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Creative destruction* – great for destructors, not so much for “destructeds”

Parts of New York City’s Triboro (aka RFK) Bridge are under destruction.

Not construction — destruction.

And many of the bridge users don’t mind it at all.

But toll-collectors do, big time — because the bridge is being converted to no-cash, electronic-payment-only traffic. The toll collectors are part of a dying profession according to Bill Cramer, Communications Director of the International Bridge, Tunnel and Turnpike Association: “People are doing away with toll booths because new technology has come along”. An involved union leader adds, “Technology is great, but there’s a human factor. The reality is you’re putting people out of work.  (See “No More Toll Booth Collectors” which summarizes these changes across the U.S.).

Moreover, in contemporary retailing, creative destruction is proving nothing short of a revolution.

In a seminal article, “Creative destruction: Thousands of traditional retailers close as consumers switch to online retailers like Amazon” Mark Perry presents a partial list of major chain store closings — largely attributable to the rapid growth of E-Commerce sales — in recent months: more than 1400 stores. He presents troubling questions: “That retail bloodbath has led to some to  pose questions like: ‘ Is 2017 the death of retail as we know it?’ and ‘With major retailers closing, could this be the end of malls?”

As if in reply, “The ‘Amazon Effect’ Is Creative Destruction A Its Finest“, a recent commentary from the free market  The Foundation for Economic Education, champions a hard-hearted defense: “The force of creative destruction, including the destruction of jobs, are unstoppable and beneficial to the economy. Economic progress and job destruction go hand in hand … Consumer sovereignty – consumers are the ultimate rulers in the market economy … As US consumers increasingly prefer doing their shopping online for more convenience, greater selection, and lower prices, traditional brick-and-mortar stores will continue to struggle and many more will disappear. This trend should be welcomed as a sign of economic progress and job creation. To help the economy grow to its full potential, we have to be willing to tolerate (and welcome) job losses and business closings.

So it’s consumers vs. workers and sociology becomes central to the debate.

Lamenting the wave of retailing creative destruction, Stacy Torres, assistant professor of sociology the the University of Albany, cautions: “Amazon’s purchase of Whole Foods is expected to revolutionize the grocery business, accelerating a trend toward increasing automation and the elimination of cashiers and other human workers. The Amazon Go store in Seattle, devoid of sales clerks and checkout lines, offers a glimpse of what this ‘just walk out’ grocery shopping experience might be like. I’m not looking forward to it. See “You Don’t Want to Buy Groceries From a Robot“.

On this new disruptive, transformative, on-demand economy journalist/best-selling author Walter Isaacson recently observed: “At certain moments in history a confluence of technological and social advances creates opportunities for a new field of innovation.”

At this moment in history, there are, of course, macro benefits for some as well as personal and social disruptions — “winners and losers”.

Isaacson focusing on new digital services: “The benefits that Airbnb and Uber pioneered go beyond convenience. They allow people to make human connections in an era that has become much more institutionalized … A disconnected society becomes slightly more connected, not just digitally but also physically… But … on a deeper level, this new economy is disrupting not only old industries but also the entire concept of work. Instead of ‘having a job’ a growing number of people will … support themselves by juggling on-demand gigs. … it will require whole new ways to think about pensions, health care, benefits, sick leave, disability and retirement savings.”

So …

Creative destruction is central — a cause and a result — of the extremely complex maelstrom of issues confronting contemporary society, including political populism, nativism, mass immigrations, new tensions in international trade and the increasing velocity of technological advances.

Ameliorating this era’s creative destruction will be no less complex. It must — somehow — include a long term commitment in addressing globalization economics and humanitarian values, improved safety nets, massive job re-training and a new emphasis on  the virtually obsolete communitarianism.

Creative destruction – truly, a business-in-society challenge for our age.



Creative destruction refers to the  incessant product and process innovation mechanism by which new production units replace outdated ones. It was coined by Joseph Schumpeter (1942) who considered it ‘the essential fact about capitalism.'”