Can we trust in entrepreneurship?

|Peter Boettke|

Also last night in his interview, Bernanke was asked whether he was optimistic or pessimistic about the future.  He said that he was optimistic because of the great entrepreneurial culture in the US, and the benefits of technological innovation in spurring economic growth.

Earlier this month Alan McCormick of the Legatum Institute made the argument that we can indeed trust in entrepreneurship, and points to the historical record.  But he also reports on the Legatum Institute's Prosperity Index, which attempts to measure environments conducive to, or restrictive of, entrepreneurial activity.  As he states:

But the case for entrepreneurship is not one dimensional. There is more than just a purely economic argument to be made for increasing levels of entrepreneurship. The newly published Legatum Prosperity Index finds that a country's ability to foster a climate of entrepreneurship and opportunity has the greatest effect on that country's overall wellbeing. It finds that entrepreneurial societies are by-and-large happier societies in which citizens have high levels of freedom and opportunity to determine the course of their own lives.

Unfortunately, there is nothing permanent about an entrepreneurial culture, it is a function of public policy as well as more fundamental institutions.  In short, we can through policy choices kill the goose that lays the golden eggs.  And the consequences are not just that we not as well off financially, we can become impoverished on multiple dimensions.

 

Comments

[Pietro M.]

Giving Bernanke's policies, we can't trust entrepreneurs, because profits are made by exploiting monetary policy, not by producing better products and offering better services. The whole financial sector is a race to the bottom in which the contest regards the most innovative way to create a black hole in the balance sheets by creating new forms of exploiting the profit opportunities created by the government's safety net. How can we trust entrepreneurs if no one pays for his own mistakes, and prices can't provide any reliable information regarding risks because there is no market process in which rights on certainty are bough and sold based on private profits and private losses?

[Bill Stepp]

Speaking of Comrade Bernanke, Bloomberg Businessweek quotes him ("The Plan," Dec. 6-12):
"Two of Tim's favorite aphorisms bear repeating. 'Life's about alternatives' and 'A plan beats no plan.' To me, these two aphorisms pretty well sum up what we know about, respectively, economics and political science."

I concur with the first one, but re: no. 2, who's doing the planning? Is it an entrepreneur or investor formulating a plan, or is it a mcgub'ment bureaucrat formulating The Plan?
I don't think these guys know the difference. The article confirms what the Wall Street Journal said a while back, that Geithner has spent his entire career, such as it is, in the mcgub'ment.