You know this viscerally here in England: Your forebears launched the Industrial Revolution and invented the locomotive, one of the most creatively destructive forces — short of Margaret Thatcher — that the world has ever known. You have lived with capitalism’s constant change longer than any other people. Creative destruction is part of your national DNA, just as it is part of ours in the United States.

Protectionism in all its guises, both domestic and international, does not contribute to the welfare of American workers. At best, it is a short-term fix at a cost of lower standards of living for the nation as a whole. We need increased education and training for those displaced by creative destruction, not a stifling of competition.

By heightening competitive forces and thus incentives for productivity and innovation, international trade has likely accelerated the process of "creative destruction" by which outdated and less productive activities are replaced by new technologies and more dynamic enterprises.

The American economy, clearly more than most, is in the grip of what the eminent Harvard professor Joseph Schumpeter many years ago called "creative destruction," the continuous process by which emerging technologies push out the old. Standards of living rise when incomes created by the productive facilities employing older, increasingly obsolescent, technologies are marshaled to finance the newly produced capital assets that embody cutting-edge technologies.

To be sure, the effects of the banking crisis, as well as the ongoing pace of consolidation within the industry, have reduced the total number of banking organizations by more than a third since 1980...The new firms come into existence often to replace old firms that were not willing or able to take on the risks associated with high-growth strategies. This replacement of stagnating firms with dynamic new firms--what the economist Joseph Schumpeter called the "perennial gale of creative destruction"--is at the heart of our robust, growth-oriented economy. It is this freedom to take on risk that characterizes our economy and, by extension, our banking system. Legislation and regulation of banks, in turn, generally should not aim to curtail the predilection of businesses and their banks to take on risk--so long as the general safety and soundness of our banking system is maintained.