Today, many people want to be like entrepreneurs. Relatively few are willing to face the risks business owners do, but everyone can admire the rewards some manage to earn. Glowing accounts of how companies such as Microsoft, Amazon, and Google began are the epic tales of a modern fairy tale story.
But what made Bill Gates’s success possible? Biographical and business literature consider the individual, evaluating conditions such as mindset, personal network, background, and awareness of market characteristics. Necessities that get treated as a guarantee include open and competitive markets, widely respected property rights, and a favorable legal system to businesses.
Literature evaluating those considerations is more commonly found elsewhere in a library. While the factors listed above can appear to be permanent fixtures, they’re recent phenomena in the historical context. They require consistent maintenance if they are to stick around for future generations.
The free market system Americans currently take for granted emerged in Europe during the early modern period. One by one, Western society rejected the aristocratic deal (summarized as “do what I say and I’ll let you work”) in favor of the bourgeois deal (which can be thought of as “leave me alone and I’ll make you rich”). To make this possible, a great deal of blood and ink spilled within and between the forming nations of the time.
Numerous revolutions, revolts, and reformations over a span of centuries were required for this reevaluation of Western values to stick. When the dust settles, the bourgeois social class perception changed from immoral characters to directors of progress. Working in one’s personal interest was in bad taste no more. Rather, it was a common expectation held of anybody who wanted to make it commercially.
Society creates entrepreneurs by embracing those motivated by self-interest. According to groundbreaking economist Adam Smith, “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
Thanks to these developments, global wealth exploded in ways never previously witnessed. 85% of the globe lived on less than $2 per day in 1800, but only 9% did in 2017. That change comes despite the global population increasing over 650% in the same two centuries. In the United States more recently, the population living below the national poverty line cut in half from 1959 to 2019. Living standards reflect the change; 9 in 10 of American households have air conditioners today. The mean household owns 1.88 cars.
Things that would have once been produced exclusively for the rich are commonplace today. Twenty-first century examples of this phenomenon may include items like smartphones and wireless internet service. Entrepreneurs are to thank for this change. While true that the most successful entrepreneurs explicitly seek to increase personal prosperity, they often improve general social welfare along the way.
The “Great Enrichment” of our modern age doesn’t solely rely on modern science and strong work ethic, despite their utmost significance. It is the liberty and dignity of entrepreneurs that greatly contributes to the world’s continuous flourishing.
When individuals from different sections of society look at entrepreneurship as a potential course of action, incomes increase and poverty is mitigated. People wouldn’t consider embracing innovation, and the successes and failures that come with it, if there was no way for them to retain the profits they worked very hard for.
Centrally directed economies permit monopolies to grow, regulate market extent, and suppress innovation. This only creates impediments to entrepreneurs and their innovative endeavors. Strict control on the free market can cause a reversal in the direction that the society is heading for, taking entire countries back to the aristocratic ways of things. Taking America’s history into account, immigrants originally wanted an escape to aristocracy, but not an embrace of it.
Free markets are necessary conditions for national prosperity, but they are insufficient alone. Recognizing the individual right to self-author requires society to extend liberty and dignity to everyone. Prosperity can’t reach all people until everyone, particularly women and minorities, is empowered to view innovation as an available career path.
The ideal world is one in which anyone can be a merchant. A world where it is possible for women and minorities to embrace the entrepreneurial maxim (“we are rich because we are free”), just like their white male peers have for centuries.
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Author: Brian Wallace
Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency based in Louisville, KY and Cincinnati, OH which works with companies that range from startups to Fortune 500s. Brian also runs #LinkedInLocal events nationwide, and hosts the Next Action Podcast. Brian has been named a Google Small Business Advisor for 2016-present and joined the SXSW Advisory Board in 2019.