I recently reread an article titled, Unleash The Mind by George Gilder, that I originally read in 2012 shortly before I started this site. It is filled with great insights into what an entrepreneur really is, and the importance of his role in the economy.
MAKING THE COMPLEX UNDERSTANDABLE
I love reading whatever George Gilder writes for few different reasons. 1) Just like a chef who invigorates my taste buds by how he seasons and prepares a dish, Gilder puts words together in ways that invigorate my earbuds. His words not only sound good, I also enjoy the pictures his words paint in my mind. It’s my personal taste, it may not be yours. 2) He explains complex things in an understandable way, which is a rare skill. 3) He always makes me think, even though I believe some of his analysis slightly misses the mark. I don’t think he has a total understanding on how scarce resources are misallocated when the Federal reserve starts down it’s road of low interest rates and monetary expansion, and I don’t think he understands spontaneous order as Hayek explains it.
Milton Friedman had the same gifts as a speaker and debater, as Gilder has as a writer, although neither is a favorite of the Austrians. I see these two men much differently than Austrians do. I look at their ability to explain complex economic concepts, to regular people like me, as a more important asset than any theoretical differences Austrians may have with them. I read and listened to Gilder and Friedman, along with Thomas Sowell, before I could ever tackle Mises, Hayek, and Rothbard in any serious or understandable way. I suggest you read Wealth and Poverty, by Gilder, watch the Free to Choose videos by Milton Friedman, and read Basic Economics by Thomas Sowell before you tackle books like Human Action by Mises, Prices and Production by Hayek, and Man Economy and State by Rothbard. You don’t try to bench press 300 lbs the first day you walk into the weight room. You start with a manageable weight and work your way up to heavier weights.
UNDERSTANDING ECONOMICS LEADS TO FREEDOM
People have to be educated about how economic reality will always get in the way of the plans of our ruling elite. The result of allowing politicians and bureaucrats to pursue unattainable ends is, in the words of Hayek, “the road to serfdom”. Throwing people aside who have talent in communicating complexity to regular people because they don’t pass some purity test is not very smart. Their ability to move peoples thinking in the right direction is important to maintaining individual freedom. As Mises said, “Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man’s human existence…..All present-day political issues concern problems commonly called economic. All arguments advanced in contemporary discussion of social and public affairs deal with fundamental matters of praxeology and economics…..There is no means by which anyone can evade his personal responsibility. Whoever neglects to examine to the best of his abilities all the problems involved voluntarily surrenders his birthright to a self-appointed elite of supermen. In such vital matters blind reliance upon “experts” and uncritical acceptance of popular catchwords and prejudices is tantamount to the abandonment of self-determination and to yielding to other people’s domination. As conditions are today, nothing can be more important to every intelligent man than economics. His own fate and that of his progeny is at stake.
EXCERPTS FROM GILDERS ARTICLE
I don’t think Gilder has a total understanding on how scarce resources are misallocated when the Federal reserve starts down it’s road of low interest rates and monetary expansion as explained by the Austrian Business Cycle Theory, and I don’t think he understands spontaneous order as Hayek explains it. Having said that, he is great at explaining how ideas of individuals are the human capital on which our expanding standard of living rests. You can click on the full article above to read the article. Here are some excerpts below.
“America’s wealth is not an inventory of goods; it is an organic entity, a fragile pulsing fabric of ideas, expectations, loyalties, moral commitments, visions….. As President Mitterand’s French technocrats discovered in the 1980s, and President Obama’s quixotic ecocrats are discovering today, government managers of complex systems of wealth soon find they are administering an industrial corpse, a socialized Solyndra.”
“The belief that wealth consists not chiefly in ideas, attitudes, moral codes, and mental disciplines but in definable static things that can be seized and redistributed—that is the materialist superstition. It stultified the works of Marx and other prophets of violence and envy. It betrays every person who seeks to redistribute wealth by coercion. It balks every socialist revolutionary who imagines that by seizing the so-called means of production he can capture the crucial capital of an economy.”
“……As Marxist despots and tribal socialists from Cuba to Greece have discovered to their huge disappointment, governments can neither create wealth nor effectively redistribute it. They can only expropriate and watch it dissipate. If we continue to harass, overtax, and oppressively regulate entrepreneurs, our liberal politicians will be shocked and horrified to discover how swiftly the physical tokens of the means of production dissolve into so much corroded wire, abandoned batteries, scrap metal, and wasteland rot”
“Capitalism…..is dynamic, a force that pushes Human enterprise down spirals of declining costs and greater abundance.”
“…..Under capitalism, wealth is less a stock of goods than a flow of ideas, the defining characteristic of which is surprise. Creativity is the foundation of wealth. As Princeton economist Albert Hirschman has put it, “creativity always comes as a surprise to us.” If it were not surprising, we could plan it, and socialism would work.”
“The process of wealth creation is offensive to levelers and planners because it yields mountains of new wealth in ways that could not possibly be planned. But unpredictability is fundamental to free human enterprise.It defies every econometric model and socialist scheme. It makes no sense to most professors, who attain their positions by the systematic acquisition off credentials pleasing to the establishment above them….. Leading entrepreneurs – from Sam Walton to Larry Page to Mark Zickerbert- did not ascend a hierarchy; they created a new one. They did not climb to the top of anything. They were pushed to the top by their own success. They did not capture the pinnacle; they became it.”
“Most of America’s leading entrepreneurs are bound to the masts of their fortunes. They are allowed to keep their wealth only as long as they invest it in others. In real sense, they can keep only what they give away. It has been given to others in the form of investments. It is embodied in a vast web of enterprises that retains its worth only through constant work and sacrifice. Capitalism is a system that begins not with taking but with giving to others.”
“For this reason, wealth is nearly as difficult to maintain as it is to create. Owners are besieged on all sides by aspiring spenders – debauchers of wealth and purveyors of poverty in the name of charity, idealism, envy, or social change. Bureaucrats, politicians, bishops, raiders, robbers, short-sellers, and business writers all think they can invest money better than its owners.”
“The distributions of capitalism make sense, but not because of the virtue or greed of entrepreneurs, nor as inevitable by-products of the invisible hand. The reason capitalism works is that the creators of wealth are granted the right and the burden of reinvesting it.”
“Entrepreneurial knowledge has little to do with certified expertise, advanced degrees, or the learning of establishment schools….Wealth all too often comes from doing what other people consider insufferably boring or unendurably hard.”
“Most people consider themselves above the gritty and relentless details of life that allow the creation of great wealth. They leave it to the experts. But in general you join the one percent of the one percent not by leaving it to the experts but by creating new expertise, not by knowing what the experts know but by learning what they think is beneath them.”
“The competitive pursuit of knowledge is not a dog-eat-dog Darwinian struggle. In capitalism, the winners do not eat the losers but teach them how to win through the spread of information far from being a zero-sum game, where the successes of some come at the expense of others, free economies climb spirals of mutual gain and learning. Far from being a system of greed, capitalism depends on a golden rule of enterprise: The good fortune of others is also your own.”
“….entrepreneurs cannot in general revel in their wealth, because most of it is not liquid. Greed, in fact, only motivates capitalists to seek government guarantees and subsidies that denature and stultify the works of entrepreneurs. The financial crash of 2007 and beyond reflected orgies of greed among crony capitalists awash in government guarantees and subsidies, sitting on their Fannies and Freddies, feeding in the troughs of Treasury privileges and government insurance scams. Greed leads as by an invisible hand to an ever-growing welfare and plutocratic state—to socialism and near-fascist corporatism……”
“….Volatile and shifting ideas, not heavy and entrenched establishments, constitute the source of wealth. There is no bureaucratic net or tax web that can catch the fleeting thoughts of Eric Schmitt of Google, Jules Urbach of Otoy, or Chris Cooper of Seldon Technologies”
“… Capitalist economies grow because they award wealth to its creators, who have already proven that they can increase it. Their proof was always the service of others rather than themselves”
AUSTRIAN ECONOMICS ADDICT 