[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.85,0:00:04.19,Default,,0000,0000,0000,,[Music]
Dialogue: 0,0:00:08.61,0:00:10.41,Default,,0000,0000,0000,,Hello. I'm Philip Coelho,
Dialogue: 0,0:00:10.41,0:00:13.44,Default,,0000,0000,0000,,I'm an economic historian at \NBall State University.
Dialogue: 0,0:00:13.44,0:00:15.13,Default,,0000,0000,0000,,Today, I'm here to talk about
Dialogue: 0,0:00:15.13,0:00:16.19,Default,,0000,0000,0000,,creative destruction.
Dialogue: 0,0:00:16.19,0:00:18.79,Default,,0000,0000,0000,,Economists talk a great deal \Nabout the term
Dialogue: 0,0:00:18.79,0:00:21.57,Default,,0000,0000,0000,,creative destruction. Creative destruction
Dialogue: 0,0:00:21.57,0:00:23.82,Default,,0000,0000,0000,,is a centerpiece for modern thinking
Dialogue: 0,0:00:23.82,0:00:26.23,Default,,0000,0000,0000,,about how economies evolve, but
Dialogue: 0,0:00:26.23,0:00:27.72,Default,,0000,0000,0000,,what is creative destruction?
Dialogue: 0,0:00:27.96,0:00:31.38,Default,,0000,0000,0000,,It seems somewhat of an oxymoron.
Dialogue: 0,0:00:31.38,0:00:35.19,Default,,0000,0000,0000,,[Shattering glass] [Quiet music]
Dialogue: 0,0:00:35.19,0:00:37.19,Default,,0000,0000,0000,,Well, not quite. Creative destruction is
Dialogue: 0,0:00:37.19,0:00:38.27,Default,,0000,0000,0000,,an economic principle
Dialogue: 0,0:00:38.27,0:00:41.29,Default,,0000,0000,0000,,that an economist, Joseph Schumpeter,
Dialogue: 0,0:00:41.29,0:00:43.08,Default,,0000,0000,0000,,observed in 1942.
Dialogue: 0,0:00:44.77,0:00:46.87,Default,,0000,0000,0000,,The opening up of new markets, foreign
Dialogue: 0,0:00:46.87,0:00:49.38,Default,,0000,0000,0000,,or domestic, the organizational \Ndevelopment
Dialogue: 0,0:00:49.38,0:00:51.16,Default,,0000,0000,0000,,from the craft shop and factory
Dialogue: 0,0:00:51.16,0:00:53.46,Default,,0000,0000,0000,,illustrate the same process of industrial
Dialogue: 0,0:00:53.46,0:00:56.18,Default,,0000,0000,0000,,mutation that incessantly \Nrevolutionizes the
Dialogue: 0,0:00:56.18,0:00:57.70,Default,,0000,0000,0000,,economic structure from within,
Dialogue: 0,0:00:57.70,0:01:00.23,Default,,0000,0000,0000,,incessantly destroying the old one,
Dialogue: 0,0:01:00.23,0:01:02.72,Default,,0000,0000,0000,,incessantly creating a new one. The
Dialogue: 0,0:01:02.72,0:01:04.58,Default,,0000,0000,0000,,process of creative destruction is the
Dialogue: 0,0:01:04.58,0:01:06.30,Default,,0000,0000,0000,,essential fact about capitalism.
Dialogue: 0,0:01:06.30,0:01:08.73,Default,,0000,0000,0000,,It is what capitalism consists of
Dialogue: 0,0:01:08.73,0:01:10.93,Default,,0000,0000,0000,,and what every capitalist concern
Dialogue: 0,0:01:10.93,0:01:13.76,Default,,0000,0000,0000,,has got to live in. What do you mean \Nby that?
Dialogue: 0,0:01:13.76,0:01:15.33,Default,,0000,0000,0000,,Step back a second and see if
Dialogue: 0,0:01:15.33,0:01:16.96,Default,,0000,0000,0000,,what Schumpeter said over
Dialogue: 0,0:01:16.96,0:01:19.22,Default,,0000,0000,0000,,70 years ago can still be applied today.
Dialogue: 0,0:01:19.22,0:01:22.23,Default,,0000,0000,0000,,Take the ice industry in the \NUnited States,
Dialogue: 0,0:01:22.23,0:01:24.48,Default,,0000,0000,0000,,for example. Ice production has had
Dialogue: 0,0:01:24.48,0:01:26.30,Default,,0000,0000,0000,,a very interesting and unique history
Dialogue: 0,0:01:26.30,0:01:28.86,Default,,0000,0000,0000,,over the past several hundred years. Today,
Dialogue: 0,0:01:28.86,0:01:31.52,Default,,0000,0000,0000,,Americans consume tens of thousands
Dialogue: 0,0:01:31.52,0:01:33.60,Default,,0000,0000,0000,,of tons of ice every day.
Dialogue: 0,0:01:33.60,0:01:35.98,Default,,0000,0000,0000,,Ice consumption has become a regular
Dialogue: 0,0:01:35.98,0:01:38.97,Default,,0000,0000,0000,,part of the American daily life, as ice
Dialogue: 0,0:01:38.97,0:01:40.60,Default,,0000,0000,0000,,has hundreds of uses, including
Dialogue: 0,0:01:40.60,0:01:43.28,Default,,0000,0000,0000,,keeping food and drinks cold and icing
Dialogue: 0,0:01:43.28,0:01:45.61,Default,,0000,0000,0000,,injuries. Ice has not always been
Dialogue: 0,0:01:45.61,0:01:47.81,Default,,0000,0000,0000,,this readily available to the \Naverage person.
Dialogue: 0,0:01:47.81,0:01:50.84,Default,,0000,0000,0000,,Back in the 16th century, \Nwealthy individuals
Dialogue: 0,0:01:50.84,0:01:52.79,Default,,0000,0000,0000,,would build personal ice houses
Dialogue: 0,0:01:52.79,0:01:54.66,Default,,0000,0000,0000,,on their property, cutting ice from
Dialogue: 0,0:01:54.66,0:01:57.36,Default,,0000,0000,0000,,nearby lakes and ponds in the \Nwinter months
Dialogue: 0,0:01:57.36,0:01:59.13,Default,,0000,0000,0000,,and transporting them to ice houses,
Dialogue: 0,0:01:59.13,0:02:01.66,Default,,0000,0000,0000,,storing it for use during the \Nsummer months.
Dialogue: 0,0:02:01.66,0:02:05.06,Default,,0000,0000,0000,,The commercial ice trade then began around
Dialogue: 0,0:02:05.06,0:02:07.78,Default,,0000,0000,0000,,1800 in the United States. Large-scale
Dialogue: 0,0:02:07.78,0:02:10.34,Default,,0000,0000,0000,,ice mining operations sprang up,
Dialogue: 0,0:02:10.34,0:02:12.03,Default,,0000,0000,0000,,concentrated mostly in New England.
Dialogue: 0,0:02:12.03,0:02:14.49,Default,,0000,0000,0000,,These ice producers transferred ice
Dialogue: 0,0:02:14.49,0:02:16.32,Default,,0000,0000,0000,,throughout the United States and much
Dialogue: 0,0:02:16.32,0:02:19.39,Default,,0000,0000,0000,,of the Caribbean. By 1818, \Nice was fetching
Dialogue: 0,0:02:19.39,0:02:21.22,Default,,0000,0000,0000,,nearly 25 cents per pound in the
Dialogue: 0,0:02:21.22,0:02:24.38,Default,,0000,0000,0000,,United States. That seems kind of
Dialogue: 0,0:02:24.38,0:02:27.43,Default,,0000,0000,0000,,affordable, 25 cents per pound. Well,
Dialogue: 0,0:02:27.43,0:02:29.29,Default,,0000,0000,0000,,compare that with what ice costs today.
Dialogue: 0,0:02:29.29,0:02:32.04,Default,,0000,0000,0000,,Ice currently costs about \N10 cents per pound,
Dialogue: 0,0:02:32.04,0:02:34.08,Default,,0000,0000,0000,,even though we've seen inflation
Dialogue: 0,0:02:34.08,0:02:36.54,Default,,0000,0000,0000,,approximately 1,800% since then.
Dialogue: 0,0:02:36.54,0:02:38.48,Default,,0000,0000,0000,,The average income per capita
Dialogue: 0,0:02:38.48,0:02:40.46,Default,,0000,0000,0000,,in the United States in 1818 was
Dialogue: 0,0:02:40.46,0:02:44.46,Default,,0000,0000,0000,,$1,919 per year. Comparing that with the
Dialogue: 0,0:02:44.46,0:02:46.36,Default,,0000,0000,0000,,United States today it is
Dialogue: 0,0:02:46.36,0:02:50.81,Default,,0000,0000,0000,,$49,965. What does it mean?
Dialogue: 0,0:02:50.81,0:02:53.33,Default,,0000,0000,0000,,Well, if we look at the price
Dialogue: 0,0:02:53.33,0:02:55.43,Default,,0000,0000,0000,,of ice as a percentage of income today
Dialogue: 0,0:02:55.43,0:02:58.23,Default,,0000,0000,0000,,compared to 1818, we found that one pound
Dialogue: 0,0:02:58.23,0:03:00.15,Default,,0000,0000,0000,,of ice took more than 65 times
Dialogue: 0,0:03:00.15,0:03:03.46,Default,,0000,0000,0000,,more income in 1818 than it does today.
Dialogue: 0,0:03:03.46,0:03:06.16,Default,,0000,0000,0000,,That is, if you buy ice commercially.
Dialogue: 0,0:03:06.16,0:03:08.33,Default,,0000,0000,0000,,In-home ice production is even cheaper.
Dialogue: 0,0:03:08.33,0:03:11.48,Default,,0000,0000,0000,,This means that in 1800's, ice
Dialogue: 0,0:03:11.48,0:03:13.88,Default,,0000,0000,0000,,could only be afforded by the wealthiest
Dialogue: 0,0:03:13.88,0:03:16.39,Default,,0000,0000,0000,,of individuals, and even then, only in a
Dialogue: 0,0:03:16.39,0:03:17.37,Default,,0000,0000,0000,,limited capacity.
Dialogue: 0,0:03:17.37,0:03:19.33,Default,,0000,0000,0000,,Well, now that we've established how much
Dialogue: 0,0:03:19.33,0:03:22.08,Default,,0000,0000,0000,,cheaper ice is than it was 200 years ago,
Dialogue: 0,0:03:22.08,0:03:24.49,Default,,0000,0000,0000,,let's look at how many people are employed
Dialogue: 0,0:03:24.49,0:03:26.04,Default,,0000,0000,0000,,in the industry over the years.
Dialogue: 0,0:03:26.04,0:03:29.08,Default,,0000,0000,0000,,In 1914, near the height of the commercial
Dialogue: 0,0:03:29.08,0:03:31.23,Default,,0000,0000,0000,,ice industry, there were more than 2,500
Dialogue: 0,0:03:31.23,0:03:33.79,Default,,0000,0000,0000,,companies producing ice, employing
Dialogue: 0,0:03:33.79,0:03:36.02,Default,,0000,0000,0000,,approximately 30,000 Americans.
Dialogue: 0,0:03:36.02,0:03:39.65,Default,,0000,0000,0000,,Then, in 1950, the automatic ice maker was
Dialogue: 0,0:03:39.65,0:03:43.65,Default,,0000,0000,0000,,developed. By 1965, its use was widespread
Dialogue: 0,0:03:43.65,0:03:46.48,Default,,0000,0000,0000,,throughout the United States. \NThis innovation
Dialogue: 0,0:03:46.48,0:03:48.39,Default,,0000,0000,0000,,dramatically changed ice production in
Dialogue: 0,0:03:48.39,0:03:50.87,Default,,0000,0000,0000,,the commercial ice industry. \NToday, the ice
Dialogue: 0,0:03:50.87,0:03:52.87,Default,,0000,0000,0000,,industry is vastly different. The majority
Dialogue: 0,0:03:52.87,0:03:54.90,Default,,0000,0000,0000,,of ice is now being produced by personally
Dialogue: 0,0:03:54.90,0:03:56.90,Default,,0000,0000,0000,,owned ice makers. With the onset of home
Dialogue: 0,0:03:56.90,0:03:58.86,Default,,0000,0000,0000,,ice makers, thousands of ice workers lost
Dialogue: 0,0:03:58.86,0:04:01.75,Default,,0000,0000,0000,,their jobs. Today, there are about 500
Dialogue: 0,0:04:01.75,0:04:03.05,Default,,0000,0000,0000,,commercial ice producers
Dialogue: 0,0:04:03.05,0:04:06.52,Default,,0000,0000,0000,,that employ just over 7,000 workers.
Dialogue: 0,0:04:06.52,0:04:10.52,Default,,0000,0000,0000,,That is more than a 75% decrease \Nin employment
Dialogue: 0,0:04:10.52,0:04:13.80,Default,,0000,0000,0000,,in the ice industry from 1914 to today.
Dialogue: 0,0:04:14.78,0:04:17.78,Default,,0000,0000,0000,,This is creative destruction on \Nfull display
Dialogue: 0,0:04:17.78,0:04:20.20,Default,,0000,0000,0000,,in the modern day. The massive ice
Dialogue: 0,0:04:20.20,0:04:22.44,Default,,0000,0000,0000,,industry of the early 1900's would
Dialogue: 0,0:04:22.44,0:04:24.00,Default,,0000,0000,0000,,be replaced through innovation,
Dialogue: 0,0:04:24.00,0:04:26.04,Default,,0000,0000,0000,,and now we enjoy a much higher standard
Dialogue: 0,0:04:26.04,0:04:27.23,Default,,0000,0000,0000,,of living because of it.
Dialogue: 0,0:04:27.23,0:04:29.73,Default,,0000,0000,0000,,Consuming more ice at a lower price
Dialogue: 0,0:04:29.73,0:04:32.05,Default,,0000,0000,0000,,and a higher quality than we ever have
Dialogue: 0,0:04:32.05,0:04:34.82,Default,,0000,0000,0000,,had before. Even though thousands
Dialogue: 0,0:04:34.82,0:04:36.70,Default,,0000,0000,0000,,of jobs were lost in the process,
Dialogue: 0,0:04:36.70,0:04:38.29,Default,,0000,0000,0000,,society as a whole has been made
Dialogue: 0,0:04:38.29,0:04:40.58,Default,,0000,0000,0000,,better off. Schumpeter knew that
Dialogue: 0,0:04:40.58,0:04:42.73,Default,,0000,0000,0000,,at times the process of \Ncreative destruction
Dialogue: 0,0:04:42.73,0:04:45.57,Default,,0000,0000,0000,,on society would be painful, \Nespecially in the short run.
Dialogue: 0,0:04:45.57,0:04:48.60,Default,,0000,0000,0000,,Creative destruction occurs in all
Dialogue: 0,0:04:48.60,0:04:50.25,Default,,0000,0000,0000,,kinds of industries today,
Dialogue: 0,0:04:50.25,0:04:52.82,Default,,0000,0000,0000,,and some individuals might be \Nmade worse off,
Dialogue: 0,0:04:52.82,0:04:54.22,Default,,0000,0000,0000,,not just in the short-term
Dialogue: 0,0:04:54.22,0:04:56.03,Default,,0000,0000,0000,,but perhaps throughout their lives.
Dialogue: 0,0:04:56.03,0:04:59.13,Default,,0000,0000,0000,,But he also knew that without creative
Dialogue: 0,0:04:59.13,0:05:00.57,Default,,0000,0000,0000,,destruction that our economies
Dialogue: 0,0:05:00.57,0:05:02.14,Default,,0000,0000,0000,,would stagnate and we would never
Dialogue: 0,0:05:02.14,0:05:03.71,Default,,0000,0000,0000,,experience the growth and
Dialogue: 0,0:05:03.71,0:05:04.87,Default,,0000,0000,0000,,higher living standards
Dialogue: 0,0:05:04.87,0:05:06.23,Default,,0000,0000,0000,,that this process enables.
Dialogue: 0,0:05:08.08,0:05:28.90,Default,,0000,0000,0000,,[Music]