Openness to Creative Destruction: Sustaining Innovative Dynamism

ISBN : 9780190263669

Arthur M., Jr. Diamond
304 Pages
156 x 235 mm
Pub date
Aug 2019
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Life improves under the economic system often called "entrepreneurial capitalism" or "creative destruction," but more accurately called "innovative dynamism." Openness to Creative Destruction: Sustaining Innovative Dynamism shows how innovation occurs through the efforts of inventors and innovative entrepreneurs, how workers on balance benefit, and how good policies can encourage innovation. The inventors and innovative entrepreneurs are often cognitively diverse outsiders with the courage and perseverance to see and pursue serendipitous discoveries or slow hunches. Arthur M. Diamond, Jr. shows how economies grow where innovative dynamism through leapfrog competition flourishes, as in the United States from roughly 1830-1930. Consumers vote with their feet for innovative new goods and for process innovations that reduce prices, benefiting ordinary citizens more than the privileged elites. Diamond highlights that because breakthrough inventions are costly and difficult, patents can be fair rewards for invention and can provide funding to enable future inventions. He argues that some fears about adverse effects on labor market are unjustified, since more and better new jobs are created than are destroyed, and that other fears can be mitigated by better policies. The steady growth in regulations, often defended on the basis of the precautionary principle, increases the costs to potential entrepreneurs and thus reduces innovation. The "Great Fact" of economic history is that after at least 40,000 years of mostly "poor, nasty, brutish, and short" humans in the last 250 years have started to live substantially longer and better lives. Diamond increases understanding of why.


List of Figures and Tables
1- An Economy of Innovative Dynamism
2- The Innovative Entrepreneur
3- The Great Fact and the Good Life
4- The Benefits: New Goods
5- The Benefits: Process Innovations
6- Easing the Pains of Labor
7- The Benefits: Labor Gains
8- The Benefits: Morality, Equality, Mobility, Culture, and the Environment
9- Innovation Bound or Unbound by Culture and Institutions
10- Funding Inventors
11- Funding Entrepreneurs
12- Unbinding Regulations
13- Hope for a Better Future
14- Overture
15- Reader's Guide on Innovative Dynamism
16- Reader's Guide on Inventors and Entrepreneurs
17- Acknowledgements

About the author: 

Arthur M. Diamond, Jr. is Professor of Economics at the University of Nebraska Omaha. He has published many journal articles on issues in labor economics, economics of technology, and economics of entrepreneurship.

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