Oct 03, 2015 · Creative destruction refers to the process where a. new products and methods of production are continuously replacing old ones b. producing more of one good causes you to produce less of another c. everybody involved is made worse off d. new ways to destroy buildings are employed ANS: A PTS: 1 DIF: Easy NAT: BUSPROG: Analytic
The term creative destruction refers to the process by which a. the capitalist system undergoes periodic waves of transformation caused by new technologies. Show more Social Science …
Creative destruction is the process whereby products processes ideas and from MANA 1234 at Electronic Engineering Polytechnic Institute of Surabaya. Study Resources. Main Menu; ...
Creative destruction means that the company closures and job losses are good for the long-term well-being of the economy. It can be seen from both a negative and positive perspective.
Joseph Schumpeter popularised the concept of creative destruction in ‘ Capitalism, Socialism and Democracy ‘ (1942). He used the phrase ‘gale of Creative Destruction’ and the concept is sometimes known as Schumpeter’s Gale. He derived his ideas from a close reading of Marx.
Free-market economics makes a case for allowing any unprofitable firm to go out of business whatever the consequences. However, some argue that the process of creative destruction can lead to long-term damage and needs to be more carefully managed.
Karl Marx wrote at length about the nature of capitalism causing large-scale loss, which enabled new wealth to be created. Marx saw wars and economic crisis as methods for destroying production and enabling capitalism to start a new round of wealth creation for the owners.
The threat of going out of business is an incentive for firms to move with the changing market and keep costs low. For example, in an electronic age, newspapers are needing to re-invent themselves with an online presence.
Powered looms. The invention of the steam-powered loom reduced the cost of making clothes. This put the traditional cottage industries out of business. But, it helped a new industry of manufactured cotton and clothes which created new kinds of jobs. (This particular invention led to the Luddites, who saw the new power looms as destroying their livelihoods)
However, from the early 2000s, electronic downloads wiped out the profitability of compact disc manufacturer and sale, creating a very different music industry, dominated by digital downloads and new companies like Napster and Apple taking the place of other more traditional music companies.