Creative destruction, as articulated by Schumpeter in his 1942 work “Capitalism, Socialism, and Democracy,” refers to the: “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” This dynamic force drives economic progress by continually replacing outdated technologies, business models, and industries with more innovative and efficient ones. Unlike traditional economic models that emphasize static equilibrium and price competition, Schumpeter’s vision portrays capitalism as a system in perpetual flux, where the true engine of growth is not the optimization of existing structures but their wholesale transformation.
The politicians are at it again!! They are making economic decisions based upon anything but workable theories of economics. In this case, The Digital Markets Act (DMA) ignores anything Schumpeter’s theory of “creative destruction” has to say about real economics. They want a status quo and homogenized digital arena where all the different platforms interoperate, despite the careful competition through differentiation.