Markets were temporarily oversupplied during the high growth period from the 1870s-90s, during which time there was also a lot of creative destruction in industries like iron, which was displaced by steel, and labor, which was displaced by machinery, but re-employed because of growth.

Joseph Schumpeter saw the entrepreneur as an innovator and popularized the use of the phrase creative destruction to describe the role of entrepreneurs in changing business norms.

In his 1842 essay The Reaction in Germany, he argued in favor of the revolutionary role of negation, summed up in the phrase " the passion for destruction is a creative passion.

The producers of the film use Carl as their voice in the film, a voice of reason amid the creative destruction brought about by Gekko's unrestrained personal philosophy.

Unlike other economic growth theories, his approach explains growth by innovation as a process of creative destruction, which captures the dual nature of technological progress: in terms of creation, entrepreneurs introduce new products or processes in the hope that they will enjoy temporary monopoly-like profits as they capture markets.

At its most basic, " creative destruction " ( German: schöpferische Zerstörung ) describes the way in which capitalist economic development arises out of the destruction of some prior economic order, and this is largely the sense implied by the German Marxist sociologist Werner Sombart who 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 ( German: Vernichtung ) 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.

Although the modern term " creative destruction " is not used explicitly by Marx, it is largely derived from his analyses, particularly in the work of Werner Sombart ( whom Engels described as the only German professor who understood Marx's Capital ), and of Joseph Schumpeter, who discussed at length the origin of the idea in Marx's work ( see below ).

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:

In Hinduism, the god Shiva is simultaneously destroyer and creator, portrayed as Shiva Nataraja ( Lord of the Dance ), which is proposed as the source of the Western notion of " creative destruction ".

In philosophical terms, the concept of " creative destruction " is close to Hegel ´ s concept of sublation.

Nietzsche represented the creative destruction of modernity through the mythical figure of Dionysus, a figure whom he saw as at one and the same time " destructively creative " and " creatively destructive ".

Other 19th century formulations of this idea include Russian anarchist Mikhail Bakunin, who wrote in 1842, " The passion for destruction is a creative passion, too!

The expression " creative destruction " was popularized by and is most associated with Joseph Schumpeter, particularly in his book Capitalism, Socialism and Democracy, first published in 1942.

Three years later, in Capitalism, Socialism and Democracy, Schumpeter introduced the term " creative destruction ", which he explicitly derived from Marxist thought ( analysed extensively in Part I of the book ) and used it to describe the disruptive process of transformation that accompanies such innovation:

In more recent times, the internet has acted as a catalyst for creative destruction.

One such example is the way in which online free newspaper sites such as The Huffington Post and Zero Hedge are leading to creative destruction of the traditional paper newspaper.

Traditional French alumni networks, which typically charge their students to network online or through paper directories, are in danger of creative destruction from free social networking sites such as Linkedin and Viadeo.

David Ames Wells ( 1890 ), who was a leading authority on the effects of technology on the economy in the late 19th century, gave many examples of creative destruction ( without using the term ) brought about by improvements in steam engine efficiency, shipping, the international telegraph network and agricultural mechanization.

Though a continually innovating economy generates new opportunities for workers to participate in more creative and productive enterprises ( provided they can acquire the necessary skills ), creative destruction can cause severe hardship in the short term, and in the long term for those who cannot acquire the skills and work experience.

In terms of individuals recovering from obsolescence caused by creative destruction, when a small entity lacks sufficient resources to retrain, this can lead to an absorbing state which may persist due to information asymmetries

Hence, in this continual process of creative destruction, capitalism does not resolve its contradictions and crises, but merely " moves them around geographically ".