Creative Destruction

This past Memorial Day weekend I decided to revisit my bookshelf to poke around and reminisce with books I'd read over the last decade. You see, I not only like to collect great books, I also date each one to remind me of when I read it. My 'invisible finger' guided me toward a book I read seven years ago titled, "Wealth and Freedom" by David Levin. Wealth and Freedom (I know?sounds boring) is a great read on political economy for non-economists?like me.

In the second chapter titled "Capitalism", Levine dedicates a segment to a phrase made popular by the Economist Joseph Schumpeter; that phrase being 'Creative Destruction' which describes the chaotic changes that occur when a new product (i.e., technology) or service is introduced into the market. For example, remember when the Compact Disc was introduced ushering in the dramatic decline of the use of audio tapes. The most current example is how Digital Video Discs (DVDs) are now ousting VHS tapes from our local video stores. Soon, even DVDs will be replaced by high-speed internet downloads.

What happens to the old products? Gone. What happens to the people that use to work for the audio or VHS tape companies? They eventually move to another position or go to work for these new digital companies. In the end, the consumer wins because a new and more efficient product has been created making our lives more convenient (e.g., no more fast forward, less shelf space for CDs and DVDs, etc.).

Change is the ongoing cycle of capitalism. Introduce a new product. It then creates an upheaval in the marketplace. The upheaval settles into normality until the next creative destruction (new technology) comes along.

As I reread Levine's description of creative destruction, my mind wandered onto the topic of success. I began to think about the many people who are so comfortable with their lives that they don't want anything to change. Yet, many of them live quiet lives of desperation; who deep down inside want change. They want something exciting to happen to their existence. But when something new is introduced into their normal daily life, they're quick to reject it. Herein lay one of the greatest conundrums of success. We want our lives to change, but we don't want anything to change that would cause us to have to make changes. Huh?!