When Austrian-born American economist Joseph Schumpeter spoke of creative destruction, he was referring to cycles of innovation in industry as new technologies displaced older, less efficient ones. As a new technology gained the upper hand, older industries died out, giving rise to a period of disruption and major unemployment.
In a chapter in his book Capitalism, Socialism and Democracy, Schumpeter writes: “The same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of creative destruction is the essential fact about capitalism,” he said. Schumpeter was more right than he knew, not only about industrial mutation, but in regard to natural mutation. As a passionate environmentalist, I would assert that Schumpeter’s insight is primarily applicable to natural systems. More than 60% of the world’s wealth is embedded in nature and natural systems. Heedless of that, we, in developed industrial societies and all aspiring, developing industrial societies, are recklessly plundering our planet’s natural resources in order to fuel economic growth; in pursuit of the cachet of success, of material wealth far beyond basic human needs of food, clothing and shelter.
Studies show that most forest trees need to be exposed to fire every 50 to 100 years to invigorate new growth. Epidemiologists have long predicted pandemics like the current one, but societies at large have been too busy chasing prosperity to pay much attention. Now that Nature has targeted humanity with some creative destruction of its own, it’s up to us to learn the lessons of the forest; clearing away the dead wood of outdated industrial practices, investing in lifestyles and technologies that eliminate waste and support planetary health.
What need for annual trillion dollar subsidies for fossil fuels when 99% of scientific studies say we should stop carbon emissions? What need for continued economic growth when wealth accrues to the 1% of the population and leaves the other 99% behind? What need for new technologies when the best ones currently available are not being used widely enough?
Political leaders won’t ask us these questions. We must ask it of them. Our survival as a species depends on it.
Growing up in a country where English was the language of higher education, I inherited an Anglo-centric view of most developments in science and technology. For example, thinking about the history of printing, the names of Johannes Gutenberg and William Caxton came to mind. When I mentioned Caxton to a German friend, they looked blank, having only heard of Gutenberg. Six hundred years before Gutenberg and Caxton, however, there were nameless Chinese monks who used carved wooden blocks coated with ink to print Buddhist texts. Subsequently, movable metal type was used in both China and Korea, two hundred years before Gutenberg’s printing press.
Language matters! The point was driven home to me when I travelled in Central Europe in the 1970s and came across a book. Lightning in his hand: the life story of Nikola Tesla. I read about his discoveries and inventions and thought, it couldn’t possibly be true. Most of these were Edison’s discoveries. The light bulb. The generator. Alternating current. Wrong on all counts apparently. Edison merely perfected the lightbulb and was a savvy marketer. He was also not above using dirty tricks to discredit competition. He is said to have publicly electrocuted dogs and cats with alternating current (ac/which we use today) to prove that his direct current was safer than Tesla’s ac. All this happened in the late 19th and early 20th century. For an amusing take on Nikola Tesla’s many accomplishments compared to Edison’s, see Why Tesla was the greatest Geek who ever lived.
In the 21st century, there’s a face-off between two companies that both borrow the great Serbian genius’s name. Nikola and Tesla. Tesla, as some of you might know, became the most valuable car company on the planet this week, based on market capitalization, overtaking Toyota.
Nikola Motors is far less known, and aims to compete head-to-head with Tesla’s electric semi, a heavy duty battery electric vehicle slated to appear in 2021. Nikola claims its trucks, powered by electricity from a hydrogen fuel cell, will provide driving range comparable to a diesel truck. They say that pure battery electric vehicles (BEVs) will have to compromise either on range or haulage capacity, simply because of the weight of its batteries. Nikola has no sales and no revenue, yet has achieved market valuation of $34 billion in 2020. Hmm! Why is there no end of people willing to bet their money against Tesla?
On the other hand, Tesla has a brilliant track record of achieving seemingly impossible goals, its cars outperforming every other electric vehicle on the road today, and it already has several prototype semis on the road. CEO Elon Musk reiterates at every opportunity that he relies on first principles of physics to base technology choices and manufacturing decisions. The above image, courtesy of the non-profit Transport and Environment (via Clean Technica), seems to support his opinion, that producing hydrogen with current technologies to run vehicles on electricity produced by a fuel cell just does not make economic sense. Many engineers at Toyota, Hyundai, Honda, BMW and Mercedes disagree with Musk and are putting a chunk of their considerable R&D resources into FCEVs* using hydrogen. None of them seem as yet to have prominent plans to roll out extensive hydrogen charging infrastructure so this indicates a future for FCEVs as niche products in the coming two decades.
All the legacy automakers are in a bind because of Tesla’s rapid roll-out of increasingly attractive and popular electric models. They face a triple whammy, locked in to their traditional supply chains, with highly qualified and experienced ICE workforces who need to either be retrained or made redundant, and confronting dramatically decreased car sales in 2020. Post-Covid, the only automotive growth segment seems to be in EVs.
A case can be made for FCEVs in the case of heavy duty, long-range transport vehicles that only need point-to-point charging infrastructure rather than a widely distributed one; think cargo ships, passenger ferries, trains. Aircraft powered by hydrogen? I don’t know whether the concept will take off (pardon the pun), although Zero Avia has short haul aircraft that run on hydrogen fuelled electricity. Whatever the case, the sooner we come off conventional ICEs, the better for our planetary future.
*FCEV – Fuel Cell Electric Vehicle
**ICE – Internal Combustion Engine