Creative destruction

David Brooks, conservative columnist for The New York Times, lists the best magazine essays of the year here and here.

One of his selections discusses the economist Joseph Schumpeter and his concept of creative destruction:

The essence of capitalist economies was, as Marx had recognized before him, the entrepreneur and the innovator: the risk taker who sets in motion new and more-efficient ways of making old or new products, and so produces an economy in constant change. Marx saw that the coming of capitalist economies destroyed all feudal, traditional, and patriarchal relationships and orders. Schumpeter saw farther: that market capitalism destroys its own earlier generations. There is, he wrote, a constant "process of industrial mutation — if I may use that biological term — that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in, and what every capitalist concern has got to live in."

Capitalism is in constant flux. New innovations create wealth and propel the economy forward, but at the same time they render old industries obsolete. Economic loss is the necessary consequence of economic gain. Detroit, once at the forefront of technology, is now suffering the destructive consequences of capitalist innovation itself.

Also worth noting: a New Yorker article from April on the psychology and economics of long-distance commuting and an article from the New York Review of Books on the immigration debate. I haven't read either yet, but they look good.