Inside the 2025 Nobel Prize in Economics: Harnessing Creative Destruction
Description
"Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary." - Austrian Economist Joseph Schumpeter (1950)
The 2025 Nobel Prize in Economics was recently awarded to Joel Mokyr, an economic historian at Northwestern University, Philippe Aghion, who is affiliated with universities in France and the U.K., and Peter Howitt, a professor of economics at Brown University.
Philippe Aghion and Peter Howitt worked together for decades to develop and publish a model that makes it possible to better understand business growth - but not just any growth. The growth fueled by Creative Destruction.
Creative Destruction was first described by Austrian economist Joseph Schumpeter in 1942 in response to ideas from Karl Marx's Communist Manifesto. In fact, Marx thought, and Schumpeter agreed, that it would lead to the end of capitalism… they just didn't agree on why.
In this episode of the Art of Supply podcast, Kelly Barner covers:
- What Creative Destruction is, and why it is no ordinary form of growth
- How the idea is connected to the potential end of capitalism
- Why it is so fascinating that this idea is being highlighted at this moment in time, with the rise of AI right before us.
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