Entrepreneurship: Productive, Unproductive, and Destructive
Posted: 11 Nov 2009
Date Written: 1990
Abstract
Examines the roles that entrepreneurs can play within a society and the allocation of their entrepreneurial activities. The role that is played by an entrepreneur is dictated by the economy's set of rules. As a result, the contributions made by entrepreneurs can vary based on the activities on which these entrepreneurs choose to focus. These contributions can be productive, unproductive, and even destructive. Unproductive activities today include tax evasion and rent seeking such as litigation and takeovers. Building on the Schumpeterian model, this analysis utilizes historical evidence from ancient Rome, medieval China, Dark Age Europe, and Renaissance Europe to support the proposition that dramatic differences in entrepreneurial activity can be found between one time and place and another based on the rules of that time and place. Further, the allocation of productive and unproductive entrepreneurial activities in an economy impacts its innovativeness and the dissemination of technological advances. Consequently, a society should encourage entrepreneurs to reallocate their activities toward productive activities. This shift is more likely to be achieved by modifying the rules in the economy that determine relative rewards for entrepreneurs than by attempting to change the goals of the entrepreneurs themselves. (SRD)
Keywords: Productivity, Rent seeking, Allocation models, Public policies, Economic policies, Legal systems, Roles, Resource model, Individual goals, Entrepreneurial environment
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