The success of free enterprise
November 28, 2006| By Nathaniel Ward
Carl Schramm explains the virtues of free enterprise and entrepreneurship at The Heritage Foundation
Many liberals complain that today’s economy no longer provides the job security that it once did. This analysis is true, Kauffman Foundation President Carl Schramm said yesterday at The Heritage Foundation, but it’s far from a bad thing. Ours is “a much more messy, unpredictable economy” than that of the 1970s and America is better off for it.
The modern American economy is no longer dominated by the old coalition of big business, big labor and big government, Schramm said. Instead, since the 1980s, the economy has been driven by millions of entrepreneurs who work with university researchers, more nimble large businesses and a less burdensome government. This has led to the creation of new small businesses and strong economic growth.
Just a few decades after some economists were declaring entrepreneurship outdated, half of new jobs are created by businesses less than five years old. Many of today’s young people, he said, are likely to start their own business during their lifetimes. And with unemployment at near-record lows, job security in the traditional sense is less necessary since jobs are so easy to come by.
This entrepreneurship is driving the economy, Schramm explained. Small businesses have proliferated, and the most successful are often purchased by larger firms, as with Google’s recent purchase of online startup YouTube. These larger firms, in turn, adopt the efficient best practices of the entrepreneurs they take on, allowing new growth. What’s more, he added, because the economy is strong and unemployment is low, even unsuccessful entrepreneurs can find new employment quickly.
Unfortunately, Schramm continued, many Americans find this vision of free enterprise daunting. He advocates a program to educate young people about “a new vision of capitalism: entrepreneurial capitalism.” This will allow the continued development of America’s dynamic and powerful economy, which remains the envy of the rest of the world.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
