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Popular economic theory characterizes capitalism as “creative destruction”. The global economic recession, which caused the growth of unemployment and reduced the safety of social net, also increased the risk for employed workers to be downsized, outsourced and being laid off. The issue of the meaning and experience of work today against the background of corporative efforts to infuse the workplace with a more participative/self-directed ethos is very significant, and in this essay I tried to discuss this important issue relatively to the theory of creative destruction.
Creative destruction
First it is necessary to outline the main idea of the creative destruction theory. The developer of this theory, German sociologist Werner Sombart, and its elaborator Austrian economist Joseph Schumpeter claimed in the first half of 20th century, that capitalism is a tool or method of social change. That is why it has the dynamic nature and it can’t always be the same as well it can’t be static. It is useless to analyze the capitalism at a single point in time, because it should be examined as the dynamic process.
“ The opening up of new markets and the organizational development from the craft shop and factory to such concerns as US Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one [The process] must be seen in its role in the perennial gale of creative destruction; it cannot be understood on the hypothesis that there is a perennial lull. (Schumpeter, 1942)”
One of the main hypotheses within the Sombart-Schumpeter theory is that the evolution of capitalism can rich its culmination in the times of big corporations flourishing and than the innovations will diminish the corporative power. In that way capitalism will transform into socialism. In shot, this won’t be the result but the process, “capitalism is being killed with its achievements. (Schumpeter, 1950)”
It is interesting that the collapse of capitalism was foreseen not only by Sombart and Schumpeter but by Karl Marx, too, though he though about other reasons of the destroy of capitalism While Marx thought capitalism couldn’t survive because of economic failure, Schumpeter believed capitalism was being destroyed because of its very creative success (Elliot, 1980).
The meaning and experience of work always was the downside of creative destruction theory. The development of economics and social changes caused with it bas the irregular character, and in the periods of sudden change the previous experience can become useless. The innovations demand new sills and experience, and many workers have to acquire the necessary skills in the short time. The workers with obsolete working skills who can’t change simultaneously with changing society and participate in more productive and creative enterprises can face the serous hardships. The inner competition among the employees in some industries becomes very high and small companies, enterprises or individuals can lose their chance to survive in business. Modern economists consider insurance as the reasonable solution of this situation, because insurance can provide individuals and small business entities the sufficient resources for transformation.
Thus, while creative destruction is the main locomotive force, which makes the society wealthy, it can be destructive for separate workers. The good example is the changes in the US farming in the 20th century.
“In 1900, nearly forty of every hundred Americans worked in farming to feed a country of ninety million people. A century later, it takes just two out of every hundred workers.(Cox, Alm, 1992”. The innovations in agriculture allowed increasing the production in times, which caused the redundancy of working force. Agriculture didn’t need many workers, and workers no longer required in agriculture moved to the cities.
The situation at the beginning of new millennium is different. First, in time of corporative power the workers have less possibility for the fast change of their employer, skills, and specialization. Second, the idea of business ethics obtained the importance in business world. More and more the term “business ethics” acquires the same meaning as “company goodwill.” Nowadays, in the time of economic recession and forced staff shortening the large companies try to infuse the workplace with a more participative or self-directed ethos. This politics has double advantage: first, it allows company employees to change slightly and gradually without the necessity of sudden changes. Second, it allows company’s management to expose the most active and flexible workers among the company’s employees. These workers can be considered as the perspective candidates to the upper level position within the company. Besides, the ethical attitude of the company to its employee can improve and reinforce the reputation of the company. This issue isn’t studies sufficiently these days; however it is possible that future researches will call such policy as the first signs of socialism.
The fate of workers is the downside of the theory of the creative destruction. Shortly speaking, the labor marker has to change simultaneously with the general economics, and those workers who can’t change fast would be eliminated from the industry. However the concept of business ethics and policy of self-stimulation within the large companies makes the chance of workers higher and the entire approach more hostile, which can be considered as the first signs of future socialism.

References
Cox, W. Michael, and Richard Alm. “The Churn: The Paradox of Progress.” Federal Reserve Bank of Dallas, annual report, 1992.
Schumpeter, Joseph A. Capitalism, Socialism, and Democracy. 3d ed. 1942. New York: Harper and Brothers, 1950.
John E. Elliott. Marx and Schumpeter on Capitalism’s Creative Destruction: A Comparative Restatement. The Quarterly Journal of Economics, Vol. 95, No. 1 (Aug., 1980), pp. 45-68