...behold the bustling crowds that work and trade in order to make a living...

NameJoseph A Schumpeter
Life1883 - 1950
"When I was young, I wanted to become the world's greatest economist, the world's best horse rider and the world's most seductive lover. Unfortunately, ladies and gentlemen, I did not become the world's best horse rider. And now, we will study economics...." Those are the words with which Joseph Alois Schumpeter introduced his autumn lectures to his Harvard students half a century ago. He did become the greatest economist of his century. If you are sick, you don't care much about your doctor's likes or dislikes; you want him to have a deep medical knowledge, as that is what might cure you. "Behold the bustling crowds..." It sounds a bit elitist. It was. But from the point of view of "knowing ourselves" it is utterly sound. A serious social scientist should analyze the world as if he was sitting on the moon observing a heap of ants. Only in that way can he find the right diagnosis for our social ills. For Schumpeter, the "innovating entrepreneur" is both hero and villain of the social plot. His fame rests upon what he found, when he beheld the bustling crowd. It is his idea of the "innovator". The hero is not the simple inventor. He is not merely a businessman. He is the courageous man "in between - entre" them, the one who chooses a new idea from an inventor, who has the courage to risk his own and other people's fortunes in order to introduce a new product or process on the market, or, even better, who introduces a new idea, like the Internet, that changes the whole market. "In all things human, change is sweet", said Aristotle. "In all things economic, innovation is King", we might say today. Why king? Because innovation is what gives us the food that feeds the stream of new children. The Schumpeterian capitalist innovator can be seen as
the father of the fourfold increase in the global population between 1900 and 2010. While Marx - wrongly - made the capitalist a hunger-creating villain, Schumpeter - rightly - made him a hero fighting the dragon of hunger. But...:Schumpeter also appointed him the villain. His concept of "creative destruction" is today as famous as, and, indeed, a consequence of, the actions of the "innovating entrepreneur". All creative innovations destroy what is old and obsolete. A new machine kicks out the old one, as well as the man who tended it. Those who benefit from the creative part of the process do well, sometimes extremely well. Those who are hit by the destructive parts of it suffer. New gaps arise. Behind innovations is intelligence. Intelligence also gives the flexibility, helping us to adjust to ever-faster technological changes. Increasingly the new gaps are related to the differences in intelligence. "Capitalism", Schumpeter also said, "inevitably and by the very logic of its civilization, creates, educates and subsidizes a vested interest in social unrest." Today, when the process of creative technological innovation can destroy whole economic sectors and nations at an ever more volatile pace, is it not time to innovate some serious protection for those who suffer from it? And, in the name of human justice is it not the time to correct the injustices of nature, especially for those who were unlucky when the mental cards from the genetic deck were dealt? Perhaps it is time for something like a guaranteed basic income for all the people on the globe. Because if we who have been lucky are not able to take care of the victims of our creative destruction, might not the "social unrest" Schumpeter predicted come back on a global scale?