in Austria in 1883, Joseph Schumpeter is credited for founding
evolutionary economics. His most notable work, Capitalism, Socialism and
Democracy (1942) was an essential publication concerning his theories;
most notably he predicted the eventual downfall of capitalism at the hands
Schumpeter argues that capitalism is an evolutionary
process, founded on economic change. The cause of this change comes from
new consumers' goods, new methods or production, and new forms of
innovation. With innovation comes an end to old methods and process, think
of how DVDs have replaced VHS tapes or CDs have replaced 8-track tapes.
Schumpeter calls this revolution of new inventions replacing old products
"Creative Destruction", which according to Schumpeter, is an essential
element of the capitalist economy and critical for growth and progress.
Without the patent process, the incentives to invent or develop and
research new products would be significantly less.