“Creative Destruction”

Abstract

The strongest case for administered innovation systems relies on government sponsorship of research and development and technological discoveries during World War II and the modern postwar era. The American Civil War provides a useful counterpoint that demonstrates the effectiveness of markets in ideas even during the severe disruptions of a devastating battle on domestic soil. The Civil War was characterized by a high degree of technological creativity for military-related inventions and innovations, to a far greater extent than during the twentieth century. Both the sourcing of new technologies and military procurement were decentralized and subject to market forces. The market incentives for private inventors to engage in trial-and-error experimentation created an impressive portfolio of radical new technologies from which military leaders chose the most appropriate to support their strategies.