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The success of the U.S. at creation destruction
The U.S. has evolved into an efficient, sometimes callous, economic machine. The ease at which companies can discard workers has helped underpin productivity and corporate profit levels in spite of a recession and has traditionally helped the economic behemoth in recovery.
But as the government steps in to bail out automakers and financial institutions, is the world's largest economy undermining the very process of creative destruction that has propelled it thus far
Steven Davis, a professor of international business and economics at the University of Chicago Booth School of Business, said the solid employment and productivity performance of the U.S. of the past 25 years has been driven to a considerable extent by the country's success at "creative destruction."
The term creative destruction was popularized by Austrian economist Joseph Schumpeter in 1942. It describes the process whereby constant innovation sustains long-term economic growth through improved productivity. This process of creation effectively destroys old products, companies and industries that are unable to compete with the new.
Creative destruction is not unique to recessions; it is a constant driver of capitalism. However, the destruction side of the theory becomes
