Posts tagged with: entrepreneurship

Buzz Aldrin walks on moonToday marks the 40th Anniversary of the one of the greatest feats of human exploration, courage and innovation: man’s setting foot on the surface of the moon.

Responding heroically to the challenges of the “Space Race” (while its arch-nemesis, the Soviet Union, was clearly in the lead), the United States stood proud to represent the free and enterprising West. To put the challenges of victory into perspective, America was running adrift amid pretty rough waters at the time: two great wars in Asia had taken their tolls on the government’s treasury; cities and communities were torn by civil riots; national inflation was escalating at a record pace; and an irreversible paradigm shift was occurring in its traditional moral values. Sound painstakingly familiar?

Yet, America loved (and still loves) challenges and risks. It excels (and still wants to excel) under pressure. It was the land forged by underdogs, the under-rated, the under-financed, while driven by an ever-zealous entrepreneurial optimism and creativity when facing life’s “insuperable” obstacles.

And all these great values were apparently at stake, as the United States stood boldly united to beat the Russians in a manned-mission to the moon. Americans knew full well that the tides of history would be turned against them had the Hammer and Sickle been raised before the Stars and Stripes on that powdery lunar desert. The American “brand” of innovation and entrepreneurship its citizens had worked so hard to achieve would have received a disgraceful black-eye. (more…)

anatomyentreperneur-1 Is moral enhancement of the entrepreneur possible? That’s the question Michael Severance, operations manager for Istituto Acton (the Acton Institute’s Rome office) recently posed to Dr. Adriana Gini, a neuroradiologist at San Camillo-Forlanini Medical Centre in Rome and an expert bioethicist at the Pontifical Athenaeum Regina Apostolorum. Dr. Gini recently led Istituto Acton’s monthly Campus Martius seminar “Moral Enhancement: Back to the Future” and offers some further insight on her topic. An audio recording of her seminar is available on the Istituto Acton home page.

Michael Severance: Dr. Gini, thank you for taking time to explain your views on the fascinating subject of moral enhancement. Most of us have heard of various forms of “physical” enhancement, as with genetic splicing for disease prevention, pre-selection of human embryos to produce “savior siblings” and mixing chemical cocktails to improve the physical endurance of our organs…In what way are the two types of enhancement – physical and moral – related, if at all? Or is this just a play on words?

Adriana Gini: The association between the word “moral” to the type of life we live, the decisions we make, our efforts and struggles to improve society and ourselves is perfectly natural. In fact, morality depends on our acts and our acts are the expression of what we are as human beings. Our behavior, as moral agents, is quite complex and, no doubt, involves our physicality. Nonetheless, a pure physical/neuronal explanation of morality -with no reference to a more comprehensive knowledge of the human person- is rather hazardous. As such, the term “moral enhancement” does not have an immediate, direct connection to some forms of genetic, pharmacological or biotechnological enhancement, unlike the ones targeted at cognitive enhancement.

MS: From an Acton perspective, it is interesting to know if there is some type of “competition” or “economic” factor driving neurological science in the direction of improving the human moral condition. What is at the bottom of all this? For example, is the real inspiration to improve human action found in creating a competitive edge in intelligence within the marketplace? Some might find it hard to believe that secular science is really interested in fostering moral excellence for its own sake in its laboratories. Much less so in its lab rats and guinea pigs!

AG: According to some authors, as with Julian Savulescu, director of the Oxford Centre for Practical Ethics and head of the Oxford Centre for Neuroethics, contemporary research aimed at enhancing human cognition will result in an economic improvement (cf. Chap. 1.4 of Enhancing Human Capacities edited by Dr. Savulescu). In other words, better people make for better jobs, and in the end, better, more productive societies – in an economic sense. However, Savulescu’s claim is that such enhancement might also lead to a greater world of evil action. For example, we can use drugs or other biotechnological means to improve our mental abilities, but sometimes also to our detriment: smarter terrorists mean fiercer terrorist attacks with the mental enhancement to fabricate more powerful, more intelligent weapons of mass destruction. Therefore, in Savulescu’s opinion, any means to morally enhance the human species in terms of cognitive enhancement should only progress alongside research on moral enhancement. No one really knows, however, how to improve the human species morally by biotechnological means alone, since morality is not purely “biological”…, although there are certainly biological correlations to human moral behavior. (more…)

In today’s Detroit News, Acton Research Director Samuel Gregg talks about the sort of “moral, legal and political environment” that must exist if entrepreneurs are to flourish. He applies these precepts to the very serious economic problems in Michigan, where Acton is located:

… in the midst of this enthusiasm about entrepreneurship, we risk forgetting that entrepreneurship’s capacity to create wealth is heavily determined by the environments in which we live. In many business schools, it’s possible to study entrepreneurship without any reference being made to the role played by factors such as rule of law, property rights and low taxes in stimulating wealth-creating entrepreneurship.

Entrepreneurs gravitate to places where conditions for starting a business are optimal and the infrastructure — financial, legal, and technical — supports new businesses. Here, Michigan has a double-barreled problem: the out-migration of Michigan job seekers — much of it compelled by the steep decline of the auto sector in recent years — and the college graduate “brain drain” from state universities. How many of these people saying goodbye to Michigan are taking their entrepreneurial dreams, and maybe the next Big Thing in the economy, with them?

Read “Entrepreneurs Require More Room to Survive.” An extended version of this essay is slated to run in tomorrow’s Acton News & Commentary. Sign up online for this free email newsletter here.

In “The Real Culture War Is Over Capitalism,” Arthur C. Brooks argues in the Wall Street Journal that the “major cultural schism” in America today divides those who support capitalism and, on the other side, those who favor socialism. He makes a strong case for the moral foundations of free enterprise and entrepreneurship and points to the recent “tea parties” as evidence that Americans still favor the market economy. Brooks, the president of the American Enterprise Institute, says Americans are revolting against “absurdities” like the bailout of General Motors that will be financed with ballooning budget deficits and trillions in new federal debt. He writes:

… the tea parties are not based on the cold wonkery of budget data. They are based on an “ethical populism.” The protesters are homeowners who didn’t walk away from their mortgages, small business owners who don’t want corporate welfare and bankers who kept their heads during the frenzy and don’t need bailouts. They were the people who were doing the important things right — and who are now watching elected politicians reward those who did the important things wrong.

Voices in the media, academia, and the government will dismiss this ethical populism as a fringe movement — maybe even dangerous extremism. In truth, free markets, limited government, and entrepreneurship are still a majoritarian taste. In March 2009, the Pew Research Center asked people if we are better off “in a free market economy even though there may be severe ups and downs from time to time.” Fully 70% agreed, versus 20% who disagreed.

He also points out that the government has been increasingly “exempting” Americans from paying taxes, an intentional strategy to create a larger class of government-dependent citizens.

My colleague Adam Lerrick showed in [the Wall Street Journal] last year that the percentage of American adults who have no federal income-tax liability will rise to 49% from 40% under Mr. Obama’s tax plan. Another 11% will pay less than 5% of their income in federal income taxes and less than $1,000 in total.

To put a modern twist on the old axiom, a man who is not a socialist at 20 has no heart; a man who is still a socialist at 40 either has no head, or pays no taxes. Social Democrats are working to create a society where the majority are net recipients of the “sharing economy.” They are fighting a culture war of attrition with economic tools. Defenders of capitalism risk getting caught flat-footed with increasingly antiquated arguments that free enterprise is a Main Street pocketbook issue. Progressives are working relentlessly to see that it is not.

Read the “The Culture of Charity,” the Spring 2007 interview with Brooks in Acton’s Religion & Liberty. Watch a 16-minute video interview with Brooks recorded at the Acton Grand Rapids office in May 2008

The Summer issue of City Journal features a piece worth reading by Guy Sorman titled “Economics Does Not Lie.” The paper includes weighty arguments favoring a free market economic system and the author does a good job explaining the rationale of those who criticize a free economy. Sorman says:

If economics is finally a science, what, exactly, does it teach? With the help of Columbia University economist Pierre-André Chiappori, I have synthesized its findings into ten propositions. Almost all top economists—those who are recognized as such by their peers and who publish in the leading scientific journals—would endorse them (the exceptions are those like Joseph Stiglitz and Jeffrey Sachs, whose public pronouncements are more political than scientific). The more the public understands and embraces these propositions, the more prosperous the world will become.

These are the ten propositions put forward by Sorman:

1. The market economy is the most efficient of all economic systems.

2. Free trade helps economic development.

3. Good institutions help development. (governments & rule of law)

4. The best measure of a good economy is its growth.

5. Creative destruction is the engine of economic growth.

6. Monetary stability, too, is necessary for growth; inflation is always harmful.

7. Unemployment among unskilled workers is largely determined by how much labor costs.

8. While the welfare state is necessary in some form, it isn’t always effective.

9. The creation of complex financial markets has brought about economic progress.

10. Competition is usually desirable.

Sorman adds:

These ten propositions should guide all economic policymaking, and to an increasing degree they do, worldwide. Does this mean that we’ve reached an “end of history” in economics, to borrow a phrase made famous by Francis Fukuyama, by way of Hegel and Alexandre Kojève? In one sense, perhaps: economic science will never rediscover the virtues of hyperinflation or industrial nationalization. Some critics charge that economics is not a science in the way that, say, physics is—after all, economists can’t make precise predictions, as an exact science can. But this isn’t quite true: economists can predict that certain bad policies will lead necessarily to catastrophe. If economics, a human science, lacks the precision of physics, a natural one, it advances the same way—evolving from one theory to the next, each approximating a reality that eludes our complete grasp.

On a somewhat related note about economic policy, here is a review I wrote about the book Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity. The review appeared in the Fall 2007 issue of Religion and Liberty.

Sir John TempletonSir John Templeton, the great entrepreneur and philanthropist, passed away on July 8, 2008. Fr. Robert Sirico, president of the Acton Institute, marks his passing with this tribute:

It was with great sadness that I learned today of the passing from this life of one of the twentieth-century’s great stalwarts in the struggle for faith and liberty. Rising from a humble background in Tennessee, John Templeton graduated from Yale and Oxford universities, the latter of which he attended as a Rhodes Scholar. He went on to become one of the most-successful investors of his generation, creating wealth and generating employment for thousands of individuals. Today the very name “Templeton” remains a byword for entrepreneurship, prudent risk-taking, integrity, and innovation in the financial industry in America and around the world.

Read Rev. Robert Sirico’s tribute to Sir John Marks Templeton (1912-2008): A Great Entrepreneur and Philanthropist.

In yesterday’s Wall Street Journal Europe, Alberto Mingardi of Istituto Bruno Leoni (and long-time Acton friend) lists some of the reforms Italy needs to boost economic growth, which is forecast at a measly 0.6 – 0.8 percent for 2008.

Mingardi advocates a number of tax cuts and a more determined privatization of state assets. Some of these issues are being discussed – timidly – in the current election campaign; Mingardi also focuses on de-regulation and de-bureaucratization, issues heretofore neglected by Italian politicians.

Current labor regulations are “so numerous that no one can even give their precise number. No one can comply with rules they don’t even know about.” Mingardi adds that “it’s safe to say at least half the statutes currently in force should be repealed, as their only effect is to create confusion.”

A recent study shows that it takes on average 696 days to dismiss a worker in Italy compared to only 19 in the Netherlands. Critics of de-regulation would argue that Italian workers are therefore better protected. Wrong. Unemployment is 5 per cent in Holland compared to 6 per cent in Italy.

This may seem counter-intuitive but makes economic sense. If I know it will be impossible to fire an unproductive worker, I will be much less likely to take a chance on hiring any worker I don’t personally know. Hence, the Italian model of “family capitalism” and higher levels of unemployment.

Italian bureaucracy also exacts high costs on business creation. According to the World Bank, the cost of opening a business is 18.7 per cent of per capita income compared to only 0.8 per cent in the United Kingdom and 0.3 per cent in the Republic of Ireland. Moreover, an Italian business spends an average of 360 hours per year filing taxes whereas in neighboring Switzerland 63 hours suffice. (Not surprisingly, Switzerland is the economic envy of Europe.)

Workers also pay for onerous regulations. Everyone in Italy nowadays complains about stagnant wages, these are clearly the result of decreasing productivity caused by bureaucratic disincentives for businesses to invest and grow.

An overwhelming bureaucracy undermines both individual liberty and the public interest. It punishes the creative spirit of the entrepreneur by obstructing investment and innovation, and harms society by killing the potential for growth and employment. The irony is that regulation and bureaucracy are often enacted in the name of social values.

Malika Worrell’s review of The Call of the Entrepreneur is a perfect storm of distorting prejudice, muddle, and simple factual errors. First, she says, “Much of Call’s 58-minute runtime is taken up with talking heads, most of whom are affiliated with the Acton Institute, affirming the film’s ideology that unfettered capitalism is inherently righteous.”

This is incorrect, and I told her it was incorrect in our interview. The majority of interviewees in the film, from Brad Morgan to George Gilder, Michael Novak, Jimmy Lai, and Peter Boettke, are not affiliated with Acton. Moreover, her description of the film’s “ideology” (why not say “argument”?) seems to be describing some other film. What little was said about the free market and capitalism in our film focused on the importance not of “unfettered capitalism” but of private property and rule of law. Such government-enforced “fetters” are preconditions for a successful capitalism. These are the lessons of economic history, not the deliverances of some kind of irrational faith, which Worrell suggests.

She also comments, “The film’s single-minded focus on the virtues of the free market is accompanied by a Calvinist streak. The entrepreneurial impulse contains elements “of God’s original creative act.” This is a quote from the film by Samuel Gregg, a Roman Catholic. The film is based on a book by a Roman Catholic priest, Robert Sirico, which Worrell elsewhere notes. Catholics aren’t Calvinists. Moreover, the idea that human beings are created in God’s image to be creators is a broadly Judeo-Christian idea, one shared even by deists like Thomas Jefferson.

On several occasions, Worrell criticizes the film because, apparently, it isn’t the film she thought we should have made: “Viewers hoping to learn more about the businesses Call’s featured entrepreneurs created will come away frustrated; the film is more interested in ideology than the actual logistics of entrepreneurship.” Again, she prefers the prejudicial word “ideology” to describe a perspective she simply disagrees with. In any case, this isn’t a valid criticism. The film is a response to the ubiquitous stereotype of business entrepreneurs as greedy misers that persists in both the entertainment and news media. It’s not a training film for aspiring entrepreneurs.

Blog author: abradley
Wednesday, September 19, 2007

In his recent and fascinating book Five Minds for the Future, Harvard professor Howard Gardner outlines the 5 basic types of intelligence people have:

1. The Disciplinary Mind: the mastery of major schools of thought, including science, mathematics, and history, and of at least one professional craft;

2. The Synthesizing Mind: the ability to integrate ideas from different disciplines or spheres into a coherent whole and to communicate that integration to others;

3. The Creating Mind: the capacity to uncover and clarify new problems, questions and phenomena;

4. The Respectful Mind: awareness of and appreciation for differences among human beings and human groups;

5. The Ethical Mind: fulfillment of one’s responsibilities as a worker and as a citizen.

Gardner makes the striking point that the Synthesizing Mind is becoming more important than ever, given our highly technological, highly informational world. The Disciplinary Mind — or what we think of as classical intelligence, the stuff child prodigies are made of — has dominated the intellectual landscape throughout history. But, Gardner argues, now that the Internet, technology, and media are making massive amounts of very dense information available to the average person, the type of mind that can acquire and store information is still impressive, but ultimately less useful than a mind that can process, connect, and communicate cross-disciplinary information to others in a meaningful way.

Thanks to the Internet, everyone can now access the vast storehouses of intellectual wealth that once belonged only to a concentrated elite. It makes sense, then, that the new elite could turn out to be those who can receive information rapidly, sift it, connect the dots, and put the whole picture to the best possible use for others.

In my mind, the Synthesizer concept parallels entrepreneurship in a few interesting ways. Just as information can behave like a type of good or service, it seems a person with a Synthesizing Mind can make prudent use of knowledge for the good of the entire human community. Technology makes it possible for the Synthesizer quickly to select the most relevant material from the experts — who have divided their labor to manage whole disciplines and systems of thought — without laboring to build a monolithic knowledge base of every field on his own, which would take a long time and allow him to share only a few authoritative insights at the end of all his pursuits. This does not mean the Synthesizer hurries or skips over important steps: he still must be a careful scholar who humbly stands “on the shoulders of giants,” as Sir Isaac Newton put it. It simply means he is free to use his creative powers to illuminate more readily for others the way various disciplines interact and the consequences they have for human life. That in turn makes him able to harness and combine the talents of others to form a serviceable “product” faster than a person with a Disciplinary Mind.

If thinking truly is “connecting things,” as G.K. Chesterton wrote in Orthodoxy, the concept of the Synthesizing Mind has a great deal to offer to people of every category of intelligence. Even if you disagree with Gardner’s categorizations, having a Synthesizing Mind might help you to figure out why.

…at least not yet.

Check out this disheartening AP story, “Judge: Cleaner owes me $65 million for pants; 2 years of litigation x 1 pair of trousers = headaches for family business.”

The US court system shouldn’t be a venue for the pursuit of a personal vendetta. This case clearly shows how lawsuits can be used to bring incredible expense and stress on the defendant, regardless of his or her guilt or culpability. And unless things change, like moving to a loser pays system, the plaintiff risks nothing.

All too often the real victims in these kinds of lawsuits are hardworking small business-owners, whose livelihood is threatened. And when small businesses suffer, the entire community suffers with them.

Is the neighborhood being made better off by Pearson’s lawsuit? Is Pearson protecting them from a business that engages in false advertising? If Pearson drives the Chungs back to Korea, the neighborhood will be made worse off, not better, and Pearson will have settled a petty grudge.

When business enterprise and successful entrepreneurship makes you the target of predatory lawsuits seeking only deep pockets, there’s something deeply wrong with the tort system.

In this monograph, Ronald Rychlak argues that the tort system needs to be reformed with a view toward the common good.

Let’s hope in this case Pearson doesn’t get off scot-free. It seems like that even in the absence of a formally-instituted loser pays system, the arbitrating authorities should have the power to dismiss Pearson’s case with extreme prejudice and require him to pay all the court costs and legal expenses for the defense.