Alan Greenspan’s book The Age of Turbulence revisits the idea of creative destruction, and its importance in a free market economy. Harvard economist Joseph Schumpeter coined the phrase “creative destruction” in 1942, which is an idea that articulates the foundation of capitalism. Greenspan describes it like this: A market economy will incessantly revitalize itself from within by scrapping old and failing businesses and then reallocating resources to newer, more productive ones.
Numerous examples in history point to this idea: the telegraph gave way to the telephone; the tin can was victim to the aluminum can—both examples of creative destruction at work.
The reason I bring up this idea is because I continue reading more information about the Amazon Kindle, and wonder if it will generate enough interest to eventually render the standard paperback/hardcover book obsolete. After reading a few reviews and watching Amazon’s online video of the product, it seems amazing, and it’s generating lots of attention.
However, the discussion of Amazon’s Kindle came up in a class I attended this past week with mixed reviews. Many students expressed the desire to hold something tangible in their hands—like a paperback book, and questioned the Kindle’s ability to provide that “effect.” I can partially relate to this fact because I prefer hardcopy versions of online materials. When studying for tests, I’ll print out the study guide rather than simply reading it online.
It’s hard to say how the Kindle will catch on, although it’s causing a craze much like Apple’s iPhone. I doubt Schumpeter’s idea of creative destruction will eliminate books as we know them, but it’s fun to speculate, and certainly makes Amazon a thought for investment. Has anyone used the Kindle yet?