Destructionism

Not to be confused with deletionism.

For the religious theory about the afterlife, see Destructionism (religious concept).

Destructionism, as discussed by Austrian economist Ludwig Von Mises, refers to policies that consume capital but do not accumulate it. It is the title of Part V of his seminal work Socialism. Since accumulation of capital is the basis for economic progress (as the capital stock of society increases, the productivity of labor rises, as well as wages and standards of living), Von Mises warned that pursuing socialist and etatist policies will eventually lead to the consumption and reliance on old capital, borrowed capital, or printed "capital" as these policies cannot create any new capital, instead only consuming the old.

Some scholars^[1][2] note that Mises's concept can be read as a critique not only of socialist policies but also of demand-side approaches in modern economics.^[3] Because consumer demand is relatively easy to measure through accounting identities,^[4][5] while the heterogeneous nature of capital goods resists formal quantification,^[6] twentieth-century economics often favored policies that stimulate present consumption over those that encourage saving and investment.^[7] This bias towards what is more easily measurable makes demand stimulating policies more attractive both in theory and in practice. Mises argued that such measures provide only temporary gains in living standards, since they draw down the existing capital stock at the expense of future production and growth.^[8][9] Over time, this reduction in capital stock hinders future productive capacities, resulting in lower productivity, wages, and growth for later generations. It is essentially a transfer of savings to consumption; the future to the immediate present.^[10]

Mises returned to this theme again in his magnum opus Human Action when he stated:

Capital is not a free gift of nature and not a fund ready for use. It is the outcome of saving. Policies aiming at increasing consumption by reducing saving are therefore policies of capital consumption. They mean living at the expense of future generations.^[11]

Some scholars observe that policymaking often suffers from a bias toward the present. As Tyler Cowen argues in Stubborn Attachments, even a minor preference for current consumption over the future can have significant long-term consequences and divert attention from sustainable growth-oriented policies.^[10] He further notes that while long-termism is crucial, short-term considerations often dominate because “they [models] can only handle so much computationally”.^[12] He and other economists have remarked that many modern qualms such as increasing real costs, stagnating wages,^[13] and societies inability to do things that were hastily completed by previous generations^[14] are in part the result of modern man inheriting a century worth of destructionist myopic policies as the status quo.^[15][16]

See also

• Creative destruction
• Economic interventionism

References

1. Jesús Huerta de Soto. Money, Bank Credit, and Economic Cycles. (2006 English ed.)
2. Murray Rothbard. Man, Economy, and State. Ch. 8 ("Production: Entrepreneurship and Change"). Ch. 12 ("The Economics of Violent Intervention"). (1962)
3. Hans-Hermann Hoppe. A Theory of Socialism and Capitalism. (1989)
4. John Maynard Keynes. The General Theory of Employment, Interest, and Money. Chapter 3. (1936).
5. Paul Samuelson. Economics. 1st ed. (1948)
6. Robert Solow. Investment and Technical Progress. (1957)
7. Fletcher, Gordon A. (1987). The Keynesian Revolution and Its Critics. New York, N.Y: New York : St. Martin's Press. ISBN 978-0-312-45260-5.
8. Ludwig von Mises. Socialism. Part V, Ch. 35. ("Destructionism") (1922)
9. Ludwig von Mises. Human Action. Book II, Ch. 20. ("Interest, Credit Expansion, and the Trade Cycle") (1949)
10. Tyler Cowen. Stubborn Attachments. (2018)
11. Ludwig von Mises. Human Action. Book II. Ch. 21. ("Work and Wages") (1949) Yale Edition. Also appears on pp. 547 in the Mises Institute Scholars Edition.
12. "Prof Tyler Cowen says our top priorities should be maximising econ growth & stabilising civilization. Is he right?". 80,000 Hours. Retrieved 2025-08-22.
13. Economic Policy Institute, Charting Wage Stagnation in Nine Charts. epi.org, Jan 6, 2015.
14. Tabarrok, Alex (2023-02-14). "Why Is Transit Construction in the US so Expensive?". Marginal REVOLUTION. Retrieved 2025-08-25.
15. Healy A, Malhotra N. Myopic Voters and Natural Disaster Policy. American Political Science Review. 2009;103(3):387-406. doi:10.1017/S0003055409990104.
16. Liscow, Zachary; Nober, Will; Slattery, Cailin (September 2023). Procurement and Infrastructure Costs. NBER Working Paper No. 31705. National Bureau of Economic Research. doi:10.3386/w31705.

• Mises, Ludwig Von (2014). Socialism. ISBN 0-913966-63-0.