Capitalism’s progress depends on business failure, not despite it.
Evidence
For Schumpeter, entrepreneurs make investments, many of which go bad, but capitalism progresses because of these failures, not despite them. We need failures, or capitalism does not evolve. The process of liquidation, of failure, produces the raw material for the next round of innovation and investment. As such, intervention, whether inflationary or otherwise, would cause two problems. First, it would obstruct the necessary liquidation process, propping up firms with cheap money, only postponing the inevitable day of reckoning. Second, it would disrupt the price signals that entrepreneurs rely upon so that they would not know in which sectors to invest. Investment would fall, despite the government intervention that was intended to increase it. — Mark Blyth, Austerity, 323
Categorization
- XREF: The liquidation argument against intervention is a direct precursor to austerity justifications Mattei traces; good connective tissue. — connects to: Creative destruction, not peace, causes capitalism’s endemic crises — Max Haiven, Cultures of Financialization, 428; Capitalist growth structurally reduces rather than increases employment. — Clara E. Mattei, Escape from Capitalism: An Intervention, 245; Widespread service failures fail to unsettle faith in capitalist efficiency — Mark Fisher, Capitalist Realism: Is There No…, 131
- SEED: Angle: how a description of market mechanics (‘creative destruction’) became a moral mandate against state help.
Broader Connections
- Creative destruction, not peace, causes capitalism’s endemic crises
#expands(0.82) — Max Haiven, Cultures of Financialization, 428 - Capitalist growth structurally reduces rather than increases employment.
#expands(0.75) — Clara E. Mattei, Escape from Capitalism, 245