#112 Creative Destruction

Good evening, and happy Sunday!

This edition is a tale of two halves: drafted on one of the best-suited aircraft types for writing with pen and paper —an Airbus A350 to Madrid —and on one of the least suited —an ATR 72 (small propeller plane) to the Isle of Man.

The 20th-century economist Joseph Schumpeter once described capitalism as “the perennial gale of creative destruction”, a process through which innovation dismantles the old to make way for the new. New technologies and ideas destroy outdated models, but economies and societies benefit as capital flows to more productive uses.

I’ve been revisiting this concept at work, writing about artificial intelligence and financial market bubbles. Outside of work, I’ve been thinking about how the same forces operate within us.

Every day is a new opportunity

A thought that gives me great optimism and confidence in the trajectory of my life is knowing that I can wake up each morning and decide who I want to be that day. Any one of us can.

The beauty of the human mind is that a change in worldview changes the world viewed. Shifting our thoughts can radically change our experience of life. We have far more agency than we realise, but often we hold ourselves back.

Creative destruction of the self

Our sense of self isn’t fixed; it’s an evolving ecosystem of beliefs, habits, relationships, and identities competing for our time and attention. Some parts thrive, others quietly hold us back. Yet rather than allow them to fade, we often sustain them out of familiarity or sentiment, maintaining patterns that no longer serve us simply because they once did.

In economics, legacy industries resist disruption because they’ve invested too much in the past. We do the same. We defend outdated versions of ourselves—the achiever, the pleaser, the tough one—because they once kept us safe or made us successful. But what once produced growth can become a drag.

The brain on safety

Neuroscience shows that every repeated thought or behaviour strengthens specific neural pathways. They become efficient and automatic, even when they no longer serve us. To change, we must prune these old circuits so new ones can form; a process the brain initially experiences as discomfort or confusion.

Our brains are prediction engines. They minimise uncertainty by favouring the familiar, because unpredictability is metabolically costly and psychologically uncomfortable. This is why we cling to routines and consistent stories about ourselves. Behaviourally, it shows up as the status quo bias and loss aversion: we prefer the known to the unknown, even when change might serve us better.

This tendency preserves stability, but it can also limit growth.

Chaos before clarity

Growth often feels chaotic before it feels clear. During moments of transition, the old self dissolves faster than the new one can take shape. But beneath the surface, reallocation is happening: energy once locked in maintaining the old is being freed for something new.

Psychologists call this identity reconstruction; the rebuilding of one’s narrative after disruption. Just as markets find new equilibrium, the self reorganises around new meaning. Our brain’s plasticity, and our capacity for reframing, make reinvention entirely possible if we will it so.

Still, it requires courage. Creative destruction is rarely gentle. It asks us to release stories that once defined us and to admit that who we were no longer fits who we’re becoming.

The danger, of course, lies in constant reinvention without reflection; burning everything down without asking what should endure. The task isn’t simply to decide who you no longer want to be, but to refocus energy on who you wish to become.

An invitation

Look at your own life: your habits, beliefs, relationships.
Ask yourself: what part of me needs to end so that something better and more aligned with me at my core can begin?

Because sometimes, the most important innovation is internal.
In capitalism, destruction fuels progress.
In the self, it fuels becoming.

— AJ

On my bedside table:

🎙Podcast: The Knowledge Project - Daniel Kahneman: Algorithms make better decisions than you (Spotify) - One of the founding fathers of behavioural economics, this is one of Kahneman’s final podcasts. He passed away in 2024 at the age of 90.

💬 Quote: “There is only one success—to be able to spend your life in your own way.”

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