Retrospectives: Schumpeter, David Wells, and Creative Destruction

Abstract

Joseph A. Schumpeter's celebrated theory of creative destruction was anticipated by David Wells's Recent Economic Changes (1989). In some respects, Wells's treatment is superior to that of Schumpeter. Unlike Schumpeter, who believed that monopolistic competition could maximize economic growth, Wells held that cartels or trusts were necessary to prevent capital-intensive firms from competing themselves into bankruptcy and sending the economy into a depression.