Joseph Schumpeter: New Capital, Innovation & New Social-Political Vortices of Competition and Renewal

If Reagan taught anything, it was that policy as an instrument of ethics matters.  We’ve forgotten the vast array of social, theological and moral underpinnings that underwrite the achievement of western Civilization; theoretical foundations will be exposed in any grapple with militant secularism.  Nevertheless, today’s talk about border adjustments, tax reform and hosts of other relevant ideas brings to mind the life, writings and achievements of Jospeh Schumpeter, a man whose life and work is despised by academia.

Schumpeter coined there term creative destruction; his insights into the achievements of innovation need renewal because digital technology reverses a millennial of an ever increasing division of labor.  With digital environments, the human person is elevated, autonomy increases and hard capital skills become the sine qua non of achievement.

What very few people have recognized in Trump’s tirade on China’s mercantile policies and their consequent social impact on America’s political economy is that trade deficits/balances are really about savings-investment patterns.  Our near permanently weak dollar industrial policy isn’t so much about underwriting a failed Bretton-Woods architecture as it is about an unwillingness for America’s dominant political class to seek reform.

What do we notice about the U.S. trade deficits?  We should see them as sources to ponder about the politics of taxation, regulation and the over size role of government in society.  We should acknowledge how little breakthrough innovation their is in our current capitalist system.  This is a function of our dominant politics, evidenced in highly leveraged debt ratios, low productivity, militant regulatory regimes and volatile capital markets.  The result:  we promote eccentricity and novelties, and get mediocrity.  Just witness all the overt rent-seeking activities throughout the Obama administration; securing captured audiences was the norm sought, not excellence nor liberty.

The reason why their is a dearth of social, fiscal capital isn’t just exhausted individuals but defeated, lost, and ultimately moribund individuals.  Although the origins of this social, political catastrophe are laid at the hands of policy, its renewal begins theoretically by acknowledging the supremacy of the bonds that constitute civil society.  The family.

What has the Amerikan left sought over the past several decades?  It has overtly sought to use government policy to compete and destroy the very social bonds that procure the most enduring capital.  This is the gift rendered by digital mediums, an autonomy conferred with minimum effort, choices promoting differentiation that years past required untold investment.

This new Presidency means we get a chance to set IT right, which isn’t easy to do.  Sound regimes require enlightened and enterprising individuals, in a word:  leadership.  America has been gifted with sustained institutional stability, an intrinsic ability to adapt to new competing ideas.  Article V Convention of the States comes to mind, but so does Schumpeter’s friend Arnold Toynbee.

Toynbee revealed a staggering truth throughout his 12 volume series A Study of History, he revealed that the criteria for growth was self-determination.

The gift of moral agency.

Schumpeter 2.0

Creative Destruction

Clock Making & Free Enterprise:  Joseph Schumpeter

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About William Holland

Systematic Theologian/International Relations
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