Is 'creative destruction' good for the economy? Why or why not?

Expert Solution

The concept of creative perspective refers to a situation how the continuous growth of the economy distract old industry and moving the economic resources to the other productive industry.In simple words development of the new product in the industry leads to the destruction of the old industry.

The concept of "creative destruction" Joseph Schumpeter in his work "capital, socialism, and Democracy" in the year 1942.

The creative of the destruction has the postive and negative impact on to the economy.The positive side of the long-run economy has benefited the development of new industry results enhance the market share and contribute to the GDP growth of the country.

On the negative side, it destructs the labors and their skill and moving the resource to the new industry it makes unemployment situation in the economy and labors are needed to upgrade their skill which is the time-consuming process.

Thus it is clearly indicating that creative industry has both negative and positive impact.

Rahul Sunny answered 1 year ago

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