that a naturalist might call the cycle of life, or that an economist might call creative destruction. Monday evening is the most popular time to visit Shiva’s temple, and one Monday near sunset I met Makwana Narindas, a construction contractor who said he’d just spent two hours praying inside. “What do you pray for?” I asked. “For me and all the public,” he said. A friend who’d prayed with him added, “For our country and our family.


pages: 391 words: 97,018

Better, Stronger, Faster: The Myth of American Decline . . . And the Rise of a New Economy by Daniel Gross

"World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, American Society of Civil Engineers: Report Card, asset-backed security, Bakken shale, banking crisis, Bear Stearns, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, carbon tax, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, congestion pricing, creative destruction, credit crunch, currency manipulation / currency intervention, demand response, Donald Trump, financial engineering, Frederick Winslow Taylor, high net worth, high-speed rail, housing crisis, hydraulic fracturing, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, index fund, intangible asset, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low interest rates, low skilled workers, man camp, Mark Zuckerberg, Martin Wolf, Mary Meeker, Maui Hawaii, McMansion, money market fund, mortgage debt, Network effects, new economy, obamacare, oil shale / tar sands, oil shock, peak oil, plutocrats, price stability, quantitative easing, race to the bottom, reserve currency, reshoring, Richard Florida, rising living standards, risk tolerance, risk/return, scientific management, Silicon Valley, Silicon Valley startup, six sigma, Skype, sovereign wealth fund, Steve Jobs, superstar cities, the High Line, transit-oriented development, Wall-E, Yogi Berra, zero-sum game, Zipcar

Aid to the auto industry was one of the smaller components of the TARP, but it was perhaps its most controversial. The aid to General Motors and Chrysler caused a great deal of political ruckus and debate, in part because it involved only two companies and an intense government involvement in the bankruptcy process. Ideology and orthodoxy would have recommended cutting the companies loose and letting creative destruction work its wonders. But simply letting General Motors and Chrysler go into unsupervised bankruptcy and an almost certain liquidation in 2009 would have been irresponsible and disastrous—not just for the employees of GM and Chrysler, but for the companies’ supply chains, vendors, and dealers.


pages: 362 words: 99,063

The Education of Millionaires: It's Not What You Think and It's Not Too Late by Michael Ellsberg

affirmative action, Black Swan, Burning Man, corporate governance, creative destruction, do what you love, financial engineering, financial independence, follow your passion, future of work, hiring and firing, independent contractor, job automation, knowledge worker, lateral thinking, Lean Startup, Mark Zuckerberg, Max Levchin, means of production, mega-rich, meta-analysis, new economy, Norman Mailer, Peter Thiel, profit motive, race to the bottom, Sand Hill Road, shareholder value, side project, Silicon Valley, Silicon Valley billionaire, Skype, social intelligence, solopreneur, Steve Ballmer, survivorship bias, telemarketer, Tony Hsieh

He has traded theoretical education in college courses, which cost him a fortune, for real-world education in his own startup, in which he’s instead earning money while he learns. He has simply bypassed the higher education bubble. “I believe the education system as a whole is broken beyond repair, and starting anew via creative destruction is our only hope for system-wide improvement,” Max wrote in a blog post announcing his decision to leave Stanford.9 This reminded me of a sentiment that Marc Ecko shared with me: “I hate the word ‘reform.’ You don’t ‘reform’ the iPod into the iPhone! You change it! You reimagine it! It’s not reform, it’s reimagination.”


pages: 364 words: 99,613

Servant Economy: Where America's Elite Is Sending the Middle Class by Jeff Faux

air traffic controllers' union, Alan Greenspan, back-to-the-land, Bear Stearns, benefit corporation, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, call centre, centre right, classic study, cognitive dissonance, collateralized debt obligation, collective bargaining, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, disruptive innovation, falling living standards, financial deregulation, financial innovation, full employment, Glass-Steagall Act, guns versus butter model, high-speed rail, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kickstarter, lake wobegon effect, Long Term Capital Management, low interest rates, market fundamentalism, Martin Wolf, McMansion, medical malpractice, Michael Milken, military-industrial complex, Minsky moment, mortgage debt, Myron Scholes, Naomi Klein, new economy, oil shock, old-boy network, open immigration, Paul Samuelson, plutocrats, price mechanism, price stability, private military company, public intellectual, radical decentralization, Ralph Nader, reserve currency, rising living standards, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, school vouchers, Silicon Valley, single-payer health, Solyndra, South China Sea, statistical model, Steve Jobs, Suez crisis 1956, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War, you are the product

In the 1860s, had either Mexico or Canada, relative to the United States, been as strong as Britain and France were relative to Germany, they might have taken advantage of our Civil War to annex chunks of territory that now appear to have been destined to become U.S. states. The result of this U.S. growth was the world’s largest internal market facilitated by a single language, enforceable laws, and a rough social contract that could accommodate the market’s growth without being seriously derailed by the social tensions generated by the relentless creative destruction of capitalism. Social tensions certainly existed. With the introduction of the steamship, immigration accelerated, and the cities of the Northeast filled up with large numbers of non-English-speaking poor. In 1845, the country’s population was roughly twenty million people. Throughout the next ten years, approximately three million immigrants arrived.


pages: 311 words: 99,699

Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe by Gillian Tett

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, asset-backed security, bank run, banking crisis, Bear Stearns, Black-Scholes formula, Blythe Masters, book value, break the buck, Bretton Woods, business climate, business cycle, buy and hold, collateralized debt obligation, commoditize, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, easy for humans, difficult for computers, financial engineering, financial innovation, fixed income, Glass-Steagall Act, housing crisis, interest rate derivative, interest rate swap, inverted yield curve, junk bonds, Kickstarter, locking in a profit, Long Term Capital Management, low interest rates, McMansion, Michael Milken, money market fund, mortgage debt, North Sea oil, Northern Rock, Plato's cave, proprietary trading, Renaissance Technologies, risk free rate, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, short selling, sovereign wealth fund, statistical model, tail risk, The Great Moderation, too big to fail, value at risk, yield curve

That left Bush and Paulson in a bind. They certainly didn’t want to see millions of voters thrown out of their homes. Nor did they wish to see the financial crisis spread. Yet Bush hailed from a Republican Party that espoused free-market ideals, and using federal intervention to prevent so-called creative destruction flew in the face of those principles. So, as Bush stood in the Rose Garden in the August sunlight, he tried to steer a middle line. “Owning a home has always been at the center of the American Dream,” he declared in his folksy style. “[But] the markets are in a period of transition, as participants reassess and reprice risk, [and] one area that has shown particular strain is the mortgage market, especially what’s known as the subprime sector of the mortgage market.”


pages: 306 words: 97,211

Value Investing: From Graham to Buffett and Beyond by Bruce C. N. Greenwald, Judd Kahn, Paul D. Sonkin, Michael van Biema

Andrei Shleifer, barriers to entry, Berlin Wall, book value, business cycle, business logic, capital asset pricing model, corporate raider, creative destruction, Daniel Kahneman / Amos Tversky, discounted cash flows, diversified portfolio, Eugene Fama: efficient market hypothesis, Fairchild Semiconductor, financial engineering, fixed income, index fund, intangible asset, junk bonds, Long Term Capital Management, naked short selling, new economy, place-making, price mechanism, quantitative trading / quantitative finance, Richard Thaler, risk free rate, search costs, shareholder value, short selling, Silicon Valley, stocks for the long run, Telecommunications Act of 1996, time value of money, tulip mania, Y2K, zero-sum game

Otherwise, the company is just breaking even, economically speaking, no matter how many new plants it builds, how many people it adds to the payroll, how much larger its sales figures are, and even how large its earnings per share swell. There are not many companies that have been able to grow successfully within their franchises. Some of the most fundamental laws of market economies seem to be conspiring against them: declining marginal returns; creative destruction; the attraction of entrepreneurs to areas where investments have been earning an above-market return; the limited duration of patents, copyrights, and other formal barriers; and the loss of energy and hunger on the part of the now satiated leaders. Pushing against these limits are powerful resources that great companies possess: economies of scale that take advantage of R&D, production, marketing, and distribution; global brand recognition; cheaper access to capital; and support in the seats of political power.


pages: 349 words: 98,868

Nervous States: Democracy and the Decline of Reason by William Davies

active measures, Affordable Care Act / Obamacare, Amazon Web Services, Anthropocene, bank run, banking crisis, basic income, Black Lives Matter, Brexit referendum, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, citizen journalism, Climategate, Climatic Research Unit, Colonization of Mars, continuation of politics by other means, creative destruction, credit crunch, data science, decarbonisation, deep learning, DeepMind, deindustrialization, digital divide, discovery of penicillin, Dominic Cummings, Donald Trump, drone strike, Elon Musk, failed state, fake news, Filter Bubble, first-past-the-post, Frank Gehry, gig economy, government statistician, housing crisis, income inequality, Isaac Newton, Jeff Bezos, Jeremy Corbyn, Johannes Kepler, Joseph Schumpeter, knowledge economy, loss aversion, low skilled workers, Mahatma Gandhi, Mark Zuckerberg, mass immigration, meta-analysis, Mont Pelerin Society, mutually assured destruction, Northern Rock, obamacare, Occupy movement, opioid epidemic / opioid crisis, Paris climate accords, pattern recognition, Peace of Westphalia, Peter Thiel, Philip Mirowski, planetary scale, post-industrial society, post-truth, quantitative easing, RAND corporation, Ray Kurzweil, Richard Florida, road to serfdom, Robert Mercer, Ronald Reagan, sentiment analysis, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, smart cities, Social Justice Warrior, statistical model, Steve Bannon, Steve Jobs, tacit knowledge, the scientific method, Turing machine, Uber for X, universal basic income, University of East Anglia, Valery Gerasimov, W. E. B. Du Bois, We are the 99%, WikiLeaks, women in the workforce, zero-sum game

It was crucial that people were free to say things which are not considered “true,” if only because this allows us to discover whether our existing facts can stand up to being challenged. Like a genetic mutation, what looks like a falsehood may turn out to be superior given time. Schumpeter, meanwhile, argued that entrepreneurs unleash “creative destruction” within the economy, overturning one set of established techniques and institutions, and replacing them with another. The real danger facing the West lies in efforts by governments and experts to pacify such processes of disruption. However, this philosophy respects no clear distinction between the realm of intellectual competition and that of economic competition.


pages: 352 words: 98,424

Cathedrals of Steam: How London’s Great Stations Were Built – and How They Transformed the City by Christian Wolmar

Ascot racecourse, British Empire, centre right, coronavirus, COVID-19, creative destruction, Crossrail, driverless car, high-speed rail, James Watt: steam engine, lockdown, mass immigration, megacity, megaproject, pneumatic tube, railway mania

As we have seen in Chapter 8, their decisions to build and to invest were often influenced by property owners, developers, hoteliers and an assortment of professional advisers who also benefited personally from the construction of these enormous stations. The dismantling and renewal of the urban fabric, called by some authors ‘creative destruction’, carried out by the railways was on an unprecedented scale especially given the speed and extent of the process. By 1890, the major railway companies had spent £100m on new terminuses, more than one eighth of their total raised capital, most of which was spent in London. They had bought at least 800 acres in the capital to build the terminuses and associated facilities, and according to Michael Freeman, the author of a book on Victorian enterprise, it was not just the direct ownership that was important: ‘In the major cities, they had become owners of up to 10 per cent of the land in central areas and indirectly influenced the functional land use of up to 20 per cent.’1 Even after chronicling the stories of how these impressive structures came to be built in London, it is difficult to understand how the capital acquired such a remarkable collection of railway stations.


pages: 393 words: 91,257

The Coming of Neo-Feudalism: A Warning to the Global Middle Class by Joel Kotkin

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, Admiral Zheng, Alvin Toffler, Andy Kessler, autonomous vehicles, basic income, Bernie Sanders, Big Tech, bread and circuses, Brexit referendum, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon footprint, Cass Sunstein, clean water, company town, content marketing, Cornelius Vanderbilt, creative destruction, data science, deindustrialization, demographic transition, deplatforming, don't be evil, Donald Trump, driverless car, edge city, Elon Musk, European colonialism, Evgeny Morozov, financial independence, Francis Fukuyama: the end of history, Future Shock, gentrification, gig economy, Gini coefficient, Google bus, Great Leap Forward, green new deal, guest worker program, Hans Rosling, Herbert Marcuse, housing crisis, income inequality, informal economy, Jane Jacobs, Jaron Lanier, Jeff Bezos, Jeremy Corbyn, job automation, job polarisation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, life extension, low skilled workers, Lyft, Marc Benioff, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, megacity, Michael Shellenberger, Nate Silver, new economy, New Urbanism, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, Occupy movement, Parag Khanna, Peter Thiel, plutocrats, post-industrial society, post-work, postindustrial economy, postnationalism / post nation state, precariat, profit motive, public intellectual, RAND corporation, Ray Kurzweil, rent control, Richard Florida, road to serfdom, Robert Gordon, Salesforce, Sam Altman, San Francisco homelessness, Satyajit Das, sharing economy, Sidewalk Labs, Silicon Valley, smart cities, Social Justice Warrior, Steve Jobs, Stewart Brand, superstar cities, technological determinism, Ted Nordhaus, The Death and Life of Great American Cities, The future is already here, The Future of Employment, The Rise and Fall of American Growth, Thomas L Friedman, too big to fail, trade route, Travis Kalanick, Uber and Lyft, uber lyft, universal basic income, unpaid internship, upwardly mobile, Virgin Galactic, We are the 99%, Wolfgang Streeck, women in the workforce, work culture , working-age population, Y Combinator

Yet today we see diminishing social mobility and little real material progress for most people, as economic power is increasingly dominated by fewer companies, particularly in the finance and technology sectors.2 Our future is coming to look like the “high-tech middle age” that the Japanese futurist Taichi Sakaiya predicted more than three decades ago.3 The pioneers of the modern tech industry were once celebrated as exemplars of capitalist competition, illustrating what Joseph Schumpeter called the “creative destruction” that breaks up monopolies and allows others to rise from below. But today’s tech leaders increasingly resemble an exclusive ruling class, controlling a few exceptionally powerful companies, and like aristocracies everywhere they are often resistant to any dispersion of their power. As they conquer ever more of the precious digital real estate, they are building a more stratified economic and social order, with widening class divisions, not only in the United States but around the world.4 The Birth of the New Oligarchy California’s Santa Clara Valley seems an unlikely incubator for neo-feudalism.


pages: 411 words: 98,128

Bezonomics: How Amazon Is Changing Our Lives and What the World's Best Companies Are Learning From It by Brian Dumaine

activist fund / activist shareholder / activist investor, AI winter, Airbnb, Amazon Robotics, Amazon Web Services, Atul Gawande, autonomous vehicles, basic income, Bernie Sanders, Big Tech, Black Swan, call centre, Cambridge Analytica, carbon tax, Carl Icahn, Chris Urmson, cloud computing, corporate raider, creative destruction, Danny Hillis, data science, deep learning, Donald Trump, Elon Musk, Erik Brynjolfsson, Fairchild Semiconductor, fake news, fulfillment center, future of work, gig economy, Glass-Steagall Act, Google Glasses, Google X / Alphabet X, income inequality, independent contractor, industrial robot, Internet of things, Jeff Bezos, job automation, Joseph Schumpeter, Kevin Kelly, Kevin Roose, Lyft, Marc Andreessen, Mark Zuckerberg, military-industrial complex, money market fund, natural language processing, no-fly zone, Ocado, pets.com, plutocrats, race to the bottom, ride hailing / ride sharing, Salesforce, Sand Hill Road, self-driving car, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, Snapchat, speech recognition, Steve Jobs, Stewart Brand, supply-chain management, TED Talk, Tim Cook: Apple, too big to fail, Travis Kalanick, two-pizza team, Uber and Lyft, uber lyft, universal basic income, warehouse automation, warehouse robotics, wealth creators, web application, Whole Earth Catalog, work culture

If Amazon’s enemies want a system where everyone plays nice, where less efficient companies get government protection, and the U.S. Justice Department is the referee, that’s their prerogative. That anti-Amazon vision, however, carries a steep price. It will stifle innovation. In the 1930s, Austrian economist Joseph Schumpeter argued that capitalism at its heart was about creative destruction—the old had to make way for the new if there was to be progress. History has borne him out. The automobile wiped out the buggy makers, cell phones have wiped out landlines, cloud computing is taking the place of corporate data centers, organic food is hurting the business of packaged goods giants like General Mills and Kraft Heinz.


pages: 405 words: 103,723

The Government of No One: The Theory and Practice of Anarchism by Ruth Kinna

Anthropocene, Berlin Wall, British Empire, complexity theory, creative destruction, critical race theory, David Graeber, deep learning, degrowth, en.wikipedia.org, Fall of the Berlin Wall, feminist movement, friendly fire, ghettoisation, Herbert Marcuse, intentional community, John Gilmore, Kickstarter, late capitalism, means of production, meritocracy, moral panic, Murray Bookchin, New Journalism, Occupy movement, post scarcity, public intellectual, rewilding, Steven Pinker, Ted Kaczynski, union organizing, wage slave

The painting is often taken as a statement of a politics that centred on principles of individual self-expression and collective harmony. His painting The Wrecker (1897–9), which depicts a male worker swinging a pickaxe in the foreground and another crow-barring stones from a monumental building behind, indicates that his anarchism had a creatively destructive edge, too.11 REBECCA SOLNIT (b. 1961) Solnit is an independent writer, historian and activist, born in Connecticut and brought up in California. Her parents were active in civil rights and anti-Vietnam War movements. She became involved in anti-nuclear activism in the late 1980s. After spending a year at the American University in Paris she studied English and journalism at Berkeley.


pages: 335 words: 97,468

Uncharted: How to Map the Future by Margaret Heffernan

"World Economic Forum" Davos, 23andMe, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, Anne Wojcicki, anti-communist, Atul Gawande, autonomous vehicles, banking crisis, Berlin Wall, Boris Johnson, Brexit referendum, chief data officer, Chris Urmson, clean water, complexity theory, conceptual framework, cosmic microwave background, creative destruction, CRISPR, crowdsourcing, data science, David Attenborough, discovery of penicillin, driverless car, epigenetics, Fall of the Berlin Wall, fear of failure, George Santayana, gig economy, Google Glasses, Greta Thunberg, Higgs boson, index card, Internet of things, Jaron Lanier, job automation, Kickstarter, Large Hadron Collider, late capitalism, lateral thinking, Law of Accelerating Returns, liberation theology, mass immigration, mass incarceration, megaproject, Murray Gell-Mann, Nate Silver, obamacare, oil shale / tar sands, passive investing, pattern recognition, Peter Thiel, prediction markets, RAND corporation, Ray Kurzweil, Rosa Parks, Sam Altman, scientific management, Shoshana Zuboff, Silicon Valley, smart meter, Stephen Hawking, Steve Ballmer, Steve Jobs, surveillance capitalism, TED Talk, The Signal and the Noise by Nate Silver, Tim Cook: Apple, twin studies, University of East Anglia

Nowhere has this constraint been more obvious than amid the bloodbath of retail, where companies seem to have taken to heart Hilaire Belloc’s line: ‘always keep ahold of Nurse/For fear of finding something worse.’ So afraid are they of failure that executives plan shop closures and layoffs with meticulous efficiency – while failing to be inventive enough to keep those businesses alive. Market analysts may call this creative destruction, but it’s hard to find much that’s creative about it. Experiments and innovation are almost nowhere to be seen. In part this is a classic competition problem. In Amazon, traditional retailers face a common threat. They all struggle to survive against a tax-free competitor who can afford to sell goods unprofitably, and whose long game is to put traditional retailers out of business.


pages: 328 words: 96,678

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

Suppose that accelerating innovation increases the potential for global growth and positive supply shocks. This climate lifts incomes and reduces inflation. Falling costs for products and services drive “good” deflation. Instead of fighting good deflation, enlightened central bankers will see its merits rather than induce bubbles with loose policies that try to fight deflation. To be sure, creative destruction will occur. Obsolete products, firms, job categories, and services must fall by the wayside to make way for new ideas, new firms, jobs, and technologies. In this brave new world, big tech firms will remain very powerful. They will battle with governments to set the scope of regulation, but those battles will be offset by the need for governments and big tech to cooperate on national security agendas including cybersecurity.


pages: 340 words: 101,675

A New History of the Future in 100 Objects: A Fiction by Adrian Hon

Adrian Hon, air gap, Anthropocene, augmented reality, blockchain, bounce rate, call centre, carbon credits, carbon tax, Cepheid variable, charter city, Clayton Christensen, clean water, cognitive dissonance, congestion charging, creative destruction, CRISPR, crowdsourcing, cryptocurrency, deepfake, defense in depth, discrete time, disinformation, disintermediation, driverless car, drone strike, food desert, game design, gamification, gravity well, hive mind, hydroponic farming, impulse control, income inequality, job automation, Kickstarter, Kim Stanley Robinson, knowledge worker, life extension, lifelogging, low earth orbit, machine translation, MITM: man-in-the-middle, moral panic, Neal Stephenson, no-fly zone, off grid, offshore financial centre, oil shale / tar sands, orbital mechanics / astrodynamics, peak oil, peer-to-peer, phenotype, planned obsolescence, post scarcity, precariat, precautionary principle, prediction markets, rewilding, Silicon Valley, skeuomorphism, Skype, smart contracts, social graph, South Sea Bubble, speech recognition, stem cell, Stewart Brand, synthetic biology, technoutopianism, telepresence, transfer pricing, tulip mania, Turing test, urban sprawl, Vernor Vinge, VTOL, working-age population

Time, chance, technology, and artificial intelligence affect all skills. There is a limit to the speed at which normal humans can learn new abilities, and if what they choose has too brief a half-life, even the fastest learners can fall permanently behind. That was the way of the twenty-first century. A wave of machine-powered creative destruction engulfed the human-powered economy—machines that didn’t just magnify human productivity but replaced human thought. Entire tracts of society found their skills literally worthless within the space of a decade. The resulting reduction in costs saw individual productivity rocket—for those individuals who still had jobs.


Capital Ideas Evolving by Peter L. Bernstein

Albert Einstein, algorithmic trading, Andrei Shleifer, asset allocation, behavioural economics, Black Monday: stock market crash in 1987, Bob Litterman, book value, business cycle, buy and hold, buy low sell high, capital asset pricing model, commodity trading advisor, computerized trading, creative destruction, currency risk, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, diversification, diversified portfolio, endowment effect, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, financial engineering, financial innovation, fixed income, high net worth, hiring and firing, index fund, invisible hand, Isaac Newton, John Meriwether, John von Neumann, Joseph Schumpeter, Kenneth Arrow, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, market bubble, mental accounting, money market fund, Myron Scholes, paper trading, passive investing, Paul Samuelson, Performance of Mutual Funds in the Period, price anchoring, price stability, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, seminal paper, Sharpe ratio, short selling, short squeeze, Silicon Valley, South Sea Bubble, statistical model, survivorship bias, systematic trading, tail risk, technology bubble, The Wealth of Nations by Adam Smith, transaction costs, yield curve, Yogi Berra, zero-sum game

But the great theories of Capital Ideas have nurtured and guided the development of today’s markets to a much greater extent than most of the participants in these markets stop to realize. In the most vivid manner, Adam Smith’s Invisible Hand is always in play, while Joseph Schumpeter’s “perennial gale of creative destruction” blows compellingly, to a point where, as Schumpeter also reminds us, “Profit . . . is temporary by nature: it will vanish in the subsequent process of competition and adaptation.”7 Here is what the evolution of Capital Ideas is all about. bern_z01bnotes.qxd 3/23/07 9:12 AM Page 247 Notes P R E FAC E 1. 2. 3. 4. 5. 6. 7. 8. 9.


pages: 431 words: 107,868

The Great Race: The Global Quest for the Car of the Future by Levi Tillemann

Affordable Care Act / Obamacare, An Inconvenient Truth, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, banking crisis, Bear Stearns, car-free, carbon footprint, clean tech, creative destruction, decarbonisation, deindustrialization, demand response, Deng Xiaoping, Donald Trump, driverless car, electricity market, Elon Musk, en.wikipedia.org, energy security, factory automation, Fairchild Semiconductor, Ford Model T, foreign exchange controls, gigafactory, global value chain, high-speed rail, hydrogen economy, index card, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Joseph Schumpeter, Kanban, Kickstarter, manufacturing employment, market design, megacity, Nixon shock, obamacare, off-the-grid, oil shock, planned obsolescence, Ralph Nader, RFID, rolodex, Ronald Reagan, Rubik’s Cube, self-driving car, shareholder value, Shenzhen special economic zone , short squeeze, Silicon Valley, Silicon Valley startup, skunkworks, smart cities, Solyndra, sovereign wealth fund, special economic zone, Steve Jobs, Tesla Model S, too big to fail, Unsafe at Any Speed, zero-sum game, Zipcar

There are no definitive reports on Schumpeter’s romantic prowess, but as an economist he certainly left his mark. One of Schumpeter’s most famous arguments was that a capitalist system “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” He wrote that Creative Destruction was “the essential fact about capitalism . . . what capitalism consists in and what every capitalist concern has got to live in.”2 In Schumpeter’s view, the goal of each business concern is to win “entrepreneurial rent” (aka profit), and that process drives innovation. But Schumpeter himself realized that there were problems with this model.


pages: 452 words: 110,488

The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead by David Callahan

1960s counterculture, affirmative action, Alan Greenspan, business cycle, Cornelius Vanderbilt, corporate governance, corporate raider, creative destruction, David Brooks, deindustrialization, East Village, eat what you kill, fixed income, forensic accounting, full employment, game design, greed is good, high batting average, housing crisis, illegal immigration, income inequality, job satisfaction, junk bonds, mandatory minimum, market fundamentalism, Mary Meeker, McMansion, Michael Milken, microcredit, moral hazard, multilevel marketing, new economy, New Urbanism, offshore financial centre, oil shock, old-boy network, PalmPilot, plutocrats, postindustrial economy, profit maximization, profit motive, RAND corporation, Ray Oldenburg, rent stabilization, Robert Bork, rolodex, Ronald Reagan, Savings and loan crisis, shareholder value, Shoshana Zuboff, Silicon Valley, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, War on Poverty, winner-take-all economy, World Values Survey, young professional, zero-sum game

Economic life turned more brutish in many places that had previously been insulated from a money-grubbing, cost-cutting, bean-counting, and one-upsmanship mind-set. Everywhere, free-market forces bulldozed long-standing social norms and professional cultures. The bulldozing wreaked havoc in sports, law, business, accounting, medicine, academia, publishing, and other fields. It was the "creative destruction of capitalism" in classic form. Unfortunately, the ethics of individuals and organizations were among the casualties of a resurgent market. As a booming economy pumped rivers of cash into every kind of business organization—and as the carrots for the Winning Class got bigger—bad behavior became more tempting.


pages: 385 words: 103,561

Pinpoint: How GPS Is Changing Our World by Greg Milner

Apollo 11, Ayatollah Khomeini, Boeing 747, British Empire, creative destruction, data acquisition, data science, Dava Sobel, different worldview, digital map, Easter island, Edmond Halley, Eratosthenes, experimental subject, Eyjafjallajökull, Flash crash, friendly fire, GPS: selective availability, Hedy Lamarr / George Antheil, Ian Bogost, Internet of things, Isaac Newton, John Harrison: Longitude, Kevin Kelly, Kwajalein Atoll, land tenure, lone genius, low earth orbit, Mars Rover, Mercator projection, place-making, polynesian navigation, precision agriculture, race to the bottom, Silicon Valley, Silicon Valley startup, Skinner box, skunkworks, smart grid, systems thinking, the map is not the territory, vertical integration

A few voices worry that all this has happened without enough thought being given to the system’s security. The voices are getting louder—and while they are concerned about people disrupting GPS by jamming its signals, this is by no means their biggest fear. Until it disbanded in 2014, an interdisciplinary think tank of creative destruction occupied a small barracks-like building on the idyllic campus of the Argonne National Laboratory, outside Chicago. The job of the Vulnerability Assessment Team was to break the unbreakable. The work they performed fell under the somewhat obscure rubric of “physical security.” Experts in this field probe the weaknesses of methods and devices that protect physical assets (buildings, people, etc.), as well the physical methods, such as fences and access control devices, that safeguard digital data, intellectual property, and other virtual assets.


pages: 465 words: 109,653

Free Ride by Robert Levine

A Declaration of the Independence of Cyberspace, Anne Wojcicki, book scanning, borderless world, Buckminster Fuller, citizen journalism, commoditize, company town, correlation does not imply causation, creative destruction, crowdsourcing, death of newspapers, Edward Lloyd's coffeehouse, Electric Kool-Aid Acid Test, Firefox, future of journalism, Googley, Hacker Ethic, informal economy, Jaron Lanier, John Gilmore, John Perry Barlow, Joi Ito, Julian Assange, Justin.tv, Kevin Kelly, linear programming, Marc Andreessen, Mitch Kapor, moral panic, offshore financial centre, pets.com, publish or perish, race to the bottom, Saturday Night Live, Silicon Valley, Silicon Valley startup, Skype, spectrum auction, Steve Jobs, Steven Levy, Stewart Brand, subscription business, Telecommunications Act of 1996, the long tail, Whole Earth Catalog, WikiLeaks

An online entrepreneur would find a new way to distribute media, use professional content to build up an audience, and hope someone else would worry about whether it could grow into a sustainable business. Napster never even had a strategy. More than a decade later, no company has made a significant profit distributing music online except maybe Apple—and it makes far more money selling iStuff. This isn’t creative destruction; it’s the destruction of creativity. When the music business won its court case against Napster, the technology business started fighting back—in Congress as well as in court. Attempts to defend copyright were cast as assaults on free speech, efforts to organize markets were criticized as outmoded, and piracy was confused with creativity.


pages: 571 words: 106,255

The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

"World Economic Forum" Davos, Airbnb, Alan Greenspan, altcoin, bank run, banks create money, bitcoin, Black Swan, blockchain, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, Charles Babbage, conceptual framework, creative destruction, cryptocurrency, currency manipulation / currency intervention, currency peg, delayed gratification, disintermediation, distributed ledger, Elisha Otis, Ethereum, ethereum blockchain, fiat currency, fixed income, floating exchange rates, Fractional reserve banking, full employment, George Gilder, Glass-Steagall Act, global reserve currency, high net worth, initial coin offering, invention of the telegraph, Isaac Newton, iterative process, jimmy wales, Joseph Schumpeter, low interest rates, market bubble, market clearing, means of production, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, Paul Samuelson, peer-to-peer, Peter Thiel, price mechanism, price stability, profit motive, QR code, quantum cryptography, ransomware, reserve currency, Richard Feynman, risk tolerance, Satoshi Nakamoto, scientific management, secular stagnation, smart contracts, special drawing rights, Stanford marshmallow experiment, The Nature of the Firm, the payments system, too big to fail, transaction costs, Walter Mischel, We are all Keynesians now, zero-sum game

The business is productive because it transforms inputs of a certain market price into outputs with a higher market price. Any firm that produces outputs valued at less than its inputs would go out of business, its resources freed up to be used by other, more productive firms, in what economist Joseph Schumpeter termed creative destruction. There can be no profit in a free market without the real risk of loss, and everyone is forced to have skin in the game: failure is always a real possibility, and can be costly. Government‐issued unsound money, however, can stall this process, keeping unproductive firms undead but not truly alive, the economic equivalent of zombies or vampires drawing on the resources of the alive and productive firms to produce things of less value than the resources needed to make them.


pages: 344 words: 104,077

Superminds: The Surprising Power of People and Computers Thinking Together by Thomas W. Malone

Abraham Maslow, agricultural Revolution, Airbnb, Albert Einstein, Alvin Toffler, Amazon Mechanical Turk, Apple's 1984 Super Bowl advert, Asperger Syndrome, Baxter: Rethink Robotics, bitcoin, blockchain, Boeing 747, business process, call centre, carbon tax, clean water, Computing Machinery and Intelligence, creative destruction, crowdsourcing, data science, deep learning, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, drone strike, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, experimental economics, Exxon Valdez, Ford Model T, future of work, Future Shock, Galaxy Zoo, Garrett Hardin, gig economy, happiness index / gross national happiness, independent contractor, industrial robot, Internet of things, invention of the telegraph, inventory management, invisible hand, Jeff Rulifson, jimmy wales, job automation, John Markoff, Joi Ito, Joseph Schumpeter, Kenneth Arrow, knowledge worker, longitudinal study, Lyft, machine translation, Marshall McLuhan, Nick Bostrom, Occupy movement, Pareto efficiency, pattern recognition, prediction markets, price mechanism, radical decentralization, Ray Kurzweil, Rodney Brooks, Ronald Coase, search costs, Second Machine Age, self-driving car, Silicon Valley, slashdot, social intelligence, Stephen Hawking, Steve Jobs, Steven Pinker, Stewart Brand, technological singularity, The Nature of the Firm, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Tim Cook: Apple, Tragedy of the Commons, transaction costs, Travis Kalanick, Uber for X, uber lyft, Vernor Vinge, Vilfredo Pareto, Watson beat the top human players on Jeopardy!

For instance, when Ford introduced the Model T, in 1908, it sold for $850, but by 1925, Ford reduced its costs enough to sell a Model T for less than $300.6 Some of the learning occurred when different companies tried lots of different things and then other companies adopted the ideas that worked well (like assembly lines). Some learning was a simple result of the forces of supply and demand in markets: when customers didn’t want to buy gas-guzzling cars, companies produced fewer of them. And some of the learning was a result of how markets encourage what economist Joseph Schumpeter called creative destruction: the companies that figured out how to profitably sell cars grew larger, and those that didn’t went out of business. All this learning was collective learning by superminds. Some occurred in hierarchies, some in markets, and some in scientific and other communities outside the auto industry itself.


pages: 417 words: 109,367

The End of Doom: Environmental Renewal in the Twenty-First Century by Ronald Bailey

3D printing, additive manufacturing, agricultural Revolution, Albert Einstein, Anthropocene, Asilomar, autonomous vehicles, biodiversity loss, business cycle, carbon tax, Cass Sunstein, Climatic Research Unit, commodity super cycle, conceptual framework, corporate governance, creative destruction, credit crunch, David Attenborough, decarbonisation, dematerialisation, demographic transition, disinformation, disruptive innovation, diversified portfolio, double helix, energy security, failed state, financial independence, Ford Model T, Garrett Hardin, Gary Taubes, Great Leap Forward, hydraulic fracturing, income inequality, Induced demand, Intergovernmental Panel on Climate Change (IPCC), invisible hand, knowledge economy, meta-analysis, Naomi Klein, negative emissions, Neolithic agricultural revolution, ocean acidification, oil shale / tar sands, oil shock, pattern recognition, peak oil, Peter Calthorpe, phenotype, planetary scale, precautionary principle, price stability, profit motive, purchasing power parity, race to the bottom, RAND corporation, Recombinant DNA, rent-seeking, rewilding, Stewart Brand, synthetic biology, systematic bias, Tesla Model S, trade liberalization, Tragedy of the Commons, two and twenty, University of East Anglia, uranium enrichment, women in the workforce, yield curve

They too find that since the Neolithic agricultural revolution, most societies have been organized around “extractive” political and economic institutions that funnel resources from the mass of people to small but powerful elites. The economic and political institutions that produce economic growth are inevitable threats to the power of reigning elites. “The fear of creative destruction is the main reason why there was no sustained increase in living standards between the Neolithic and Industrial revolutions. Technological innovation makes human societies prosperous, but also involves the replacement of the old with the new, and the destruction of the economic privileges and political power of certain people,” they explain.


pages: 459 words: 103,153

Adapt: Why Success Always Starts With Failure by Tim Harford

An Inconvenient Truth, Andrew Wiles, banking crisis, Basel III, behavioural economics, Berlin Wall, Bernie Madoff, Black Swan, Boeing 747, business logic, car-free, carbon footprint, carbon tax, Cass Sunstein, charter city, Clayton Christensen, clean water, cloud computing, cognitive dissonance, complexity theory, corporate governance, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, Dava Sobel, Deep Water Horizon, Deng Xiaoping, disruptive innovation, double entry bookkeeping, Edmond Halley, en.wikipedia.org, Erik Brynjolfsson, experimental subject, Fall of the Berlin Wall, Fermat's Last Theorem, financial engineering, Firefox, food miles, Gerolamo Cardano, global supply chain, Great Leap Forward, Herman Kahn, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, Jarndyce and Jarndyce, John Harrison: Longitude, knowledge worker, loose coupling, Martin Wolf, mass immigration, Menlo Park, Mikhail Gorbachev, mutually assured destruction, Netflix Prize, New Urbanism, Nick Leeson, PageRank, Piper Alpha, profit motive, Richard Florida, Richard Thaler, rolodex, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, South China Sea, SpaceShipOne, special economic zone, spectrum auction, Steve Jobs, supply-chain management, tacit knowledge, the market place, The Wisdom of Crowds, too big to fail, trade route, Tyler Cowen, Tyler Cowen: Great Stagnation, Virgin Galactic, web application, X Prize, zero-sum game

As the pike cichlid closes in for a meal, it’s little consolation to the polka-dotted guppy that its failure is helping clear space for a thriving population of pebble-coloured nieces and nephews. A struggling entrepreneur is just as unlikely to be comforted by the thought that the failure of her start-up is part of a wealth-generating process of creative destruction. So let’s first acknowledge a crucial difference: individuals, unlike populations, can succeed without adapting. The guppy population evolved pebble-camouflage through trial rror, but no individual guppy did: each was born either with good-enough camouflage, or not. Similarly, many of the heroes of this book – Reginald Mitchell, Mario Capecchi, H.R.


pages: 356 words: 105,533

Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market by Scott Patterson

Alan Greenspan, algorithmic trading, automated trading system, banking crisis, bash_history, Bear Stearns, Bernie Madoff, Black Monday: stock market crash in 1987, butterfly effect, buttonwood tree, buy and hold, Chuck Templeton: OpenTable:, cloud computing, collapse of Lehman Brothers, computerized trading, creative destruction, Donald Trump, financial engineering, fixed income, Flash crash, Ford Model T, Francisco Pizarro, Gordon Gekko, Hibernia Atlantic: Project Express, High speed trading, information security, Jim Simons, Joseph Schumpeter, junk bonds, latency arbitrage, Long Term Capital Management, machine readable, Mark Zuckerberg, market design, market microstructure, Michael Milken, military-industrial complex, pattern recognition, payment for order flow, pets.com, Ponzi scheme, popular electronics, prediction markets, quantitative hedge fund, Ray Kurzweil, Renaissance Technologies, seminal paper, Sergey Aleynikov, Small Order Execution System, South China Sea, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stochastic process, three-martini lunch, Tragedy of the Commons, transaction costs, uptick rule, Watson beat the top human players on Jeopardy!, zero-sum game

Maschler, Citron, and Levine had gone head-to-head with a corrupt, self-dealing network of Nasdaq market makers and helped destroy it. Island was a classic example of the massively disruptive computer technology that started sweeping across the world in the last fifty years, the epitome of Joseph Schumpeter’s “perennial gale of creative destruction” behind capitalism. Fueled by Island, a new breed of dealers, quick-draw computer outfits like ATD, Tradebot, Getco, and Timber Hill were the new market makers. And Island’s progeny fanned out across Wall Street, a technocratic vanguard of elite players. And for a time, it looked as if Levine’s vision of a seamless, nearly free market had come to pass.


pages: 357 words: 110,017

Money: The Unauthorized Biography by Felix Martin

Alan Greenspan, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, call centre, capital asset pricing model, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, creative destruction, credit crunch, David Graeber, en.wikipedia.org, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, Fractional reserve banking, full employment, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Hyman Minsky, inflation targeting, invention of writing, invisible hand, Irish bank strikes, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, land bank, Michael Milken, mobile money, moral hazard, mortgage debt, new economy, Northern Rock, Occupy movement, Paul Volcker talking about ATMs, plutocrats, private military company, proprietary trading, public intellectual, Republic of Letters, Richard Feynman, Robert Shiller, Savings and loan crisis, Scientific racism, scientific worldview, seigniorage, Silicon Valley, smart transportation, South Sea Bubble, supply-chain management, The Wealth of Nations by Adam Smith, too big to fail

(illustration credit 4.1) Argentina’s experience is not the only example of a guerrilla war waged by a Monetary Maquis against government economic policy. When the Soviet Union disintegrated in the early 1990s, a similar thing happened. Financial shock therapy aimed to impose hard budget constraints on companies that had lived off continuous subsidies for decades. The idea was to liquidate the unviable enterprises in an avalanche of creative destruction, from which a brighter corporate future would emerge. But the managers of the enterprises themselves were not persuaded. When their access to the official banking sector dried up and they were invited quietly to exit the stage, they had a better idea. They created their own monetary networks with which to settle trade—circles of companies connected by supply chains that could accumulate trade credit with one another and then use it to offset debts without the use of the national money.


pages: 335 words: 104,850

Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business by John Mackey, Rajendra Sisodia, Bill George

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Abraham Maslow, Bear Stearns, benefit corporation, Berlin Wall, Buckminster Fuller, business process, carbon footprint, collective bargaining, corporate governance, corporate social responsibility, creative destruction, crony capitalism, cross-subsidies, do well by doing good, en.wikipedia.org, Everything should be made as simple as possible, Fall of the Berlin Wall, fear of failure, Flynn Effect, income per capita, invisible hand, Jeff Bezos, job satisfaction, John Elkington, lone genius, low interest rates, Mahatma Gandhi, microcredit, Nelson Mandela, Occupy movement, profit maximization, Ralph Waldo Emerson, shareholder value, six sigma, social intelligence, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Steven Pinker, systems thinking, The Fortune at the Bottom of the Pyramid, The Wealth of Nations by Adam Smith, too big to fail, union organizing, wealth creators, women in the workforce, zero-sum game

Even if most existing companies are unable or unwilling to make a successful transition to Conscious Capitalism, it won’t matter in the long term because there will be more and more conscious entrepreneurs starting up conscious businesses that will outcompete traditional businesses in the marketplace and eventually replace them. Free-enterprise capitalism is incredibly dynamic and its “creative destruction” processes (whereby more effective and efficient approaches continually supplant older ones) ensure that in the long term, the superior business philosophy triumphs. Once the founder leaves, companies always revert to the norm. Reversion after the loss of a strong leader is a real danger, and there are many cautionary tales from recent years to show how easily this can happen.


pages: 408 words: 108,985

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, Airbnb, Alan Greenspan, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, basic income, behavioural economics, benefit corporation, Berlin Wall, bilateral investment treaty, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, deindustrialization, discovery of DNA, diversified portfolio, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial intermediation, Francis Fukuyama: the end of history, full employment, gender pay gap, George Akerlof, gig economy, Gini coefficient, Glass-Steagall Act, hiring and firing, housing crisis, Hyman Minsky, income inequality, independent contractor, inflation targeting, informal economy, information asymmetry, intangible asset, investor state dispute settlement, invisible hand, Isaac Newton, labor-force participation, liberal capitalism, low interest rates, low skilled workers, market fundamentalism, mini-job, moral hazard, non-tariff barriers, offshore financial centre, open economy, Paris climate accords, patent troll, pension reform, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, Robert Shiller, Ronald Reagan, selection bias, shareholder value, Silicon Valley, sovereign wealth fund, TaskRabbit, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, tulip mania, universal basic income, unorthodox policies, vertical integration, zero-sum game

In banking, they encouraged excessive risk taking and short-termism; in the auto industry, they facilitated attempts to circumvent environmental regulations; in some international businesses, they enabled corruption and bribery. As long as CEOs and other high-level corporate executives have their compensation and benefits linked to stock prices, and particularly stock prices in the here and now, as many currently do, they will be tempted to pursue short-term gains and creative—destructive is a better word—accounting tricks, which are ephemeral sources of growth at best, over adding real long-term value to their companies. CEOs who can manipulate share prices by using creative (or even fraudulent) accounting practices are simply exercising their market power on their own behalf and for their own financial reward.


Smart Mobs: The Next Social Revolution by Howard Rheingold

"hyperreality Baudrillard"~20 OR "Baudrillard hyperreality", A Pattern Language, Alvin Toffler, AOL-Time Warner, augmented reality, barriers to entry, battle of ideas, Brewster Kahle, Burning Man, business climate, citizen journalism, computer vision, conceptual framework, creative destruction, Dennis Ritchie, digital divide, disinformation, Douglas Engelbart, Douglas Engelbart, experimental economics, experimental subject, Extropian, Free Software Foundation, Garrett Hardin, Hacker Ethic, Hedy Lamarr / George Antheil, Herman Kahn, history of Unix, hockey-stick growth, Howard Rheingold, invention of the telephone, inventory management, Ivan Sutherland, John Markoff, John von Neumann, Joi Ito, Joseph Schumpeter, Ken Thompson, Kevin Kelly, Lewis Mumford, Metcalfe's law, Metcalfe’s law, more computing power than Apollo, move 37, Multics, New Urbanism, Norbert Wiener, packet switching, PalmPilot, Panopticon Jeremy Bentham, pattern recognition, peer-to-peer, peer-to-peer model, pez dispenser, planetary scale, pre–internet, prisoner's dilemma, radical decentralization, RAND corporation, recommendation engine, Renaissance Technologies, RFID, Richard Stallman, Robert Metcalfe, Robert X Cringely, Ronald Coase, Search for Extraterrestrial Intelligence, seminal paper, SETI@home, sharing economy, Silicon Valley, skunkworks, slashdot, social intelligence, spectrum auction, Steven Levy, Stewart Brand, the Cathedral and the Bazaar, the scientific method, Tragedy of the Commons, transaction costs, ultimatum game, urban planning, web of trust, Whole Earth Review, Yochai Benkler, zero-sum game

Reed, who played an important part in facilitating innovation through the end-to-end architectural principle underlying the Internet, told Werbach, “We could have the greatest wave of innovation since the Internet (and probably bigger in impact, because more pervasive) if we could unlock the spectrum to explore the new possibilities.”89 New technologies have a history of destroying the dominance of prior technologies or making them obsolete. Joseph Schumpeter claimed that “this process of Creative Destruction is the essential fact about capitalism.”90 Lessig reminded me of Machiavelli’s counterpoint to Schumpeter: “Innovation makes enemies of all those who prospered under the old regime, and only lukewarm support is forthcoming from those who would prosper under the new.”91 Those who created an infrastructure in which the devices (telephones, televisions, and radios) are inexpensive and dumb, the network that connects the devices is highly specialized and expensive to install, and the service is sold on a metered basis (telephony, cable TV, and wired Internet access) are challenged by new enterprises in which cheap devices are the network, and no private enterprise owns the medium that carries their messages.


pages: 297 words: 108,353

Boom and Bust: A Global History of Financial Bubbles by William Quinn, John D. Turner

accounting loophole / creative accounting, Alan Greenspan, algorithmic trading, AOL-Time Warner, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Big bang: deregulation of the City of London, bitcoin, blockchain, book value, Bretton Woods, business cycle, buy and hold, capital controls, Celtic Tiger, collapse of Lehman Brothers, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, debt deflation, deglobalization, Deng Xiaoping, different worldview, discounted cash flows, Donald Trump, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, fake news, financial deregulation, financial intermediation, Flash crash, Francis Fukuyama: the end of history, George Akerlof, government statistician, Greenspan put, high-speed rail, information asymmetry, initial coin offering, intangible asset, Irish property bubble, Isaac Newton, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, junk bonds, land bank, light touch regulation, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, negative equity, Network effects, new economy, Northern Rock, oil shock, Ponzi scheme, quantitative easing, quantitative trading / quantitative finance, railway mania, Right to Buy, Robert Shiller, Shenzhen special economic zone , short selling, short squeeze, Silicon Valley, smart contracts, South Sea Bubble, special economic zone, subprime mortgage crisis, technology bubble, the built environment, total factor productivity, transaction costs, tulip mania, urban planning

When Rudge-Whitworth first cut prices in July 1897, rival companies felt entitled to object.73 However, they were soon compelled to follow suit, and the firms which attempted to maintain high prices often went bankrupt.74 Firms that branched into alternative industries, such as motor cars, were more likely to survive the recession. In contrast with the unnecessary and wasteful competition of the Railway Mania, the Bicycle Mania is perhaps an illustration of Schumpeter’s principle of creative destruction, in which the failure of inefficient companies paves the way for more innovative ones.75 Finally, the overabundance of affordable bicycles resulting from the bubble had some clear positive social and political effects. Unlike horses and motor cars, the use of bicycles provided health benefits, did not produce harmful waste products, and posed significantly less of a threat to the safety of pedestrians.


pages: 382 words: 105,166

The Reckoning: Financial Accountability and the Rise and Fall of Nations by Jacob Soll

accounting loophole / creative accounting, bank run, Bear Stearns, Bonfire of the Vanities, British Empire, collapse of Lehman Brothers, computer age, corporate governance, creative destruction, Credit Default Swap, delayed gratification, demand response, discounted cash flows, double entry bookkeeping, financial independence, Frederick Winslow Taylor, Glass-Steagall Act, God and Mammon, High speed trading, Honoré de Balzac, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, joint-stock company, Joseph Schumpeter, new economy, New Urbanism, Nick Leeson, Plato's cave, Ponzi scheme, Ralph Waldo Emerson, scientific management, Scientific racism, South Sea Bubble, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade route

Weber saw accounting as one of many cultural elements necessary to the growth of complex capitalism, placing it squarely among the fundamental traits of the Protestant work ethic that he believed allowed early Americans to master capitalist culture.5 Even blunter was the influential German economist Werner Sombart: “One cannot imagine what capitalism would be without double-entry bookkeeping: the two phenomena are connected as intimately as form and contents.” The Austrian American economist, political scientist, and coiner of the term “creative destruction,” Joseph Schumpeter, not only saw accounting as central to capitalism but also lamented that economists had not devoted more attention to it; it was only through a historical understanding of accounting practices, he wrote, that effective economic theory could be formulated.6 These thinkers saw accounting as an ingredient to economic success and a key to understanding economic history.


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab, Peter Vanham

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

Perhaps as consequence of the much more positive role technology and companies played in this Western golden age, people's ideological views on capital versus labor and man versus machine softened significantly. Importantly, economists too touted more the positive effects of enterprises and their innovations in societal and economic development. Austrian economist Joseph Schumpeter already in the 1940s saw a world emerge in which “creative destruction”42 led to the breakdown of old companies and their products, by new companies and their breakthrough technologies. The car replaced the horse, the plane replaced the ship, and electric household devices replaced domestic workers. Milton Friedman and his colleagues at the University of Chicago (the so-called Chicago School) went a step further.


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

Perhaps as consequence of the much more positive role technology and companies played in this Western golden age, people's ideological views on capital versus labor and man versus machine softened significantly. Importantly, economists too touted more the positive effects of enterprises and their innovations in societal and economic development. Austrian economist Joseph Schumpeter already in the 1940s saw a world emerge in which “creative destruction”42 led to the breakdown of old companies and their products, by new companies and their breakthrough technologies. The car replaced the horse, the plane replaced the ship, and electric household devices replaced domestic workers. Milton Friedman and his colleagues at the University of Chicago (the so-called Chicago School) went a step further.


pages: 363 words: 109,834

The Crux by Richard Rumelt

activist fund / activist shareholder / activist investor, air gap, Airbnb, AltaVista, AOL-Time Warner, Bayesian statistics, behavioural economics, biodiversity loss, Blue Ocean Strategy, Boeing 737 MAX, Boeing 747, Charles Lindbergh, Clayton Christensen, cloud computing, cognitive bias, commoditize, coronavirus, corporate raider, COVID-19, creative destruction, crossover SUV, Crossrail, deep learning, Deng Xiaoping, diversified portfolio, double entry bookkeeping, drop ship, Elon Musk, en.wikipedia.org, financial engineering, Ford Model T, Herman Kahn, income inequality, index card, Internet of things, Jeff Bezos, Just-in-time delivery, Larry Ellison, linear programming, lockdown, low cost airline, low earth orbit, Lyft, Marc Benioff, Mark Zuckerberg, Masayoshi Son, meta-analysis, Myron Scholes, natural language processing, Neil Armstrong, Network effects, packet switching, PageRank, performance metric, precision agriculture, RAND corporation, ride hailing / ride sharing, Salesforce, San Francisco homelessness, search costs, selection bias, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, Snapchat, social distancing, SoftBank, software as a service, statistical model, Steve Ballmer, Steve Jobs, stochastic process, Teledyne, telemarketer, TSMC, uber lyft, undersea cable, union organizing, vertical integration, WeWork

Christensen, “Disruptive Technologies: Catching the Wave,” Harvard Business Review (January–February 1995): 43. 4. Jill Lepore, “What the Gospel of Innovation Gets Wrong,” New Yorker, June 16, 2014, www.newyorker.com/magazine/2014/06/23/the-disruption-machine. 5. Mitsuru Igami, “Estimating the Innovator’s Dilemma: Structural Analysis of Creative Destruction in the Hard Disk Drive Industry, 1981–1998,” Journal of Political Economy 125, no. 3 (2017): 48. 6. Josh Lerner, “An Empirical Exploration of a Technology Race,” Rand Journal of Economics (1997): 228–247. CHAPTER 11. SEEK AN EDGE 1. Karl Popper, “Natural Selection and the Emergence of Mind,” speech delivered at Darwin College, November 8, 1977. 2.


pages: 367 words: 110,161

The Bond King: How One Man Made a Market, Built an Empire, and Lost It All by Mary Childs

Alan Greenspan, asset allocation, asset-backed security, bank run, Bear Stearns, beat the dealer, break the buck, buy and hold, Carl Icahn, collateralized debt obligation, commodity trading advisor, coronavirus, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, diversification, diversified portfolio, Edward Thorp, financial innovation, fixed income, global macro, high net worth, hiring and firing, housing crisis, Hyman Minsky, index card, index fund, interest rate swap, junk bonds, Kevin Roose, low interest rates, Marc Andreessen, Minsky moment, money market fund, mortgage debt, Myron Scholes, NetJets, Northern Rock, off-the-grid, pneumatic tube, Ponzi scheme, price mechanism, quantitative easing, Robert Shiller, Savings and loan crisis, skunkworks, sovereign wealth fund, stem cell, Steve Jobs, stocks for the long run, The Great Moderation, too big to fail, Vanguard fund, yield curve

Implicit and explicit, most parts of financial markets now feel secured by the full faith and credit of the U.S. government. Before, if lenders suddenly didn’t want to lend, companies didn’t get loans; now, ten years after the financial crisis broke the seal, the Federal Reserve steps in. “Creative destruction”—letting things fail, for the health of the ecosystem—now seems too destructive. What they still call capitalism has become a fun sandbox where someone always comes running if you get hurt. In this book, a window into a crucible of money management in Southern California, you’ll see them lay the groundwork for the system we have today.


pages: 396 words: 117,149

The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World by Pedro Domingos

Albert Einstein, Amazon Mechanical Turk, Arthur Eddington, backpropagation, basic income, Bayesian statistics, Benoit Mandelbrot, bioinformatics, Black Swan, Brownian motion, cellular automata, Charles Babbage, Claude Shannon: information theory, combinatorial explosion, computer vision, constrained optimization, correlation does not imply causation, creative destruction, crowdsourcing, Danny Hillis, data is not the new oil, data is the new oil, data science, deep learning, DeepMind, double helix, Douglas Hofstadter, driverless car, Erik Brynjolfsson, experimental subject, Filter Bubble, future of work, Geoffrey Hinton, global village, Google Glasses, Gödel, Escher, Bach, Hans Moravec, incognito mode, information retrieval, Jeff Hawkins, job automation, John Markoff, John Snow's cholera map, John von Neumann, Joseph Schumpeter, Kevin Kelly, large language model, lone genius, machine translation, mandelbrot fractal, Mark Zuckerberg, Moneyball by Michael Lewis explains big data, Narrative Science, Nate Silver, natural language processing, Netflix Prize, Network effects, Nick Bostrom, NP-complete, off grid, P = NP, PageRank, pattern recognition, phenotype, planetary scale, power law, pre–internet, random walk, Ray Kurzweil, recommendation engine, Richard Feynman, scientific worldview, Second Machine Age, self-driving car, Silicon Valley, social intelligence, speech recognition, Stanford marshmallow experiment, statistical model, Stephen Hawking, Steven Levy, Steven Pinker, superintelligent machines, the long tail, the scientific method, The Signal and the Noise by Nate Silver, theory of mind, Thomas Bayes, transaction costs, Turing machine, Turing test, Vernor Vinge, Watson beat the top human players on Jeopardy!, white flight, yottabyte, zero-sum game

An earthquake is a phase transition in the relative position of two adjacent tectonic plates. A bump in the night is just the sound of the microscopic tectonic plates in your house’s walls shifting, so don’t be scared. Joseph Schumpeter said that the economy evolves by cracks and leaps: S curves are the shape of creative destruction. The effect of financial gains and losses on your happiness follows an S curve, so don’t sweat the big stuff. The probability that a random logical formula is satisfiable—the quintessential NP-complete problem—undergoes a phase transition from almost 1 to almost 0 as the formula’s length increases.


pages: 385 words: 118,314

Cities Are Good for You: The Genius of the Metropolis by Leo Hollis

Airbnb, Alvin Toffler, banking crisis, Berlin Wall, Big Tech, Boris Johnson, Broken windows theory, Buckminster Fuller, call centre, car-free, carbon footprint, cellular automata, classic study, clean water, cloud computing, complexity theory, congestion charging, creative destruction, credit crunch, Credit Default Swap, crowdsourcing, Deng Xiaoping, digital divide, digital map, Disneyland with the Death Penalty, Donald Shoup, East Village, Edward Glaeser, Elisha Otis, Enrique Peñalosa, export processing zone, Firefox, Frank Gehry, General Motors Futurama, Geoffrey West, Santa Fe Institute, Gini coefficient, Google Earth, Great Leap Forward, Guggenheim Bilbao, haute couture, Hernando de Soto, high-speed rail, housing crisis, illegal immigration, income inequality, informal economy, Internet of things, invisible hand, Jane Jacobs, Jevons paradox, Kickstarter, knowledge economy, knowledge worker, Leo Hollis, Lewis Mumford, Long Term Capital Management, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, Masdar, mass immigration, megacity, negative equity, Neil Armstrong, new economy, New Urbanism, Occupy movement, off-the-grid, openstreetmap, packet switching, Panopticon Jeremy Bentham, place-making, power law, Quicken Loans, Ray Oldenburg, Richard Florida, sharing economy, Silicon Valley, Skype, smart cities, smart grid, spice trade, Steve Jobs, technoutopianism, the built environment, The Chicago School, The Death and Life of Great American Cities, The Great Good Place, the High Line, The Spirit Level, the strength of weak ties, The Wisdom of Crowds, Thomas Malthus, trade route, traveling salesman, urban planning, urban renewal, urban sprawl, walkable city, white flight, Y2K, Yom Kippur War

In 1970 there were 200 cities in China; today there are over 700, over 160 with a population of more than 1 million; in the US there are only nine, and four in the UK. Will the sheer force of numbers change the way the city works? The rebirth of Shanghai since the 1980s has been a sustained period of ‘creative destruction’ – the city has not just grown beyond its traditional boundaries, it has been razed to the ground and rebuilt at the same time. In the 1990s more people in Shanghai were displaced, their homes destroyed and rebuilt, than over thirty years in the whole of the US; between 1992 and 2004 this amounted to 925 million square feet.


pages: 415 words: 119,277

Naked City: The Death and Life of Authentic Urban Places by Sharon Zukin

1960s counterculture, big-box store, blue-collar work, classic study, corporate social responsibility, crack epidemic, creative destruction, David Brooks, East Village, en.wikipedia.org, Frank Gehry, gentrification, Guggenheim Bilbao, Haight Ashbury, Jane Jacobs, late capitalism, mass immigration, messenger bag, new economy, New Urbanism, Panopticon Jeremy Bentham, rent control, rent stabilization, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, South of Market, San Francisco, subprime mortgage crisis, the built environment, The Death and Life of Great American Cities, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, upwardly mobile, urban decay, urban planning, urban renewal, W. E. B. Du Bois, white flight, working poor, Works Progress Administration, young professional

Burrows and Mike Wallace, Gotham: A History of New York City to 1898 (New York: Oxford University Press, 1999), p. 695; Henry James, The American Scene (1907; Bloomington: Indiana University Press, 1968), p. 77. James also notes the disappearance of both his parents’ house and the original home of the Metropolitan Museum of Art, “stately though scrappy, in a large eccentric house in West Fourteenth Street” (p. 190). Also see Max Page, The Creative Destruction of Manhattan, 1900–1940 (Chicago: University of Chicago Press, 1999). 11. Robert Beauregard, Voices of Decline: The Postwar Fate of American Cities (Oxford: Blackwell, 1993); Robert A. Caro, The Power Broker: Robert Moses and the Fall of New York (New York: Vintage, 1974); Samuel Zipp, “Manhattan Projects: Cold War Urbanism in the Age of Urban Renewal (New York),” PhD dissertation, Yale University, 2006. 12.


pages: 429 words: 120,332

Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens by Nicholas Shaxson

Asian financial crisis, asset-backed security, bank run, battle of ideas, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, collapse of Lehman Brothers, computerized trading, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, Double Irish / Dutch Sandwich, export processing zone, failed state, financial deregulation, financial engineering, financial innovation, Fractional reserve banking, full employment, Glass-Steagall Act, Global Witness, Golden arches theory, high net worth, income inequality, Kenneth Rogoff, laissez-faire capitalism, land reform, land value tax, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, Martin Wolf, Money creation, money market fund, New Journalism, Northern Rock, offshore financial centre, oil shock, old-boy network, out of africa, passive income, plutocrats, Ponzi scheme, race to the bottom, regulatory arbitrage, reserve currency, Ronald Reagan, shareholder value, Suez crisis 1956, The Spirit Level, too big to fail, transfer pricing, vertical integration, Washington Consensus

But look closer, and they collapse in a puff of nonsense. Here’s why. Competition between companies in a market is absolutely nothing like competition between jurisdictions on tax. Think about it like this: If a company cannot compete it may fail and be replaced by another that provides better and cheaper goods or services. This “creative destruction” is painful, but it is also a source of capitalism’s dynamism. But what happens when a country cannot “compete?” A failed state? That is a very different prospect. Nobody would, or could, as Mitchell put it, “shut down New Hampshire.” What does it actually mean for a country to be “competitive”?


pages: 515 words: 117,501

Miracle Cure by William Rosen

Affordable Care Act / Obamacare, availability heuristic, biofilm, cognitive bias, cognitive dissonance, conceptual framework, Copley Medal, creative destruction, demographic transition, discovery of penicillin, do well by doing good, Edward Jenner, Ernest Rutherford, experimental subject, Fellow of the Royal Society, Frances Oldham Kelsey, Frederick Winslow Taylor, friendly fire, functional fixedness, germ theory of disease, global supply chain, Haber-Bosch Process, Ignaz Semmelweis: hand washing, Isaac Newton, James Watt: steam engine, Johannes Kepler, John Snow's cholera map, Joseph Schumpeter, Louis Pasteur, medical malpractice, meta-analysis, microbiome, New Journalism, obamacare, out of africa, pattern recognition, Pepto Bismol, public intellectual, randomized controlled trial, selection bias, stem cell, the long tail, transcontinental railway, working poor

Pfizer is even bigger, a company with sales of more than $50 billion. Eli Lilly is a $23-billion company. The combination of Bristol-Myers and Squibb, which merged in 1989, weighs in at nearly $20 billion as does Abbott Laboratories. Others are no longer going concerns, run onto the rocks by waves of the “creative destruction” that the Austrian economist Joseph Schumpeter called the defining characteristic of capitalism. In 1988, Eastman Kodak acquired Winthrop (or Sterling Winthrop), a member of the original penicillin project and the discoverer of the first quinolone antibiotics. It was then broken apart and sold, in pieces: to the French pharmaceutical company Sanofi, to the British firm SmithKline Beecham (a successor to the original Beecham’s Pills, now known as GlaxoSmithKline), and to the revived German giant, Bayer, which, as a result, finally reacquired the rights to the name “Bayer Aspirin.”


pages: 393 words: 115,217

Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries by Safi Bahcall

accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, AOL-Time Warner, Apollo 11, Apollo 13, Apple II, Apple's 1984 Super Bowl advert, Astronomia nova, behavioural economics, Boeing 747, British Empire, Cass Sunstein, Charles Lindbergh, Clayton Christensen, cognitive bias, creative destruction, disruptive innovation, diversified portfolio, double helix, Douglas Engelbart, Douglas Engelbart, Dunbar number, Edmond Halley, Gary Taubes, Higgs boson, hypertext link, industrial research laboratory, invisible hand, Isaac Newton, Ivan Sutherland, Johannes Kepler, Jony Ive, knowledge economy, lone genius, Louis Pasteur, Mark Zuckerberg, Menlo Park, Mother of all demos, Murray Gell-Mann, PageRank, Peter Thiel, Philip Mirowski, Pierre-Simon Laplace, power law, prediction markets, pre–internet, Ralph Waldo Emerson, RAND corporation, random walk, reality distortion field, Richard Feynman, Richard Thaler, Sheryl Sandberg, side project, Silicon Valley, six sigma, stem cell, Steve Jobs, Steve Wozniak, synthetic biology, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tim Cook: Apple, tulip mania, Wall-E, wikimedia commons, yield management

A Moses can point to a loonshot and will it to life. But that magic only lasts so long before the wheel stops turning. The Austro-Germanic school of fatalism (Spengler, Schumpeter) says that decline is inevitable. Empires will always ossify, a David will always rise to slay Goliath, and so it goes. Is that cycle of creative destruction truly inevitable? What’s an empire to do? Bush and Vail understood that the doomsday cycle is not inevitable, and that the best chance for sustainable, renewable creativity and growth comes from bringing an organization to the top-right quadrant: separate phases connected by a balanced, dynamic equilibrium.


pages: 402 words: 110,972

Nerds on Wall Street: Math, Machines and Wired Markets by David J. Leinweber

"World Economic Forum" Davos, AI winter, Alan Greenspan, algorithmic trading, AOL-Time Warner, Apollo 11, asset allocation, banking crisis, barriers to entry, Bear Stearns, Big bang: deregulation of the City of London, Bob Litterman, book value, business cycle, butter production in bangladesh, butterfly effect, buttonwood tree, buy and hold, buy low sell high, capital asset pricing model, Charles Babbage, citizen journalism, collateralized debt obligation, Cornelius Vanderbilt, corporate governance, Craig Reynolds: boids flock, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Danny Hillis, demand response, disintermediation, distributed generation, diversification, diversified portfolio, electricity market, Emanuel Derman, en.wikipedia.org, experimental economics, fake news, financial engineering, financial innovation, fixed income, Ford Model T, Gordon Gekko, Hans Moravec, Herman Kahn, implied volatility, index arbitrage, index fund, information retrieval, intangible asset, Internet Archive, Ivan Sutherland, Jim Simons, John Bogle, John Nash: game theory, Kenneth Arrow, load shedding, Long Term Capital Management, machine readable, machine translation, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, market fragmentation, market microstructure, Mars Rover, Metcalfe’s law, military-industrial complex, moral hazard, mutually assured destruction, Myron Scholes, natural language processing, negative equity, Network effects, optical character recognition, paper trading, passive investing, pez dispenser, phenotype, prediction markets, proprietary trading, quantitative hedge fund, quantitative trading / quantitative finance, QWERTY keyboard, RAND corporation, random walk, Ray Kurzweil, Reminiscences of a Stock Operator, Renaissance Technologies, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Metcalfe, Ronald Reagan, Rubik’s Cube, Savings and loan crisis, semantic web, Sharpe ratio, short selling, short squeeze, Silicon Valley, Small Order Execution System, smart grid, smart meter, social web, South Sea Bubble, statistical arbitrage, statistical model, Steve Jobs, Steven Levy, stock buybacks, Tacoma Narrows Bridge, the scientific method, The Wisdom of Crowds, time value of money, tontine, too big to fail, transaction costs, Turing machine, two and twenty, Upton Sinclair, value at risk, value engineering, Vernor Vinge, Wayback Machine, yield curve, Yogi Berra, your tax dollars at work

They did, and went from being synonymous with “electronic market data terminal” to being nowhere in a remarkably short time. The first Quotrons were so alien to Wall Street types that they rearranged the “QWERTY” keyboard to be “ABCDE.” Schumpeter was right about capitalism being a process of creative destruction. 13. Large is a relative term here. The bleeding-edge machines of the mid-1980s had 32M of memory. Fifteen years earlier, the onboard computers used on the lunar landings had 64K. 14. Evan’s fine account of his career is in Alan Rubenfeld’s book, The Super Traders: Secrets and Successes of Wall Street’s Best and Brightest (McGraw-Hill, 1995), pp. 227–252. 15.


pages: 521 words: 110,286

Them and Us: How Immigrants and Locals Can Thrive Together by Philippe Legrain

affirmative action, Albert Einstein, AlphaGo, autonomous vehicles, Berlin Wall, Black Lives Matter, Boris Johnson, Brexit referendum, British Empire, call centre, centre right, Chelsea Manning, clean tech, coronavirus, corporate social responsibility, COVID-19, creative destruction, crowdsourcing, data science, David Attenborough, DeepMind, Demis Hassabis, demographic dividend, digital divide, discovery of DNA, Donald Trump, double helix, Edward Glaeser, en.wikipedia.org, eurozone crisis, failed state, Fall of the Berlin Wall, future of work, illegal immigration, immigration reform, informal economy, Jane Jacobs, job automation, Jony Ive, labour market flexibility, lockdown, low cost airline, low interest rates, low skilled workers, lump of labour, Mahatma Gandhi, Mark Zuckerberg, Martin Wolf, Mary Meeker, mass immigration, moral hazard, Mustafa Suleyman, Network effects, new economy, offshore financial centre, open borders, open immigration, postnationalism / post nation state, purchasing power parity, remote working, Richard Florida, ride hailing / ride sharing, Rishi Sunak, Ronald Reagan, Silicon Valley, Skype, SoftBank, Steve Jobs, tech worker, The Death and Life of Great American Cities, The future is already here, The Future of Employment, Tim Cook: Apple, Tyler Cowen, urban sprawl, WeWork, Winter of Discontent, women in the workforce, working-age population

Kerr and William F. Lincoln, ‘The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention’, Journal of Labor Economics, 28:3, 2010, pp. 473–508. https://ideas.repec.org/a/ucp/jlabec/v28y2010i3p473-508.html 60 Gaurav Khanna and Munseob Lee, ‘High-Skill Immigration, Innovation, and Creative Destruction’, SSRN, 6 June 2018. http://dx.doi.org/10.2139/ssrn.3207942 61 Sari Pekkala Kerr, William Kerr and William Lincoln, ‘Skilled Immigration and the Employment Structures of US Firms’, Journal of Labor Economics, 33:S1, 2015, pp. S147–86. https://ideas.repec.org/a/ucp/jlabec/doi10.1086-678986.html 62 Robert Guest, ‘How Migration Makes the World Brainier’, The Economist, 14 November 2019. https://www.economist.com/special-report/2019/11/14/how-migration-makes-the-world-brainier 63 Anna Maria Mayda, Francesc Ortega, Giovanni Peri, Kevin Shih and Chad Sparber, ‘The Effect of the H-1B Quota on Employment and Selection of Foreign-Born Labor’, NBER Working Paper 23902, October 2017. https://www.nber.org/papers/w23902.pdf 64 Britta Glennon, ‘How Do Restrictions on High-Skilled Immigration Affect Offshoring?


pages: 444 words: 117,770

The Coming Wave: Technology, Power, and the Twenty-First Century's Greatest Dilemma by Mustafa Suleyman

"World Economic Forum" Davos, 23andMe, 3D printing, active measures, Ada Lovelace, additive manufacturing, agricultural Revolution, AI winter, air gap, Airbnb, Alan Greenspan, algorithmic bias, Alignment Problem, AlphaGo, Alvin Toffler, Amazon Web Services, Anthropocene, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, ASML, autonomous vehicles, backpropagation, barriers to entry, basic income, benefit corporation, Big Tech, biodiversity loss, bioinformatics, Bletchley Park, Blitzscaling, Boston Dynamics, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, ChatGPT, choice architecture, circular economy, classic study, clean tech, cloud computing, commoditize, computer vision, coronavirus, corporate governance, correlation does not imply causation, COVID-19, creative destruction, CRISPR, critical race theory, crowdsourcing, cryptocurrency, cuban missile crisis, data science, decarbonisation, deep learning, deepfake, DeepMind, deindustrialization, dematerialisation, Demis Hassabis, disinformation, drone strike, drop ship, dual-use technology, Easter island, Edward Snowden, effective altruism, energy transition, epigenetics, Erik Brynjolfsson, Ernest Rutherford, Extinction Rebellion, facts on the ground, failed state, Fairchild Semiconductor, fear of failure, flying shuttle, Ford Model T, future of work, general purpose technology, Geoffrey Hinton, global pandemic, GPT-3, GPT-4, hallucination problem, hive mind, hype cycle, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, Internet of things, invention of the wheel, job automation, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kickstarter, lab leak, large language model, Law of Accelerating Returns, Lewis Mumford, license plate recognition, lockdown, machine readable, Marc Andreessen, meta-analysis, microcredit, move 37, Mustafa Suleyman, mutually assured destruction, new economy, Nick Bostrom, Nikolai Kondratiev, off grid, OpenAI, paperclip maximiser, personalized medicine, Peter Thiel, planetary scale, plutocrats, precautionary principle, profit motive, prompt engineering, QAnon, quantum entanglement, ransomware, Ray Kurzweil, Recombinant DNA, Richard Feynman, Robert Gordon, Ronald Reagan, Sam Altman, Sand Hill Road, satellite internet, Silicon Valley, smart cities, South China Sea, space junk, SpaceX Starlink, stealth mode startup, stem cell, Stephen Fry, Steven Levy, strong AI, synthetic biology, tacit knowledge, tail risk, techlash, techno-determinism, technoutopianism, Ted Kaczynski, the long tail, The Rise and Fall of American Growth, Thomas Malthus, TikTok, TSMC, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, uranium enrichment, warehouse robotics, William MacAskill, working-age population, world market for maybe five computers, zero day

Sequential and disruptive clusters of technologies recur in discussions of technology. For the futurist Alvin Toffler, the information technology revolution was a “third wave” in human society following the Agricultural and Industrial revolutions. Joseph Schumpeter saw waves as explosions of innovation igniting new businesses in bursts of “creative destruction.” The great philosopher of technology Lewis Mumford believed the “machine age” was actually more like a thousand-year unfolding of three major successive waves. More recently the economist Carlota Perez has talked about “techno-economic paradigms” rapidly shifting amid technological revolutions.


pages: 447 words: 111,991

Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It by Azeem Azhar

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 23andMe, 3D printing, A Declaration of the Independence of Cyberspace, Ada Lovelace, additive manufacturing, air traffic controllers' union, Airbnb, algorithmic management, algorithmic trading, Amazon Mechanical Turk, autonomous vehicles, basic income, Berlin Wall, Bernie Sanders, Big Tech, Bletchley Park, Blitzscaling, Boeing 737 MAX, book value, Boris Johnson, Bretton Woods, carbon footprint, Chris Urmson, Citizen Lab, Clayton Christensen, cloud computing, collective bargaining, computer age, computer vision, contact tracing, contact tracing app, coronavirus, COVID-19, creative destruction, crowdsourcing, cryptocurrency, cuban missile crisis, Daniel Kahneman / Amos Tversky, data science, David Graeber, David Ricardo: comparative advantage, decarbonisation, deep learning, deglobalization, deindustrialization, dematerialisation, Demis Hassabis, Diane Coyle, digital map, digital rights, disinformation, Dissolution of the Soviet Union, Donald Trump, Double Irish / Dutch Sandwich, drone strike, Elon Musk, emotional labour, energy security, Fairchild Semiconductor, fake news, Fall of the Berlin Wall, Firefox, Frederick Winslow Taylor, fulfillment center, future of work, Garrett Hardin, gender pay gap, general purpose technology, Geoffrey Hinton, gig economy, global macro, global pandemic, global supply chain, global value chain, global village, GPT-3, Hans Moravec, happiness index / gross national happiness, hiring and firing, hockey-stick growth, ImageNet competition, income inequality, independent contractor, industrial robot, intangible asset, Jane Jacobs, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Perry Barlow, Just-in-time delivery, Kickstarter, Kiva Systems, knowledge worker, Kodak vs Instagram, Law of Accelerating Returns, lockdown, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, megacity, Mitch Kapor, Mustafa Suleyman, Network effects, new economy, NSO Group, Ocado, offshore financial centre, OpenAI, PalmPilot, Panopticon Jeremy Bentham, Peter Thiel, Planet Labs, price anchoring, RAND corporation, ransomware, Ray Kurzweil, remote working, RFC: Request For Comment, Richard Florida, ride hailing / ride sharing, Robert Bork, Ronald Coase, Ronald Reagan, Salesforce, Sam Altman, scientific management, Second Machine Age, self-driving car, Shoshana Zuboff, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, software as a service, Steve Ballmer, Steve Jobs, Stuxnet, subscription business, synthetic biology, tacit knowledge, TaskRabbit, tech worker, The Death and Life of Great American Cities, The Future of Employment, The Nature of the Firm, Thomas Malthus, TikTok, Tragedy of the Commons, Turing machine, Uber and Lyft, Uber for X, uber lyft, universal basic income, uranium enrichment, vertical integration, warehouse automation, winner-take-all economy, workplace surveillance , Yom Kippur War

, Time, 7 February 1972 <http://content.time.com/time/subscriber/article/0,33009,905747,00.html> [accessed 3 April 2021]. 4 John Maynard Keynes, ‘Economic Possibilities for Our Grandchildren’, in Essays in Persuasion (London: Palgrave Macmillan UK, 2010), pp. 321–332 <https://doi.org/10.1007/978-1-349-59072-8_25>. 5 Creative Destruction Lab, ‘Geoff Hinton: On Radiology’, 24 November 2016 <https://www.youtube.com/watch?v=2HMPRXstSvQ> [accessed 24 February 2021]. 6 Paul Daugherty, H. James Wilson and Paul Michelman, ‘Revisiting the Jobs That Artificial Intelligence Will Create’, MIT Sloan Management Review (Summer 2017). 7 Lana Bandoim, ‘Robots Are Cleaning Grocery Store Floors During the Coronavirus Outbreak’, Forbes, 8 April 2020 <https://www.forbes.com/sites/lanabandoim/2020/04/08/robots-are-cleaning-grocery-store-floors-during-the-coronavirus-outbreak/> [accessed 24 February 2021]. 8 Jame DiBiasio, ‘A.I.


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The Nature of Software Development: Keep It Simple, Make It Valuable, Build It Piece by Piece by Ron Jeffries

Amazon Web Services, anti-pattern, bitcoin, business cycle, business intelligence, business logic, business process, c2.com, call centre, cloud computing, continuous integration, Conway's law, creative destruction, dark matter, data science, database schema, deep learning, DevOps, disinformation, duck typing, en.wikipedia.org, fail fast, fault tolerance, Firefox, Hacker News, industrial robot, information security, Infrastructure as a Service, Internet of things, Jeff Bezos, Kanban, Kubernetes, load shedding, loose coupling, machine readable, Mars Rover, microservices, Minecraft, minimum viable product, MITM: man-in-the-middle, Morris worm, move fast and break things, OSI model, peer-to-peer lending, platform as a service, power law, ransomware, revision control, Ruby on Rails, Schrödinger's Cat, Silicon Valley, six sigma, software is eating the world, source of truth, SQL injection, systems thinking, text mining, time value of money, transaction costs, Turing machine, two-pizza team, web application, zero day

Using Timeouts ensures that you can come back from a call out to the troubled point. Users Users are a terrible thing. Systems would be much better off with no users. Obviously, I’m being somewhat tongue-in-cheek. Although users do present numerous risks to stability, they’re also the reason our systems exist. Yet the human users of a system have a knack for creative destruction. When your system is teetering on the brink of disaster like a car on a cliff in a movie, some user will be the seagull that lands on the hood. Down she goes! Human users have a gift for doing exactly the worst possible thing at the worst possible time. Worse yet, other systems that call ours march remorselessly forward like an army of Terminators, utterly unsympathetic about how close we are to crashing.


System Error by Rob Reich

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2021 United States Capitol attack, A Declaration of the Independence of Cyberspace, Aaron Swartz, AI winter, Airbnb, airport security, Alan Greenspan, Albert Einstein, algorithmic bias, AlphaGo, AltaVista, artificial general intelligence, Automated Insights, autonomous vehicles, basic income, Ben Horowitz, Berlin Wall, Bernie Madoff, Big Tech, bitcoin, Blitzscaling, Cambridge Analytica, Cass Sunstein, clean water, cloud computing, computer vision, contact tracing, contact tracing app, coronavirus, corporate governance, COVID-19, creative destruction, CRISPR, crowdsourcing, data is the new oil, data science, decentralized internet, deep learning, deepfake, DeepMind, deplatforming, digital rights, disinformation, disruptive innovation, Donald Knuth, Donald Trump, driverless car, dual-use technology, Edward Snowden, Elon Musk, en.wikipedia.org, end-to-end encryption, Fairchild Semiconductor, fake news, Fall of the Berlin Wall, Filter Bubble, financial engineering, financial innovation, fulfillment center, future of work, gentrification, Geoffrey Hinton, George Floyd, gig economy, Goodhart's law, GPT-3, Hacker News, hockey-stick growth, income inequality, independent contractor, informal economy, information security, Jaron Lanier, Jeff Bezos, Jim Simons, jimmy wales, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Perry Barlow, Lean Startup, linear programming, Lyft, Marc Andreessen, Mark Zuckerberg, meta-analysis, minimum wage unemployment, Monkeys Reject Unequal Pay, move fast and break things, Myron Scholes, Network effects, Nick Bostrom, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, NP-complete, Oculus Rift, OpenAI, Panopticon Jeremy Bentham, Parler "social media", pattern recognition, personalized medicine, Peter Thiel, Philippa Foot, premature optimization, profit motive, quantitative hedge fund, race to the bottom, randomized controlled trial, recommendation engine, Renaissance Technologies, Richard Thaler, ride hailing / ride sharing, Ronald Reagan, Sam Altman, Sand Hill Road, scientific management, self-driving car, shareholder value, Sheryl Sandberg, Shoshana Zuboff, side project, Silicon Valley, Snapchat, social distancing, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, spectrum auction, speech recognition, stem cell, Steve Jobs, Steven Levy, strong AI, superintelligent machines, surveillance capitalism, Susan Wojcicki, tech billionaire, tech worker, techlash, technoutopianism, Telecommunications Act of 1996, telemarketer, The Future of Employment, TikTok, Tim Cook: Apple, traveling salesman, Triangle Shirtwaist Factory, trolley problem, Turing test, two-sided market, Uber and Lyft, uber lyft, ultimatum game, union organizing, universal basic income, washing machines reduced drudgery, Watson beat the top human players on Jeopardy!, When a measure becomes a target, winner-take-all economy, Y Combinator, you are the product

., “International Evaluation of an AI System for Breast Cancer Screening,” Nature 577 (January 2020): 89–94, https://doi.org/10.1038/s41586-019-1799-6. “an algorithm that can detect”: Pranav Rajpurkar et al., “Radiologist-Level Pneumonia Detection on Chest X-Rays with Deep Learning,” CheXNet, December 25, 2017, http://arxiv.org/abs/1711.05225. “people should stop training radiologists”: Geoff Hinton, “Geoff Hinton: On Radiology,” Creative Destruction Lab, uploaded to YouTube November 24, 2016, https://www.youtube.com/watch?v=2HMPRXstSvQ. the work radiologists and other medical professionals do: Hugh Harvey, “Why AI Will Not Replace Radiologists,” Medium, April 7, 2018, https://towardsdatascience.com/why-ai-will-not-replace-radiologists-c7736f2c7d80.


Falling Behind: Explaining the Development Gap Between Latin America and the United States by Francis Fukuyama

Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, creative destruction, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, public intellectual, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus, zero-sum game

See also Daron Acemoglu, Simon Johnson, and James A. Robinson, “The Colonial Origins of Comparative Development,” American Economic Review 91 (2001): 1369–1401. This is not the place for theoretical discussions, but note that “security of property rights” is a notoriously fuzzy concept. For one, in a Schumpeterian world of creative destruction, property would be secure only if it were defended by barriers to entry (see Daron Acemoglu, “The Form of Property Rights: Oligarchic vs. Democratic Societies,” Working Paper, Department of Economics [Cambridge: Massachusetts Institute of Technology, 2005]). Secondly, property can be made secure not by right but by might: in Latin America, land was often protected by private militias (see Fernando López-Alves, State Formation and Democracy in Latin America, 1810–1900 [Durham: Duke University Press, 2000]).


pages: 476 words: 125,219

Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy by Robert W. McChesney

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, Alan Greenspan, Albert Einstein, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, AOL-Time Warner, Automated Insights, barriers to entry, Berlin Wall, Big Tech, business cycle, Cass Sunstein, citizen journalism, classic study, cloud computing, collaborative consumption, collective bargaining, company town, creative destruction, crony capitalism, David Brooks, death of newspapers, declining real wages, digital capitalism, digital divide, disinformation, Double Irish / Dutch Sandwich, Dr. Strangelove, Erik Brynjolfsson, Evgeny Morozov, failed state, fake news, Filter Bubble, fulfillment center, full employment, future of journalism, George Gilder, Gini coefficient, Google Earth, income inequality, informal economy, intangible asset, invention of agriculture, invisible hand, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Perry Barlow, Joseph Schumpeter, Julian Assange, Kickstarter, Mark Zuckerberg, Marshall McLuhan, means of production, Metcalfe’s law, military-industrial complex, mutually assured destruction, national security letter, Nelson Mandela, Network effects, new economy, New Journalism, Nicholas Carr, Occupy movement, ocean acidification, offshore financial centre, patent troll, Peter Thiel, plutocrats, post scarcity, Post-Keynesian economics, power law, price mechanism, profit maximization, profit motive, public intellectual, QWERTY keyboard, Ralph Nader, Richard Stallman, road to serfdom, Robert Metcalfe, Saturday Night Live, sentiment analysis, Silicon Valley, Silicon Valley billionaire, single-payer health, Skype, spectrum auction, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, Stewart Brand, technological determinism, Telecommunications Act of 1996, the long tail, the medium is the message, The Spirit Level, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, Upton Sinclair, WikiLeaks, winner-take-all economy, yellow journalism, Yochai Benkler

It is monopoly power, for example, that makes it possible for Facebook to disregard its users’ concerns about privacy; in a competitive market consumers would be able to switch to a more privacy-friendly social medium.73 Without effective competition, capitalism loses much or all of its justification to exist, its claims to be a rational and fair system compatible with political democracy. Some economists acknowledge that such monopolies have emerged but claim they will be only temporary due to the technological dynamism of the digital world. The assumption is that new technology will beat down the walls erected around any monopolistic market in a Schumpeterian wave of creative destruction.74 But there is little evidence to support this claim. Given these giant firms’ enormous size and financial and political power, there may be some reshuffling of the deck, but, barring political intervention, some version of these giant monopolies is likely here for the duration. For Wired’s Chris Anderson, the new world order of monopoly über alles is simply the way of the world: “A technology is invented, it spreads, a thousand flowers bloom, and then some one finds a way to own it, locking others out.


pages: 480 words: 123,979

Dawn of the New Everything: Encounters With Reality and Virtual Reality by Jaron Lanier

4chan, air gap, augmented reality, back-to-the-land, Big Tech, Bill Atkinson, Buckminster Fuller, Burning Man, carbon footprint, cloud computing, collaborative editing, commoditize, Computer Lib, cosmological constant, creative destruction, crowdsourcing, deep learning, Donald Trump, Douglas Engelbart, Douglas Hofstadter, El Camino Real, Elon Musk, fake news, Firefox, game design, general-purpose programming language, gig economy, Google Glasses, Grace Hopper, Gödel, Escher, Bach, Hacker Ethic, Hans Moravec, Howard Rheingold, hype cycle, impulse control, information asymmetry, intentional community, invisible hand, Ivan Sutherland, Jaron Lanier, John Gilmore, John Perry Barlow, John von Neumann, Kevin Kelly, Kickstarter, Kuiper Belt, lifelogging, mandelbrot fractal, Mark Zuckerberg, Marshall McLuhan, Menlo Park, military-industrial complex, Minecraft, Mitch Kapor, Mondo 2000, Mother of all demos, Murray Gell-Mann, Neal Stephenson, Netflix Prize, Network effects, new economy, Nick Bostrom, Norbert Wiener, Oculus Rift, pattern recognition, Paul Erdős, peak TV, Plato's cave, profit motive, Project Xanadu, quantum cryptography, Ray Kurzweil, reality distortion field, recommendation engine, Richard Feynman, Richard Stallman, Ronald Reagan, self-driving car, Silicon Valley, Silicon Valley startup, Skinner box, Skype, Snapchat, stem cell, Stephen Hawking, Steve Bannon, Steve Jobs, Steven Levy, Stewart Brand, systems thinking, technoutopianism, Ted Nelson, telemarketer, telepresence, telepresence robot, Thorstein Veblen, Turing test, Vernor Vinge, Whole Earth Catalog, Whole Earth Review, WikiLeaks, wikimedia commons

And yet I was soon overcome with an even stronger feeling of gratitude. My father lived into his nineties, and got to know my daughter. They knew and loved each other. They made each other happy. Death and loss are inevitable, whatever my digital supremacist friends with their immortality laboratories think, even as they proclaim their love for creative destruction. However much we are pierced with suffering over it, in the end death and loss are boring because they are inevitable. It is the miracles we build, the friendships, the families, the meaning, that are astonishing, interesting, blazingly amazing. Love creation. Appendix One: Postsymbolic Communication (About the Reveries of One of My Classic VR Talks) More Transcript The section titled Transcript documents one of my circa 1980/81 talks that began with a discussion of mountain-sized cephalopods and the experience of early childhood.


pages: 433 words: 125,031

Brazillionaires: The Godfathers of Modern Brazil by Alex Cuadros

"World Economic Forum" Davos, affirmative action, Asian financial crisis, benefit corporation, big-box store, bike sharing, BRICs, buy the rumour, sell the news, cognitive dissonance, creative destruction, crony capitalism, Deng Xiaoping, Donald Trump, Elon Musk, facts on the ground, family office, financial engineering, high net worth, index fund, invisible hand, Jeff Bezos, Mark Zuckerberg, megaproject, NetJets, offshore financial centre, profit motive, prosperity theology / prosperity gospel / gospel of success, rent-seeking, risk/return, Rubik’s Cube, savings glut, short selling, Silicon Valley, sovereign wealth fund, stem cell, stock buybacks, tech billionaire, The Wealth of Nations by Adam Smith, too big to fail, transatlantic slave trade, We are the 99%, William Langewiesche

So by firing people, Lemann may not be eliminating costs at all but shifting them onto the rest of society. When I asked Lemann’s people to name a “new thing” he’s created, they didn’t respond. A recent Heinz investor presentation touted innovations that included yellow mustard and hot sauces. It’s like creative destruction without the creative part. Lemann said once that he hopes to build companies of “lasting greatness.” He said he wants his model of corporate management to outlive him. To put this another way, he wants to build an empire and to leave his mark on history. But in the end, his corporate alchemy struck me as a sophisticated form of rent seeking: claiming a piece of the economic pie rather than making the pie larger.


pages: 637 words: 128,673

Democracy Incorporated by Sheldon S. Wolin

affirmative action, Berlin Wall, British Empire, centre right, coherent worldview, collective bargaining, colonial rule, corporate governance, creative destruction, cuban missile crisis, David Ricardo: comparative advantage, dematerialisation, Donald Trump, Fall of the Berlin Wall, full employment, illegal immigration, invisible hand, It's morning again in America, mass incarceration, money market fund, mutually assured destruction, new economy, offshore financial centre, Plato's cave, public intellectual, radical decentralization, Ralph Nader, Ronald Reagan, school vouchers, single-payer health, stem cell, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen

It has become familiar in the form of the regrettable casualties—typically of civilians, especially women and children—reckoned to be the inescapable “costs” of military actions and the “price” of “winning.” Consider “downsizing” as the corporate version. Firms downsize in order to compete more efficiently with rivals. Downsizing means casualties: careers destroyed, lives radically changed, hopes blasted. It is hailed as an essential, inescapable part of the “creative destructiveness” (Schumpeter) of capitalism. Equally important, downsizing is mimicked by a politics that consistently sacrifices the needs of the poorer and often the more vulnerable classes—the counterparts to civilian casualties. Reduction of social benefits, lax enforcement of workplace standards, preserving a scandalously low minimum wage, all these are part of strategies devised to achieve an electoral victory and demonstrate the political superfluousness of the working classes.


pages: 420 words: 124,202

The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention by William Rosen

Albert Einstein, All science is either physics or stamp collecting, barriers to entry, Charles Babbage, collective bargaining, computer age, Copley Medal, creative destruction, David Ricardo: comparative advantage, decarbonisation, delayed gratification, Fellow of the Royal Society, flying shuttle, Flynn Effect, fudge factor, full employment, Higgs boson, independent contractor, invisible hand, Isaac Newton, Islamic Golden Age, iterative process, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, Joseph Schumpeter, Joseph-Marie Jacquard, knowledge economy, language acquisition, Lewis Mumford, moral hazard, Network effects, Panopticon Jeremy Bentham, Paul Samuelson, Peace of Westphalia, Peter Singer: altruism, QWERTY keyboard, Ralph Waldo Emerson, rent-seeking, Robert Solow, Ronald Coase, Simon Kuznets, spinning jenny, tacit knowledge, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, three-masted sailing ship, transaction costs, transcontinental railway, zero-sum game, éminence grise

., the Industrial Revolution), and his son, John, the 1986 winner of the Nobel Prize in Chemistry. * A remarkable number of discoveries about the function of brain structures have been preceded by an improbable bit of head trauma. * In addition to his status as a cheerleader for entrepreneurism—his most famous phrase is undoubtedly the one about the “perennial gale of creative destruction”—Schumpeter was also legendarily hostile to the importance of institutions, particularly laws, and especially patent law. * When the original finally wore out, in 1879, a replica, using many of the same granite stones (and Smeaton’s innovative marble dowels and dovetails), was rebuilt in Plymouth in honor of Smeaton


pages: 457 words: 126,996

Hacker, Hoaxer, Whistleblower, Spy: The Story of Anonymous by Gabriella Coleman

1960s counterculture, 4chan, Aaron Swartz, Amazon Web Services, Bay Area Rapid Transit, bitcoin, Chelsea Manning, citizen journalism, cloud computing, collective bargaining, corporate governance, creative destruction, crowdsourcing, data science, David Graeber, Debian, digital rights, disinformation, do-ocracy, East Village, Eben Moglen, Edward Snowden, false flag, feminist movement, Free Software Foundation, Gabriella Coleman, gentrification, George Santayana, Hacker News, hive mind, impulse control, information security, Jacob Appelbaum, jimmy wales, John Perry Barlow, Julian Assange, Laura Poitras, lolcat, low cost airline, mandatory minimum, Mohammed Bouazizi, Network effects, Occupy movement, Oklahoma City bombing, operational security, pirate software, power law, Richard Stallman, SETI@home, side project, Silicon Valley, Skype, SQL injection, Steven Levy, Streisand effect, TED Talk, Twitter Arab Spring, WikiLeaks, zero day

For Hobsbawm, the bandit is pitted against “the forces of the new society which he cannot understand. At most he can fight it and seek to destroy it.” This explains why “the bandit is often destructive and savage beyond the range of his myth.”12 Today’s digital bandits, however, understand the forces of creative destruction, consciously deploying them for political purposes. The lulz retained a prominent seat, but not at the head of the table. Chanology was a far cry from a chaotic horde of loons. While working in the midst of an often miasmic environment of drama, in-fighting, and competing groups, Chanology members developed a strong organization, with core participants devoting extraordinary chunks of time to the endeavor.


pages: 482 words: 125,973

Competition Demystified by Bruce C. Greenwald

additive manufacturing, airline deregulation, AltaVista, AOL-Time Warner, asset allocation, barriers to entry, book value, business cycle, creative destruction, cross-subsidies, deindustrialization, discounted cash flows, diversified portfolio, Do you want to sell sugared water for the rest of your life?, Everything should be made as simple as possible, fault tolerance, intangible asset, John Nash: game theory, Nash equilibrium, Network effects, new economy, oil shock, packet switching, PalmPilot, Pepsi Challenge, pets.com, price discrimination, price stability, revenue passenger mile, search costs, selective serotonin reuptake inhibitor (SSRI), shareholder value, Silicon Valley, six sigma, Steve Jobs, transaction costs, vertical integration, warehouse automation, yield management, zero-sum game

With an open architecture and components readily available, IBM was soon joined by other PC manufacturers, including a number of start-up companies that saw opportunity in what they rightly predicted would be a rapidly growing industry. Most of these machines were compatible with the IBM standard. The explosive rise of the desktop computer was as pure an instance of creative destruction as we are likely to see. It established Microsoft and Intel as two of the largest and most profitable companies on the globe. At the same time, it weakened and eventually destroyed most established manufacturers who had built mainframes and minicomputers, the ghosts of Route 128 like Digital Equipment and Prime among them.


pages: 316 words: 117,228

The Code of Capital: How the Law Creates Wealth and Inequality by Katharina Pistor

Andrei Shleifer, Asian financial crisis, asset-backed security, barriers to entry, Bear Stearns, Bernie Madoff, Big Tech, bilateral investment treaty, bitcoin, blockchain, Bretton Woods, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, conceptual framework, Corn Laws, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, digital rights, Donald Trump, double helix, driverless car, Edward Glaeser, Ethereum, ethereum blockchain, facts on the ground, financial innovation, financial intermediation, fixed income, Francis Fukuyama: the end of history, full employment, global reserve currency, Gregor Mendel, Hernando de Soto, income inequality, initial coin offering, intangible asset, investor state dispute settlement, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, land reform, land tenure, London Interbank Offered Rate, Long Term Capital Management, means of production, money market fund, moral hazard, offshore financial centre, phenotype, Ponzi scheme, power law, price mechanism, price stability, profit maximization, railway mania, regulatory arbitrage, reserve currency, Robert Solow, Ronald Coase, Satoshi Nakamoto, secular stagnation, self-driving car, seminal paper, shareholder value, Silicon Valley, smart contracts, software patent, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, trade route, Tragedy of the Commons, transaction costs, Wolfgang Streeck

They obtain stronger rights against the world and even get to make them durable in order to withstand not only unexpected events, the “exogenous shocks” that create imbalances in standard economic models, but the forces of competition. Competition is essential for the operation of markets; it fuels the forces of creative destruction, which, according to Joseph Schumpeter, are the drivers of economic progress.37 But the legal code of capital does not follow the rules of competition; instead, it operates according to the logic of power and privilege. Property Rights as Industrial Policy The rulers over cities, regions, and countries discovered long ago how by offering special legal protection they could retain local and attract foreign craftsmen and artisans.


pages: 453 words: 122,586

Samuelson Friedman: The Battle Over the Free Market by Nicholas Wapshott

2021 United States Capitol attack, Alan Greenspan, bank run, basic income, battle of ideas, Bear Stearns, Berlin Wall, Bretton Woods, business cycle, California gold rush, collective bargaining, coronavirus, corporate governance, COVID-19, creative destruction, David Ricardo: comparative advantage, Donald Trump, double helix, en.wikipedia.org, fiat currency, financial engineering, fixed income, floating exchange rates, full employment, God and Mammon, greed is good, Gunnar Myrdal, income inequality, indoor plumbing, invisible hand, John von Neumann, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, light touch regulation, liquidity trap, lockdown, low interest rates, Machinery of Freedom by David Friedman, market bubble, market clearing, mass immigration, military-industrial complex, Money creation, money market fund, Mont Pelerin Society, moral hazard, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, paradox of thrift, Paul Samuelson, Philip Mirowski, Phillips curve, price mechanism, price stability, public intellectual, pushing on a string, quantitative easing, rent control, road to serfdom, Robert Bork, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, seminal paper, Simon Kuznets, social distancing, Tax Reform Act of 1986, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, too big to fail, trickle-down economics, universal basic income, upwardly mobile, urban renewal, War on Poverty, We are all Keynesians now, Works Progress Administration, zero-sum game

Barnett, University of Kansas, December 23, 2003, p. 156. 28.Wassily Wassilyevich Leontief (August 5, 1906–February 5, 1999), American economist, born in Austro-Hungary, winner of the 1973 Nobel Prize for Economics. 29.Joseph Alois Schumpeter (February 8, 1883–January 8, 1950), Austrian-born American economist and political scientist who served as finance minister of Austria in 1919. Associated with the term “creative destruction” in which markets gradually restore themselves after a crash. 30.Gottfried von Haberler (July 20, 1900–May 6, 1995), an American economist born in Austria. 31.Alvin Harvey Hansen, professor of economics at Harvard, helped create the Council of Economic Advisers and the Social Security system.


pages: 515 words: 126,820

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

"World Economic Forum" Davos, Airbnb, altcoin, Alvin Toffler, asset-backed security, autonomous vehicles, barriers to entry, behavioural economics, bitcoin, Bitcoin Ponzi scheme, blockchain, Blythe Masters, Bretton Woods, business logic, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon footprint, clean water, cloud computing, cognitive dissonance, commoditize, commons-based peer production, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, cryptocurrency, currency risk, decentralized internet, digital capitalism, disintermediation, disruptive innovation, distributed ledger, do well by doing good, Donald Trump, double entry bookkeeping, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Future Shock, Galaxy Zoo, general purpose technology, George Gilder, glass ceiling, Google bus, GPS: selective availability, Hacker News, Hernando de Soto, Higgs boson, holacracy, income inequality, independent contractor, informal economy, information asymmetry, information security, intangible asset, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, money market fund, Neal Stephenson, Network effects, new economy, Oculus Rift, off grid, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, QR code, quantitative easing, radical decentralization, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Salesforce, Satoshi Nakamoto, search costs, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, Snow Crash, social graph, social intelligence, social software, standardized shipping container, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, systems thinking, TaskRabbit, TED Talk, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Soul of a New Machine, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Tyler Cowen, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, unorthodox policies, vertical integration, Vitalik Buterin, wealth creators, X Prize, Y2K, Yochai Benkler, Zipcar

This includes everything from turning on a payment mechanism, to having a reliable store of value, to using blockchain software to manage financial statements. Democratized Entrepreneurship: Under the right conditions, entrepreneurs are the engines of economic growth in society. They bring fresh thinking to the marketplace and fuel the creative destruction that makes market economies prosper. Blockchain technology bestows individuals and small companies anywhere in the world with many of the same capabilities of larger organizations. Blockchain-based ledgers and smart contracts lower barriers to starting a company, expedite incorporation, and cut red tape particularly in the developing world, where it takes three times longer to incorporate and costs five times as much.


pages: 532 words: 139,706

Googled: The End of the World as We Know It by Ken Auletta

"World Economic Forum" Davos, 23andMe, AltaVista, An Inconvenient Truth, Andy Rubin, Anne Wojcicki, AOL-Time Warner, Apple's 1984 Super Bowl advert, Ben Horowitz, bioinformatics, Burning Man, carbon footprint, citizen journalism, Clayton Christensen, cloud computing, Colonization of Mars, commoditize, company town, corporate social responsibility, creative destruction, death of newspapers, digital rights, disintermediation, don't be evil, facts on the ground, Firefox, Frank Gehry, Google Earth, hypertext link, Innovator's Dilemma, Internet Archive, invention of the telephone, Jeff Bezos, jimmy wales, John Markoff, Kevin Kelly, knowledge worker, Larry Ellison, Long Term Capital Management, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Mary Meeker, Menlo Park, Network effects, new economy, Nicholas Carr, PageRank, Paul Buchheit, Peter Thiel, Ralph Waldo Emerson, Richard Feynman, Sand Hill Road, Saturday Night Live, semantic web, sharing economy, Sheryl Sandberg, Silicon Valley, Skype, slashdot, social graph, spectrum auction, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, strikebreaker, Susan Wojcicki, systems thinking, telemarketer, the Cathedral and the Bazaar, the long tail, the scientific method, The Wisdom of Crowds, Tipper Gore, Upton Sinclair, vertical integration, X Prize, yield management, zero-sum game

The world would have been better served if its leaders had been more paranoid in the 1930s; media companies would be better served if they were less paranoid and defensive today. If Google is destroying or weakening old business models, it is because the Internet inevitably destroys old ways of doing things, spurs “creative destruction.” This does not mean that Google is not ambitious to grow, and will not grow at the expense of others. But the rewards, and the pain, are unavoidable. When Google Earth started displaying paintings from the Prado in Madrid, allowing users to zoom in and see the art as an up-close digital photo, it was giving many people access to art they would never see, granting them the time to study paintings that security guards in the bustling museum would never allow them.


pages: 462 words: 129,022

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, antiwork, barriers to entry, basic income, battle of ideas, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Big Tech, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, central bank independence, clean water, collective bargaining, company town, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, DeepMind, deglobalization, deindustrialization, disinformation, disintermediation, diversified portfolio, Donald Trump, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, fake news, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, Glass-Steagall Act, global macro, global supply chain, greed is good, green new deal, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low interest rates, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, opioid epidemic / opioid crisis, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, search costs, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Bannon, Steve Jobs, surveillance capitalism, TED Talk, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population, Yochai Benkler

Decent Jobs with Good Working Conditions At the core of the angst in the United States and Western Europe—and central to restoring a dynamic economy—is jobs, good jobs, plain and simple. Those with jobs worry that migrants will take away their jobs and drive down wages. They worry that globalization will move jobs abroad. They see as largely a fairy tale the standard economists’ argument that as old jobs get destroyed new and better jobs are created. Even if such creative destruction works for some, it obviously isn’t working for many. Most are struggling to maintain a reasonable work–life balance. Women want to progress in their careers, but they also want to have a happy family. Men want to do their part, but often worry too about the trade-offs between advancing in their jobs and other dimensions of their lives, most importantly, spending more time at home.


pages: 494 words: 142,285

The Future of Ideas: The Fate of the Commons in a Connected World by Lawrence Lessig

AltaVista, Andy Kessler, AOL-Time Warner, barriers to entry, Bill Atkinson, business process, Cass Sunstein, commoditize, computer age, creative destruction, dark matter, decentralized internet, Dennis Ritchie, disintermediation, disruptive innovation, Donald Davies, Erik Brynjolfsson, Free Software Foundation, Garrett Hardin, George Gilder, Hacker Ethic, Hedy Lamarr / George Antheil, history of Unix, Howard Rheingold, Hush-A-Phone, HyperCard, hypertext link, Innovator's Dilemma, invention of hypertext, inventory management, invisible hand, Jean Tirole, Jeff Bezos, John Gilmore, John Perry Barlow, Joseph Schumpeter, Ken Thompson, Kenneth Arrow, Larry Wall, Leonard Kleinrock, linked data, Marc Andreessen, Menlo Park, Mitch Kapor, Network effects, new economy, OSI model, packet switching, peer-to-peer, peer-to-peer model, price mechanism, profit maximization, RAND corporation, rent control, rent-seeking, RFC: Request For Comment, Richard Stallman, Richard Thaler, Robert Bork, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, smart grid, software patent, spectrum auction, Steve Crocker, Steven Levy, Stewart Brand, systematic bias, Ted Nelson, Telecommunications Act of 1996, the Cathedral and the Bazaar, The Chicago School, tragedy of the anticommons, Tragedy of the Commons, transaction costs, vertical integration, Yochai Benkler, zero-sum game

.: MIT Press, 2000), 234-37 (“Modularity creates design options and in so doing can radically change the market value of a given set of designs.”). 14 Telephone interview with David Reed. 15 Though, as he acknowledges, the idea was first suggested by Dean Kim Clark. See Kim B. Clark, “The Interaction of Design Hierarchies and Market Concepts in Technological Evolution,” Research Policy 14 (1985): 235-51. For a more recent study adding support to Christensen's thesis, see Richard Foster and Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them (New York: Currency/Doubleday, 2001). There is also a link to the work of William Abernathy, who has argued that “as designers worked on the agenda of problems established by the dominant design, the locus of competition between firms would shift from product improvement to cost reduction.


How I Became a Quant: Insights From 25 of Wall Street's Elite by Richard R. Lindsey, Barry Schachter

Albert Einstein, algorithmic trading, Andrew Wiles, Antoine Gombaud: Chevalier de Méré, asset allocation, asset-backed security, backtesting, bank run, banking crisis, Bear Stearns, Black-Scholes formula, Bob Litterman, Bonfire of the Vanities, book value, Bretton Woods, Brownian motion, business cycle, business process, butter production in bangladesh, buy and hold, buy low sell high, capital asset pricing model, centre right, collateralized debt obligation, commoditize, computerized markets, corporate governance, correlation coefficient, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency risk, discounted cash flows, disintermediation, diversification, Donald Knuth, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial engineering, financial innovation, fixed income, full employment, George Akerlof, global macro, Gordon Gekko, hiring and firing, implied volatility, index fund, interest rate derivative, interest rate swap, Ivan Sutherland, John Bogle, John von Neumann, junk bonds, linear programming, Loma Prieta earthquake, Long Term Capital Management, machine readable, margin call, market friction, market microstructure, martingale, merger arbitrage, Michael Milken, Myron Scholes, Nick Leeson, P = NP, pattern recognition, Paul Samuelson, pensions crisis, performance metric, prediction markets, profit maximization, proprietary trading, purchasing power parity, quantitative trading / quantitative finance, QWERTY keyboard, RAND corporation, random walk, Ray Kurzweil, Reminiscences of a Stock Operator, Richard Feynman, Richard Stallman, risk free rate, risk-adjusted returns, risk/return, seminal paper, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, sorting algorithm, statistical arbitrage, statistical model, stem cell, Steven Levy, stochastic process, subscription business, systematic trading, technology bubble, The Great Moderation, the scientific method, too big to fail, trade route, transaction costs, transfer pricing, value at risk, volatility smile, Wiener process, yield curve, young professional

It did, and went from being synonymous with “electronic market data terminal” to being nowhere in a remarkably JWPR007-Lindsey May 18, 2007 11:41 Notes 341 short time. The first Quotrons were so alien to Wall Street types that they rearranged the “QWERTY” keyboard to be ABCDE. Schumpeter was right about capitalism being a process of creative destruction. 7. Large is a relative term here. The bleeding-edge machines of the mid-1980s had 32MB of memory. Fifteen years earlier, the on-board computers used on the lunar landings had 64K. Today, you can get a 1GB memory card for about forty bucks. 8. “A Little AI Goes A Long Way on Wall Street,” D.


pages: 549 words: 134,988

Pro Git by Scott Chacon, Ben Straub

Chris Wanstrath, continuous integration, creative destruction, Debian, distributed revision control, GnuPG, pull request, remote working, revision control, systems thinking, web application

Furthermore, many of these systems deal pretty well with having several remote repositories they can work with, so you can collaborate with different groups of people in different ways simultaneously within the same project. This allows you to set up several types of workflows that aren’t possible in centralized systems, such as hierarchical models. A Short History of Git As with many great things in life, Git began with a bit of creative destruction and fiery controversy. The Linux kernel is an open source software project of fairly large scope. For most of the lifetime of the Linux kernel maintenance (1991–2002), changes to the software were passed around as patches and archived files. In 2002, the Linux kernel project began using a proprietary DVCS called BitKeeper.


pages: 493 words: 145,326

Fire and Steam: A New History of the Railways in Britain by Christian Wolmar

accounting loophole / creative accounting, Beeching cuts, carbon footprint, collective bargaining, computer age, Corn Laws, creative destruction, cross-subsidies, Crossrail, financial independence, hiring and firing, James Watt: steam engine, joint-stock company, low cost airline, railway mania, rising living standards, Silicon Valley, South Sea Bubble, strikebreaker, Traffic in Towns by Colin Buchanan, union organizing, upwardly mobile, vertical integration, working poor, yield management

In Ashton-under-Lyne, Stockport and other nearby towns, shopkeepers were complaining that their customers were going into Manchester to shop. The actual construction of the railways also resulted in much protest from the local residents it displaced. Bringing a railway into town was rather like a slum clearance scheme – ‘creative destruction’17 – as it was inevitably routed through the poorer areas; powerful landowners, and even affluent tenants such as James Watt, were able to ensure that railways did not cross their land. Although the rail service was becoming well used, by the mid-1840s there was still nothing like a countrywide network, and the capacity of the existing railways was severely constrained with, for example, all traffic for the major towns north of London having to run on a single pair of tracks all the way to Rugby.


pages: 444 words: 127,259

Super Pumped: The Battle for Uber by Mike Isaac

"Susan Fowler" uber, "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, always be closing, Amazon Web Services, Andy Kessler, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Bay Area Rapid Transit, Benchmark Capital, Big Tech, Burning Man, call centre, Cambridge Analytica, Chris Urmson, Chuck Templeton: OpenTable:, citizen journalism, Clayton Christensen, cloud computing, corporate governance, creative destruction, data science, Didi Chuxing, don't be evil, Donald Trump, driverless car, Elon Musk, end-to-end encryption, fake news, family office, gig economy, Google Glasses, Google X / Alphabet X, Greyball, Hacker News, high net worth, hockey-stick growth, hustle culture, impact investing, information security, Jeff Bezos, John Markoff, John Zimmer (Lyft cofounder), Kevin Roose, Kickstarter, Larry Ellison, lolcat, Lyft, Marc Andreessen, Marc Benioff, Mark Zuckerberg, Masayoshi Son, mass immigration, Menlo Park, Mitch Kapor, money market fund, moral hazard, move fast and break things, Network effects, new economy, off grid, peer-to-peer, pets.com, Richard Florida, ride hailing / ride sharing, Salesforce, Sand Hill Road, self-driving car, selling pickaxes during a gold rush, shareholder value, Shenzhen special economic zone , Sheryl Sandberg, side hustle, side project, Silicon Valley, Silicon Valley startup, skunkworks, Snapchat, SoftBank, software as a service, software is eating the world, South China Sea, South of Market, San Francisco, sovereign wealth fund, special economic zone, Steve Bannon, Steve Jobs, stock buybacks, super pumped, TaskRabbit, tech bro, tech worker, the payments system, Tim Cook: Apple, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, ubercab, union organizing, upwardly mobile, Vision Fund, WeWork, Y Combinator

Founder culture—or more accurately, founder worship—emerged as bedrock faith in Silicon Valley from several strains of quasi-religious philosophy. Sixties-era San Francisco embraced a sexual, chemical, hippie-led revolution inspired by dreams of liberated consciousness and utopian social structures. This antiestablishment counterculture mixed well with emerging ideas about the efficiency of individual greed and the gospel of creative destruction. Out of those two strands, technologists began building a different kind of counterculture, one that would uproot entrenched power structures and create innovative new ways for society to function. Founders saw inefficiencies in city infrastructure, payment systems, and living quarters.


Mastering Private Equity by Zeisberger, Claudia,Prahl, Michael,White, Bowen, Michael Prahl, Bowen White

Alan Greenspan, asset allocation, backtesting, barriers to entry, Basel III, Bear Stearns, book value, business process, buy low sell high, capital controls, carbon credits, carried interest, clean tech, commoditize, corporate governance, corporate raider, correlation coefficient, creative destruction, currency risk, deal flow, discounted cash flows, disintermediation, disruptive innovation, distributed generation, diversification, diversified portfolio, family office, fixed income, high net worth, impact investing, information asymmetry, intangible asset, junk bonds, Lean Startup, low interest rates, market clearing, Michael Milken, passive investing, pattern recognition, performance metric, price mechanism, profit maximization, proprietary trading, risk tolerance, risk-adjusted returns, risk/return, Savings and loan crisis, shareholder value, Sharpe ratio, Silicon Valley, sovereign wealth fund, statistical arbitrage, time value of money, transaction costs, two and twenty

In today’s competitive mergers and acquisitions market, buyout firms must focus on making long-term, sustainable improvements to portfolio companies’ operations to generate their returns. Indeed, the sense of urgency and the industry’s increasing focus on value creation ensure that businesses are reshaped through a process of creative destruction: resources will be concentrated on the best opportunities, enhance competitive strengths and generate investor returns. The full control offered to a buyout firm, but also the fresh perspective provided by a minority investor, makes it likely that operating segments and projects with the highest productivity or net present value will be favored.


pages: 563 words: 136,190

The Next Shift: The Fall of Industry and the Rise of Health Care in Rust Belt America by Gabriel Winant

affirmative action, Affordable Care Act / Obamacare, anti-communist, antiwork, blue-collar work, business cycle, Capital in the Twenty-First Century by Thomas Piketty, classic study, clean water, collective bargaining, company town, coronavirus, COVID-19, creative destruction, deindustrialization, desegregation, deskilling, emotional labour, employer provided health coverage, Erik Brynjolfsson, Ford paid five dollars a day, full employment, future of work, ghettoisation, independent contractor, invisible hand, Kitchen Debate, labor-force participation, longitudinal study, low skilled workers, mandatory minimum, manufacturing employment, mass incarceration, MITM: man-in-the-middle, moral hazard, new economy, New Urbanism, obamacare, opioid epidemic / opioid crisis, pink-collar, post-industrial society, post-work, postindustrial economy, price stability, RAND corporation, Ronald Reagan, Second Machine Age, secular stagnation, the built environment, union organizing, upwardly mobile, urban renewal, vertical integration, War on Poverty, white flight, Wolfgang Streeck, women in the workforce, work culture , working poor

“We are perceived as an area with high wage costs,” warned the Allegheny Conference on Community Development in a report on regional economic prospects. With the collapse of steel, the transition finally materialized. “In retrospect, while the 1982–1983 recession was wrenching in its effects on the area, it forced important changes in our economy and the way we do business,” the report declared. Creative destruction had done its work.75 The fall of steel had made room for the replacement of manufacturing with “services.” “The most remarkable growth has occurred in the category which for government data gathering purposes is described as ‘private services’, and which includes such major employers as health care facilities, business support services … and educational institutions,” the conference report exulted.


pages: 458 words: 132,912

The Dying Citizen: How Progressive Elites, Tribalism, and Globalization Are Destroying the Idea of America by Victor Davis Hanson

"World Economic Forum" Davos, 2021 United States Capitol attack, 23andMe, affirmative action, Affordable Care Act / Obamacare, airport security, Bernie Sanders, Big Tech, Black Lives Matter, Boeing 737 MAX, borderless world, bread and circuses, British Empire, business climate, business cycle, carbon footprint, centre right, clean water, coronavirus, COVID-19, creative destruction, currency manipulation / currency intervention, defund the police, deindustrialization, deplatforming, disinformation, Donald Trump, Dr. Strangelove, drone strike, El Camino Real, fake news, Ferguson, Missouri, fixed income, Francis Fukuyama: the end of history, future of work, George Floyd, Gini coefficient, global pandemic, Herbert Marcuse, high-speed rail, Honoré de Balzac, illegal immigration, immigration reform, income inequality, Jeff Bezos, Joseph Schumpeter, laissez-faire capitalism, lockdown, Mark Zuckerberg, mass immigration, mass incarceration, Menlo Park, microaggression, military-industrial complex, mortgage debt, Nate Silver, new economy, New Urbanism, obamacare, old-boy network, Paris climate accords, Parler "social media", peak oil, Potemkin village, Ralph Waldo Emerson, Robert Mercer, Ronald Reagan, school choice, Silicon Valley, Silicon Valley billionaire, Skype, social distancing, Social Justice Warrior, tech worker, Thomas L Friedman, transcontinental railway, upwardly mobile, vertical integration, WikiLeaks, working poor, Yom Kippur War, zero-sum game

“They are,” he wrote, “an army of scribes clamoring for a society in which planning, regulation, and supervision are paramount and the prerogative of the educated.”33 The philosophical theories and economic tenets of elites were no doubt based on logical premises, but often they guided public policy with little concern about their effects on real people. “Creative destruction”—which Joseph Schumpeter called “the central fact about capitalism”—is inherent and necessary in a free market. The constant creation and dismantling of businesses to meet rapidly changing consumer tastes, government policies, and national security and natural resource realities certainly are requisites of economic growth and flexibility in adapting to rapid global change.


Reaganland: America's Right Turn 1976-1980 by Rick Perlstein

8-hour work day, Aaron Swartz, affirmative action, air traffic controllers' union, airline deregulation, Alan Greenspan, Alistair Cooke, Alvin Toffler, American Legislative Exchange Council, anti-communist, Apollo 13, Ayatollah Khomeini, Berlin Wall, Bernie Sanders, Boeing 747, Brewster Kahle, business climate, clean water, collective bargaining, colonial rule, COVID-19, creative destruction, crowdsourcing, cuban missile crisis, currency peg, death of newspapers, defense in depth, Deng Xiaoping, desegregation, disinformation, Donald Trump, Dr. Strangelove, energy security, equal pay for equal work, facts on the ground, feminist movement, financial deregulation, full employment, global village, Golden Gate Park, guns versus butter model, illegal immigration, In Cold Blood by Truman Capote, index card, indoor plumbing, Internet Archive, invisible hand, Julian Assange, Kitchen Debate, kremlinology, land reform, low interest rates, Marshall McLuhan, mass immigration, military-industrial complex, MITM: man-in-the-middle, Monroe Doctrine, moral panic, multilevel marketing, mutually assured destruction, New Journalism, oil shock, open borders, Peoples Temple, Phillips curve, Potemkin village, price stability, Ralph Nader, RAND corporation, rent control, road to serfdom, Robert Bork, Robert Solow, rolodex, Ronald Reagan, Rosa Parks, Saturday Night Live, Silicon Valley, Suez crisis 1956, three-martini lunch, traveling salesman, unemployed young men, union organizing, unpaid internship, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban renewal, wages for housework, walking around money, War on Poverty, white flight, WikiLeaks, Winter of Discontent, yellow journalism, Yom Kippur War, zero-sum game

But the kind of people who bought $500 tickets to political events were not taking subways or buses. And, way out at Reagan headquarters next to the Los Angeles International Airport, von Damm was hardly aware that a new Manhattan was arising from the ashes of the old. Theorists of capitalism called this “creative destruction”: investors, sometimes unsavory ones, swooped in to buy depreciating assets, redeveloping them to create fantastic new sources of wealth. A paradigmatic example was the Commodore Hotel on East 42nd Street, across from the Chrysler Building, down the street from Grand Central Station. In 1976, the elegant pile, opened right after the First World War, was near ruins.

., 357 Cohn, Roy, 856 Colby, William, 43 Coleman, Randy, 257 Colorado, 232, 395 Colson, Charles, 67, 487, 608 Commentary magazine, 130 Committee for Abortion Rights and Against Sterilization Abuse, 821 Committee for Responsible Healthcare, 754 Committee for the Survival of a Free Congress, 37, 234, 235 Committee for Traffic Safety, 195 Committee on the Present Danger, 45, 392, 426 Commodore Hotel (New York City), 662–663 Common Cause, 572, 892 common situs, 316 Commoner, Barry, 911 Communism, 42–43, 433 Communist Workers Party, 690, 827 Concerned Citizens of California, 377 Concerned Voters of California, 372 Congressional Black Caucus, 214, 379–380, 459, 598 Congressional Club, 386 Congressional Quarterly, 46 Conlan, John, 24, 25, 97, 241, 249, 480, 484, 608, 722 Connally, John, 7, 18, 68, 70, 266, 449–457, 496, 511, 521, 522, 523, 539, 594, 607, 611, 613, 614, 619–625, 665, 709, 724, 747–748, 752, 768, 806 Connecticut, 559, 567, 757 Conscience of a Conservative (Goldwater), 34, 283, 288 conservation Carter on, 380–381 Reagan on, 221 Conservative Caucus, 35, 45, 46, 65, 69, 71, 80, 96, 231, 256, 387, 490 Conservative Digest, 97, 256, 605, 787 Conservative Register (index), 142 Conservative Union, 426 conservatives in 1976, 30–47 in 1977, 48 in 1978, 337–343 in 1979, 595–609 on abortion, 47, 122–123, 173 Carter-Ford election, 13–14 Carter on, 383 on Carter’s foreign policy, 171 “China Lobby,” 368 in Democratic Party, 397 on economics, 189 on electoral reform, 95 on gay rights, 236 on gays and lesbians, 171 on inflation, 629–630 International Women’s Year, 99, 156–160 in Minnesota, 69 preachers as, 484 protesting fall TV season, 355 on Reagan, 135 Save Our Children, 68 in the Senate, 396 on social issues, 69 in state elections, 231–234 women’s conference and, 179 Young Republican Leadership Conference, 457 See also neoconservatives; New Right Conservatives for the Removal of the President, 34 consumer agency bill, 205, 206, 217 Consumer Issues Working Group, 203, 204, 206–207, 217 consumer price index, 431 Consumer Product Safety Commission, 200, 728 consumer protection legislation, 190–203, 244–249 consumer safety about, 199, 202–205, 219, 461–465 advertising food to children, 461–463 cigarette warnings, 460 funeral homes, 461 “lemon law,” 388 used-car warranty rules, 460 Conyers, John, 223, 379 Cooke, Terrence, 577, 888 Coors, Joseph, 37, 225, 325 Coppola, Francis Ford, 757 Copulos, Milton, 224 Corman, James, 913 corporate PACs, 387–388 corporate power, 192–193, 195, 200–201 corporate tax cuts, 335 Corvair, safety of, 194, 195, 196, 246 Costanza, Midge, 54, 85, 91–92, 128, 296 Costikyan, Edward, 883 Council of Fifty-Six, 606 Council on Wage and Price Stability (COWPS), 383 Cox, Archibald, 654 COYOTE (group), 19 CPD, 835 Craig, Jim, 733, 734 Crane, Dan, 233, 253, 254, 255, 384, 385, 396 Crane, David, 233, 396 Crane, Judy, 385 Crane, Phil, 233, 235, 254, 256, 369, 370, 396, 472, 473, 517, 518, 736, 843 Cranston, Alan, 334, 598, 912 creative destruction, 662 credit card debt, 421 credit controls, 743, 744, 762, 777, 781 crime capital punishment, 68, 123–126, 128, 130, 132, 134, 262, 394 in New York, 129–130, 132, 661 Reagan on, 68 San Diego mass shooting (1979), 420 in San Francisco, 127 serial killers, 117, 126, 132, 133, 149, 415, 419 sex crimes, 116–117 Crisp, Mary, 220, 796, 797 Criswell, W.

See National Conservative Political Action Committee Nebraska, 343, 351 Neighborhoods, Reagan on, 553–554 Nelson, Avi, 364 Nelson, Gaylord, 106, 259, 912 Nelson, Willie, 825 neoconservatives about, 41–45, 460, 595 CIA head nomination, 47 Communism and, 42–43 Esquire article on, 350 Irving Kristol and, 284–287 Novak as conduit for leaks, 59 Reagan and, 505 “Vietnam Syndrome,” 44 Neshoba County Fair, 820–833, 852 Nessen, Ron, 23 Nestlé, 457 Nevada, 334, 395 New Deal, 188, 189 New Hampshire, 232, 256, 262, 351–352, 353, 384, 396, 510, 517, 518, 527, 536, 612, 724, 731, 734–739, 750 New Jersey, 232, 304, 325, 326, 364, 564 New Mexico, 601 New Orleans, 790 new public finance, 280 New Republic magazine, 189, 362, 591, 624, 767 New Right about, 32–33, 37–38, 60, 69, 251–253, 782 complaint against, 41 congressional races, 395 corporate PACs, 387–388 on electoral reforms, 94 Hatch as New Right nominee, 39 Kingston Group, 367, 368 organizing discontent, 354 on Panama Canal, 141–142 Reagan and, 100, 841–847, 870–871, 911 on Republican Party, 113 in state elections, 231–234 See also Christian Right New Right Report newsletter, 388, 457, 458, 518 New Spirit Inaugural Concert, 53 New York City in 1979, 661–664 blackout, 129–130 blizzard (1978), 217 Commodore Hotel, 662–663 Conference on Families, 787 creative destruction, 662 crime in, 129–130, 132, 661 Democratic National Convention, 812–828 gays and lesbians, 84, 120 Iran hostages, 814 mayoral race (1977), 130–134, 148–150, 168–169 pornography in, 131 serial killers, 117, 126, 132, 133, 149 Stonewall Inn raid, 84, 120 New York Daily News, 131, 132, 149, 169, 695, 732, 745, 787 New York Herald-Tribune, 137 New York magazine, 437, 690, 799 New York Post, 117, 149, 174, 616, 746, 901 New York Review of Books, 410 New York State capital punishment, 130, 132, 262 gay rights, 149 Javits, 597, 640, 856, 882–883, 912 Liberal Party, 855–856 Love Canal scandal, 404–405, 415, 779 state payroll slashes, 331 New York Times, 4, 5, 10, 14, 16, 30, 47, 64, 73, 76, 93, 105, 106, 108, 114, 118, 121, 131, 133–134, 137, 139, 144, 146, 159, 172, 174, 194, 196, 204, 206, 211, 219, 235, 252, 257, 262, 263, 267, 274, 276, 327, 330, 335, 349, 353, 384, 388, 405, 406, 415, 438, 444, 469, 493, 524, 525, 530, 536, 576, 607, 619, 624, 632, 635, 659, 662, 663, 672, 674, 719, 720, 722, 723, 732, 743, 744, 767, 778, 779, 793, 825, 838, 839, 840, 847, 854, 856, 857, 859, 863, 873, 880, 884, 903 New York Times Magazine, 602, 625, 635, 637 New Yorker magazine, 53, 119, 786, 894 The Newscasters (TV programs), 356 Newsday, 462 Newsweek magazine, 148, 154, 193, 200, 445, 466, 535, 562, 567, 622, 635, 636, 682, 718, 743, 762, 849, 870, 883 Ngo Dinh Diem, 438–439 Nicaragua, 349, 431, 579, 597, 795 Nicholson, Jack, 118 Niebuhr, Reinhold, 119 Niemöller, Martin, 109 Nightline, 649, 912 Nilsson, Lennart, 394 Nitze, Paul, 44, 59, 509 Nixon, Pat, 72 Nixon, Richard about, 18, 101, 177, 501, 747, 804, 814 approval rating, 259 China trip, 836 Clean Water Act, 200 consumer protection legislation, 199 economic growth, 421 economic policy, 407, 454 Federal Trade Commission, 198 Howard Phillips and, 34 impeachment, 132 inauguration speech, 268 on Iran, 435, 437, 641 Irving Kristol and, 284 on John Connally, 453–455, 457 “kitchen debate,” 137 memoir, 339–340 proposed reelection budget, 200 Reagan and, 103, 370 Reagan dinner party for, 370–371 Safire and, 137 on SALT treaty, 425 Sears and, 497 Shanghai Communiqué, 836 visit to Washington after resignation, 215 Nixon Doctrine, 435 Noble, Elaine, 85 Nofziger, Lyn, 14, 69, 70, 71, 72, 96, 100, 144, 219, 370, 398, 498, 512, 513, 515, 612, 616, 619, 681, 717, 835, 836, 861, 862, 879, 880–881, 888 Norman, Thomas F., 545 NORML.


pages: 892 words: 91,000

Valuation: Measuring and Managing the Value of Companies by Tim Koller, McKinsey, Company Inc., Marc Goedhart, David Wessels, Barbara Schwimmer, Franziska Manoury

accelerated depreciation, activist fund / activist shareholder / activist investor, air freight, ASML, barriers to entry, Basel III, Black Monday: stock market crash in 1987, book value, BRICs, business climate, business cycle, business process, capital asset pricing model, capital controls, Chuck Templeton: OpenTable:, cloud computing, commoditize, compound rate of return, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, currency risk, discounted cash flows, distributed generation, diversified portfolio, Dutch auction, energy security, equity premium, equity risk premium, financial engineering, fixed income, index fund, intangible asset, iterative process, Long Term Capital Management, low interest rates, market bubble, market friction, Myron Scholes, negative equity, new economy, p-value, performance metric, Ponzi scheme, price anchoring, proprietary trading, purchasing power parity, quantitative easing, risk free rate, risk/return, Robert Shiller, Savings and loan crisis, shareholder value, six sigma, sovereign wealth fund, speech recognition, stocks for the long run, survivorship bias, technology bubble, time value of money, too big to fail, transaction costs, transfer pricing, two and twenty, value at risk, yield curve, zero-coupon bond

Some might argue that it would be better for the government to develop incentives, regulations, and taxes. In the example of climate change, this view might favor government action to encourage a migration away from polluting sources of energy. Others may espouse a free-market approach, allowing creative destruction to replace aging technologies and systems with cleaner and more efficient sources of power. This trading off of different economic interests and time horizons is precisely what governments are supposed to do, with institutional investors such as pension funds in a critical supporting role.

Research has shown that as a business becomes more mature and competitive challenges increase, it loses the potential for ongoing value creation, and its total returns to shareholders start to decline, relative to the business’s industry sector.6 An opportune moment to 4 P. Cusatis, J. Miles, and J. Woolridge, “Some New Evidence That Spinoffs Create Value,” Journal of Applied Corporate Finance 7 (1994): 100–107. 5 J. Brandimarte, W. Fallon, and R. McNish, “Trading the Corporate Portfolio,” McKinsey on Finance (Fall 2001): 1–5. 6 R. Foster and S. Kaplan, Creative Destruction (New York: Doubleday, 2001). VALUE CREATION FROM DIVESTITURES 633 divest the business is therefore shortly before market valuations begin to reflect its lower performance expectations. However, divesting profitable and/or growing businesses also can benefit both the parent and the business unit.


pages: 535 words: 158,863

Superclass: The Global Power Elite and the World They Are Making by David Rothkopf

"World Economic Forum" Davos, airport security, Alan Greenspan, anti-communist, asset allocation, Ayatollah Khomeini, bank run, barriers to entry, Bear Stearns, Berlin Wall, Big Tech, Bob Geldof, Branko Milanovic, Bretton Woods, BRICs, business cycle, carried interest, clean water, compensation consultant, corporate governance, creative destruction, crony capitalism, David Brooks, Doha Development Round, Donald Trump, fake news, financial innovation, fixed income, Francis Fukuyama: the end of history, Gini coefficient, global village, high net worth, income inequality, industrial cluster, informal economy, Internet Archive, Jeff Bezos, jimmy wales, John Elkington, joint-stock company, knowledge economy, Larry Ellison, liberal capitalism, Live Aid, Long Term Capital Management, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, mass immigration, means of production, Mexican peso crisis / tequila crisis, Michael Milken, Mikhail Gorbachev, military-industrial complex, Nelson Mandela, old-boy network, open borders, plutocrats, Ponzi scheme, price mechanism, proprietary trading, Savings and loan crisis, shareholder value, Skype, special economic zone, Steve Jobs, Thorstein Veblen, too big to fail, trade liberalization, trickle-down economics, upwardly mobile, vertical integration, Vilfredo Pareto, Washington Consensus, William Langewiesche

Similarly, the United States Civil War, itself a consequence of the country’s internal struggle between its agricultural past and its industrial future, altered the economic and social landscapes both with the end of slavery and the flowering of the industrial era that enriched the class of business leaders who were able to take advantage of the birth of a new, continental economy that supplanted the once fairly separate state economies. Limited or weak institutional constraints invite the changes associated with political and economic “creative destruction.” One of the conundrums posed by history is that the same conditions that promote creativity and entrepreneurship also can invite abuse, inequality, injustice, and eventually social upheaval. Yet societies that impose too many rules to preserve order often stifle creativity. For example, Sparta, the most powerful Greek city-state, militarized its society to such a degree that both dissent and creativity were suppressed.


India's Long Road by Vijay Joshi

Affordable Care Act / Obamacare, barriers to entry, Basel III, basic income, blue-collar work, book value, Bretton Woods, business climate, capital controls, carbon tax, central bank independence, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, congestion charging, Cornelius Vanderbilt, corporate governance, creative destruction, crony capitalism, decarbonisation, deindustrialization, demographic dividend, demographic transition, Doha Development Round, eurozone crisis, facts on the ground, failed state, financial intermediation, financial repression, first-past-the-post, floating exchange rates, foreign exchange controls, full employment, germ theory of disease, Gini coefficient, global supply chain, global value chain, hiring and firing, income inequality, Indoor air pollution, Induced demand, inflation targeting, invisible hand, land reform, low interest rates, Mahatma Gandhi, manufacturing employment, Martin Wolf, means of production, microcredit, moral hazard, obamacare, Pareto efficiency, price elasticity of demand, price mechanism, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, race to the bottom, randomized controlled trial, rent-seeking, reserve currency, rising living standards, school choice, school vouchers, secular stagnation, Silicon Valley, smart cities, South China Sea, special drawing rights, The Future of Employment, The Market for Lemons, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, transaction costs, universal basic income, urban sprawl, vertical integration, working-age population

Profitability fell quite sharply after domestic liberalization and external opening-​up before recovering to pre-​liberalization levels, which conforms to the reaction that one would expect from exposure to greater competition. At the same time, other features of the liberalization process have not been quite so healthy. The first is that firm exit and ‘shake-​ out’ has been modest. In other words, India has experienced much more of the ‘creation’ than the ‘destruction’ part of Schumpeterian ‘creative destruction’. Secondly, entry by new stand-​alone firms, which had been strong in the 1990s, stalled in the next decade, and concentration rates went up again. Thirdly, although there has been some churning in the list of the top 20 firms, the dominance of incumbent privately-​owned ‘business houses’ in terms of assets, sales, and profits has remained quite solid.18 There are two possible interpretations of these tendencies.


pages: 554 words: 149,489

The Content Trap: A Strategist's Guide to Digital Change by Bharat Anand

Airbnb, Alan Greenspan, An Inconvenient Truth, AOL-Time Warner, Benjamin Mako Hill, Bernie Sanders, Clayton Christensen, cloud computing, commoditize, correlation does not imply causation, creative destruction, crowdsourcing, death of newspapers, disruptive innovation, Donald Trump, driverless car, electricity market, Eyjafjallajökull, fulfillment center, gamification, Google Glasses, Google X / Alphabet X, information asymmetry, Internet of things, inventory management, Jean Tirole, Jeff Bezos, John Markoff, Just-in-time delivery, Kaizen: continuous improvement, Khan Academy, Kickstarter, late fees, managed futures, Mark Zuckerberg, market design, Minecraft, multi-sided market, Network effects, post-work, price discrimination, publish or perish, QR code, recommendation engine, ride hailing / ride sharing, Salesforce, selection bias, self-driving car, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, social graph, social web, special economic zone, Stephen Hawking, Steve Jobs, Steven Levy, Stuart Kauffman, the long tail, Thomas L Friedman, transaction costs, two-sided market, ubercab, vertical integration, WikiLeaks, winner-take-all economy, zero-sum game

Penney Is Having a Little Too Much Fun at the Super Bowl,” Mashable , last modified February 2, 2014, accessed March 10, 2016, http://mashable.com/​2014/​02/​02/​jc-penny-super-bowl/​#Sdo6vmbUiqqB . 15 percent of the amount Patricia Winters Lauro, The Media Business: Advertising; New Methods of Agency Payments Drive a Stake Through the Heart of the old 15% Commission,” New York Times , April 2, 1999. the urge for agencies to inflate costs Ibid. “If you aren’t thinking about connecting” “Secrets of Creative Management: Timeless Wisdom from David Ogilvy,” citing quotes from The Unpublished David Ogilvy (New York: Crown, 1987). “A revolution has begun” “Creative Destruction,” Economist, June 28, 2014. whose delivery remained unchanged for nearly three centuries Joel Rose, “How to Break Free of Our 19th-Century Factory-Model Education System,” Atlantic , May 9, 2012. One Ivy League professor Michael Pupin, “Professor-Inventor Predicts Radio Universities,” Popular Science Monthly, February 1923.


pages: 504 words: 143,303

Why We Can't Afford the Rich by Andrew Sayer

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, Anthropocene, anti-globalists, asset-backed security, banking crisis, banks create money, basic income, biodiversity loss, bond market vigilante , Boris Johnson, Bretton Woods, British Empire, Bullingdon Club, business cycle, call centre, capital controls, carbon footprint, carbon tax, collective bargaining, corporate raider, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, declining real wages, deglobalization, degrowth, deindustrialization, delayed gratification, demand response, don't be evil, Double Irish / Dutch Sandwich, en.wikipedia.org, Etonian, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, G4S, Goldman Sachs: Vampire Squid, green new deal, high net worth, high-speed rail, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", James Dyson, job automation, Julian Assange, junk bonds, Kickstarter, labour market flexibility, laissez-faire capitalism, land bank, land value tax, long term incentive plan, low skilled workers, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, means of production, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, New Urbanism, Northern Rock, Occupy movement, offshore financial centre, oil shale / tar sands, patent troll, payday loans, Philip Mirowski, plutocrats, popular capitalism, predatory finance, price stability, proprietary trading, pushing on a string, quantitative easing, race to the bottom, rent-seeking, retail therapy, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, Steve Jobs, tacit knowledge, TED Talk, The Nature of the Firm, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, trickle-down economics, universal basic income, unpaid internship, upwardly mobile, Washington Consensus, wealth creators, WikiLeaks, Winter of Discontent, working poor, Yom Kippur War, zero-sum game

Pension funds, mutual funds and banks ‘invested’ this growing flow of money on their behalf in financial securities. This of course gave them a stake in the expansion of the sector.27 Capitalism has always depended on the movement of capital from low-profit ventures into high-profit ones. It’s all part of the process of creative destruction that has fuelled the incredible economic growth of the last 250 years. Yet, in the new financialised capitalism, the creativity lay not in long-term investment in goods and services, as it had done in productionist capitalism, but in finding ways of outsourcing activities to cheap labour providers, in sweating existing assets for more income, speculating on price differences in different places and price movements and engaging in tax avoidance and creative accounting.


pages: 582 words: 160,693

The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State by James Dale Davidson, William Rees-Mogg

affirmative action, agricultural Revolution, Alan Greenspan, Alvin Toffler, bank run, barriers to entry, Berlin Wall, borderless world, British Empire, California gold rush, classic study, clean water, colonial rule, Columbine, compound rate of return, creative destruction, Danny Hillis, debt deflation, ending welfare as we know it, epigenetics, Fall of the Berlin Wall, falling living standards, feminist movement, financial independence, Francis Fukuyama: the end of history, full employment, George Gilder, Hernando de Soto, illegal immigration, income inequality, independent contractor, informal economy, information retrieval, Isaac Newton, John Perry Barlow, Kevin Kelly, market clearing, Martin Wolf, Menlo Park, money: store of value / unit of account / medium of exchange, new economy, New Urbanism, Norman Macrae, offshore financial centre, Parkinson's law, pattern recognition, phenotype, price mechanism, profit maximization, rent-seeking, reserve currency, road to serfdom, Ronald Coase, Sam Peltzman, school vouchers, seigniorage, Silicon Valley, spice trade, statistical model, telepresence, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, trade route, transaction costs, Turing machine, union organizing, very high income, Vilfredo Pareto

They were able to do this, while inflaming a sense of grievance and entitlement, by blaming the structure of society as a whole, and white men in general, for the economic shortcomings of various subcultures within society. The Megapolitics of Innovation Even before information technology began to threaten "creative destruction" of the industrial economy, it had clearly antiquated much of the cherished myth of Marxists and socialists. We examined the megapolitics of innovation in a previous chapter. The point we emphasized there is of importance in placing the social impact of the Information Revolution into perspective.


pages: 487 words: 151,810

The Social Animal: The Hidden Sources of Love, Character, and Achievement by David Brooks

"World Economic Forum" Davos, Abraham Maslow, Albert Einstein, asset allocation, assortative mating, Atul Gawande, behavioural economics, Bernie Madoff, business process, Cass Sunstein, choice architecture, classic study, clean water, cognitive load, creative destruction, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, deliberate practice, disintermediation, Donald Trump, Douglas Hofstadter, Emanuel Derman, en.wikipedia.org, fake it until you make it, fear of failure, financial deregulation, financial independence, Flynn Effect, George Akerlof, Henri Poincaré, hiring and firing, impulse control, invisible hand, Jeff Hawkins, Joseph Schumpeter, labor-force participation, language acquisition, longitudinal study, loss aversion, medical residency, meta-analysis, mirror neurons, Monroe Doctrine, Paul Samuelson, power law, Richard Thaler, risk tolerance, Robert Shiller, school vouchers, six sigma, social intelligence, Stanford marshmallow experiment, Steve Jobs, Steven Pinker, tacit knowledge, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Tyler Cowen, Walter Mischel, young professional

National service programs bring people together across class lines. Publicly funded, locally administered social-entrepreneurship funds encourage civic activism and community-service programs. Simple and fair tax policies rouse energies, increase dynamism, lift the animal spirits, and encourage creative destruction. Aristotle wrote that legislators habituate citizens. Whether they mean to or not, legislators encourage certain ways of living and discourage other ways. Statecraft is inevitably soulcraft. Experiments in Thinking Harold began writing a series of essays for policy journals on what his soft side approach might mean in the real world.


pages: 790 words: 150,875

Civilization: The West and the Rest by Niall Ferguson

Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, Ayatollah Khomeini, Berlin Wall, BRICs, British Empire, business cycle, clean water, collective bargaining, colonial rule, conceptual framework, Copley Medal, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, Dean Kamen, delayed gratification, Deng Xiaoping, discovery of the americas, Dissolution of the Soviet Union, Easter island, European colonialism, Fall of the Berlin Wall, financial engineering, Francisco Pizarro, full employment, Great Leap Forward, Gregor Mendel, guns versus butter model, Hans Lippershey, haute couture, Hernando de Soto, income inequality, invention of movable type, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Joseph Schumpeter, Kickstarter, Kitchen Debate, land reform, land tenure, liberal capitalism, Louis Pasteur, Mahatma Gandhi, market bubble, Martin Wolf, mass immigration, means of production, megacity, Mikhail Gorbachev, new economy, Pearl River Delta, Pierre-Simon Laplace, power law, probability theory / Blaise Pascal / Pierre de Fermat, profit maximization, purchasing power parity, quantitative easing, rent-seeking, reserve currency, retail therapy, road to serfdom, Ronald Reagan, savings glut, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, spice trade, spinning jenny, Steve Jobs, Steven Pinker, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, The Great Moderation, the market place, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, total factor productivity, trade route, transaction costs, transatlantic slave trade, undersea cable, upwardly mobile, uranium enrichment, wage slave, Washington Consensus, women in the workforce, work culture , World Values Survey

Each organic being … has to struggle for life … As natural selection acts solely by accumulating slight, successive, favourable variations, it can produce no great or sudden modification … 26 In that sense, it might make more sense for historians to talk about an Industrial Evolution, in Darwin’s sense of the word. As the economists Thorstein Veblen and Joseph Schumpeter would later remark, nineteenth-century capitalism was an authentically Darwinian system, characterized by seemingly random mutation, occasional speciation and differential survival or, to use Schumpeter’s memorable phrase, ‘creative destruction’.27 Yet precisely the volatility of the more or less unregulated markets created by the Industrial Revolution caused consternation among many contemporaries. Until the major breakthroughs in public health described in the previous chapter, mortality rates in industrial cities were markedly worse than in the countryside.


pages: 488 words: 144,145

Inflated: How Money and Debt Built the American Dream by R. Christopher Whalen

Alan Greenspan, Albert Einstein, bank run, banking crisis, Bear Stearns, Black Swan, book value, Bretton Woods, British Empire, business cycle, buy and hold, California gold rush, Carl Icahn, Carmen Reinhart, central bank independence, classic study, commoditize, conceptual framework, Cornelius Vanderbilt, corporate governance, corporate raider, creative destruction, cuban missile crisis, currency peg, debt deflation, falling living standards, fiat currency, financial deregulation, financial innovation, financial intermediation, floating exchange rates, Ford Model T, Fractional reserve banking, full employment, Glass-Steagall Act, global reserve currency, housing crisis, interchangeable parts, invention of radio, Kenneth Rogoff, laissez-faire capitalism, land bank, liquidity trap, low interest rates, means of production, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, mutually assured destruction, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, oil shock, Paul Samuelson, payday loans, plutocrats, price stability, pushing on a string, quantitative easing, rent-seeking, reserve currency, Ronald Reagan, Savings and loan crisis, special drawing rights, Suez canal 1869, Suez crisis 1956, The Chicago School, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, Upton Sinclair, women in the workforce

Still, there is a long-standing debate about whether bubbles and the ensuing crises are due to poor government policies (the traditional conservative and Austrian view) or due to market failure requiring policy reaction (the liberal and Keynesian view). Chris takes the Austrian view but the Great Depression experience shows that too much Schumpeterian “creative destruction” leads to uncreative destructive depression. On the other hand, the Japanese experience of the 1990s also suggests that keeping alive zombie banks and companies can lead to persistent near depression. The most fascinating parts of this great book are about the historical similarities in U.S. financial history: Cycles of asset and credit booms and bubbles followed by crashes and busts; The fiscal recklessness of U.S. states that leads to state and local government defaults; The temptation to socialize those state and local government losses, as well as the losses of the private sector (households and banks) via federal government bailouts; The recurrent history of high inflation as the solution to high public deficit and debt problems and private debt problems both after wars (Civil War, World War I, Vietnam War, and possibly now following budget-busting wars in Iraq and Afghanistan) and in the aftermath of asset and credit bubbles gone bust; The historical resistance of U.S. state, local, and federal governments to raise enough taxes to finance an increasing public demand for public services and entitlements that cause these large fiscal deficits, and the schizophrenia of an American public that hates high taxes but also wants public and social services—the trouble being that you cannot have at the same time public spending like in the social welfare states of Europe and low tax rates as under Reagan—at least the Europeans are willing to bear high taxes for the public services that they demand instead of living in the delusional bubble that both the government and the household sectors can live beyond their means, piling on more private and public debt.


pages: 482 words: 149,351

The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, airline deregulation, Alan Greenspan, anti-communist, bank run, banking crisis, Basel III, Bear Stearns, benefit corporation, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, British Empire, business climate, business cycle, capital controls, carried interest, Cass Sunstein, Celtic Tiger, central bank independence, centre right, Clayton Christensen, cloud computing, corporate governance, corporate raider, creative destruction, Credit Default Swap, cross-subsidies, David Ricardo: comparative advantage, demographic dividend, Deng Xiaoping, desegregation, Donald Trump, Etonian, export processing zone, failed state, fake news, falling living standards, family office, financial deregulation, financial engineering, financial innovation, forensic accounting, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, Global Witness, high net worth, Ida Tarbell, income inequality, index fund, invisible hand, Jeff Bezos, junk bonds, Kickstarter, land value tax, late capitalism, light touch regulation, London Whale, Long Term Capital Management, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, megaproject, Michael Milken, Money creation, Mont Pelerin Society, moral hazard, neoliberal agenda, Network effects, new economy, Northern Rock, offshore financial centre, old-boy network, out of africa, Paul Samuelson, plutocrats, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, pushing on a string, race to the bottom, regulatory arbitrage, rent-seeking, road to serfdom, Robert Bork, Ronald Coase, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, sharing economy, Silicon Valley, Skype, smart grid, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, special economic zone, Steve Ballmer, Steve Jobs, stock buybacks, Suez crisis 1956, The Chicago School, Thorstein Veblen, too big to fail, Tragedy of the Commons, transfer pricing, two and twenty, vertical integration, Wayback Machine, wealth creators, white picket fence, women in the workforce, zero-sum game

For starters, a moment’s thought reveals that ‘competition’ between countries or tax systems bears no resemblance whatsoever to competition between companies in a market. To get a taste of this, ponder the difference between a failed company like Carillion or Enron and a failed state like Somalia a few years back. When a company fails it is sad, but hopefully its employees will get new jobs, and the creative destruction involved when companies compete in markets can be a source of dynamism for capitalism. A failed state, involving warlords and murder and nuclear trafficking, is an utterly different beast. They only thing they really have in common is a shared word in the English language: competition. Even if you believe, as I do, that competition between private actors in unsabotaged markets can be a great thing, this says nothing about the state-versus-state kind.


pages: 589 words: 147,053

The Age of Em: Work, Love and Life When Robots Rule the Earth by Robin Hanson

8-hour work day, artificial general intelligence, augmented reality, Berlin Wall, bitcoin, blockchain, brain emulation, business cycle, business process, Clayton Christensen, cloud computing, correlation does not imply causation, creative destruction, deep learning, demographic transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental subject, fault tolerance, financial intermediation, Flynn Effect, Future Shock, Herman Kahn, hindsight bias, information asymmetry, job automation, job satisfaction, John Markoff, Just-in-time delivery, lone genius, Machinery of Freedom by David Friedman, market design, megaproject, meta-analysis, Nash equilibrium, new economy, Nick Bostrom, pneumatic tube, power law, prediction markets, quantum cryptography, rent control, rent-seeking, reversible computing, risk tolerance, Silicon Valley, smart contracts, social distancing, statistical model, stem cell, Thomas Malthus, trade route, Turing test, Tyler Cowen, Vernor Vinge, William MacAskill

Forbes Israel, April 17. http://www.forbes.co.il/news/new.aspx?pn6Vq=J&0r9VQ=IEII. Foster, Lucia, John Haltiwanger, and C. J. Krizan. 2006. “Market Selection, Reallocation, and Restructuring in the U.S. Retail Trade Sector in the 1990s.” Review of Economics and Statistics 88(4): 748–758. Foster, Richard. 2012. “Creative Destruction Whips through Corporate America: An Innosight Executive Briefing on Corporate Strategy.” Strategy & Innovation 10(1). Fox, J.G., and E.D. Embrey. 1972. “Music—an aid to productivity.” Applied Ergonomics 3(4): 202–205. Frattaroli, J. 2006. “Experimental Disclosure and its Moderators: A Meta-analysis.”


pages: 495 words: 144,101

Goddess of the Market: Ayn Rand and the American Right by Jennifer Burns

Abraham Maslow, Alan Greenspan, Alvin Toffler, anti-communist, Apollo 11, bank run, barriers to entry, centralized clearinghouse, collective bargaining, creative destruction, desegregation, feminist movement, financial independence, gentleman farmer, George Gilder, Herbert Marcuse, invisible hand, jimmy wales, Joan Didion, John Markoff, Joseph Schumpeter, knowledge worker, laissez-faire capitalism, Lewis Mumford, lone genius, Menlo Park, minimum wage unemployment, Mont Pelerin Society, new economy, Norman Mailer, offshore financial centre, Ponzi scheme, profit motive, public intellectual, RAND corporation, rent control, road to serfdom, Robert Bork, rolodex, Ronald Reagan, side project, Stewart Brand, The Chicago School, The Wisdom of Crowds, union organizing, urban renewal, We are as Gods, white flight, Whole Earth Catalog

She presented a spiritualized version of America’s market system, creating a compelling vision of capitalism that drew on traditions of self-reliance and individualism but also presented a for ward-looking, even futuristic ideal of what a capitalist society could be. Throughout the novel Rand demonstrated a keen appreciation for capitalism’s creative destruction and a basic comfort with competition and flux. A worker on Taggart Transcontinental admires the prowess of a competitor, stating, “Phoenix-Durango is doing a brilliant job” (16). By contrast, her villains long for the security of a static, planned economy. One bureaucrat declares, “What it comes down to is that we can manage to exist as and where we are, but we can’t afford to move!


pages: 476 words: 148,895

Cooked: A Natural History of Transformation by Michael Pollan

biofilm, bioinformatics, Columbian Exchange, correlation does not imply causation, creative destruction, dematerialisation, Drosophila, energy security, Gary Taubes, Helicobacter pylori, Hernando de Soto, hygiene hypothesis, Kickstarter, Louis Pasteur, Mason jar, microbiome, off-the-grid, peak oil, pneumatic tube, Ralph Waldo Emerson, Steven Pinker, women in the workforce

Like the earth itself, the various arts of fermentation rely instead on biology to transform organic matter from one state to a more interesting and nutritious other state. Here I encountered the most amazing alchemies of all: strong, allusive flavors and powerful intoxicants created for us by fungi and bacteria—many of them the denizens of the soil—as they go about their invisible work of creative destruction. This section falls into three chapters, covering the fermentation of vegetables (into sauerkraut, kimchi, pickles of all kinds); milk (into cheese); and alcohol (into mead and beer). Along the way, a succession of “fermentos” tutored me in the techniques of artfully managing rot, the folly of the modern war against bacteria, the erotics of disgust, and the somewhat upside-down notion that, while we were fermenting alcohol, alcohol has been fermenting us.


pages: 391 words: 22,799

To Serve God and Wal-Mart: The Making of Christian Free Enterprise by Bethany Moreton

affirmative action, American Legislative Exchange Council, anti-communist, Berlin Wall, big-box store, Bretton Woods, Buckminster Fuller, collective bargaining, company town, corporate personhood, creative destruction, deindustrialization, desegregation, Donald Trump, emotional labour, estate planning, eternal september, Fall of the Berlin Wall, Frederick Winslow Taylor, George Gilder, global village, Great Leap Forward, informal economy, invisible hand, liberation theology, longitudinal study, market fundamentalism, Mont Pelerin Society, mortgage tax deduction, Naomi Klein, new economy, post-industrial society, postindustrial economy, prediction markets, price anchoring, prosperity theology / prosperity gospel / gospel of success, Ralph Nader, RFID, road to serfdom, Ronald Reagan, scientific management, Silicon Valley, Stewart Brand, strikebreaker, The Wealth of Nations by Adam Smith, union organizing, walkable city, Washington Consensus, white flight, Whole Earth Catalog, work culture , Works Progress Administration

“Almost evÂ�eryÂ�one is white, speaks EnÂ�glish, and shares the same values of God, family and country. Almost evÂ�eryÂ�one who wants a job has one,” and the state was just a bumbling, Â�risible tax collector.15 In this imagined homeland, rural white virtue offered a hiding place from the twentieth century’s tempests of creative destruction. Throughout most of the preceding century, the Ozarks periÂ�odically offered the same comfort to a nation deeply ambivalent about the modern incorporation of America. Urbanites dazed by sudden, unchecked industrialization in the early 1900s often located the new urban€pathologies in the polyglot work force that staffed the factories and filled the€ tenements.


pages: 524 words: 143,993

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

air freight, Alan Greenspan, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, break the buck, Bretton Woods, business cycle, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, full employment, Glass-Steagall Act, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, Les Trente Glorieuses, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandatory minimum, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, subprime mortgage crisis, tail risk, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, vertical integration, very high income, winner-take-all economy, zero-sum game

Many investors – particularly those concerned with providing incomes in retirement, such as pension funds – needed higher returns than government bonds provided, while stocks looked less attractive after the collapse of the market in 2000. The market’s response was to mass-produce higher-yielding, pseudo-high-grade assets. In an inversion of Joseph Schumpeter’s idea of ‘creative destruction’, Jagdish Bhagwati of Columbia University called this ‘destructive creation’.41 It was the new structured finance that provided investors with what they thought they wanted. As Lloyd Blankfein, chairman of Goldman Sachs, pointed out in 2009: ‘In January 2008, there were 12 triple A-rated companies in the world.


pages: 655 words: 156,367

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era by Gary Gerstle

2021 United States Capitol attack, A Declaration of the Independence of Cyberspace, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, Alan Greenspan, Alvin Toffler, anti-communist, AOL-Time Warner, Bear Stearns, behavioural economics, Bernie Sanders, Big Tech, Black Lives Matter, blue-collar work, borderless world, Boris Johnson, Brexit referendum, British Empire, Broken windows theory, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, Cornelius Vanderbilt, coronavirus, COVID-19, creative destruction, crony capitalism, cuban missile crisis, David Brooks, David Graeber, death from overwork, defund the police, deindustrialization, democratizing finance, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, Donald Trump, Electric Kool-Aid Acid Test, European colonialism, Ferguson, Missouri, financial deregulation, financial engineering, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, future of work, Future Shock, George Floyd, George Gilder, gig economy, Glass-Steagall Act, global supply chain, green new deal, Greenspan put, guns versus butter model, Haight Ashbury, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Ida Tarbell, immigration reform, informal economy, invention of the printing press, invisible hand, It's morning again in America, Jeff Bezos, John Perry Barlow, Kevin Kelly, Kitchen Debate, low interest rates, Lyft, manufacturing employment, market fundamentalism, Martin Wolf, mass incarceration, Menlo Park, microaggression, Mikhail Gorbachev, military-industrial complex, millennium bug, Modern Monetary Theory, money market fund, Mont Pelerin Society, mortgage debt, mutually assured destruction, Naomi Klein, neoliberal agenda, new economy, New Journalism, Northern Rock, obamacare, Occupy movement, oil shock, open borders, Peter Thiel, Philip Mirowski, Powell Memorandum, precariat, price stability, public intellectual, Ralph Nader, Robert Bork, Ronald Reagan, scientific management, Seymour Hersh, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, social distancing, Steve Bannon, Steve Jobs, Stewart Brand, Strategic Defense Initiative, super pumped, technoutopianism, Telecommunications Act of 1996, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Uber and Lyft, uber lyft, union organizing, urban decay, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now, We are the 99%, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, Works Progress Administration, Y2K, Yom Kippur War

That theft qualifies as one of history’s great terminological heists.70 Many of the principals in the story of neoliberalism’s rise, as a result of the heist, ended up identifying themselves as conservatives. But conservative is not a good descriptor of the commitment to free market capitalism that lay at the heart of their worldview. Free market capitalism connotes dynamism, creative destruction, irreverence toward institutions, and the complex web of relations that imbed individuals in those institutions. This sort of capitalism, in other words, is the enemy of what conservatives in the classical sense value: order, hierarchy, tradition, embeddedness, continuity. The principals in the neoliberal story understood all too well the poor fit between their worldview and a conservative worldview.


pages: 561 words: 157,589

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

"Friedman doctrine" OR "shareholder theory", 4chan, Affordable Care Act / Obamacare, Airbnb, AlphaGo, Alvin Roth, Amazon Mechanical Turk, Amazon Robotics, Amazon Web Services, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, behavioural economics, benefit corporation, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, Blitzscaling, blockchain, book value, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, carbon tax, Carl Icahn, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, congestion pricing, corporate governance, corporate raider, creative destruction, CRISPR, crowdsourcing, Danny Hillis, data acquisition, data science, deep learning, DeepMind, Demis Hassabis, Dennis Ritchie, deskilling, DevOps, Didi Chuxing, digital capitalism, disinformation, do well by doing good, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, Filter Bubble, Firefox, Flash crash, Free Software Foundation, fulfillment center, full employment, future of work, George Akerlof, gig economy, glass ceiling, Glass-Steagall Act, Goodhart's law, Google Glasses, Gordon Gekko, gravity well, greed is good, Greyball, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, independent contractor, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Bogle, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Zimmer (Lyft cofounder), Kaizen: continuous improvement, Ken Thompson, Kevin Kelly, Khan Academy, Kickstarter, Kim Stanley Robinson, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Ellison, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, machine readable, machine translation, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, Network effects, new economy, Nicholas Carr, Nick Bostrom, obamacare, Oculus Rift, OpenAI, OSI model, Overton Window, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, post-truth, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Rutger Bregman, Salesforce, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, stock buybacks, strong AI, synthetic biology, TaskRabbit, telepresence, the built environment, the Cathedral and the Bazaar, The future is already here, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, Tony Fadell, Tragedy of the Commons, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, two-pizza team, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

But in overexcited markets, it’s too easy for many startups to aim to cash out with “dumb money” while the getting is good, with no real plan for ever delivering real revenues or profits. The enormous leverage provided by the marketplace of expectations is the key to all that is good about Silicon Valley, but also all that is bad. On the good side, this leveraged financial adventurism allows for huge waves of Schumpeterian “creative destruction.” A company like Amazon, Tesla, or Uber is effectively able to capitalize future hopes and dreams into current cash value and use it to finance a world-changing business despite losing money for years. This is a good thing. It’s what capital markets are for: to provide the money that lets entrepreneurs large and small take risks.


pages: 568 words: 174,089

The Power Elite by C. Wright Mills, Alan Wolfe

affirmative action, Albert Einstein, American ideology, anti-communist, Asilomar, collective bargaining, Cornelius Vanderbilt, creative destruction, cuban missile crisis, desegregation, full employment, Ida Tarbell, it's over 9,000, Joseph Schumpeter, long peace, means of production, military-industrial complex, Monroe Doctrine, one-China policy, plutocrats, pneumatic tube, profit motive, Ralph Waldo Emerson, Ronald Reagan, Simon Kuznets, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, Vilfredo Pareto

These techniques and the social forms they have assumed are the very motors of the capitalist advance, and the great moguls who create and command them are the pace-setters of the capitalist motion itself. In this way, Schumpeter combines a theory of capitalist progress with a theory of social stratification to explain, and indeed to celebrate, the ‘creative destruction’ of the great entrepreneurs.1 These contrasting images—of the robber and of the innovator—are not necessarily contradictory: much of both could be true, for they differ mainly in the context in which those who hold them choose to view the accumulators of great fortune. Myers is more interested in legal conditions and violations, and in the more brutal psychological traits of the men; Schumpeter is more interested in their role in the technological and economic mechanics of various phases of capitalism, although he, too, is rather free and easy with his moral evaluations, believing that only men of superior acumen and energy in each generation are lifted to the top by the mechanics they are assumed to create and to focus.


Engineers of Dreams: Great Bridge Builders and the Spanning of America by Henry Petroski

Bay Area Rapid Transit, Cornelius Vanderbilt, creative destruction, Donald Trump, financial engineering, independent contractor, intermodal, Loma Prieta earthquake, Suez canal 1869, Tacoma Narrows Bridge, the built environment, transcontinental railway

Technology and Culture 23: 535–68. Kuesel, Thomas R. 1990. “Whatever Happened to Long-Term Bridge Design?” Civil Engineering, February, pp. 57–60. Kunz, F. C. 1915. Design of Steel Bridges: Theory and Practice for the Use of Civil Engineers and Students. New York: McGraw-Hill. Kutler, Stanley I. 1990. Privilege and Creative Destruction: The Charles River Bridge Case. Baltimore: Johns Hopkins University Press. Kyle, John M. 1966. “A Tribute to Othmar H. Ammann,” The Port Authority Review 4: 3–8. ——. 1967. “Tribute to Othmar Hermann Ammann.” Annals of the New York Academy of Sciences 136: 741–46. Labrum, E. A., ed. 1994.


pages: 552 words: 168,518

MacroWikinomics: Rebooting Business and the World by Don Tapscott, Anthony D. Williams

"World Economic Forum" Davos, accounting loophole / creative accounting, airport security, Andrew Keen, augmented reality, Ayatollah Khomeini, barriers to entry, Ben Horowitz, bioinformatics, blood diamond, Bretton Woods, business climate, business process, buy and hold, car-free, carbon footprint, carbon tax, Charles Lindbergh, citizen journalism, Clayton Christensen, clean water, Climategate, Climatic Research Unit, cloud computing, collaborative editing, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, commoditize, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, death of newspapers, demographic transition, digital capitalism, digital divide, disruptive innovation, distributed generation, do well by doing good, don't be evil, en.wikipedia.org, energy security, energy transition, Evgeny Morozov, Exxon Valdez, failed state, fault tolerance, financial innovation, Galaxy Zoo, game design, global village, Google Earth, Hans Rosling, hive mind, Home mortgage interest deduction, information asymmetry, interchangeable parts, Internet of things, invention of movable type, Isaac Newton, James Watt: steam engine, Jaron Lanier, jimmy wales, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, machine readable, Marc Andreessen, Marshall McLuhan, mass immigration, medical bankruptcy, megacity, military-industrial complex, mortgage tax deduction, Netflix Prize, new economy, Nicholas Carr, ocean acidification, off-the-grid, oil shock, old-boy network, online collectivism, open borders, open economy, pattern recognition, peer-to-peer lending, personalized medicine, radical decentralization, Ray Kurzweil, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, scientific mainstream, shareholder value, Silicon Valley, Skype, smart grid, smart meter, social graph, social web, software patent, Steve Jobs, synthetic biology, systems thinking, text mining, the long tail, the scientific method, The Wisdom of Crowds, transaction costs, transfer pricing, University of East Anglia, urban sprawl, value at risk, WikiLeaks, X Prize, Yochai Benkler, young professional, Zipcar

For successful companies and artists, the ability to deliver exceptional value is their hallmark. Joseph Schumpeter, the great economic theorist, maintained that businesses must either embrace new technologies by giving up old methods and products or cede the market share to those who will. Of course, Schumpeter’s theories of creative destruction assume free competition: that firms will bring new technologies and products to market in a competitive environment and that customers, not government, will be the ultimate arbiters of who wins. The bottom line is that intellectual property laws were never intended to put the brakes on technological change—quite the opposite.


The Origins of the Urban Crisis by Sugrue, Thomas J.

affirmative action, business climate, classic study, collective bargaining, correlation coefficient, creative destruction, Credit Default Swap, deindustrialization, desegregation, Detroit bankruptcy, Ford paid five dollars a day, gentrification, George Gilder, ghettoisation, Gunnar Myrdal, hiring and firing, housing crisis, income inequality, indoor plumbing, informal economy, invisible hand, job automation, jobless men, Joseph Schumpeter, labor-force participation, low-wage service sector, manufacturing employment, mass incarceration, military-industrial complex, New Urbanism, oil shock, pink-collar, postindustrial economy, Quicken Loans, rent control, restrictive zoning, Richard Florida, Ronald Reagan, side project, Silicon Valley, strikebreaker, technological determinism, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, union organizing, upwardly mobile, urban planning, urban renewal, War on Poverty, white flight, working-age population, Works Progress Administration

Newly resurgent racial liberals and radicals battled with deeply entrenched racial conservatives over fundamental questions of rights and equality. At the same time, the national economy underwent a period of extraordinary dynamism and growth, fueling unprecedented prosperity, but also unleashing what economist Joseph Schumpeter called the forces of “creative destruction.” Northern industrial cities like Detroit were overwhelmed by the combination of racial strife and economic restructuring. Their impact played out in urban streets and workplaces. The labor and housing markets of the postwar city became arenas where inequality was shaped and contested.8 In the following pages, I hope to complicate the conventional narratives of post-World War II American history.


pages: 596 words: 163,682

The Third Pillar: How Markets and the State Leave the Community Behind by Raghuram Rajan

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, airline deregulation, Albert Einstein, Andrei Shleifer, banking crisis, barriers to entry, basic income, battle of ideas, Bernie Sanders, blockchain, borderless world, Bretton Woods, British Empire, Build a better mousetrap, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, central bank independence, computer vision, conceptual framework, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, data acquisition, David Brooks, Deng Xiaoping, desegregation, deskilling, disinformation, disruptive innovation, Donald Trump, driverless car, Edward Glaeser, facts on the ground, financial innovation, financial repression, full employment, future of work, Glass-Steagall Act, global supply chain, Great Leap Forward, high net worth, household responsibility system, housing crisis, Ida Tarbell, illegal immigration, income inequality, industrial cluster, intangible asset, invention of the steam engine, invisible hand, Jaron Lanier, job automation, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, labor-force participation, Les Trente Glorieuses, low interest rates, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, means of production, Money creation, moral hazard, Network effects, new economy, Nicholas Carr, obamacare, opioid epidemic / opioid crisis, Productivity paradox, profit maximization, race to the bottom, Richard Thaler, Robert Bork, Robert Gordon, Ronald Reagan, Sam Peltzman, shareholder value, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, SoftBank, South China Sea, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, superstar cities, The Future of Employment, The Wealth of Nations by Adam Smith, trade liberalization, trade route, transaction costs, transfer pricing, Travis Kalanick, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, Upton Sinclair, Walter Mischel, War on Poverty, women in the workforce, working-age population, World Values Survey, Yom Kippur War, zero-sum game

For essentially, the capitalists at the center of these cartels insisted that they, not the free market, knew what was best for the public. The free market was not perfect. Bouts of euphoria, fueled by easy money, undoubtedly led to overexpansion and industry hangovers. However, eliminating these wasteful and volatile episodes would also eliminate the innovation, dynamism, and creative destruction of the free market. What the cartels called waste was in fact the constant experimentation fostered by the market, energized by competition. In a sense, the magnates of the late-nineteenth-century Gilded Age in the United States wanted to restore the aristocracy, where they decided what was best for the public, but without the explicit responsibilities of the feudal manor.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

"World Economic Forum" Davos, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, driverless car, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, financial engineering, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, global macro, Goodhart's law, guns versus butter model, hiring and firing, hype cycle, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Japanese asset price bubble, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, Larry Ellison, lateral thinking, liberal capitalism, low interest rates, Malacca Straits, Mark Zuckerberg, market bubble, Mary Meeker, mass immigration, megacity, megaproject, Mexican peso crisis / tequila crisis, middle-income trap, military-industrial complex, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, open immigration, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, tacit knowledge, tech billionaire, The Future of Employment, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, work culture , working-age population

Measuring changes in the scale, rate of turnover, and sources of billionaire wealth can help to provide some insight into whether an economy is creating the kind of productive wealth that will help it grow in the future. It’s a bad sign if the billionaire class owns a bloated share of the economy, becomes an entrenched and inbred elite, and produces its wealth mainly from politically connected industries. A healthy economy needs an evolving cast of productive tycoons, not a fixed cast of corrupt tycoons. Creative destruction drives strong growth in a capitalist society, and because bad billionaires have everything to gain from the status quo, they are enemies of wider prosperity and lightning rods for social movements pushing predictable demands for redistributing rather than growing the economic pie. * Piñera served from 2010 to early 2014, and World Bank data show that Chile’s score on the Gini index of inequality fell from 52 in 2009 to 50.45 in 2013


pages: 606 words: 157,120

To Save Everything, Click Here: The Folly of Technological Solutionism by Evgeny Morozov

"World Economic Forum" Davos, 3D printing, algorithmic bias, algorithmic trading, Amazon Mechanical Turk, An Inconvenient Truth, Andrew Keen, augmented reality, Automated Insights, behavioural economics, Berlin Wall, big data - Walmart - Pop Tarts, Buckminster Fuller, call centre, carbon footprint, Cass Sunstein, choice architecture, citizen journalism, classic study, cloud computing, cognitive bias, creative destruction, crowdsourcing, data acquisition, Dava Sobel, digital divide, disintermediation, Donald Shoup, driverless car, East Village, en.wikipedia.org, Evgeny Morozov, Fall of the Berlin Wall, Filter Bubble, Firefox, Francis Fukuyama: the end of history, frictionless, future of journalism, game design, gamification, Gary Taubes, Google Glasses, Ian Bogost, illegal immigration, income inequality, invention of the printing press, Jane Jacobs, Jean Tirole, Jeff Bezos, jimmy wales, Julian Assange, Kevin Kelly, Kickstarter, license plate recognition, lifelogging, lolcat, lone genius, Louis Pasteur, machine readable, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, moral panic, Narrative Science, Nelson Mandela, Nicholas Carr, packet switching, PageRank, Parag Khanna, Paul Graham, peer-to-peer, Peter Singer: altruism, Peter Thiel, pets.com, placebo effect, pre–internet, public intellectual, Ray Kurzweil, recommendation engine, Richard Thaler, Ronald Coase, Rosa Parks, self-driving car, Sheryl Sandberg, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, Slavoj Žižek, smart meter, social graph, social web, stakhanovite, Steve Jobs, Steven Levy, Stuxnet, surveillance capitalism, systems thinking, technoutopianism, TED Talk, the built environment, The Chicago School, The Death and Life of Great American Cities, the medium is the message, The Nature of the Firm, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, transaction costs, Twitter Arab Spring, urban decay, urban planning, urban sprawl, Vannevar Bush, warehouse robotics, WikiLeaks, work culture , Yochai Benkler

A world in which there is no “Internet” to withdraw from eludes our creative faculties. Even more peculiar is the fact that our smartest technologists—the guys who basically see the future in their bathroom mirror every morning—are equally helpless in this endeavor. These techies, who worship the god of creative destruction and pray on the altar of innovation and see industries come and go without shedding a tear, might be spending their weekends mining asteroids and jogging on other planets—but even they can’t imagine how “the Internet” would die, let alone suggest what might succeed it. Their predictive models can anticipate and simulate the odds (and probably the consequences) of a global porcupine rebellion, but the basic outline of a world without cables, switches, and URLs still remains beyond their computing abilities.


pages: 769 words: 169,096

Order Without Design: How Markets Shape Cities by Alain Bertaud

autonomous vehicles, call centre, colonial rule, congestion charging, congestion pricing, creative destruction, cross-subsidies, Deng Xiaoping, discounted cash flows, Donald Trump, Edward Glaeser, en.wikipedia.org, extreme commuting, garden city movement, gentrification, Google Earth, Great Leap Forward, Jane Jacobs, job satisfaction, Joseph Schumpeter, land tenure, manufacturing employment, market design, market fragmentation, megacity, microapartment, new economy, New Urbanism, openstreetmap, Pearl River Delta, price mechanism, rent control, Right to Buy, Ronald Coase, self-driving car, Shenzhen special economic zone , Silicon Valley, special economic zone, the built environment, trade route, transaction costs, transit-oriented development, trickle-down economics, urban planning, urban sprawl, zero-sum game

Marx’s observation in his Communist Manifesto that markets produced “everlasting uncertainty and agitation” and that as a result “all that is solid melts into air” is still true today and could refer to the changes taking place in the most dynamic cities of emerging economies. Economist and Harvard professor Joseph Schumpeter, giving a more optimistic version of Marx’s original insight, called this process “creative destruction.” Markets thus recycle obsolete land use quasi-automatically through rising and falling prices. This constant land recycling is usually very positive for the long-term welfare of the urban population. In the short term, changes in land use and in the spatial concentration of employment are disorienting and alarming for workers and firms alike.


pages: 632 words: 163,143

The Musical Human: A History of Life on Earth by Michael Spitzer

Ada Lovelace, agricultural Revolution, AlphaGo, An Inconvenient Truth, Asperger Syndrome, Berlin Wall, Boris Johnson, bread and circuses, Brownian motion, cellular automata, Charles Babbage, classic study, coronavirus, COVID-19, creative destruction, crowdsourcing, David Attenborough, Douglas Hofstadter, East Village, Ford Model T, gamification, Gödel, Escher, Bach, hive mind, horn antenna, HyperCard, Internet of things, invention of agriculture, invention of writing, Johannes Kepler, Kickstarter, language acquisition, loose coupling, mandelbrot fractal, means of production, Menlo Park, mirror neurons, music of the spheres, out of africa, planetary scale, power law, randomized controlled trial, Snapchat, social intelligence, Steven Pinker, talking drums, technological singularity, TED Talk, theory of mind, TikTok, trade route, Turing test, Yom Kippur War

It then segues in the late Middle Ages to the febrile energies of the rising merchant classes on the path, after the Renaissance, to liberal democracy, climaxing with the heroic idealism of a Beethoven.66 Guillaume de Machaut’s 1365 Messe de Notre Dame, the first musical mass setting in history, is a useful touchstone.67 His mass is as embedded in time, place and function as any music in Africa, India or China. Its sounds can also be savoured as objects in themselves, abstracted from these contexts. However, it is not this abstraction or distancing that is so unusual; we have encountered that elsewhere. Rather, it is Machaut’s creatively destructive attitude to layers of history inscribed within a written musical language. He could do that because the norm in Western music was to write music down and disseminate it far beyond a face-to-face, oral encounter between master and pupil. The French musicologist Jacques Chailley has touched upon Western music’s paradoxical fusion of continuity and destruction in a notorious 1961 book called 40,000 Years of Music.68 The joke was that Chailley got through the first 39,000 years in two pages.


pages: 693 words: 169,849

The Aristocracy of Talent: How Meritocracy Made the Modern World by Adrian Wooldridge

"World Economic Forum" Davos, Ada Lovelace, affirmative action, Alan Greenspan, Albert Einstein, assortative mating, barriers to entry, Bernie Sanders, Black Lives Matter, Bletchley Park, borderless world, Boris Johnson, Brexit referendum, business intelligence, central bank independence, circulation of elites, Clayton Christensen, cognitive bias, Corn Laws, coronavirus, corporate governance, correlation coefficient, COVID-19, creative destruction, critical race theory, David Brooks, Dominic Cummings, Donald Trump, Double Irish / Dutch Sandwich, Etonian, European colonialism, fake news, feminist movement, George Floyd, George Gilder, Gini coefficient, glass ceiling, helicopter parent, Home mortgage interest deduction, income inequality, intangible asset, invention of gunpowder, invention of the printing press, Isaac Newton, Jeff Bezos, Jeremy Corbyn, Jim Simons, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, land tenure, London Interbank Offered Rate, Long Term Capital Management, Louis Pasteur, Mahatma Gandhi, Mark Zuckerberg, means of production, meritocracy, meta-analysis, microaggression, mortgage tax deduction, Myron Scholes, offshore financial centre, opioid epidemic / opioid crisis, Panopticon Jeremy Bentham, Peter Thiel, plutocrats, post-industrial society, post-oil, pre–internet, public intellectual, publish or perish, Ralph Waldo Emerson, RAND corporation, rent-seeking, Richard Florida, Ronald Reagan, scientific management, sexual politics, shareholder value, Sheryl Sandberg, Silicon Valley, spinning jenny, Steve Bannon, Steven Pinker, supply-chain management, surveillance capitalism, tech bro, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thorstein Veblen, three-martini lunch, Tim Cook: Apple, transfer pricing, Tyler Cowen, unit 8200, upwardly mobile, Vilfredo Pareto, W. E. B. Du Bois, wealth creators, women in the workforce

In his Lectures on the Philosophy of History, Hegel described the ‘world-historical figure’ who embodies the will of his age and thereby actualizes his age.65 Nietzsche, a recovering Romantic, was partly thinking of Napoleon when he said that men of genius ‘were like explosives’, dangerous but awe-inspiring, primed for creative destruction.66 The French Revolution also placed a new principle at the heart of European society: the career open to talent. Paris became one of the most open cities in Europe. New talent-based professions such as journalism and the theatre flourished.67 Celebrity chefs appeared, with chefs who had once served great aristocrats opening restaurants such as the Café de Paris.


pages: 687 words: 189,243

A Culture of Growth: The Origins of the Modern Economy by Joel Mokyr

Andrei Shleifer, barriers to entry, Berlin Wall, business cycle, classic study, clockwork universe, cognitive dissonance, Copley Medal, creative destruction, David Ricardo: comparative advantage, delayed gratification, deliberate practice, Deng Xiaoping, Edmond Halley, Edward Jenner, epigenetics, Fellow of the Royal Society, financial independence, flying shuttle, framing effect, germ theory of disease, Haber-Bosch Process, Herbert Marcuse, hindsight bias, income inequality, information asymmetry, invention of movable type, invention of the printing press, invisible hand, Isaac Newton, Jacquard loom, Jacques de Vaucanson, James Watt: steam engine, Johannes Kepler, John Harrison: Longitude, Joseph Schumpeter, knowledge economy, labor-force participation, land tenure, law of one price, Menlo Park, moveable type in China, new economy, phenotype, price stability, principal–agent problem, rent-seeking, Republic of Letters, Robert Solow, Ronald Reagan, seminal paper, South Sea Bubble, statistical model, survivorship bias, tacit knowledge, the market place, the strength of weak ties, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, transaction costs, ultimatum game, World Values Survey, Wunderkammern

As Brandt, Ma, and Rawski (2014) make clear, such institutions were lacking in post-1750 China and prevented it from taking advantage of the opportunities created by technological progress in the West, the way Japan did. Qing China, as already noted, was above all a society in which the major players sought “stability and prosperity” (Brandt, Ma, and Rawski, 2014, p. 105). The historical irony is that prosperity as it was experienced after 1750 required creative destruction, the very opposite of social and economic stability. In the pre-1750 economies, periods of relative rapid growth and rising prosperity occurred quite frequently. The problem with these earlier efflorescences was always negative feedback: prosperity and development bred the very forces that would undo it.


pages: 602 words: 177,874

Thank You for Being Late: An Optimist's Guide to Thriving in the Age of Accelerations by Thomas L. Friedman

3D printing, additive manufacturing, affirmative action, Airbnb, AltaVista, Amazon Web Services, Anthropocene, Apple Newton, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, biodiversity loss, bitcoin, blockchain, Bob Noyce, business cycle, business process, call centre, carbon tax, centre right, Chris Wanstrath, Clayton Christensen, clean tech, clean water, cloud computing, cognitive load, corporate social responsibility, creative destruction, CRISPR, crowdsourcing, data science, David Brooks, deep learning, demand response, demographic dividend, demographic transition, Deng Xiaoping, digital divide, disinformation, Donald Trump, dual-use technology, end-to-end encryption, Erik Brynjolfsson, fail fast, failed state, Fairchild Semiconductor, Fall of the Berlin Wall, Ferguson, Missouri, first square of the chessboard / second half of the chessboard, Flash crash, fulfillment center, game design, gig economy, global pandemic, global supply chain, Great Leap Forward, illegal immigration, immigration reform, income inequality, indoor plumbing, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the steam engine, inventory management, Irwin Jacobs: Qualcomm, Jeff Bezos, job automation, John Markoff, John von Neumann, Khan Academy, Kickstarter, knowledge economy, knowledge worker, land tenure, linear programming, Live Aid, low interest rates, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, mass immigration, Maui Hawaii, Menlo Park, Mikhail Gorbachev, mutually assured destruction, Neil Armstrong, Nelson Mandela, ocean acidification, PalmPilot, pattern recognition, planetary scale, power law, pull request, Ralph Waldo Emerson, ransomware, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Reagan, Salesforce, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, Solyndra, South China Sea, Steve Jobs, subscription business, supercomputer in your pocket, synthetic biology, systems thinking, TaskRabbit, tech worker, TED Talk, The Rise and Fall of American Growth, Thomas L Friedman, Tony Fadell, transaction costs, Transnistria, uber lyft, undersea cable, urban decay, urban planning, Watson beat the top human players on Jeopardy!, WikiLeaks, women in the workforce, Y2K, Yogi Berra, zero-sum game

Donner isn’t alone in fantasizing that he’d like to smash some recent advances in software and artificial intelligence (AI). These advances are not only replacing blue-collar jobs but also supplanting white-collar skills—even those of chess grandmasters. Jobs have always come and gone, thanks to creative destruction. If horses could have voted there never would have been cars. But the disruptions do seem to be coming faster these days, as technological advances keep building on themselves, taking us from one platform to another and touching a wider and wider swath of the labor market. I know, because as a sixty-three-year-old journalist I’ve lived through a bunch of these platform changes, and I’ve seen them coming faster and faster.


pages: 624 words: 180,416

For the Win by Cory Doctorow

anti-globalists, barriers to entry, book value, Burning Man, company town, creative destruction, double helix, Internet Archive, inventory management, lateral thinking, loose coupling, Maui Hawaii, microcredit, New Journalism, off-the-grid, planned obsolescence, Ponzi scheme, post-materialism, printed gun, random walk, reality distortion field, RFID, San Francisco homelessness, Silicon Valley, skunkworks, slashdot, speech recognition, stem cell, Steve Jobs, Steve Wozniak, supply-chain management, technoutopianism, time dilation, union organizing, wage slave, work culture

Bottom line: should your portfolio include a litigation-investment component? Yes, unequivocally. While risky and slow to mature, litigation-investments promise a staggering return on investment not seen in decades. A million or two carefully placed with the right litigation fund could pay off enough to make it all worthwhile. This is creative destruction at its finest: the old dinosaurs like Disney Parks are like rich seams of locked-away capital begging to be liquidated and put to work at nimbler firms. How can you tell if you’ve got the right fund? Come back next week, when we’ll have a Q&A with a litigation specialist at Credit Suisse/First Boston.


pages: 593 words: 189,857

Stress Test: Reflections on Financial Crises by Timothy F. Geithner

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, Atul Gawande, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Bernie Sanders, Black Monday: stock market crash in 1987, break the buck, Buckminster Fuller, Carmen Reinhart, central bank independence, collateralized debt obligation, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency risk, David Brooks, Doomsday Book, eurozone crisis, fear index, financial engineering, financial innovation, Flash crash, Goldman Sachs: Vampire Squid, Greenspan put, housing crisis, Hyman Minsky, illegal immigration, implied volatility, Kickstarter, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, market fundamentalism, Martin Wolf, McMansion, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, Nate Silver, negative equity, Northern Rock, obamacare, paradox of thrift, pets.com, price stability, profit maximization, proprietary trading, pushing on a string, quantitative easing, race to the bottom, RAND corporation, regulatory arbitrage, reserve currency, Saturday Night Live, Savings and loan crisis, savings glut, selection bias, Sheryl Sandberg, short selling, sovereign wealth fund, stock buybacks, tail risk, The Great Moderation, The Signal and the Noise by Nate Silver, Tobin tax, too big to fail, working poor

You can recognize the kind of vulnerabilities that tend to precede severe crises, such as substantial increases in asset prices and dramatic expansions of leverage, but you can’t be sure whether the initial market turmoil is a healthy adjustment or the start of a systemic meltdown, a precursor to a modest economic slowdown or something much worse. An orderly deleveraging of an overheated market can be a good thing, even if some big companies fail. That’s how capitalism is supposed to work: weak, bloated, and mismanaged firms make way for more dynamic competitors. Creative destruction instills discipline in the survivors. But a healthy correction can spiral out of control if fear and uncertainty gain too much momentum. You don’t want a central bank to underreact, allowing runs by depositors and creditors to unleash a cascade of fire sales, where firms desperate for cash have to sell assets into a depressed market, further depressing asset prices, inducing more cash shortages and more desperate selling.


The Man Who Knew Infinity: A Life of the Genius Ramanujan by Robert Kanigel

Albert Michelson, Arthur Eddington, Augustin-Louis Cauchy, British Empire, computer age, Copley Medal, creative destruction, Fellow of the Royal Society, Filipino sailors, Frederick Winslow Taylor, Gregor Mendel, Isaac Newton, Mahatma Gandhi, New Journalism, Norbert Wiener, Paul Erdős, the market place, upwardly mobile

A Western observer to such a temple might still be brought up short by the bewildering variety of deities he’d find there—sculpted figures, statues large and small, in wood and stone, sometimes garlanded with flowers, even dressed in rude clothing. But in mainstream Hinduism, these could all be seen as part of a grand edifice of belief vastly more sophisticated than the religion of the villages. The three chief deities in the Hindu pantheon, Brahma, Siva, and Vishnu, were traditionally represented as, respectively, the universe’s creative, destructive, and preserving forces. In practice, however, Brahma, once having fashioned the world, was seen as cold and aloof, and tended to be ignored. So the two great branches of Brahminic Hinduism became Shaivism and Vaishnavism. Shaivism had a kind of demonic streak, a fierceness, a malignity, a raw sexual energy embodied in the stylized phallic symbol known as a lingam that was the centerpiece of every Shaivite temple.


pages: 7,371 words: 186,208

The Long Twentieth Century: Money, Power, and the Origins of Our Times by Giovanni Arrighi

anti-communist, Asian financial crisis, barriers to entry, Bretton Woods, British Empire, business climate, business logic, business process, classic study, colonial rule, commoditize, Corn Laws, creative destruction, cuban missile crisis, David Ricardo: comparative advantage, declining real wages, deindustrialization, double entry bookkeeping, European colonialism, Fairchild Semiconductor, financial independence, financial intermediation, floating exchange rates, gentrification, Glass-Steagall Act, Great Leap Forward, income inequality, informal economy, invisible hand, joint-stock company, Joseph Schumpeter, Kōnosuke Matsushita, late capitalism, London Interbank Offered Rate, means of production, Meghnad Desai, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, new economy, offshore financial centre, oil shock, Peace of Westphalia, post-Fordism, profit maximization, Project for a New American Century, RAND corporation, reserve currency, scientific management, spice trade, Strategic Defense Initiative, Suez canal 1869, the market place, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, trade route, transaction costs, transatlantic slave trade, transcontinental railway, upwardly mobile, vertical integration, Yom Kippur War

Hence, ‘“restraints of trade’ . . . may in the end produce not only steadier but also greater expansion of total output than could be secured by an entirely uncontrolled onward rush that cannot fail to be studded with catastrophes” (Schumpeter 1954: 84—95;98-103) In other words, for Schumpeter “competitive” and “restrictive” practices were not mutually exclusive features of opposite market structures but obverse sides of the same process of creative destruction, which in his scheme of things was the essential fact about capitalism: There is no more of a paradox in this than there is in saying that motorcars are travelling faster than they otherwise would because they are provided with brakes. . . . [Concerns] that introduce new commodities or processes . . . or else reorganize a part or the whole of an industry . . . . are aggressors by nature and wield the really effective weapon of competition.


The Big Score by Michael S. Malone

Apple II, Bob Noyce, bread and circuses, Buckminster Fuller, Byte Shop, Charles Babbage, Claude Shannon: information theory, computer age, creative destruction, Donner party, Douglas Engelbart, Douglas Engelbart, El Camino Real, Fairchild Semiconductor, fear of failure, financial independence, game design, Isaac Newton, job-hopping, lone genius, market bubble, Menlo Park, military-industrial complex, packet switching, plutocrats, RAND corporation, ROLM, Ronald Reagan, Salesforce, Sand Hill Road, Silicon Valley, Silicon Valley startup, speech recognition, Steve Jobs, Steve Wozniak, tech worker, Teledyne, The Home Computer Revolution, transcontinental railway, Turing machine, union organizing, Upton Sinclair, upwardly mobile, William Shockley: the traitorous eight, Yom Kippur War

Sure, Atari was fallen and Trilogy was in trouble and Osborne was just a ghost, but among the new companies springing up, how many new comets were there to fly across the sky in a flaming path? Regis McKenna, public relations man turned visionary, saw the ebb and flow of companies as part of an ongoing upward growth by the Valley, not as a sign of its decline. Silicon Valley, he said, “will go through its period of creative destruction, and we have seen some of this already with the passing from preeminence of firms like Philco, Raytheon, and Fairchild.” Nevertheless, he said, “the return on investment and the venture network will continue to stimulate new happenings in Silicon Valley for some time… companies will expand from Silicon Valley to other areas, primarily in the Sun Belt, and, as they expand, pieces of the culture and the network go with them.”


pages: 619 words: 177,548

Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity by Daron Acemoglu, Simon Johnson

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 4chan, agricultural Revolution, AI winter, Airbnb, airline deregulation, algorithmic bias, algorithmic management, Alignment Problem, AlphaGo, An Inconvenient Truth, artificial general intelligence, augmented reality, basic income, Bellingcat, Bernie Sanders, Big Tech, Bletchley Park, blue-collar work, British Empire, carbon footprint, carbon tax, carried interest, centre right, Charles Babbage, ChatGPT, Clayton Christensen, clean water, cloud computing, collapse of Lehman Brothers, collective bargaining, computer age, Computer Lib, Computing Machinery and Intelligence, conceptual framework, contact tracing, Corn Laws, Cornelius Vanderbilt, coronavirus, corporate social responsibility, correlation does not imply causation, cotton gin, COVID-19, creative destruction, declining real wages, deep learning, DeepMind, deindustrialization, Demis Hassabis, Deng Xiaoping, deskilling, discovery of the americas, disinformation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Snowden, Elon Musk, en.wikipedia.org, energy transition, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, factory automation, facts on the ground, fake news, Filter Bubble, financial innovation, Ford Model T, Ford paid five dollars a day, fulfillment center, full employment, future of work, gender pay gap, general purpose technology, Geoffrey Hinton, global supply chain, Gordon Gekko, GPT-3, Grace Hopper, Hacker Ethic, Ida Tarbell, illegal immigration, income inequality, indoor plumbing, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Watt: steam engine, Jaron Lanier, Jeff Bezos, job automation, Johannes Kepler, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph-Marie Jacquard, Kenneth Arrow, Kevin Roose, Kickstarter, knowledge economy, labor-force participation, land reform, land tenure, Les Trente Glorieuses, low skilled workers, low-wage service sector, M-Pesa, manufacturing employment, Marc Andreessen, Mark Zuckerberg, megacity, mobile money, Mother of all demos, move fast and break things, natural language processing, Neolithic agricultural revolution, Norbert Wiener, NSO Group, offshore financial centre, OpenAI, PageRank, Panopticon Jeremy Bentham, paperclip maximiser, pattern recognition, Paul Graham, Peter Thiel, Productivity paradox, profit maximization, profit motive, QAnon, Ralph Nader, Ray Kurzweil, recommendation engine, ride hailing / ride sharing, Robert Bork, Robert Gordon, Robert Solow, robotic process automation, Ronald Reagan, scientific management, Second Machine Age, self-driving car, seminal paper, shareholder value, Sheryl Sandberg, Shoshana Zuboff, Silicon Valley, social intelligence, Social Responsibility of Business Is to Increase Its Profits, social web, South Sea Bubble, speech recognition, spice trade, statistical model, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, subscription business, Suez canal 1869, Suez crisis 1956, supply-chain management, surveillance capitalism, tacit knowledge, tech billionaire, technoutopianism, Ted Nelson, TED Talk, The Future of Employment, The Rise and Fall of American Growth, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, theory of mind, Thomas Malthus, too big to fail, total factor productivity, trade route, transatlantic slave trade, trickle-down economics, Turing machine, Turing test, Twitter Arab Spring, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, universal basic income, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, W. E. B. Du Bois, War on Poverty, WikiLeaks, wikimedia commons, working poor, working-age population

Hindle, Steve. 1999. “Hierarchy and Community in the Elizabethan Parish: The Swallowfield Articles of 1596.” Historical Journal 42, no. 3: 835‒851. Hindle, Steve. 2000. The State and Social Change in Early Modern England, 1550‒1640. New York: Palgrave Macmillan. Hinton, Geoff. 2016. “On Radiology.” Creative Destruction Lab: Machine Learning and the Market for Intelligence, November 24. www.youtube.com/watch?v=2HMPRXstSvQ. Hirschman, Albert O. 1958. The Strategy of Economic Development. New Haven, CT: Yale University Press. Hochschild, Adam. 1999. King Leopold’s Ghost: A History of Greed, Terror, and Heroism in Colonial Africa.


pages: 652 words: 172,428

Aftershocks: Pandemic Politics and the End of the Old International Order by Colin Kahl, Thomas Wright

"World Economic Forum" Davos, 2021 United States Capitol attack, banking crisis, Berlin Wall, biodiversity loss, Black Lives Matter, Boris Johnson, British Empire, Carmen Reinhart, centre right, Charles Lindbergh, circular economy, citizen journalism, clean water, collapse of Lehman Brothers, colonial rule, contact tracing, contact tracing app, coronavirus, COVID-19, creative destruction, cuban missile crisis, deglobalization, digital rights, disinformation, Donald Trump, drone strike, eurozone crisis, failed state, fake news, Fall of the Berlin Wall, fear of failure, future of work, George Floyd, German hyperinflation, Gini coefficient, global pandemic, global supply chain, global value chain, income inequality, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, it's over 9,000, job automation, junk bonds, Kibera, lab leak, liberal world order, lockdown, low interest rates, Mahatma Gandhi, Martin Wolf, mass immigration, megacity, mobile money, oil shale / tar sands, oil shock, one-China policy, open borders, open economy, Paris climate accords, public intellectual, Ronald Reagan, social distancing, South China Sea, spice trade, statistical model, subprime mortgage crisis, W. E. B. Du Bois, World Values Survey, zoonotic diseases

In advanced industrial countries, the economic growth seen in recent decades has not redounded to the benefit of many in the working and middle classes, who have seen their wages stagnate and face the prospect of their children faring even less well than they have. Millions have been left behind as creative destruction (such as incessant product and process innovation), market efficiencies, automation, digitization, and trade accompanying globalization have displaced jobs, disrupted communities, and produced stagnant wages.22 Meanwhile, in low- and middle-income economies, hundreds of millions of people were still living in extreme poverty on the eve of the coronavirus pandemic.


pages: 706 words: 206,202

Den of Thieves by James B. Stewart

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", Bear Stearns, Black Monday: stock market crash in 1987, book value, Carl Icahn, corporate raider, creative destruction, deal flow, discounted cash flows, diversified portfolio, fixed income, fudge factor, George Gilder, index arbitrage, Internet Archive, Irwin Jacobs, junk bonds, margin call, Michael Milken, money market fund, Oscar Wyatt, Ponzi scheme, rolodex, Ronald Reagan, Savings and loan crisis, shareholder value, South Sea Bubble, Tax Reform Act of 1986, The Predators' Ball, walking around money, zero-coupon bond

After passing muster with Williams, Epstein was granted the first personal interview with Milken. He wasn't allowed to ask about the investigation. The Wall Street JournaV?, editorial-page writers became the most potent exponents of the pro-Milken line. This camp seemed to favor the antiestablishment "creative destruction" that they believed Milken had spawned, and showed a barely disguised contempt for the securities laws as needless government limitations on innovation and entre-preneurship. As the hot summer of 1987 wore on, an uneasy calm descended on Wall Street. The period of cooperation, which culminated in the Boesky and Siegel plea agreements, was obviously over.


pages: 823 words: 220,581

Debunking Economics - Revised, Expanded and Integrated Edition: The Naked Emperor Dethroned? by Steve Keen

accounting loophole / creative accounting, Alan Greenspan, banking crisis, banks create money, barriers to entry, behavioural economics, Benoit Mandelbrot, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, book value, business cycle, butterfly effect, capital asset pricing model, cellular automata, central bank independence, citizen journalism, clockwork universe, collective bargaining, complexity theory, correlation coefficient, creative destruction, credit crunch, David Ricardo: comparative advantage, debt deflation, diversification, double entry bookkeeping, en.wikipedia.org, equity risk premium, Eugene Fama: efficient market hypothesis, experimental subject, Financial Instability Hypothesis, fixed income, Fractional reserve banking, full employment, Glass-Steagall Act, Greenspan put, Henri Poincaré, housing crisis, Hyman Minsky, income inequality, information asymmetry, invisible hand, iterative process, John von Neumann, Kickstarter, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, market microstructure, means of production, minimum wage unemployment, Money creation, money market fund, open economy, Pareto efficiency, Paul Samuelson, Phillips curve, place-making, Ponzi scheme, Post-Keynesian economics, power law, profit maximization, quantitative easing, RAND corporation, random walk, risk free rate, risk tolerance, risk/return, Robert Shiller, Robert Solow, Ronald Coase, Savings and loan crisis, Schrödinger's Cat, scientific mainstream, seigniorage, six sigma, South Sea Bubble, stochastic process, The Great Moderation, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, total factor productivity, tulip mania, wage slave, zero-sum game

In contrast, the Noughty Nineties recorded a higher rate of nominal growth of 5.3 percent, and this was very stable, ranging between 2.6 and 6.6 percent with a standard deviation of only 1.4 percent. 13.19 Change in nominal GDP growth then and now However, as well as being a decade of stock market speculation, the 1920s also saw serious Schumpeterian investment and ‘creative destruction.’ It was the decade of the Charleston and The Great Gatsby, but it was the decade of the production line, technological innovation in manufacturing and transportation, and the continuing transformation of American employment from agriculture to industry. The average rate of real economic growth was therefore higher in the 1920s than in the period from 1999 to 2009 – though disentangling this from the gyrations in the price level is extremely difficult. 13.20 Real GDP growth then and now For example, the nominal rate of growth in 1922/23 was 13 percent, but the ‘real’ rate was an even higher 20 percent.


pages: 891 words: 220,950

Winds of Change by Peter Hennessy

anti-communist, Beeching cuts, Berlin Wall, Bletchley Park, Bretton Woods, British Empire, centre right, Corn Laws, creative destruction, cuban missile crisis, Dr. Strangelove, Etonian, Fall of the Berlin Wall, floating exchange rates, full employment, government statistician, Great Leap Forward, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land tenure, liberal capitalism, meritocracy, Mikhail Gorbachev, Nelson Mandela, Norman Macrae, North Sea oil, oil shock, reserve currency, rising living standards, Robert Gordon, Scramble for Africa, Suez canal 1869, Suez crisis 1956, Ted Sorensen, The Rise and Fall of American Growth, total factor productivity, upwardly mobile, uranium enrichment

That night Wilson suggested that each new peak in production brought about by the spread of automation ‘is marked by a higher and higher level of unemployment’.32 What he did not foresee was the growth of service industries that would fill the place left by those jobs made technologically redundant by the power and reach of the computer, robotics and, increasingly, artificial intelligence. Wilson did have a sense of what the great Austrian-born Harvard economist Joseph Schumpeter had described twenty years earlier as the ‘creative destruction’ that technology-fuelled capitalism could wreak.33 It was as if Wilson’s idea of planning was devoted to boosting the ‘creative’ part of that juxtaposition while curbing its ‘destructive’ properties. In Schumpeter’s classic Capitalism, Socialism and Democracy of 1942, there is a vivid line on Karl Marx that could apply to Harold Wilson at his best: ‘The cold metal of economic history is in Marx’s pages immersed in such a wealth of steaming phrases as to acquire a temperature not naturally its own.’34 Wilson was skilled, too, at capturing the long sweeps of history and integrating them into his speeches.


pages: 788 words: 223,004

Merchants of Truth: The Business of News and the Fight for Facts by Jill Abramson

"World Economic Forum" Davos, 23andMe, 4chan, Affordable Care Act / Obamacare, Alexander Shulgin, Apple's 1984 Super Bowl advert, barriers to entry, Bernie Madoff, Bernie Sanders, Big Tech, Black Lives Matter, Cambridge Analytica, Charles Lindbergh, Charlie Hebdo massacre, Chelsea Manning, citizen journalism, cloud computing, commoditize, content marketing, corporate governance, creative destruction, crowdsourcing, data science, death of newspapers, digital twin, diversified portfolio, Donald Trump, East Village, Edward Snowden, fake news, Ferguson, Missouri, Filter Bubble, future of journalism, glass ceiling, Google Glasses, haute couture, hive mind, income inequality, information asymmetry, invisible hand, Jeff Bezos, Joseph Schumpeter, Khyber Pass, late capitalism, Laura Poitras, Marc Andreessen, Mark Zuckerberg, move fast and break things, Nate Silver, new economy, obamacare, Occupy movement, Paris climate accords, performance metric, Peter Thiel, phenotype, pre–internet, race to the bottom, recommendation engine, Robert Mercer, Ronald Reagan, Saturday Night Live, self-driving car, sentiment analysis, Sheryl Sandberg, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, skunkworks, Snapchat, social contagion, social intelligence, social web, SoftBank, Steve Bannon, Steve Jobs, Steven Levy, tech billionaire, technoutopianism, telemarketer, the scientific method, The Wisdom of Crowds, Tim Cook: Apple, too big to fail, vertical integration, WeWork, WikiLeaks, work culture , Yochai Benkler, you are the product

The ceiling had collapsed three times, but with its footprint in music, Vice attracted big-name acts like the Arctic Monkeys and Amy Winehouse. Having survived one near-death experience, Smith, the master marketer, was not about to see his company become a victim of what the Austrian economist Joseph Schumpeter called “creative destruction,” the process by which an industry is revolutionized from within, its old economic model destroyed by the new. Over the previous 25 years, the overall audience for network news had been cut in half. The concerns of those who remained were reflected in the ads for dentures, adult diapers, and pharmaceuticals to treat erectile dysfunction.


pages: 351 words: 102,379

Too big to fail: the inside story of how Wall Street and Washington fought to save the financial system from crisis--and themselves by Andrew Ross Sorkin

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Andy Kessler, Asian financial crisis, Bear Stearns, Berlin Wall, book value, break the buck, BRICs, business cycle, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, deal flow, Dr. Strangelove, Emanuel Derman, Fall of the Berlin Wall, fear of failure, financial engineering, fixed income, Glass-Steagall Act, Goldman Sachs: Vampire Squid, housing crisis, indoor plumbing, invisible hand, junk bonds, Ken Thompson, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, market bubble, Michael Milken, Mikhail Gorbachev, money market fund, moral hazard, naked short selling, NetJets, Northern Rock, oil shock, paper trading, proprietary trading, risk tolerance, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, savings glut, shareholder value, short selling, sovereign wealth fund, supply-chain management, too big to fail, uptick rule, value at risk, éminence grise

While attacking the rescue plan was one of the few completely bipartisan affairs in town, the Republicans hated it for different reasons. The conservatives believed that the marketplace would take care of everything, and that any government intervention was bound to make things worse. “First, do no harm!” they’d say, quoting Hippocrates’ Epidemics. A little blood might be spilled, but creative destruction was one of the costs of capitalism. Moderate Republicans, meanwhile, were inundated with complaints from their constituents, who wondered why the parties responsible for decimating their 401(k) s deserved any taxpayer money at all. Everyone was calling it a “bailout”—a word Paulson hated.


pages: 809 words: 237,921

The Narrow Corridor: States, Societies, and the Fate of Liberty by Daron Acemoglu, James A. Robinson

Affordable Care Act / Obamacare, agricultural Revolution, AltaVista, Andrei Shleifer, bank run, Berlin Wall, British Empire, California gold rush, central bank independence, centre right, classic study, collateralized debt obligation, collective bargaining, colonial rule, Computer Numeric Control, conceptual framework, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Dava Sobel, David Ricardo: comparative advantage, Deng Xiaoping, discovery of the americas, double entry bookkeeping, Edward Snowden, en.wikipedia.org, equal pay for equal work, European colonialism, export processing zone, Ferguson, Missouri, financial deregulation, financial innovation, flying shuttle, Francis Fukuyama: the end of history, full employment, Glass-Steagall Act, Great Leap Forward, high-speed rail, income inequality, income per capita, industrial robot, information asymmetry, interest rate swap, invention of movable type, Isaac Newton, it's over 9,000, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Kula ring, labor-force participation, land reform, Mahatma Gandhi, manufacturing employment, mass incarceration, Maui Hawaii, means of production, megacity, Mikhail Gorbachev, military-industrial complex, Nelson Mandela, obamacare, openstreetmap, out of africa, PageRank, pattern recognition, road to serfdom, Ronald Reagan, seminal paper, Skype, spinning jenny, Steven Pinker, the market place, transcontinental railway, War on Poverty, WikiLeaks

We also stressed that these can only survive in the long haul if they are supported by “inclusive political institutions” that prevent the monopolization of political power by a small segment of society while also enabling the state to enforce laws. We emphasized that new innovations, technologies, and organizations, though indispensable for sustained economic growth, will often be resisted because they may destabilize an existing order (what we called “political creative destruction”). The best guarantee that we have to prevent some powerful actors blocking new technologies, and in the process stamping out economic development, is to make sure that nobody, and nothing, is powerful enough to be able to do so. Looked at from this perspective, our conceptual framework here expands on Why Nations Fail.


pages: 800 words: 240,175

Wasps: The Splendors and Miseries of an American Aristocracy by Michael Knox Beran

anti-communist, British Empire, Charles Lindbergh, company town, Corn Laws, Cornelius Vanderbilt, creative destruction, cuban missile crisis, Etonian, fulfillment center, George Santayana, Isaac Newton, Jane Jacobs, Joseph Schumpeter, Lao Tzu, Lewis Mumford, old-boy network, phenotype, plutocrats, Ralph Waldo Emerson, Republic of Letters, Steven Pinker, The Wealth of Nations by Adam Smith, W. E. B. Du Bois, éminence grise

Rockefeller and Cecil Rhodes, men who, Oliver Wendell Holmes said, had a more “poignant” insight into the future than their duller-witted contemporaries. In the culmination of the new mythology Joseph Schumpeter, the Austro-Harvard economist, would depict the capitalist as a romantic hero like Shelley’s Prometheus or Milton’s Satan, a rebel against conventional order, a master of the arts of creative destruction. There was a touch of this romantic diablerie in Morgan himself. He had tremendous powers of will; meeting his gaze, the photographer Edward Steichen said, was like looking into the headlights of an oncoming express. His hideous nose only contributed to the impression that sinister forces were at work in his soul.


pages: 1,034 words: 241,773

Enlightenment Now: The Case for Reason, Science, Humanism, and Progress by Steven Pinker

3D printing, Abraham Maslow, access to a mobile phone, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Alignment Problem, An Inconvenient Truth, anti-communist, Anton Chekhov, Arthur Eddington, artificial general intelligence, availability heuristic, Ayatollah Khomeini, basic income, Berlin Wall, Bernie Sanders, biodiversity loss, Black Swan, Bonfire of the Vanities, Brexit referendum, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charlie Hebdo massacre, classic study, clean water, clockwork universe, cognitive bias, cognitive dissonance, Columbine, conceptual framework, confounding variable, correlation does not imply causation, creative destruction, CRISPR, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, dark matter, data science, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic transition, Deng Xiaoping, distributed generation, diversified portfolio, Donald Trump, Doomsday Clock, double helix, Eddington experiment, Edward Jenner, effective altruism, Elon Musk, en.wikipedia.org, end world poverty, endogenous growth, energy transition, European colonialism, experimental subject, Exxon Valdez, facts on the ground, fake news, Fall of the Berlin Wall, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, frictionless, frictionless market, Garrett Hardin, germ theory of disease, Gini coefficient, Great Leap Forward, Hacker Conference 1984, Hans Rosling, hedonic treadmill, helicopter parent, Herbert Marcuse, Herman Kahn, Hobbesian trap, humanitarian revolution, Ignaz Semmelweis: hand washing, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of writing, Jaron Lanier, Joan Didion, job automation, Johannes Kepler, John Snow's cholera map, Kevin Kelly, Khan Academy, knowledge economy, l'esprit de l'escalier, Laplace demon, launch on warning, life extension, long peace, longitudinal study, Louis Pasteur, Mahbub ul Haq, Martin Wolf, mass incarceration, meta-analysis, Michael Shellenberger, microaggression, Mikhail Gorbachev, minimum wage unemployment, moral hazard, mutually assured destruction, Naomi Klein, Nate Silver, Nathan Meyer Rothschild: antibiotics, negative emissions, Nelson Mandela, New Journalism, Norman Mailer, nuclear taboo, nuclear winter, obamacare, ocean acidification, Oklahoma City bombing, open economy, opioid epidemic / opioid crisis, paperclip maximiser, Paris climate accords, Paul Graham, peak oil, Peter Singer: altruism, Peter Thiel, post-truth, power law, precautionary principle, precision agriculture, prediction markets, public intellectual, purchasing power parity, radical life extension, Ralph Nader, randomized controlled trial, Ray Kurzweil, rent control, Republic of Letters, Richard Feynman, road to serfdom, Robert Gordon, Rodney Brooks, rolodex, Ronald Reagan, Rory Sutherland, Saturday Night Live, science of happiness, Scientific racism, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Kuznets, Skype, smart grid, Social Justice Warrior, sovereign wealth fund, sparse data, stem cell, Stephen Hawking, Steve Bannon, Steven Pinker, Stewart Brand, Stuxnet, supervolcano, synthetic biology, tech billionaire, technological determinism, technological singularity, Ted Kaczynski, Ted Nordhaus, TED Talk, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, total factor productivity, Tragedy of the Commons, union organizing, universal basic income, University of East Anglia, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, urban renewal, W. E. B. Du Bois, War on Poverty, We wanted flying cars, instead we got 140 characters, women in the workforce, working poor, World Values Survey, Y2K

The second law of thermodynamics is the first law of psychology: Evolutionary developmental psychology and the theory of tandem, coordinated inheritances. Psychological Bulletin, 129, 858–65. Tooby, J., & DeVore, I. 1987. The reconstruction of hominid evolution through strategic modeling. In W. G. Kinzey, ed., The evolution of human behavior: Primate models. Albany, NY: SUNY Press. Topol, E. 2012. The creative destruction of medicine: How the digital revolution will create better health care. New York: Basic Books. Trivers, R. L. 2002. Natural selection and social theory: Selected papers of Robert Trivers. New York: Oxford University Press. Trzesniewski, K. H., & Donnellan, M. B. 2010. Rethinking “generation me”: A study of cohort effects from 1976–2006.


pages: 1,000 words: 247,974

Empire of Cotton: A Global History by Sven Beckert

agricultural Revolution, Bartolomé de las Casas, British Empire, colonial exploitation, colonial rule, company town, Corn Laws, cotton gin, creative destruction, crony capitalism, deindustrialization, European colonialism, flying shuttle, Francisco Pizarro, Great Leap Forward, imperial preference, industrial cluster, James Hargreaves, James Watt: steam engine, joint-stock company, laissez-faire capitalism, land tenure, Mahatma Gandhi, market fundamentalism, race to the bottom, restrictive zoning, scientific management, Silicon Valley, spice trade, spinning jenny, Suez canal 1869, The Wealth of Nations by Adam Smith, transaction costs, transatlantic slave trade, union organizing, vertical integration, women in the workforce, work culture

The agents of industrial capitalism rode railways that penetrated Berar, sent cotton prices over telegraph cables that crossed the Atlantic, and followed behind military expeditions that “pacified” Tashkent and Tanganyika. These cotton kings riding on the coattails of a strengthened state furthered a double process of creative destruction. They pushed metropolitan capital closer to cotton producers outside the world’s slave areas, in the process often destroying older merchant networks that had moved cotton from field to factory prior to the 1860s. And they undermined hand spinning and handloom weaving, effecting the world’s most significant wave of deindustrialization ever.


pages: 1,104 words: 302,176

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Charles Lindbergh, classic study, clean water, collective bargaining, computer age, cotton gin, creative destruction, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, driverless car, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, food desert, Ford Model T, full employment, general purpose technology, George Akerlof, germ theory of disease, glass ceiling, Glass-Steagall Act, Golden age of television, government statistician, Great Leap Forward, high net worth, housing crisis, Ida Tarbell, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the sewing machine, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Les Trente Glorieuses, Lewis Mumford, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, mass immigration, mass incarceration, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, Phillips curve, pink-collar, pneumatic tube, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, restrictive zoning, revenue passenger mile, Robert Solow, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, Southern State Parkway, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, streetcar suburb, The Market for Lemons, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, undersea cable, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, vertical integration, warehouse robotics, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yellow journalism, yield management

The editor of … a gadget website [said] “this industry that employs all of these engineers, and has all of these factories and salespeople, needs you to throw out your old stuff and buy new stuff—even if that new stuff is only slightly upgraded.”28 Decline in Business Dynamism. Recent research has used the word “dynamism” to describe the process of creative destruction by which new startups and young firms are the source of productivity gains that occur when they introduce best-practice technologies and methods as they shift resources away from old low-productivity firms. As shown in figure 17–4, the share of all business firms consisting of young firms (aged five years or younger) declined from 14.6 percent in 1978 to only 8.3 percent in 2011 even as the share of firms exiting (going out of business) remained roughly constant in the range of 8–10 percent.


pages: 1,073 words: 314,528

Strategy: A History by Lawrence Freedman

Albert Einstein, anti-communist, Anton Chekhov, Ayatollah Khomeini, barriers to entry, battle of ideas, behavioural economics, Black Swan, Blue Ocean Strategy, British Empire, business process, butterfly effect, centre right, Charles Lindbergh, circulation of elites, cognitive dissonance, coherent worldview, collective bargaining, complexity theory, conceptual framework, Cornelius Vanderbilt, corporate raider, correlation does not imply causation, creative destruction, cuban missile crisis, Daniel Kahneman / Amos Tversky, defense in depth, desegregation, disinformation, Dr. Strangelove, Edward Lorenz: Chaos theory, en.wikipedia.org, endogenous growth, endowment effect, escalation ladder, Ford Model T, Ford paid five dollars a day, framing effect, Frederick Winslow Taylor, Gordon Gekko, greed is good, Herbert Marcuse, Herman Kahn, Ida Tarbell, information retrieval, interchangeable parts, invisible hand, John Nash: game theory, John von Neumann, Kenneth Arrow, lateral thinking, linear programming, loose coupling, loss aversion, Mahatma Gandhi, means of production, mental accounting, Murray Gell-Mann, mutually assured destruction, Nash equilibrium, Nelson Mandela, Norbert Wiener, Norman Mailer, oil shock, Pareto efficiency, performance metric, Philip Mirowski, prisoner's dilemma, profit maximization, race to the bottom, Ralph Nader, RAND corporation, Richard Thaler, road to serfdom, Ronald Reagan, Rosa Parks, scientific management, seminal paper, shareholder value, social contagion, social intelligence, Steven Pinker, strikebreaker, The Chicago School, The Myth of the Rational Market, the scientific method, theory of mind, Thomas Davenport, Thomas Kuhn: the structure of scientific revolutions, Torches of Freedom, Toyota Production System, transaction costs, Twitter Arab Spring, ultimatum game, unemployed young men, Upton Sinclair, urban sprawl, Vilfredo Pareto, W. E. B. Du Bois, War on Poverty, women in the workforce, Yogi Berra, zero-sum game

Mintzberg somewhat gleefully includes an embarrassing interview conducted by Hamel with Enron Chairman Kenneth Lay in Strategy Bites Back. 28. Hamel was not the only author to identify Enron as the model for the future. The Financial Times observed on December 4, 2001: “The books of various gurus have singled out the company as paragon of good management, for LEADING THE REVOLUTION (Gary Hamel, 2000), practising CREATIVE DESTRUCTION (Richard Foster and Sarah Kaplan, 2001), devising STRATEGY THROUGH SIMPLE RULES (Kathy Eisenhardt and Donald Sull, 2001), winning the WAR FOR TALENT (Ed Michaels, 1998) and Navigating the ROAD TO THE NEXT ECONOMY (James Critin, scheduled for publication in February 2002—and now, presumably being rewritten).” 29.


pages: 1,009 words: 329,520

The Last Tycoons: The Secret History of Lazard Frères & Co. by William D. Cohan

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", activist fund / activist shareholder / activist investor, Alan Greenspan, AOL-Time Warner, bank run, Bear Stearns, book value, Carl Icahn, carried interest, cognitive dissonance, commoditize, computer age, corporate governance, corporate raider, creative destruction, credit crunch, deal flow, diversification, Donald Trump, East Village, fear of failure, financial engineering, fixed income, G4S, Glass-Steagall Act, hiring and firing, interest rate swap, intermodal, Joseph Schumpeter, junk bonds, land bank, late fees, Long Term Capital Management, Marc Andreessen, market bubble, Michael Milken, offshore financial centre, Ponzi scheme, proprietary trading, Ralph Nader, Ralph Waldo Emerson, rolodex, Ronald Reagan, shareholder value, short squeeze, SoftBank, stock buybacks, The Nature of the Firm, the new new thing, Yogi Berra

The decades of internal turmoil and paternalistic management led ultimately to the once-unthinkable: a Lazard Freres free from its founders, as a publicly traded company just like any other, its operational flaws and obscene profitability open to the world--its special cachet lost forever. The story of Lazard has always been one of internecine warfare, calamity, and resurrection, proving definitively that the forces of "creative destruction"--in the Austrian economist Joseph Schumpeter's famous observation--are alive and well to this day in American capitalism. OF ALL LAZARD'S Great Men, none was greater than Felix George Rohatyn. Felix was considered by many to be the world's preeminent investment banker. He was the man who saved, first, Wall Street and then New York City from financial ruin in the early 1970s.


Hawaii by Jeff Campbell

airport security, big-box store, California gold rush, carbon footprint, centre right, Charles Lindbergh, commoditize, company town, creative destruction, Drosophila, Easter island, G4S, haute couture, land reform, lateral thinking, low-wage service sector, machine readable, Maui Hawaii, off-the-grid, Peter Pan Syndrome, polynesian navigation, risk/return, sustainable-tourism, upwardly mobile, urban sprawl, wage slave, white picket fence

So many ancient sites are preserved, and so well, that it takes little imagination to conjure helmeted warriors and Captain Cook, bays full of outrigger canoes and the terror of the gods. Without question, Pele still lives here. Her home is Kilauea, and try as one might, it is impossible not to personify the fiery volcanoes and their creative-destructive power, which is everywhere evident – in burnt, blackened landscapes and in the ongoing eruption giving birth to the islands. Hawai′i is a place you can return to again and again, always finding something new, and always deepening and broadening your understanding of what ‘Hawaii’ means. * * * HIGHLIGHTS Hike the smoking craters and lava terrain of Hawai′i Volcanoes National Park (Click here) Brush bellies, almost, with Pacific manta rays (Click here) while snorkeling Soak up the sun and swim at the idyllic white-sand beaches of Kekaha Kai State Park (Click here) Get a shot of both art and caffeine at the galleries and coffee farms of Holualoa (Click here) Commune with the ancients at Pu′uhonua o Honaunau National Historical Park (Click here) Watch the sun set and the stars blaze from Mauna Kea (Click here) Discover historic downtown Hilo (Click here) – its museums, historic buildings and ice shave Indulge your inner gourmet, paniolo-style, in Waimea (Click here) Lounge with wild horses on the black-sand beach in Waipi′o Valley (Click here) Explore the underground realm of lava tubes (Click here) in Ka′u POPULATION 173,000 AREA: 4028 SQ MILES NICKNAME: ORCHID ISLE * * * HISTORY The modern history of the Big Island is a tale of two cities – Kailua-Kona and Hilo – which represent the island’S split personality: West Hawai′i and East Hawai′i.


pages: 1,737 words: 491,616

Rationality: From AI to Zombies by Eliezer Yudkowsky

Albert Einstein, Alfred Russel Wallace, anthropic principle, anti-pattern, anti-work, antiwork, Arthur Eddington, artificial general intelligence, availability heuristic, backpropagation, Bayesian statistics, behavioural economics, Berlin Wall, Boeing 747, Build a better mousetrap, Cass Sunstein, cellular automata, Charles Babbage, cognitive bias, cognitive dissonance, correlation does not imply causation, cosmological constant, creative destruction, Daniel Kahneman / Amos Tversky, dematerialisation, different worldview, discovery of DNA, disinformation, Douglas Hofstadter, Drosophila, Eddington experiment, effective altruism, experimental subject, Extropian, friendly AI, fundamental attribution error, Great Leap Forward, Gödel, Escher, Bach, Hacker News, hindsight bias, index card, index fund, Isaac Newton, John Conway, John von Neumann, Large Hadron Collider, Long Term Capital Management, Louis Pasteur, mental accounting, meta-analysis, mirror neurons, money market fund, Monty Hall problem, Nash equilibrium, Necker cube, Nick Bostrom, NP-complete, One Laptop per Child (OLPC), P = NP, paperclip maximiser, pattern recognition, Paul Graham, peak-end rule, Peter Thiel, Pierre-Simon Laplace, placebo effect, planetary scale, prediction markets, random walk, Ray Kurzweil, reversible computing, Richard Feynman, risk tolerance, Rubik’s Cube, Saturday Night Live, Schrödinger's Cat, scientific mainstream, scientific worldview, sensible shoes, Silicon Valley, Silicon Valley startup, Singularitarianism, SpaceShipOne, speech recognition, statistical model, Steve Jurvetson, Steven Pinker, strong AI, sunk-cost fallacy, technological singularity, The Bell Curve by Richard Herrnstein and Charles Murray, the map is not the territory, the scientific method, Turing complete, Turing machine, Tyler Cowen, ultimatum game, X Prize, Y Combinator, zero-sum game

But until you know about search trees, until you know about conditional independence, until you know about Bayes’s Theorem, then it may still seem to you that you have a perfectly good understanding of where good moves and nonmonotonic reasoning and evaluation of evidence come from. It may seem, for example, that they come from cooling the blood. And indeed I know many people who believe that intelligence is the product of commonsense knowledge or massive parallelism or creative destruction or intuitive rather than rational reasoning, or whatever. But all these are only dreams, which do not give you any way to say what intelligence is, or what an intelligence will do next, except by pointing at a human. And when the one goes to build their wondrous AI, they only build a system of detached levers, “knowledge” consisting of LISP tokens labeled apple and the like; or perhaps they build a “massively parallel neural net, just like the human brain.”