(A) Social Policy, Transfers and Entitlements

By Phil Gramm and Michael Solon – Feb. 5, 2026 – Societal gains from technological change come from what the economist Joseph Schumpeter called “the wave of creative destruction.” The lost jobs and investments rendered unprofitable by new technology free up labor and capital that can be redeployed to produce new and higher-valued goods and services. The more seamlessly the transition from the old to the new, the greater the gain from the new technology. “American exceptionalism,” our ability to generate and sustain higher living standards, has come in part from developing new technology and benefiting from being the first to implement it, and in part from our ability to move labor and capital dislocated by the wave of creative destruction efficiently into higher and better uses. Read More