Sponsoring Entrepreneurship in the 21st Century

By: William Shaub, Online Assistant Editor

Quite often, I hear about the value of entrepreneurship to the effectiveness of modern state capitalism. It is so highly regarded, that some macroeconomics textbook authors (such as Bradley Schiller) categorize entrepreneurship as a factor of production, creating a quartet among the usual land, labor and capital trio. “Without entrepreneurship, capitalism would be half the success that it is today. Therefore, we must sponsor that spirit as a society.”

The concept of self-motivation and the spirit of entrepreneurship should be considered valuable or important in any society or condition, not just a certain style of capitalism. It’s not a value that made the American state-capitalist system great, it’s a value that made every successful rags to riches story great.

However, a Wikipedia description of the word illustrates the fact that it works both ways, it doesn’t have unique consequences. “Entrepreneurs emerge from the population on demand, and become leaders because they perceive opportunities available and are well-positioned to take advantage of them”. I don’t see how entrepreneurship didn’t have some role to play in the ‘successes’ of Krushchev, Hitler, or Mao. The desire to succeed or be an opportunist just is.

Entrepreneurship is an inclination that’s not restricted or specialized within certain conditions that choices are made. So what’s this ‘sponsorship of entrepreneurial values’ talking point really about?

Let’s have a look at what it means to sponsor entrepreneurial values from our strict libertarian, conservative, free market leaders.

Nobody is more passionate about entrepreneurship than Newt Gingrich, as evidenced by his self-made Entrepreneurship Award, which he inadvertently gave to Pink Visual (a porn studio—he later took it back). In his book, Real Change: From the World That Fails to the World That Works, he calls his district the Norman Rockwell world of jet planes and fiber optics. Here’s the free-market kicker; if you ask where jet planes and fiber-optics came from, you discover that the public paid for them, and still pays for them, but all the money (profit) goes to ‘entrepreneurs’.

Up until his last day as House Speaker, Gingrich managed to get more Federal subsidies for his district than any suburban county in the country outside the Federal system.

You can look at the Reagan administration, which was also very passionate about free markets and promoting entrepreneurial strategies. Meanwhile, it boasted to the American business community, correctly, that it had done more to institute protectionism than any post-war American administration, in fact, more than all of them combined. It had doubled import restrictions, blocking, and poured public funds into major industries through the Pentagon (and other industries) to enable them to recapitalize.

Is that what it means to promote entrepreneurial values? Viciously defending economic power while the scraps trickle down to those who’re really struggling to make it?

We have a pretty interesting kind of economic recovery taking place in the U.S right now. There’s a lot of economic growth, incredibly high corporate and banking profits, businesses are sitting on over $1 trillion in cash, but there are barely enough good jobs for one in five Americans, aka entrepreneurs.

Here’s how the ‘libertarian’ state legislature of Oklahoma decided to deal with the situation. It was recently reported that a stove factory is being set up in Tulsa, which is expected to create hundreds of new jobs. Why did Whirlpool decide to put the factory in Tulsa, rather than Mexico or a place with cheap labor and no unions? Well, the taxpayers in Tulsa County are going to pay 25% of Whirlpool’s capital costs.

Is that how we sponsor entrepreneurship in the 21st century?