Innovation, for what effect? Reflections with Schumpeter and Polanyi

Synonymous with growth and perpetual change for Joseph Schumpeter, innovation leads to social disintegration for his colleague Karl Polanyi. Two economists look at the consequences of inventions in a market economy.

What on earth could the Spinning Jenny—the famous spinning machine invented in England in 1764—possibly have in common with a digital camera? Not much, at first glance. Yet the phenomena behind these two innovations gave rise to an economic theory that is still taught today in universities.

In his book *Capitalism, Socialism, and Democracy*, published in 1942, the Austrian economist and anthropologist Joseph Schumpeter reportedly referred to both as «product innovations.» Driven by entrepreneurs, these two inventions b