Why business matters: Entrepreneurial Capitalism in the age of
omniscient government
Townhall – Carl Schramm – 7/22/2013
Fascinating speech given to
graduating class of UC Davis to entrepreneurs:
To understand why business
is so important to the American saga we should start at the beginning.
The Declaration of Independence announced that freedom was at the heart
of the incomprehensible daring of those who started a revolution in a weak, loosely
affiliated group of colonies against the strongest empire on Earth. They
wrote, “We hold these truths to be self-evident, that all men are created
equal, that they are endowed by their Creator with certain unalienable Rights,
that among these are Life, Liberty
and the Pursuit of Happiness.” It is clear that as the founders saw
liberty it involved the freedom to determine how anyone could apply himself or
herself to making a living, trading, making things, and inventing new products
and ideas. In many ways it was this quest for the freedom of individuals
to advance their economic condition as they saw fit that required inventing a
new country!
The protection of “business
freedom” was even more important eleven years later when the Constitution was
ratified. Recall that the father of economics, Adam Smith, had written The
Wealth of Nations in 1776, the same year as the Declaration. Hamilton and
Franklin understood Smith’s powerful argument that countries prosper when
individuals operate in their own self-interest. They saw, unlike
Jefferson who believed that America’s
experiment with democracy would only succeed if it formed itself as an agrarian
utopia, that the idea of self-governance could succeed only if it showed that
it produced expanding economic welfare for its citizens. In its
pre-constitutional years, the United States were flourishing because a diverse
economic base was emerging that already revealed that freedom had unleashed new
levels of human inventiveness. That the Constitution reflected the innovative
potential of the new nation’s commercial life is evident in its unprecedented
and explicit protection of new ideas as a form of individual property in its
patent clause.
The emergence of
revolutionary new businesses in the United States has had an enormous
worldwide impact, raising living standards for billions. The global
impact of our innovations in computers, telecom, medicine and air conditioning,
have had such unmitigated benefits that America should rightly think of itself
in the terms President Clinton’s Secretary of State, Madeline Albright, urged
when she called ours “the indispensable nation.” American
innovations such as the World Wide Web just might lead to the spread of
participatory democracy itself. FREE MARKETS REALLY DO BIRTH FREEDOM.
I want to emphasize that
this is not a partisan observation on my part – it is entirely descriptive.
The reason I raise this question is my concern that when government
intrudes upon our privacy, for whatever reason including security in an age of
terrorism, there are economic consequences. American capitalism depends
of individual freedom. With individual freedom comes the liberty to think
“crazy” new thoughts about goods and services that have never been thought
about before. Hamilton and Franklin saw the importance of keeping government
small in just this context.
In the end, the most
disruptive part of entrepreneurship is the innovations that it begets. It
is precisely these disruptions that drive economic expansion, including the
creation of most new jobs! But for innovation to happen there must be
unbridled individual freedom.
one of the glories of
free-market capitalism is its vital ambiguity, its unpredictable nature, which
will permit each of you and millions more like you to bring your quest for
making something new or making something better or cheaper into a reality, a
new product or service, a new company, that will benefit humankind. But
this freedom of action is inexorably linked to freedom of thought! It is
always going to be threatened by government advancing the idea that it can
control the future and make it predictable, planned and free of economic
danger.
Northwoods Patriots - Standing up for Faith, Family, Country - northwoodspatriotscomm@gmail.com
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