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Entrepreneurship and Capitalism

  1. Sep 3, 2007 #1


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    Staff: Mentor

    I am all for capitalism, but it's got to be good capitalism as opposed to bad.

    Good Capitalism, Bad Capitalism, and the the Economics of Growth and Prosperity

    Ewing Marion Kauffman Foundation

    and The Foundation for Entrepreneurship

    See also - National Dialogue on Entrepreneurship

    See also the discussion here -
    Capitalism, the Good Society
  2. jcsd
  3. Sep 3, 2007 #2
    What exactly is good capitalism and bad capitalism anyway?
  4. Sep 4, 2007 #3


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    May I recommend reading the book?


    or download pdf

    The authors present four forms of capitalism: enterpreneurial, big-firm (corporate), state-directed, and oligarchic.

    The authors mention that “entrepreneurial capitalism” has powered the U.S. economy toward a higher growth rate since the 1990s and seems to be taking hold in other parts of the world, such as Ireland,
    Israel, the United Kingdom, India, and China, to name just a few. It would seem that this form of capitalism is the only good form of capitalism. However Baumol has elaborated over a decade ago, it takes a mix of innovative firms as well as established larger enterprises to make an economy really tick. He argues that a small set of entrepreneurs may come up with the “next big things,” but few if any of them would be brought to market unless the new products, services, or methods of production were refined to the point where they could be sold in the marketplace at prices such that large numbers of people or firms could buy them. In other words, small entrepreneurs often need the support of the traditional big-firms.

    The authors conclude that the best form of “good capitalism” is a blend of “entrepreneurial” and “big-firm” capitalism, although the precise mix will vary from country to country, depending on a combination of cultural and historical characteristics that they hope will be clarified in the years to come.

    The authors also recognize and acknowledge the support of the Kauffman Foundation, which is considered by some the world’s leading foundation in increasing understanding of and encouraging entrepreneurship.

    Consider the following from Chapter 1:
    The book is an excellent resource, even if one disagrees with the thesis.
  5. Sep 5, 2007 #4


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    Sounds like a good book and I may pick it up. However:
    Doesn't his primary example disprove his thesis? The tech boom of the 80s and 90s was almost exclusively powered by small startups - dozens of companies that with one or two or three employees grew into Fortune 500 companies in scarcely a decade. Granted, MS used IBM in the way you describe, but Dell started in his dorm room and then leased the building across the street as he grew. He created his market completely from scratch, as did Apple, Netscape, and a host of others.

    That may be a relatively minor point - in general, I am in agreement that the primary driver of a mature economy is entreprenurial spirit. And that is something that is uniquely fostered by the American system. Developing countries can sustain double-digit growth because they are so far behind. The US is more correctly measured against the mature economies of Europe and we're still kicking their butts on a regular basis because their systems do not encourage innovation the way ours does.
    Last edited: Sep 5, 2007
  6. Sep 5, 2007 #5


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    True, but Dell bought off-the-shelf components and when he got big enough, Dell could order per Dell specs. Dell still buys microprocessors from Intel or AMD, and so Dell is supported by big-firms. Also, the OS on DELL is MS, or perhaps LINUX (although I'm not sure).

    Nevertheless, I think the book is worth reading.
  7. Apr 7, 2008 #6
    On the other hand, we also have the haters of Capitalism at hand. The current leaders of the Democratic party are all Socialists. They will destroy us if they get their way. They got their way in New Orleans, and we know how that worked out.
  8. May 23, 2008 #7
    Capital defined

    Capital is the ability to do work. For example, fresh vs salt water; education vs less; valuation of underlying asests i.e derivative. Labor, natural resources, financial, and technical are natural divisions.
  9. May 23, 2008 #8


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    I worked with the Kaufmann Foundation for years assisting in getting them grant money from our company. They do good work.
  10. May 23, 2008 #9


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    that mix of entrepreneurial and bigfirm capitalism you are talking about (illustrated by some historical and contemporary growth examples) sounds great
    and makes me think I should download the PDF version of the book. To respond immediately, without having read it, what concerns me is when corporations assume control of the media, determine the conditions of election campaigning, and become dominant channels of political influence.

    well I clicked on your link and it's FREE, no hassle. I got the whole book right away
    it doesnt seem to have much though about large commercial concentrations of power controlling the media, the way people think and the body politic (in some cases for the corporate interest)

    have to say it DOES make good points and have interesting examples of creative capitalism though, I like the anecdotes I happened across
    Last edited: May 23, 2008
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