I have thought a lot about the pattern of innovation. It becomes
strongest during depressions, which are the times when the system orders
itself. You get some innovation during the booms when shortages appear,
but nothing compared to the crunch time.
The Schumpeter idea is that the booms get out of hand and the depressions
sort things out. This creates "stability", but only if the system
weathers the depression.
In this 30s this theory was called liquidationism.
Keynes' theory turned its back on this idea and pretended that you could
get uninterrupted growth -- at least in the U.S. version of Keynesianism.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 916-898-5321
E-Mail michael@ecst.csuchico.edu