Creative destruction
Creative destruction (German: "schöpferische Zerstörung"), sometimes known as Schumpeter's gale, is a concept in economics which since the 1950s is the most readily identified with the Austrian-born economist Joseph Schumpeter who derived it from the work of Karl Marx and popularized it as a theory of economic innovation and the business cycle.

According to Schumpeter, the "gale of creative destruction" describes the "process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one". In Marxian economic theory the concept refers more broadly to the linked processes of the accumulation and annihilation of wealth under capitalism.

The German sociologist Werner Sombart has been credited with the first use of these terms in his work "Krieg und Kapitalismus" ("War and Capitalism", 1913). In the earlier work of Marx, however, the idea of creative destruction or annihilation (German: "Vernichtung") implies not only that capitalism destroys and reconfigures previous economic orders, but also that it must ceaselessly devalue existing wealth (whether through war, dereliction, or regular and periodic economic crises) in order to clear the ground for the creation of new wealth.

In "Capitalism, Socialism and Democracy" (1942), Joseph Schumpeter developed the concept out of a careful reading of Marx's thought (to which the whole of Part I of the book is devoted), arguing (in Part II) that the creative-destructive forces unleashed by capitalism would eventually lead to its demise as a system (see below). Despite this, the term subsequently gained popularity within mainstream economics as a description of processes such as downsizing in order to increase the efficiency and dynamism of a company. The Marxian usage has, however, been retained and further developed in the work of social scientists such as David Harvey, Marshall Berman, Manuel Castells and Daniele Archibugi.
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economics
Concept
Q237534
Austrian
PER
Q78477
Joseph Schumpeter
PER
Q9061
Karl Marx
PER
Q1664193
economic innovation
UNK
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business cycle
Concept
Q854537
Marxian economic theory
Concept
Q200535
wealth
Concept
Q21201
sociologist
Concept
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Werner Sombart
PER
Q1074682
Capitalism, Socialism and Democracy
MEDIA
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downsizing
Concept
Q34749
social scientists
Concept
Q343055
David Harvey
PER
Q3312100
Marshall Berman
PER
Q310161
Manuel Castells
PER
Q2557199
Daniele Archibugi
PER
Q1570382
Creative destruction
Concept
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1950
DATE
1913-01-01T00:00:00Z^^http://www.w3.org/2001/XMLSchema#dateTime
1913
DATE
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1942
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significant person
significant person
field of work
field of work
field of work