Embracing Creative Destruction

Good column.

Embracing Creative Destruction - Mises Institute: "Creative destruction (Joseph Schumpeter's phrase) occurs when innovations — new technologies or business models — demolish the capital structures of well-established industries, industries that have lost the ability to satisfy the urgent wants of consumers.

This process can happen almost over night, such as when the vinyl record industry collapsed in the wake of digital music. Or, the process can slowly run its course, similar to the decades-long crumbling of a building's foundation. Here the process is akin to the way moss attaches to surface imperfections and degrades — over decades — the strength and resilience of concrete.

Just a few weeks ago, I saw a possible crack develop in an established capital structure. I found some moss on the massive concrete structure that is the lawn-care business.

The lawns of central Ohio suffered this summer due to heat and drought. Lawns were dry and brown by the end of August. Cooler, wetter weather did not arrive in September as usual; the warmth and clear skies prevailed.

To help lawns return to health, many residents hired lawn-care services to aerate their lawns. Aeration is an interesting process; a machine — the size of a stand-up, professional lawn mower — pulls plugs of turf and soil from the yard. The resulting holes reduce soil compaction and thatch, allowing water and nutrients to get to the roots of lawns that suffered for months."

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