> People often confuse creative destruction with societal collapse.

If you're in the buggy whip biz when it fails, its destruction is a form of societal collapse.

Remember - a recession is when your neighbor loses his job. A depression is when you lose your job.

People fight to keep their "phony, baloney jobs" because said jobs are their jobs - the phony, baloney is external to them.

I'm not sure what you're getting at exactly, but I would suggest that such people need to brush up on their definitions. Creative destruction is when an obsolete industry or practice is allowed to fail. Some people lose jobs, and find other ones later. It hurts.

Societal collapse is when we all starve to death because we are all critically dependent on modern industrial agriculture. It kills.

There's a difference. Preventing creative destruction is choosing to avoid pain now with death not-too-far-from-now. I am not being metaphorical. The article cites examples where just that happened; all those collapses were accompanied by carrying-capacity reductions, which is a rather dry technical way of saying "lots of people died".

A society full of people who don't get this distinction is a rather scary prospect, but alas, more people now than ever before get this and it's still probably nowhere near enough.

(Questions about whether our society is facing just such an inflection point right now left as an exercise for the reader, as well as what "pain-avoidance" measures are currently floating around that might qualify.)

Really, I though creative destruction would be something more like, letting GM fall apart, so that several new companies could buy the pieces, cheap, and creatively make new and innovative automobiles.

Yes. That's actually an important observation about the process; just because a billion-dollar-practice (called "GM") has keeled over dead doesn't mean that the economy automatically takes a billion-dollar hit. First, the billion dollar value clearly wasn't there in the first place (and acting as if it is is dangerous to the economy; the current economic crisis in a nutshell is "bad valuations"), and second, assets remain in existence that can be reused by more effective entities.

But people are hurt, jobs are lost (even if only temporarily and ideally with more recovered in the end), and there's still displacement that occurs. It's just that it's vital to understand that the alternative is far, far worse.

IMHO, if there is a safety net allowing failures (condition to creation/experiments), I call it creative destruction. Otherwise, it's a question of threshold: will the system collapse or not.

Edit: of course, those are not totally orthogonal notions, and those can be quite interleaved at different levels. (e.g. a company collapses, but it's employees aren't supposed to be left dying under a bridge and can integrate/create another one)