
The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times (Kauffman Foundation Series on Innovation and Entrepreneurship)
Princeton University Press, 2010
584 pp., $78.50
Robert Whaples
Cool Capitalism
In praise of entrepreneurship.Entrepreneur. The word evokes heroic images. A creative, hardworking risk-taker with a vision for a new and improved product, an innovative marketing strategy, a revolutionary technological or organizational breakthrough that allows us to do more with less. Someone with the judgment, the ingenuity, the leadership skills, the networking abilities, and the courage to overcome obstacles and put a plan into action. A fierce competitor beset by opponents in a contest to serve customers.
In recent decades, this conception of the entrepreneur has begun to reemerge as the benign face of business, the paragon of the free market—even the essence of cool capitalism. There is good reason for this recent celebration of entrepreneurship. A growing body of evidence links entrepreneurship to the one thing that modern society seems to want most: rising material standards of living and the elimination of absolute poverty. But what makes some societies more entrepreneurial than others? How can a society become more entrepreneurial? Unfortunately, economists have found it nearly impossible to answer these questions. Our standard approach is to develop mathematical models of economic interaction and to use statistical firepower to estimate the size and impact of each relevant variable. Entrepreneurship—which is all about the dynamic interactions between people with keen, unexpected insights—has proven too subtle and slippery for this approach. Some of the actions of entrepreneurs are quite predictable and easy to model, but the important ones aren't. Moreover, the heterogeneity of entrepreneurs means that they can't be easily quantified, counted, and added up. When theory and statistics fail, economists turn to the underused third tool in their bag of tricks: history.
The Invention of Enterprise is a bold, exploratory attempt to answer our most important questions about how entrepreneurship has evolved and what makes it flourish. The volume brings together a stellar cast ...



Jeremiah Chaffee
I agree with Ms. Belousek. Whaples' states, "Sam Walton did an immense amount of good in the world; entrepreneurs - when given the incentives to add value and not destroy it - are doing God's work of feeding the hungry, clothing the naked, curing the sick, and serving the rest of mankind." If entrepreneurs need economic incentives to do God's work, it isn't God's work they are doing. Put whatever "economic" label on it you wish, the "incentive" of the Christian should not be monetary profit but love of mankind and the command of Christ to feed the hungry, clothe the naked, cure the sick, and serve the rest of mankind without any thought to your own gain. Christ's command was not a suggestion to go-getters of a great business opportunity. Christ didn't look at the 12 and say, "Plastics!" Robert Whaples seems to me to have put the golden calf before the sacrificial lamb. Christian love is sacrificial; what did Sam Walton sacrifice?
William Caylor
Ms. Belousek: your second point is well-taken. But you assert "lower prices at the consumption end of the supply chain thus entails lower wages at the production end." Assuming there are no costs savings from say, efficient distribution, lean inventories or cheaper non-labor inputs, it would have to come out of wages. But that shouldn't be possible unless Wal-Mart or its suppliers have considerable monopsony power in labor markets. They may or may not, but that's an empirical question.
PAULA SNYDER BELOUSEK
Second, we have to consider what counts in God's kingdom. In the Sermon on the Mount, Jesus addresses four types of exchange: good for good, evil for evil, evil for good, and good for evil. The first two constitute the normal ethic of common humanity. While Jesus does not condemn returning good for good, neither does he consider it praiseworthy--even pagans and sinners do good expecting the same in return. What characterizes kingdom righteousness is two-fold: to return good for evil and to do good expecting nothing in return, which contradicts and exceeds normal human justice. The exchange of value for value, the normal practice of a fair market, may contribute to the common good, but it is not of ultimate account in God's kingdom. Wal-Mart, after all, does not feed the poor expecting nothing in return--no matter how low the prices, you still have to pay at the checkout. We thus need not make Sam Walton into a robber baron, but neither should we confuse him with Saint Francis.
PAULA SNYDER BELOUSEK
Robert Whaples sings the praises of Sam Walton. Wal-Mart's business model saves shoppers $1,000 annually and creates "spillover" effects in local economies through lower prices, such that "its benefits to society clearly outweigh its costs." In this way, by providing affordable goods and supporting local employment, Wal-Mart is "doing God's work." Two caveats are in order (which I'll make in subsequent posts for space reasons). First, we must make a full accounting of that $1,000 in savings. That benefit to consumers has to be compensated as a cost to someone somewhere--and it is surely not coming from Wal-Mart's profits. Lower prices at the consumption end of the supply chain thus entails lower wages at the production end. And inadequate income for workers could create negative externalities for the communities where Wal-Mart merchandise is manufactured. Darrin W Snyder Belousek, Lecturer in Philosophy, Ohio Northern University
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