Openness to Creative Destruction

Sustaining Innovative Dynamism

[Amazon Link]

This book has a clunky title. And somewhat misleading. The actual subject is in the subtitle: what the author, Arthur M. Diamond, Jr., calls "innovative dynamism" (which I'll just call "ID" from here on out.)

As Schumpeter observed, modern entrepreneurial capitalism involves both ID and "creative destruction". Can't have one without the other, as new ways of doing things leapfrog and obsolete the status quo. Diamond gives a full-throated defense of this process. Or, actually, celebration. Because, of course, we're unimaginably richer thanks to a few centuries of ID. And we should fervently hope for more in the future.

The book concentrates strictly on economic/business dynamism. (Appropriate, since Diamond is an econ prof at the University of Nebraska-Omaha.) Culture is the tail wagged by the economic dog here. I think that might be a slight problem, but it's a minor one at best. Diamond tells a rich and interesting story with lots of examples, both recent and historical. Colorful tales, for example, dying Steve Jobs demanding a more esthetically designed oxygen mask.

In my case, I didn't need a lot of persuading, but his thesis is pretty convincing: a healthy level of ID benefits society generally and nearly all individuals.

Problems: stifling regulations, onerous taxation both hold back ID. He makes a pretty good defense of patents (although he advocates reforms that would quash overly broad ones).

Although the book is published by Oxford University Press, there's nothing in here that would challenge a bright high schooler or an interested undergrad. Highly recommended.