JOSEPH SCHUMPETER by Peter F. Drucker

“Joseph Schumpeter insisted that innovation is the very essence of economics and most certainly of a modern economy.

But innovation, in Schumpeter’s famous phrase, is also ‘creative destruction.’ It makes obsolete yesterday’s capital equipment and capital investment. The more an economy progresses, the more capital formation.

Thus, what the classical economist– or the accountant or the stock exchange– considers ‘profit’ is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today’s profitable business will become tomorrow’s white elephant.”

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JOSEPH SCHUMPETER by Peter F. Drucker

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