Friday, August 20, 2010

"Creative destruction" (revised)

(Revised - see Note)
A controversial genius, Summers has long been considered a top U.S. economic brain. As the new head of the National Economic Council (NEC), Summers will now have a chance to exercise maximum sway over U.S. economic policy as the top White House economic adviser during the worst economic crisis since the Great Depression.
from entry entitled Lawrence H. Summers, in Who Runs Government ("A Washington Post Company publication")
In Summers' case, the devotion to Schumpeter was slavish. From the White House Office of Social Innovation and Civic Participation (sic), the following post by Larry Summers on Sept. 21, 2009 is exemplary:

"An important aspect of any economic expansion is the role innovation plays as an engine of economic growth. In this regard, the most important economist of the twenty-first century might actually turn out to be not Smith or Keynes, but Joseph Schumpeter. One of Schumpeter's most important contributions was the emphasis he placed on the tremendous power of innovation and entrepreneurial initiative to drive growth through a process he famously characterized as 'creative destruction.' His work captured not only an economic truth, but also the particular source of America's strength and dynamism."
... the man who first promoted the concept of "creative destruction" was a died-in-the-wool Nazi named Werner Sombart. Sombart credited Friedrich Nietzsche with the origin of the term and concept....
... how could you wish to become new unless you had FIRST become ashes!
from Thus Spake Zarathustra by Freidrich Nietzsche [emphasis added]

Summers doesn't just pay lip service to creative destruction (in its evil true sense) either - he was largely responsible for the destruction of Russia's economy (partly by selling it off to organized crime, as advocated by Summer's advisers of the feudalist Mont Pelerin Society, since the mob is run by the oligarchy), and the loss of about $1.8 billion of Harvard's endowment. (If he had his way entirely, it would have been worse.) So, it is only fitting that he would be the head of Obama's economic team.

[Note: the previous revision of this entry was based on the erroneous assumption that Schumpeter understood "creative destruction" to mean that destruction was creative. In fact, this "destruction" is a consequence of abandoning whatever is outmoded by creativity. Subsequent posts on the subject, above, address what I now believe to be the real issue. I also changed the title of this entry from "The big lie of creative destruction."]