Book Alert / Prophet of Innovation

Prophet of Innovation -- Joseph Schumpeter and Creative Destruction by Thomas K. McCraw, Belknap/Harvard '07, $35, 719 pages, ISBN #0-674-02523-7. Index, illustration credits, no bibliography, source notes, b&w images sprinkled through text.

"For capitalism, and for Schumpeter personally," writes the author, "nothing was ever stable. Uproar was their only music." Its essence, he says, is a process he called creative destruction. For some, the obliteration of the old and the innovation needed to create the new is a bloodless exercise in which lost careers, even lives, are little more than collateral damage.

Not to Schumpeter, says McCraw, even though the iconic economist thought of himself very much a conservative. "Schumpeter abhorred some of the banalities of business culture and revered the artistic attainments of the Old World. He knew that creative destruction fosters economic growth but also that it undercuts cherished human values. He saw that poverty brings misery but also that prosperity cannot assure peace of mind."

McCraw finds Joseph Alois Schumpeter, who lived from 1883 to 1950, to have been "to capitalism what Freud was to the mind: someone whose ideas have become so ubiquitous and ingrained that we cannot separate his foundational thoughts from our own." To tell his story, the Harvard Business School professor emeritus divides his narrative into three chronological sections: Part I -- L'Enfant Terrible, 1883-1926: Innovation and Economics; Part II -- The Adult, 1926-1939: Capitalism and Society; and Part III -- The Sage: 1939-1950: Innovation, Capitalism, and History.