Welfare Creation and Destruction in a Schumpeterian World

Christian Schubert

Papers on Economics and Evolution from Philipps University Marburg, Department of Geography

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".

Keywords: Joseph Schumpeter; Creative Destruction; Endogenous Preferences; Welfare Economics Length 41 pages (search for similar items in EconPapers)
JEL-codes: B25 D03 D63 (search for similar items in EconPapers)
Date: 2009-11
New Economics Papers: this item is included in nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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