Entrepreneurship and Progress

Per Bylund is an Associate Professor of Entrepreneurship and Records-Johnston Professor of Free Enterprise in the School of Entrepreneurship at Oklahoma State University. Per is touring with the Free Market Road Show 2023. Our Simon Sarevski exchanged e-mails with him about entrepreneurship, what it is, and what the future holds for the entrepreneur as well as the consumer.

Simon Sarevski: Many people have an idea, usually as misinformed as loud, about what entrepreneurship is and means to society. What interests me is how entrepreneurship looks through the eyes of an economist.

Per Bylund: For most economists, the entrepreneur is unfortunately not part of the picture at all. If the entrepreneur all is part of the discussion, it is usually in the form of statistics on new/small businesses or self-employed. For me as an Austrian economist, however, the entrepreneur embodies the driving force of the market process. Entrepreneurs are the creators of our tomorrow, competing by producing what they imagine will best serve consumers. Without entrepreneurs there is no market and no innovation.

The word entrepreneurship is almost 300 years old, which prompts me to ask whether only the term is new or the concept itself.

Neither, I think. Mark Thornton has written quite a bit about the word’s meaning and how Richard Cantillon, the world’s first ‘real’ economist, change the meaning of the word from basically government contractor to an economic actor bearing the uncertainty of production because revenues are no known. Entrepreneurship was an important part of economic theory for a long time, but was pushed out as economists became ever more mathematical in their analyses in the 20th century. It’s only quite recently that entrepreneurship has again become a hot topic, primarily because most people recognize that it is what causes economic growth and prosperity.

How has entrepreneurship changed since the dawn of the industrial revolution?

The practice of entrepreneurship is in some sense always unique because it is the attempt to create new value. But there are some important differences between now and earlier times. The enormous progress that has happened in technology and communication has changed the whole economy to become more accepting of decentralized, distributed production. There is also a lot more capital available today than used to be the case, which entrepreneurship builds on and adds to. But the most significant differences are probably cultural and political. The culture has become much more supportive of entrepreneurship and entrepreneurialism; many today see it as a dream ‘career’ and a real alternative to climbing the corporate ladder. And the State has been retreating in the sense that regulations have become more general and indirect, whereas the State used to literally hand out monopoly privileges to preferred members of the upper classes. It is much more open and supportive today, which we are benefiting from. But, of course, entrepreneurs are still burdened with a gross complex of regulations.

Has entrepreneurship always been in favor of big business? Or, with the help of the words of our friends on the left, a way for the “rich to get richer, while the poor get poorer?”

I would say it is quite the opposite: entrepreneurship creates progress through creative destruction, in which entrepreneurs’ innovations undermine the influence and control of big business and ultimately replaces the ‘dinosaurs.’ If the left were at all interested in creating a prosperous society, they would be proponents of entrepreneurship and free markets. But they tend to prefer regulations, which stifle entrepreneurship and both protect and prop up incumbent corporations.

What does the future hold for entrepreneurship in times of AI, social media, and technological advancement, especially for the little guy?

I don’t see these technologies as different in an economic sense than any other capital development and accumulation. They’re new technologies, but what they do in the economy is the same as any productive capital: they increase the productivity of labor and make possible types of production that weren’t possible before. The difference in technology will of course cause change and we’ll likely see many now common types of businesses disappear whereas new types will emerge. As with any great change, it comes with so-called frictions and suffering during the transition. People may need to retrain, gain new expertise, change their careers, etc. This is sadly always the case with automation and technological progress.

Considering that the more advanced societies become, the less entrepreneurial they become in the process, what would be your advice for those teenagers entering the workforce in the next 3-5 years? Opt for a “secure,” “well-paying” job or the risky entrepreneurial “gamble?”

I don’t think there is a real choice, because the future – and not even the distant future – will see the regular employment disappear. The economy will increasingly become a ‘gig economy’ in which we do not sell our labor to one employer who gets to plan our work weeks. Instead, we will, to a much greater extent, be able to put together our own work schedules, choose with what and for whom to work, and when and where. What young people need to think about is to develop their expertise and a personal brand to accompany it. Doing this systematically and from a young age will prepare them for what is to come.

Finally, even though not directly related to the general topic of today’s conversation, I always end my interviews with this: How to find freedom in an unfree world?

The short answer is to get rich. There is no better way to find freedom than to build your own financial independence. With enough money, you are not tied to an employer or a city or country. It would be great if there was a place to go where everybody was free and the market was unhampered, but that’s unfortunately not the case. So the only option is to make oneself and one’s life as independent of circumstances, situations, and others as possible. This is becoming increasingly important but also increasingly difficult, as governments around the world are trying to crack down on financial independence and are set on controlling us through banking and money. This is both a problem and a sign that things are going in the right direction – they are losing control and they are aware of it (and they hate it!).