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Political vs Market Entrepreneurs
Entrepreneurs come in all shapes and sizes and emerge from all kinds of backgrounds; however, they are often grouped together. There are two main categories that people use to help differentiate between those entrepreneurs based on their similar approaches: political entrepreneurs and market entrepreneurs. Specifically, political entrepreneurs are those who bring their ideas to various government agencies in the hopes of receiving a subsidy to pursue this project. These subsidies are used to fund many aspects of this endeavor, including the accumulation of resources and the hiring of staff and other essential workers. These subsidies will also allow the entrepreneur to freely experiment with their idea and attempt to execute it on a larger scale. Market entrepreneurs, on the other hand, utilize their own private funds to make their dreams a reality. They take advantage of the resources available to them and work diligently to create a competitive product that will thrive in their chosen market. Often times, these two forces drive each other to be better than the other and continuously impact the outcome of this specialized product within the consumer market.
America’s Entrepreneurial History
As Dr. Burt Folsom discussed in his speech, there has been a long-standing history within the United States of America of different entrepreneurial forces duking it out to be the best. No matter what the chosen product or service is, there will always be a dichotomy between the two main entrepreneurial forces, a stark rivalry that typically ends in massive societal improvement. Take Dr. Folsom’s example of the integration of steamboats in America in the 1800s. Dr. Folsom mentions that many centuries ago, the United States wanted to catch up to the technological development of England. One way of doing so was to create a fleet of steamboats that would easily compete with the British market. A man by the name of Edward Collins was given the opportunity to turn this into a reality. Collins was given multiple subsidies to support him on this journey, but what threw a wrench in those plans was the appearance of Cornelius Vanderbilt. Mr. Vanderbilt wanted in on this project and asked the government to let him take over. The ever-loyal central government decided against that offer and chose to remain with the man who had gotten them this far, Mr. Collins. But soon, subsidy after subsidy led to failure after failure trying to keep up with Vanderbilt and his private funding. Eventually, Collins lost to Vanderbilt as the quality of his business dwindled and government funding dried up. What we learn from this exchange is that government subsidies and partial control of the public market are not beneficial to the advancement of our society as a whole. Once government entities step aside and allow natural competition between market entrepreneurs, innovation arises and a new era begins.
Where should we go from here?
Taking the lessons of Dr. Folsom into account, it is clear that the only direction America should take is to reduce the participation of the government in the economy. This is an idea we have discussed throughout this semester as we have examined the causes of the Great Recession and the ideas of various economists. Government involvement has yet to produce a positive outcome. Going forward, it is important to keep in mind that government bailout and assistance is not necessary for this country to thrive. Our country thrives on the creativity and competitive nature of our entrepreneurs, and the only way to encourage these behaviors is to leave the market free and inclusive. The best way to grow and learn is through trial and error; constantly being given the answers or avoiding consequences gets you nowhere.