Creative Destruction:Dodge Division

Joseph Schumpeter had a brilliant economic theory a case study of which should be the Dodge car company. Here a biographer’s description of Creative Destruction.

 “Schumpeter’s signature legacy is his insight that innovation in the form of creative destruction is the driving force not only of capitalism but of material progress in general. Almost all businesses, no matter how strong they seem to be at a given moment, ultimately fail and almost always because they failed to innovate.”

Chrysler and Dodge resisted making fuel efficient cars so long that the only incentive they have left is to sell you subsidized gas for three years. That’s pathetic.

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0 Responses to Creative Destruction:Dodge Division

  1. Kris says:

    And before anyone gets the idea that this might be a great deal for buyers, here are a couple of analyses of the deal from the consumer point of view: (Consumer Reports)

    The verdict from both is not very positive, especially in the long term

  2. Morgan Warstler says:


  3. Morgan Warstler says:

    Jon, sorry I’m unable to post in other threads. Weird huh? My data all comes from you favorite source.

    Rich are happier than poor:

    Conservatives are happier than liberals:

    Extremists are happier than moderates, on both ends of the spectrum, but still again conservatives more than liberals:

    But it should be obvious to you, in general here, that my evidence isn’t anecdotal. I source stuff pretty aggressively. What’s weird, in this case, most all social scientists accept this work, you even note in the post, the Academy is afraid of this kind fo work, but apparently you are too… based I assume on your own anecdotal circle.

    To get a better sense of where libertarian minded folks come from, I’d urge you to read all that Freakonomics stuff. Ya know, there’s very little I disagree with from Levitt’s gang. And the guy doing much of the econ whispering in Obama’s ear, is very much this kind of guy.

    But taken in total, materialists are happier than spiritualists. And amongst spiritualists, Christians are happier than hippies. And certainly, conservatives are happier than liberals. Look, I dig on Maselow. But the truth is, almost everyone in this country is wrestling with steps 4 & 5.


    Meanwhile I do wish you’d stop hoisting the canard that that the price of oil ($125) isn’t driven in large part by China & India new demand – and OPEC. It is intellectually dispiriting to say the least. I know politically, you want to blame richie baddies (traders), and fear calling OPEC nations our enemies, for fear it will cause more war footing with them, but jesus, it is WRONG.

    Here’s some more from today’s Freakonomics, that should help make my point…

    “What’s clear is that the income elasticity of demand for quantity is less than one: when our income doubles, we don’t double the number of cars we buy, the number of beers we drink in a day, or the number of houses we own.

    The income elasticity of demand for quality must therefore be more than one: as our incomes rise, we increase the quality of what we consume. We shift from Honda Civics to Lexuses (Lexi?), Budweiser to Belgian dobbels, prefab houses to mini-mansions.

    The reason is simple: it takes time to consume quantities, while the consumption of high-quality goods takes no more time than low-quality goods; and as we get richer we have no more time — we all face 24 hours in the day.”

    You should wrap your head around that in regards to oil consumption. Materialism doesn’t equal more products consumed, it equals better products consumed. That means the same amount of gas used shipping the same amount of stuff.

    It also means that huge developing countries coming online drives the demand for oil. The projections on oil consumption, are all based on the poor becoming middle class, and we don’t have many true poor.

    You need to be intellectually honest. OPEC nations are baddies. YES, they conspire to drive uip the price of oil. YES, even in boom times, the oil companies have profit margins lower than all the other sectors of our economy. Exxon Mobile, and energy traders -the people who live next to you (your neighbors), are NOT the problem. There’s real reasons we need to be protective of the resources our economy survives on, stop refusing to blame our enemies.

    If you want to cut back on oil, you need to start by being intellectually honest.

  4. Morgan Warstler says:

    I can’t post. Don’t know why. :)

  5. Jon Taplin says:

    Morgan- The reason your post didn’t go up is that when WordPress sees so many links, it thinks it’s spam. Sorry.

    So here is the deal. I think the neoconservative philosophy that has had the whip hand on the Republican Party for 30 years is about to experience a complete rejection by the electorate. I’m going to write about it today. You are going to have to learn how to be in the loyal opposition.

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