I find two of his ideas stand out. The first is his idea of "creative destruction." Schumpeter said that a growing economy was an economy of constant change. And that change resulted new firms and products being created, and old products and firms being destroyed - creative destruction.
The second idea of interest to me was his view of the role of the entrepreneur in the economy. He identified five elements of entrepreneurship:
1) Introducing a new good or service,
2) Adoption of new inputs to produce a new or previously produced good or service,
3) Introduction of new technology,
4) Opening a new market,
5) Creating a new economic organization by combining and/or spinning off parts of existing firms.
Last week there was an intriguing series on National Public Radio (NPR) that examined the current economic situation in my home state, Michigan. It is an excellent piece, well-done in ways that regular NPR listeners are familiar with. (I must admit, I did not hear it in the original - I've been listening to other podcasts on my commute. So I thank Don Boudreaux at Cafe Hayek for the link that took me to one of the stories.)
I think if you go to the NPR series site, you will find a number of short pieces to share with your classes that will illustrate either the entrepreneurial opportunity that lies hidden in the current crisis, or the underlying change that is the result of the same event. Either way, you and your students will walk away with a sense of optimism that has been too often lacking in reporting from the Great Lake State.
I look forward to your comments.
This post relates to the following Keystone Economic Principles:
2. There ain’t no such thing as a free lunch.
5. Incentives produce “predictable” responses.
6. Do what you do best; trade for the rest.
7. Economic thinking is marginal thinking.
8. Quantity and quality of available resources impact living standards.