3.1 Marx's thought
Creative destruction，sometimes known as Schumpeter's gale，is a concept in economics which since the 1950 shas become most readily identified with the Austrian American economist Joseph Schumpeter who derived it from the work of Karl Marx and popularized it as a theory of economic innovation and the business cycle.
According to Schumpeter，the“gale of creative destruction”describes the“process of industrial mutation that incessantly revolutionizes the economic structure from within，incessantly destroying the old one，incessantly creating a new one”.In Marxian economic theory the concept refers more broadly to the linked processes of the accumulation and annihilation of wealth under capitalism.
The German Marxist sociologist Werner Sombart has been credited with the first use of these terms in his work Krieg und Kapitalismus（War and Capitalism，1913）.In the earlier work of Marx，however，the idea of creative destruction or annihilation implies not only that capitalism destroys and reconfigures previous economic orders，but also that it must ceaselessly devalue existing wealth（whether through war，dereliction，or regular and periodic economic crises）in order to clear the ground for the creation of new wealth.
In Capitalism，Socialism and Democracy（1942），Joseph Schumpeter developed the concept out of a careful reading of Marx's thought，arguing that the creative-destructive forces unleashed by capitalism would eventually lead to its demise as a system.Despite this，the term subsequently gained popularity within neoliberal or free-market economics as a description of processes such as downsizing in order to increase the efficiency and dynamism of a company.In The Communist Manifesto of 1848，Karl Marx and Friedrich Engels described the crisis tendencies of capitalism in terms of“the enforced destruction of a mass of productive forces”.
Modern bourgeois society，with its relations of production，of exchange and of property，a society that has conjured up such gigantic means of production and of exchange，is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells.It is enough to mention the commercial crises that by their periodical return put the existence of the whole of bourgeois society on trial，each time more threateningly.In these crises，agreat part not only of existing production，but also of previously created productive forces，are periodically destroyed.In these crises，there breaks out an epidemic that，in all earlier epochs，would have seemed an absurdity—the epidemic of over-production.Society suddenly finds itself put back into a state of momentary barbarism；it appears as if a famine，a universal war of devastation，had cut off the supply of every means of subsistence；industry and commerce seem to be destroyed；and why？Because there is too much civilisation，too much means of subsistence，too much industry，too much commerce.The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property；on the contrary，they have become too powerful for these conditions.And how does the bourgeoisie get over these crises？On the one hand by enforced destruction of a mass of productive forces，On the other hand，by the conquest of new markets，and by the more thorough exploitation of the old ones.That is to say，by paving the way for more extensive and more destructive crises，and by diminishing the means whereby crises are prevented.
A few years later，in the Grundrisse，Marx was writing of“the violent destruction of capital not by relations external to it，but rather as a condition of its self-preservation”.In other words，he establishes a necessary link between the generative or creative forces of production in capitalism and the destruction of capital value as one of the key ways in which capitalism attempts to overcome its internal contradictions.
These contradictions lead to explosions，cataclysms，crises，in which momentaneous suspension of labour and annihilation of agreat portion of capital violently lead it back to the point where it is enabled fully employing its productive powers without committing suicide.
In the Theories of Surplus Value，Marx refines this theory to distinguish between scenarios where the destruction of（commodity）values affects either use values or exchange values or both together.The destruction of exchange value combined with the preservation of use value presents clear opportunities for new capital investment and hence for the repetition of the production-devaluation cycle：the destruction of capital through crises means the depreciation of values which prevents them from later renewing their reproduction process as capital on the same scale.This is the ruinous effect of the fall in the prices of commodities.It does not cause the destruction of any use-values.What one loses，the other gains.Values used as capital are prevented from acting again as capital in the hands of the same person.The old capitalists go bankrupt.A large part of the nominal capital of the society，i.e.，of the exchange-value of the existing capital，is once for all destroyed，although this very destruction，since it does not affect the use-value，may very much expedite the new reproduction.This is also the period during which moneyed interest enriches itself at the cost of industrial interest.
Social geographer David Harvey sums up the differences between Marx's usage of these concepts and Schumpeter's：“Both Karl Marx and Joseph Schumpeter wrote at length on the‘creative-destructive’tendencies inherent in capitalism.While Marx clearly admired capitalism's creativity he strongly emphasized its self-destructiveness.The Schumpeterians have all along gloried in capitalism's endless creativity while treating the destructiveness as mostly a matter of the normal costs of doing business.”