Illustration: The Tao of Innovation — Creative Destruction as a Yin–Yang Cycle.
The News
The 2025 Nobel Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their pioneering research explaining “innovation-driven economic growth.” Their work sheds light on the process of creative destruction, a concept introduced by economist Joseph Schumpeter, which describes how technological innovation replaces old industries, reshaping economies and societies.
Mokyr, a historian of economics, traced centuries of innovation to show that progress depends not only on invention but also on scientific understanding. Aghion and Howitt, meanwhile, built mathematical models showing how cycles of innovation, competition, and renewal sustain long-term growth.
In their words and models, innovation is both the engine and the disruptor — a dual force that drives expansion while dismantling the past.
The Commentary: The Tao of Innovation
This year’s Nobel recognition resonates deeply with the central idea in my upcoming book, The Tao of Quantum, which explores the harmony between Eastern philosophy and Western science.
The Nobel laureates’ work brings scientific clarity to what ancient Taoist thinkers expressed symbolically: the eternal Yin–Yang rhythm of creation and destruction. When Yang (innovation, expansion, optimism) dominates, Yin (correction, contraction, humility) begins to emerge — restoring balance.
Their theory of creative destruction is the economic expression of this same principle. Every great technological revolution — from steam and electricity to the internet and now artificial intelligence — follows this cyclical dance.
AI today is the new Yang: radiant, expansive, full of promise. Companies invest billions; stock markets soar with exuberance. Yet, hidden within this surge is the seed of Yin — overvaluation, dislocation, and the inevitable correction that restores equilibrium.
The Yin–Yang of the Market
In the language of Taoism, when Yang reaches its extreme, Yin is born. In market psychology, this translates into the boom and bust cycle — or what I call “The Yin–Yang of Market Psychology.”
The Nobel laureates’ findings help explain why this happens not by accident but by design. Innovation breeds optimism; optimism fuels speculation; speculation breeds imbalance; and imbalance leads to collapse — from which new innovation arises again.
This eternal motion, this “creative destruction,” is not a flaw in capitalism but its heartbeat. It is the same cosmic rhythm that governs the universe, from the birth and death of stars to the rise and fall of civilizations.
The Quantum Connection
In The Tao of Quantum, I argue that both quantum physics and Taoism point to a world of dualities — wave and particle, Yin and Yang, growth and decay — existing not in opposition but in harmony.
The Nobel Prize this year, honoring the science of innovation cycles, is an affirmation of that view: the quantum of economics lies in its oscillation. The creative impulse and the destructive correction are not enemies; they are partners in evolution.
Just as electrons leap to higher energy states only to return, releasing energy, economies leap forward through innovation and settle back through correction — gaining wisdom, balance, and new potential each time.
Reflection
The 2025 Nobel Prize in Economics is not just an award for scholars — it is a mirror for our time. It reminds us that progress is cyclical, not linear; that AI’s promise and peril are two faces of the same force; and that the key to navigating the coming wave is not resistance, but balance.
As Lao Tzu wrote, “When nothing is done, nothing is left undone.” In the same way, when we move with the rhythm of innovation — not against it — we find prosperity without excess, and wisdom within change.
Author: David H. Huynh
Book in Progress: The Tao of Quantum — When Physics Meets Philosophy
Illustration: The Tao of Innovation: Creative Destruction as a Yin–Yang Cycle
Published: October 13, 2025
No comments:
Post a Comment