Economy Daikon

Published on April 26th, 2009 | by Rhonda Winter


Are We on the Eve of “Creative Destruction”?


Last Wednesday, as I was riding my bicycle down Third Street to the farmer’s market, my thoughts turned to the economist Jospeh Schumpeter andĀ  his seminal book “Capitalism, Socialism and Democracy“. Streams of loud cars and trucks blared past me on the road, some of the vehicles nearly grazing me as oblivious drivers chattered on cell phones. As I continued pedaling down the street, images of organic daikon and Schumpeter’s theory of “Creative Destruction” swirled around in my brain.

Daikon at the Mission Bay Farmer's MarketThe seasonal weekly farmer’s market at UCSF Mission Bay will be held Wednesdays, from April 22 to November 25, 2009


Creative Destruction as Positive Change


The concept of “Creative Destruction” describes a process in which new innovation and entrepreneurship are constantly reforming economic systems and commerce. Old established enterprises are destroyed, and new companies sprout up in their place. For example, Polaroid was once a very innovative business that helped to redefine the photography industry, but has now been put out of business by the explosion of digital cameras. A plethora of historical, environmental and social conditions are constantly influencing which companies thrive and which will become sickly and fail.

“The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel, illustrate the same process of industrial mutation…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.”

Joseph Schumpeter, " width=


In the 20th century the rise of the automobile put most blacksmiths out of work. Subsequently, in our current flailing economy many car companies are now helplessly floundering, hemorrhaging money fasterĀ  than a rusted oil pan gushes petroleum; while other industries, like bicycle and seed companies, are seeing huge increases in business. The structure of our economy, which commodities are needed, where and how they are produced, is constantly evolving.

Schumpeter also argues that sustained long-term economic growth is not really viable, because resources are limited and new ideas are constantly reshaping how business and commerce function; essentially, that if capitalism is a continued success, it will eventually destroy itself. And though Schumpeter’s book and ideas were written over sixty-seven years ago, they still remain incredibly relevant today.

my bike at the Mission Bay Farmer's Market

Perhaps, in a sense, it is a very good thing that our nation’s economy is going down in flames, so that an improved redesigned system can rise from the ashes of the old, like a phoenix reborn. Hopefully the old established industries that have become bloated, ineffective and irrelevant will wither, while other innovative progressive locally-based companies will rise up to take their place.

I was thinking about all of these possibilities as I purchased some whole wheat pita bread that had been made a few miles away, while I pushed my bicycle through the crowded bustling market. Scores of people were strolling about and buying locally grown seasonal produce, as well as just enjoying the beautiful sunny afternoon.

Mission Bay Farmer's Market

I bought some organic rainbow chard and contemplated our country’s massive failing behemoth banks and the rise of small locally-based economies. I thought about how much better my local credit union cooperative is, as compared to my former evil profit-driven mega-bank, and about how pleasant it was to ride my bike to the local weekly farmer’s market, as opposed to driving a polluting car for miles to some corporate chain supermarket to buy blueberries shipped from New Zealand.

As a nation we must now reject the excessive consumption of our past and embrace a new simpler way of living. Our planet’s resources are finite, and they are in rapid decline. Perhaps “Creative Destruction” can help us to create a better designed commerce system, with increased decentralized local production and a network of small locally-based interdependent economies of scale that are not only viable, but also actually sustainable?

rainbow chardThis delicious organic rainbow chard is from Tomatero Farm in Watsonville, California.

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About the Author

was raised by wolves, and subsequently has difficulty interacting with other humans; she can also be found on and Twitter.

7 Responses to Are We on the Eve of “Creative Destruction”?

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    • Our population grew from about 340 million in 1947 (after the British left), to the current 1.2 billion. Mahatma Gandhi, was in favor of a village based, decentralized society, calling it a village republic. However Nehru preferred the flavour of the day, and went in for socialism and heavy industrialization (aka Soviet Union). It was a big failure. We went n foe economic reforms, in 1991. And the economy has improved. Indian grew at 9%, last year. It is likely to be 7% this year (fiscal April-March 2011-12) however our agricultural production is stagnant at 20% of the GDP. While 70% of our people live in rural areas, villages and small towns. Our cities are over crowded and have big slums, as mos of the “jobs” are created, in the urban areas. So there is significant brain-drain from the villages to the cities.

      The Industrial revolution was largely possible with cheap and amply available low cost energy, esp fossil (coal and oil). Oil costing less than a dollar a barrel in the 1960’s. Now it touches $100+, and shortly will go up to $150-200/barrel. Besides global warming and water shortages loom ahead.
      India, like many other developing countries is rushing into rapid industrialization and urbanization. Which takes time. So probably by when we do reach their, oil will be $200/barrel and global warming would be a global challenge.

      India also has over 700M young people who will work for the next 25-60 years. Potentially the largest manpower resource, in the world.
      I and like minded people are looking at Global resource Planning (GRP), similar to ERP (Enterprise resource Planning for corporates), to optimize the use of resources globally. This can make cost effective use of Indian man-power, for the whole globe. So extensive offshore of tasks can be done. This will generate a LARGE market for the products, ideas etc from the rest of the world. Utilizing global resources equitably.

      For that we are looking at global partnerships (cooperation at a village/community level, NGO etc, NOT govt to govt), for cooperative working. Our strategy is to create awareness, then education and training of our bright Class 8 students in IT, eLearning, and appropriate technology (for decentralized economy), and help them become the change agents for their respective villages, and further the spread thru distance eLearning, into relevant areas.Add to that VRP (Village Resource Planning), systems, foe local governance. Increase agri productivity, thru aquaponics to re-cycle water, no need for chemical fertlisers and pesticides, and thru solar energy based CSP (concentrating solar power), generate electricity for local use, for light loads, like lighting, computers etc gadgets. use the waste heat for HVAC, using the absorption refrig cycle. Use computers for tele-health and consulting. As people grow, get experience, train them in BPO work for Indian business/industry. Much like India Inc., is currently doing work for global economies. Therebu giving a flip to the productivity of the Indian economy, and rural employment. Without the disruption of rural to urban migration.

      A decentralised, empowered economy, using Gandhi ji’s concepts, only instead of his advocacy of a Charkha, for weaving and cloth making, use the computer and Internet for Hi-tech work, education, learning and Health care.

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