Abstract: The economic system of innovative dynamism is often accused of harming the environment. The opposite is true. As economies flourish through innovative dynamism, birth rates decline, new ways to extract old resources are invented, and previously useless materials are turned into useful new resources. Human and nonhuman animals are often adaptable and resilient in the face of environmental change. Flourishing economies can better afford to protect current species, create new species, and possibly revive some currently extinct species. The rate of global warming is likely to be slow enough that humans and most nonhuman species can adapt to it. If the rate quickens and creates high costs, entrepreneurial geoengineering, enabled within the system of innovative dynamism, can slow or even reverse the warming. We should not shackle the innovative-dynamism system that enables us to live long and flourish.

Keywords: Innovative dynamism, environmental economics, population growth, climate change, global warming

Download PDF: “Innovative Dynamism Improves the Environment”

While the consumer benefits from the new products and improved production processes due to creative destruction, the major downside to creative destruction is technological unemployment.  However, policies adopted by government and by workers can increase the upside and reduce the downside.  Governments can enable entrepreneurial innovation by allowing the labor market to be flexible.  A government safety net is also considered. However, workers can become more resilient in attitude and frugal in spending in order to cope with technological unemployment, and can invest in more diversified and enduring human capital.  The family can also provide a private safety net.  The process of creative destruction is not a zero-sum game.

Download Paper: “The Creative Destruction of Labor Policy.”