Joe Schumpeter and the truth about technology

This morning’s Observer column.

Pondering the role of entrepreneurship and innovation in this process, Schumpeter argued that capitalism renews itself in periodic waves of traumatic upheaval. He was not the first to have this idea, but he was the first to come up with a memorable term for the process: Schumpeter called them waves of “creative destruction”.

We’re living through one such wave at the moment, but our public discourse about it is lopsided. That’s because the narrative tends to be dominated by enthusiasts and evangelists, by people who, like the “cybertheorists” Poole detests, tend to focus on the creative side of the Schumpeterian wave. At the same time, people who are sceptical or fearful about the new technology tend to be labelled – and sometimes derided – as luddites or technophobes.

The trouble is that Schumpeter meant what he said: innovation is a double-edged sword.

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