While “creative destruction” is a deeply ambivalent phrase, the word “disruption” is frequently positioned as something to be explicitly celebrated. It becomes something to be taught and striven for. And where Schumpeter’s perspective of the business cycle assumes a kind of Olympian view from above, disruption puts us in the trenches, presumably on the side of the attacker rather than the stalwart. While creative destruction was neutral on whether whatever was getting creatively destroyed deserved it, anything that is getting disrupted had it coming.
But there is a less obvious shift in usage, especially when we turn specifically to contemporary thinking about disruption. Schumpeter proposed creative destruction as a concept that applies to the business cycle. Companies dominate the market, are challenged by other companies that operate entirely differently, and are displaced. But today’s rhetoric of disruption frequently applies to things other than companies. This is why people like Peter Thiel are so intent on claiming that higher education, say, or health care as a whole, or government are oligopolies or even monopolies. Schumpeter almost certainly would have looked at Blockbuster’s gradual defeat by Netflix—a rival it never saw coming, a rival that when threatened it didn’t take seriously and even refused to buy when given the chance—as a textbook case of creative destruction. But is the same true for your local travel agency, record store, and pharmacist? Is it true of the postal service or the regional bus company? Disruption is a concept that draws combatants into an arena they had no idea they were entering.
The rhetoric of disruption frequently creates solidity, stability, and uniformity where they didn’t exist. Just as kvetching over political correctness often requires the invention of the restrictions and pieties which it sees itself as engaged in a titanic struggle against, so the disrupter portrays even the most staid cottage industry as a Death Star against which its plucky rebels have to do battle. Misperceiving, misunderstanding, or simply ignoring the industry one is seeking to disrupt seems, if not necessary, then at least no impediment to disrupting it. The world is out there, stupid and driven by habits. You just graduated from college and have had a credit card for three years. You’re still on your parents’ car insurance. Would the world in that situation not seem like one large opportunity for disruption?
Friedrich Nietzsche once wrote that “forgetfulness is a property of all action.” If I could clearly see what everyone had done before me and what the consequences were, I would never act. To act decisively, Nietzsche proposed, requires a moment of egocentrism, “drawing a limited horizon round one’s self,” the power to be “super-historical.” Disruption is premised on creative amnesia, on a productive or at least profitable disregard for details. Sometimes what comes out at the other end is a Tesla Model 3. Sometimes it’s a Hutzler 571 banana slicer. The way the concept is used today is deeply suspicious of any cumulative force of progress. This despite the fact that while stories of gradual progress aren’t as exciting as stories of people just flipping the game board, they actually end up describing the world we live in fairly well.
Disruption depends on regarding people as participating in the business cycle who insist that they’re doing no such thing—another aspect of creative destruction that actually retains a lot of the idea’s Marxist DNA. And it depends on an extension of the sense in which the terms “monopoly” or “oligopoly” can be applied. Did big taxi companies once dominate personal transportation, or did thousands of individual cabbies who were barely making ends meet? Did Yelp disrupt the oligopoly of people having an opinion? The term “disruption” makes a monolith of the particulars of the everyday, a leviathan out of structures and organizations that are old, have grown up organically, and are therefore pretty scattered and decentralized.
Think about the peculiar alchemy involved in talking about how Google disrupted the media landscape: suddenly the hundred-billion-dollar company is a scrappy underdog and a magazine with forty employees is a Big Bad Monopolist. The problem of scale is central to the tech industry more generally. We approach the economy with a certain sense of dimension. We know what the iconography of economic power looks like. It’s pretty central to the success of the tech industry that it confuses that sense of dimension and refuses the iconography.
The final distortion the rhetoric of disruption introduces concerns where society and the state lend their support. For Schumpeter, creative destruction comes from challengers who are able to spontaneously expand or change the playing field. But what happens when disruption itself becomes institutionalized? Today’s plucky rebels are funded by billionaires, can go into massive debt if they need to, are supported by regulatory bodies they or their business school buddies have long ago captured, and are encouraged in their attacks by people who have wanted to get rid of unions and regulation all along. They are outsiders in only a very limited sense, or, not to put too fine a point on it, about as much as the horse was a victory gift to Troy.
And while it’s hard to look at a company like Blockbuster and cheer it on in thinking that the market it found would remain uniform forever, it’s also strange to look at companies like Uber and cheer them on in thinking that government regulation will eventually need to adjust to support their business model. For the upshot of the disrupter’s super-historical impulse is the expectation that, rather than your idea conforming to the world in some manner, the world ought to accommodate the sheer genius of your idea.
When Mad Money’s Jim Cramer had Elizabeth Holmes on his show after
