The Moral Alibi of Progress

The Nobel Prize in Economics this year went to three economists — Philippe Aghion, Peter Howitt, and Joel Mokyr — for their work on “creative destruction.”

It’s a phrase that sounds exciting, almost poetic. Innovation replaces the old with the new. Progress marches on. The world renews itself through disruption.

But the idea isn’t new. Joseph Schumpeter coined “creative destruction” nearly a century ago. So why does it feel like it’s being rediscovered — and rewarded — now?

Reading the Nobel committee’s statement, I couldn’t shake the sense that this was less about new insight and more about reaffirming an old story: that growth — measured by GDP — is the ultimate sign of progress. That if we just innovate faster, the rest will take care of itself.

Except we know that’s not true. GDP doesn’t tell us how people actually live. It doesn’t measure the cost of anxiety, debt, or displacement. Nor does GDP measure the invisible labor that keeps the world running: the care work done at home, the raising of children, the tending of the sick and elderly, the unpaid teaching and nurturing that sustain communities. None of it counts as “productive.” In the language of economics, it vanishes.

Nor does this framework account for the growing dominance of financial markets. The Nobel committee’s background note points to the unprecedented acceleration of GDP growth in the twentieth century compared to all of human history — as if innovation alone could explain it. Yet it makes little mention of the parallel explosion of financial markets over the same period: the rise of speculative capital, securitization, and leverage that magnified both wealth and fragility.

Credit cycles, bubbles, and financial engineering now dictate who gets to innovate and who gets left behind. Thomas Piketty showed that financial returns have long outpaced real economic growth, meaning capital grows faster than the economy itself. Yet Piketty, who exposed the mechanics of inequality with empirical precision, has never won a Nobel. Perhaps because his work questions the very premise that growth, in itself, is good.

These contradictions are most apparent in the tech sector. The same companies now evangelizing “AI-driven productivity” are often engaged in circular financial deals that inflate valuations without producing tangible public value. AI excitement is buoyed by companies investing in their own customers, buying their own compute credits, and counting speculative hype as innovation. The metrics of “growth” may expand, but the measure of social output — the quality of education, health, creativity, care — remains ambiguous at best, stagnant at worst.

The prize, then, begins to feel less like recognition of truth and more like reinforcement of faith, i.e., faith in the moral virtue of disruption. It suspiciously echoes the refrain of AI companies insisting that “change is inevitable,” that our job is simply to adapt. The machinery will evolve, they say. The destruction is creative; just trust the process.

It’s not that the Nobel winners are wrong. Their models capture something real about how economies evolve. But when we celebrate growth without asking what grows, and at whose expense, we risk mistaking movement for meaning.

Maybe the more honest question is this:

Has creative destruction become a moral alibi? A myth to romanticize a system that destroys far more than it creates?