Creative Destruction in Russia and America: The Case of Energy

An alternative explanation for the oil glut is that technical change was initiated by profit-motivated private companies for whom a price decrease was not part of their intention. They may have had no intention to hurt producers and help consumers. Other producers followed the innovators and adopted the new technology. The resulting competitive process is an example of Creative Destruction that produced net gains for the world economy, while simultaneously harming incumbent producers. Adam Smith’s famous description of the motives of a businessman is applicable: “.. he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention”.

→ Economonitor