IDEAS home Printed from https://ideas.repec.org/p/esi/evopap/2009-14.html
   My bibliography  Save this paper

Welfare Creation and Destruction in a Schumpeterian World

Author

Listed:
  • Christian Schubert

Abstract

Economic change, while promoting innovation and growth, at the same time generates "gales of creative destruction". It is still largely unclear what this concept implies for the task of assessing welfare (and, correspondingly, the need for and scope of policy-making) in a novelty-generating, knowledge-based economy. Is novelty desirable per se? Is a rise of living standards due to innovation always worth the risks involved? Standard welfare economics is inherently incapable of answering these questions. By examining Joseph Schumpeter's explicit and implicit reasoning on welfare and linking his thoughts to recent ideas, within normative economics, on how to redefine "well-being" when preferences are variable and inconsistent, we argue that in an evolving economy, well-being should not be conceptualized in static preference-satisfaction terms, but rather in partly procedural terms of "effective preference learning".

Suggested Citation

  • Christian Schubert, 2009. "Welfare Creation and Destruction in a Schumpeterian World," Papers on Economics and Evolution 2009-14, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:esi:evopap:2009-14
    as

    Download full text from publisher

    File URL: ftp://137.248.191.199/RePEc/esi/discussionpapers/2009-14.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert Sugden, 2004. "The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences," American Economic Review, American Economic Association, vol. 94(4), pages 1014-1033, September.
    2. Ulrich Witt, 2002. "How Evolutionary Is Schumpeter'S Theory Of Economic Development?," Industry and Innovation, Taylor & Francis Journals, vol. 9(1-2), pages 7-22.
    3. Ulrich Witt, 2003. "Economic policy making in evolutionary perspective," Journal of Evolutionary Economics, Springer, vol. 13(2), pages 77-94, April.
    4. Arnold Heertje, 2006. "Schumpeter on the Economics of Innovation and the Development of Capitalism," Books, Edward Elgar Publishing, number 3891.
    5. Schumpeter, Joseph A., 1947. "The Creative Response in Economic History," The Journal of Economic History, Cambridge University Press, vol. 7(2), pages 149-159, November.
    6. Richard Layard, 2006. "Happiness and Public Policy: a Challenge to the Profession," Economic Journal, Royal Economic Society, vol. 116(510), pages 24-33, March.
    7. Frank H. Knight, 1923. "The Ethics of Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 37(4), pages 579-624.
    8. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    9. Horst Hanusch & Andreas Pyka, 2007. "Principles of Neo-Schumpeterian Economics," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 31(2), pages 275-289, March.
    10. James Stanley Metcalfe, 2005. "Systems Failure and the Case for Innovation Policy," Springer Books, in: Patrick Llerena & Mireille Matt (ed.), Innovation Policy in a Knowledge-Based Economy, chapter 2, pages 47-74, Springer.
    11. Peter E. Earl & Jason Potts, 2004. "The market for preferences," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(4), pages 619-633, July.
    12. Shionoya,Yuichi, 1997. "Schumpeter and the Idea of Social Science," Cambridge Books, Cambridge University Press, number 9780521430340, September.
    13. Horst Hanusch & Andreas Pyka (ed.), 2007. "Elgar Companion to Neo-Schumpeterian Economics," Books, Edward Elgar Publishing, number 2973.
    14. Fabrizio Zilibotti, 2007. "�Economic Possibilities for Our Grandchildren� 75 Years after: A Global Perspective," IEW - Working Papers 344, Institute for Empirical Research in Economics - University of Zurich.
    15. Jan Fagerberg, 2003. "Schumpeter and the revival of evolutionary economics: an appraisal of the literature," Journal of Evolutionary Economics, Springer, vol. 13(2), pages 125-159, April.
    16. John E. Elliott, 1980. "Marx and Schumpeter on Capitalism's Creative Destruction: A Comparative Restatement," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(1), pages 45-68.
    17. Ebner, Alexander, 2006. "Institutions, entrepreneurship, and the rationale of government: An outline of the Schumpeterian theory of the state," Journal of Economic Behavior & Organization, Elsevier, vol. 59(4), pages 497-515, April.
    18. Lee W. McKnight & Paul M. Vaaler & Raul L. Katz (ed.), 2002. "Creative Destruction: Business Survival Strategies in the Global Internet Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026263256x, April.
    19. Ulrich Witt & Christian Schubert, 2008. "Constitutional interests in the face of innovations: how much do we need to know about risk preferences?," Constitutional Political Economy, Springer, vol. 19(3), pages 203-225, September.
    20. Joseph A. Schumpeter, 1949. "English Economists and the State-Managed Economy," Journal of Political Economy, University of Chicago Press, vol. 57(5), pages 371-371.
    21. N. De Liso & G. Filatrella, 1999. "On technology competition," Working Papers 337, Dipartimento Scienze Economiche, Universita' di Bologna.
    22. Witt, Ulrich, 1996. "Innovations, Externalities and the Problem of Economic Progress," Public Choice, Springer, vol. 89(1-2), pages 113-130, October.
    23. Markus C. Becker & Thorbjørn Knudsen, 2002. "Schumpeter 1911: Farsighted Visions on Economic Development," American Journal of Economics and Sociology, Wiley Blackwell, vol. 61(2), pages 387-403, April.
    24. Soete, Luc & Weel, Bas ter, 1999. "Schumpeter and the Knowledge-Based Economy: On Technology and Competition Policy," Research Memorandum 004, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    25. Patrick Llerena & Mireille Matt (ed.), 2005. "Innovation Policy in a Knowledge-Based Economy," Springer Books, Springer, number 978-3-540-26452-1, December.
    26. Knight, Frank H., 1923. "The Ethics of Competition," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 37, pages 579-624, August.
    27. Mauro Boianovsky & Hans-Michael Trautwein, 2010. "Schumpeter on unemployment," Journal of Evolutionary Economics, Springer, vol. 20(2), pages 233-263, April.
    28. Stan Metcalfe, "undated". "Capitalism and evolution," Openloc Working Papers 1201, Public policies and local development.
    29. Fleurbaey,Marc & Salles,Maurice & Weymark,John A. (ed.), 2008. "Justice, Political Liberalism, and Utilitarianism," Cambridge Books, Cambridge University Press, number 9780521640930, September.
    30. Marc Fleurbaey & Maurice Salles & John A. Weymark, 2008. "Justice, Political Liberalism and Utilitarianism," Post-Print hal-00246415, HAL.
    31. Ursula Backhaus, 2002. "Seventh Chapter Of The Theory Of Economic Development," Industry and Innovation, Taylor & Francis Journals, vol. 9(1-2), pages 93-145.
    32. Ulrich Witt, 2001. "special issue: Learning to consume - A theory of wants and the growth of demand," Journal of Evolutionary Economics, Springer, vol. 11(1), pages 23-36.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christian Schubert, 2013. "Is Novelty Always a Good Thing? Towards an Evolutionary Welfare Economics," Economic Complexity and Evolution, in: Guido Buenstorf & Uwe Cantner & Horst Hanusch & Michael Hutter & Hans-Walter Lorenz & Fritz Rahmeyer (ed.), The Two Sides of Innovation, edition 127, pages 209-242, Springer.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christian Schubert, 2013. "Is Novelty Always a Good Thing? Towards an Evolutionary Welfare Economics," Economic Complexity and Evolution, in: Guido Buenstorf & Uwe Cantner & Horst Hanusch & Michael Hutter & Hans-Walter Lorenz & Fritz Rahmeyer (ed.), The Two Sides of Innovation, edition 127, pages 209-242, Springer.
    2. Schubert, Christian, 2015. "Opportunity And Preference Learning," Economics and Philosophy, Cambridge University Press, vol. 31(2), pages 275-295, July.
    3. Vanberg Viktor J., 2014. "Evolving Preferences and Welfare Economics: The Perspective of Constitutional Political Economy," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(2-3), pages 328-349, April.
    4. Andreas Pyka & Uwe Cantner & Alfred Greiner & Thomas Kuhn (ed.), 2009. "Recent Advances in Neo-Schumpeterian Economics," Books, Edward Elgar Publishing, number 12982.
    5. Christian Schubert & Andreas Chai, 2012. "Sustainable Consumption and Consumer Sovereignty," Papers on Economics and Evolution 2012-14, Philipps University Marburg, Department of Geography.
    6. Rahmeyer Fritz, 2013. "Schumpeter, Marshall, and Neo-Schumpeterian Evolutionary Economics: A Critical Stocktaking," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(1), pages 39-64, February.
    7. Christian Schubert, 2012. "Pursuing Happiness," Kyklos, Wiley Blackwell, vol. 65(2), pages 245-261, May.
    8. Callegari, Beniamino & Nybakk, Erlend, 2022. "Schumpeterian theory and research on forestry innovation and entrepreneurship: The state of the art, issues and an agenda," Forest Policy and Economics, Elsevier, vol. 138(C).
    9. Christian Schubert, 2006. "A Note on the Principle of "Normative Individualism"," Papers on Economics and Evolution 2005-17, Philipps University Marburg, Department of Geography.
    10. Anthony Endres & Christine Woods, 2010. "Schumpeter’s ‘conduct model of the dynamic entrepreneur’: scope and distinctiveness," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 583-607, August.
    11. Christian Schubert, 2014. "“Generalized Darwinism” and the quest for an evolutionary theory of policy-making," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 479-513, July.
    12. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    13. Ron Boschma & Ron Martin, 2010. "The Aims and Scope of Evolutionary Economic Geography," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 1, Edward Elgar Publishing.
    14. Fagerberg, Jan, 2018. "Mobilizing innovation for sustainability transitions: A comment on transformative innovation policy," Research Policy, Elsevier, vol. 47(9), pages 1568-1576.
    15. Binder, Martin & Witt, Ulrich, 2012. "A critical note on the role of the capability approach for sustainability economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 721-725.
    16. Kurt Dopfer, 2012. "The origins of meso economics," Journal of Evolutionary Economics, Springer, vol. 22(1), pages 133-160, January.
    17. Mário Graça Moura, 2017. "Schumpeter and the meanings of rationality," Journal of Evolutionary Economics, Springer, vol. 27(1), pages 115-138, January.
    18. Jakob Edler & Jan Fagerberg, 2017. "Innovation policy: what, why, and how," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(1), pages 2-23.
    19. Viktor J. Vanberg, 2009. "Evolving Preferences and Policy Advice in Democratic Society," Papers on Economics and Evolution 2009-19, Philipps University Marburg, Department of Geography.
    20. Brendan Markey-Towler, 2018. "A formal psychological theory for evolutionary economics," Journal of Evolutionary Economics, Springer, vol. 28(4), pages 691-725, September.

    More about this item

    Keywords

    Joseph Schumpeter; Creative Destruction; Endogenous Preferences; Welfare Economics Length 41 pages;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:esi:evopap:2009-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christoph Mengs (email available below). General contact details of provider: https://edirc.repec.org/data/vamarde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.