Joseph Schumpeter

Joseph Schumpeter was an Austrian-born economist who taught at Harvard from 1932 until his death, and who argued that capitalism advances not through gentle equilibrium adjustment but through waves of entrepreneurial innovation that continually destroy the firms, products and industries that preceded them. His 1942 book Capitalism, Socialism and Democracy named this process creative destruction and called it the essential fact about capitalism, a phrase that became the standard economic account of why protecting incumbent firms from competition can slow the very innovation it is meant to encourage.