THE ORIGINS OF THE “CREATIVE DESTRUCTION” THAT ROCKED THE WORLD
by NICOLÒ ADDARIO
From an article in Italian by NICOLÒ ADDARIO Full professor of general sociology. Teaches Theory of Social Change and Innovation and Political Communication at the University of Modena and Reggio Emilia.
In the 18th century there were regions of the world (Mughal India, imperial China, the Turkish Empire) that had many of the conditions that were present in Western Europe (particularly in England and Holland), but only here did that exponential development arise and take hold that we too often take for granted.
Weber had already grasped this extraordinariness on the level of universal history, especially under the aspect of the “rationalization of the conduct of life,” which began (this was his famous thesis) with the advent of the great universal (salvation) religions, would lead, but only here in the West, to the establishment of the “spirit of modern capitalism.” Especially with the Protestant Reformation and the spread of the Puritan sects, that particular direction of rejection of the world took hold (since the seventeenth century), which, by an only apparent paradox, became an “intra-worldly asceticism.”
According to Weber’s typology, the other three forms of rejection of the world, which to a greater or lesser extent prevailed in India or China or the Islamic world, are mystical contemplation that eschews the world, mysticism that remains within the world, and extra-worldly asceticism. Of these, the former is by far the most radical, because it requires the renunciation of all attachment to the world, which creates only illusion and thus suffering. Therefore, it requires the destruction of the self, as advocated by many Hindu doctrines. Intra-worldly mystical contemplation accepts the given social order, but only because it is devoid of religious meaning.
In this case, the mystic adapts to the world because he places no value on material things; he seeks only to attain salvation. Extra-worldly asceticism, on the other hand, regards the world as corrupt and focuses on “active performances of redemption,” which are considered in conformity with the divine commandment. In contrast, infra-worldly (Puritan) asceticism is geared toward not following the prescriptions of the prevailing social order because they are considered unpalatable to god (it should be remembered that the Puritan sects considered the Anglican church corrupt and, along with the Stuart court, subservient to the Antichrist i.e., the Pope).
Intra-worldly asceticism, therefore, has the conviction that one must act in the world to transform it according to divine prescriptions actively. This form of asceticism also elaborated a highly rational theodicy (i.e., why God created evil) in the form of predestination (already present in Augustine): man cannot understand God’s purposes, he can only conform to his commandments, because only faith can make sense of the world. He can thus hope to belong to the ranks of the blessed. Grace has already been decided by God, but outside the tempus of creation and in ways inscrutable to us.
Active work in this world, however, is how men glorify God’s work, although it in itself is by no means a means of obtaining grace. Thus, the strictest self-discipline of “professional work” is simply a duty of the good believer. His success in the profession, in addition to improving the conditions of the “community of brothers” (of faith), is interpreted as a God-given “vocation.” On a psychological level, professional success is often regarded as a sign of grace received. This is also why it is insistently sought after.
In this way, the social figure of the entrepreneur was established far beyond the circle of Puritans, until it became the “spirit of capitalism,” the most widespread cultural form of legitimation of the free market economy. This, however, required a more general institutional framework that was capable of ensuring respect for property and capital investment over time, preventing the arbitrariness of constituted power. On the level of economic theory, however, an adequate conceptualization of the entrepreneurial function was lacking.
Early in the last century, Joseph Schumpeter wrote a highly original book on the theory of economic development, centering on the concept of “creative destruction.” Perhaps too hastily, we might so define it. It is a “social climate” such that there are “entrepreneurs” who innovate (in business processes or conducts, in products or markets) and thus while driving to failure many firms that had been lying on previous standards, generate a forward thrust of the entire economic system because they give rise to previously unthinkable sectors and increasing productivity. And so on for cycles that follow one another. In short, what is the source of “destruction” is at the same time the real spring of development. It should also be noted that the theory of the entrepreneur (creator and therefore at the same time destroyer of the old) did not explain why here, that is, there were such entrepreneurs in the Western capitalist economy.
What was very interesting was that for Schumpeter they were “deviants” because, compared to the economic routines established from time to time, they were going against the current. Economic theory would say that they act under conditions of “uncertainty,” where uncertainty, unlike “risk,” is not calculable in terms of the probability of success multiplied by assumed gain. It could be said that “risk” is related to the degree of freedom of competition and macroeconomic cycles, while “uncertainty” arises because of the complexity of the world, all the more so for the “deviant.” Consider the current pandemic: it was predicted by specialists but no one could predict “when, where, and what.” The complexity of the world, in turn, also depends a great deal on the kind of social structures that have been historically established.
The presence, however, of this systematic “deviance” was explained in rather vague terms. In retrospect, it can be assumed that by “social climate” Schumpeter was somehow referring to the more general social, not just economic, environment. Certainly, such an interpretation is one advocated by modern neo-institutionalism (as found in Douglass D. North, Daron Acemoglu, and many others). In my view, although in very different conceptual terms, it is a problem not unlike the one posed by Max Weber already in The Protest Ethics and the Spirit of Capitalism (1904–05). Weber emphasized that the capitalism in which he was interested was that which was properly “modern and Western,” i.e., that which is based, in a systematic way, on “acting rationally concerning purpose,” mediated by money prices formed in free markets.
Rationality, in turn, is expressed in the “organization of formally free labor” (quote from memory), without which there would be none of the “peculiarities of Western capitalism”: the universalization and scientific “technification” along with the concepts of “citizen,” bourgeoisie and proletariat. In short: without the “social ordering of the West” no rational capitalism.
Capitalist enterprises and their entrepreneurs are thus historically and geographically very particular figures. It is a very different form of capitalism from other types we encounter in the history of the world (even of the West itself, as well as in China, India, Babylon, Egypt, the Middle East, and the Mediterranean), since antiquity: capitalism of robbery or plunder, of monopoly granted by the monarch and/or protected by guilds, of a warlike character with the imposition of tribute and real plunder. In the definition of the Middle Ages as a time of “dark ages,” there was a certain exaggeration. But from the perspective of the great leap represented by Western modernity, it was perhaps not an entirely wrong definition.
All these themes are at the heart of the later Sociology of Religion (which has remained unfinished as it lacks the parts on Islam, early Christianity, and an in-depth study of ancient Judaism that he had planned). It includes, at the opening of the first volume, The Protestant Ethic. Almost all of its chapters had been published (between 1915 and 1919) in the journal he edited (with W. Sombart and E. Jaffé). The part published in the other magnum opus, Economy and Society, is also posthumous. In this work, the (historical) connection between rationalization and types of social orderings in the world is explored in depth, especially about forms of power. In addition, the “evolutionary” dimension of religious forms of rationalization of the world (starting with “magic”) is mentioned several times, especially in the chapter on the sociology of religion.
We cannot go into the merits of this evolutionary dimension here, except to point out that “Evolutionary Economics” has developed considering an evolutionary approach linked significantly with the conception of “creative destruction.” It should be emphasized that this “generalized Darwinism” is neither a biological reductionism nor a mere metaphor. By now it is well known, not only to economic science, how important innovation (precisely in the sense of “creative deviance”) is in explaining one of the basic features of the society we merely call “modern.” A term, this, which in itself says very little (modern was also spoken of in the early Renaissance). In any case, the idea of social evolution has also spread to other disciplines, as much in political science as in sociology.
Even in historiography, some authors emphasize the often decisive role played by contingency (a kind of unpredictable correlation between “chance and necessity,” as biologists say). There are authors (such as Paul Veyne) who deny that there is, in concrete history, that “red thread” that believes the writer of history already knows how it turned out. From a sociological point of view, however, it is possible and perhaps more useful to look far less at aspects of mathematical modeling to focus, on the one hand, on a deeper evolutionary conceptualization and, on the other hand, on the lessons of comparative history. The importance of religion in the relationship between man and the world has also already been emphasized by leading anthropologists (since the time of Marx). The most recent studies confirm this hypothesis.
In our perspective, the basic question remains the same: “Why the European Miracle? Why not in China or India?” This was precisely what Weber asked with his hypothesis on rationalization. He thought that rationalization created tension with other “social spheres.” In the path, quite divergent from those taken in the rest of the world and which, from this tension, leads to Puritan intra-Worldly asceticism, the spheres of life increasingly separate themselves from religion, to operate only based on their own “legality,” that is, orienting themselves to a “logic” peculiar to the “functions” of each of these “spheres.” Perhaps we are moving in the direction of an increasing mechanicity of life (the famous “steel cage”). It may also be true that from the perspective of the individual man, only religion or faith (as a “political utopia”) can give meaning to life. It is not for us to judge, although we know that political utopias have only produced disasters of inhumanity.
Evolution has neither a purpose nor a predetermined direction. It proceeds by “punctuated leaps” and offshoots: world history, as Weber has well shown with the nexus of intra-worldly asceticism and capitalist rationality that is completely detached from its religious premises, goes its way. The branches of this evolutionary history, and on which we stand, are also the product of our actions, but, as Marx said, we did not choose them at all. Moreover, their results are “unintentional emergent effects of intentional actions.”
