All rational action is in the first place individual action. Only the individual thinks. Only the individual reasons. Only the individual acts.
~ Ludwig von Mises

Primacy of the Individual Entrepreneur

I gave a talk last Saturday at the annual meeting of the National Governor’s Association at Williamsburg, Virginia.  I arrived Friday night, returning from Africa and out of the loop on U.S. news.  It turns out a speech given on Friday in the same state, except at Roanoke, has generated some controversy.

President Obama said in the Friday speech that individuals don’t create jobs, telling entrepreneurs: ‘If you’ve got a business – you didn’t build that. Somebody else made that happen.’

My opening remarks at the NGA meeting turned out to be exactly the opposite of the President.

Entrepreneurs are the enablers of new markets, innovation, and economic creativity.  Of course, entrepreneurs work with others to make things happen and are the beneficiaries of mentors, helpers, encouragers, investors, cheerleaders and many others.  Few great things, if any, were the result entirely of one individual.  However, you remove the individual, you remove the result.

Does the light bulb happen without Thomas Edison?  Perhaps eventually, but not as soon or as effectively.  Does the mouldboard plow happen without John Deere?  Perhaps eventually, but not as soon or as effectively.  Do frozen vegetables happen without a Charles Birdseye?  Perhaps eventually, but not as soon or as effectively.

Individual entrepreneurs and business people are the key to creation of new technologies, products, companies, business models, and distribution systems.  Deployment of new and better products and services makes our lives better and creates wealth.

The reason why such a thing that we label as an ‘economy’ exists is because of what individuals do.  Individuals buy, sell, trade, negotiate, compete, and partner with one another.  As they do so, technologies, products, services, companies, markets, and industries develop.  Phenomena economists work to describe and understand like prices, wages, money, interest rates, recessions, and wealth creation are all the result of countless individual actions.  Economic activity is the result of purposeful actions and choices by you and me, each of us doing our best under particular circumstances to meet various wants and needs.

Classical economists of the 18th and 19th century dubunked the old assumptions of the pre-capitalist era: that competition was unjust, that change in traditional production methods was socially unacceptable, that technology was evil because it replaces labor, that a task of government is to prevent efficient business people from gaining wealth, and that to restrict the freedom of entrepreneurs by government coercion is an appropriate goal for social harmony.

Apparently there is still work to be done to promote a deeper understanding of the role that economic freedom has played and will yet play in the technological progress of the the last two hundred years.  Our lives today are healthier, longer, and more fulfilling because of the free interaction and exchange of individuals.

Today’s grumblers harken back to the medieval era expropriators who found any number of means to straightjacket business people and tradesman who threatened to their idea of appropriate economic and social norms.  The ruling class today, as then, pushes for government control of all activities of individuals.  These controls are couched within any number of terms promoting various societal goals.  But society is the combination of individuals.  Society exists nowhere outside the actions of individuals.  To speak of social goals as though society itself is a being, a thing of itself, is nonsensical.

There clearly needs to be a more vociferous defense of individual freedom in today’s political environment.  The tremendous progress of technology and the resulting increase in wealth and welfare of the last two centuries were made possible only through the pursuits of individuals in an environment of economic freedom.

America has its political heroes of the past: George Washington, Thomas Jefferson, and Abraham Lincoln.  Did we build monuments to honor their memories for merely lack of better alternatives?  No.  We built them because we understand that the country is a different and better place because of their impact as individuals.  They certainly did not accomplish what they did alone, but without their leadership history would look much different.

America also has its entrepreneur heroes of the past: Thomas Edison, Henry Ford, Steve Jobs, among many others.  The world is a different and better place because of their impacts as individuals.

I challenge students in my entrepreneurship course each semester to work to make a positive difference in whatever way their interests, skills, and passion leads them.  I have no plans to drop the challenge or the recognition and reward of those individual students who step up to the challenge.  My hope is that America remains a country where their initiative is celebrated and supported.