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The Importance of Entrepreneurial Capitalism in Today’s Society
Capitalism is not a contrivance: it is a manifestation of nature. No person, committee or nation invented it. They didn’t have to—it just happens naturally as an essential means of survival and advancement. The same is true for entrepreneurialism.
Freedom is our natural state as humans; free-market capitalism is its natural manifestation. The wealth of individuals, communities, and nations comes first from the world of business where producers and consumers of goods and services meet in free, mutually rewarding exchanges. Everyone benefits from the natural and necessary fruits of capitalism. Even freedom-depriving systems such as socialism, communism, and dictatorships must release strong enough doses of capitalism to keep their economies (and people) alive.
In an earlier Executive Street blog post, I explained that profit is the lifeblood of all civilization as it empowers capitalism. Just as this is true, entrepreneurialism is the driving force and purest form of capitalism.
All private-sector enterprises started as entrepreneurial ventures, even eventual global corporations, all began as a form of entrepreneurial capitalism. Think of Henry Ford’s early days and Steve Jobs’ garage-birth to Apple.
To appreciate the importance of private-sector successes, you need only consider the development of any city or nation. Everything other than natural landscapes is directly or indirectly a result of the profit motives of capitalism. All farms, highways, bridges, buildings, trains, cars and airplanes come from wealth created by people of private-sector enterprises. All cities, parks, hospitals, schools and governments depend on flows of wealth from the private sector.
Whatever our work, the profits of our efforts allow us to accumulate money and property. Capitalism enables such wealth building, and thus helps us remain free to advance the quality of life for ourselves and for those we serve.
Just as profit enables and feeds the lives of individuals, it manifests capitalism as the fountainhead of civilization. Without profits of individuals exchanged in social and communal settings, there would be no civilization. Capitalism-borne freedom and civilization enable and amplify the shared happiness, peace of mind and compassion that hold people together.
Adam Smith’s The Wealth of Nations was first published in England just 4 months before the United States’ declaration of independence (March 9, 1776). Over the intervening years, his insightful book has contributed greatly to the enlightenment, freedom and prosperity of western civilization. He labeled what he recognized as the socioeconomic system best prepared to build the wealth of nations as the “Mercantile System”. What he described is what we now call capitalism.
All that Adam Smith observed and shared about human nature has passed the test of time. We see this as true wherever people are at least partially free to invest their labors and capital for best-possible profits. We see it in how well capitalism works to answer our needs, in how smoothly our cities run, and how free we have remained to be masters of our own destinies.
As a product of nature, the basics of capitalism are as good as they ever will be. However, its recognition and support within socioeconomic systems is very much subject to human influence. As you enjoy and defend free-market-based capitalism, please know and remember that Mother Nature will not only be on your side, she will be rewarding your successes all along the way.
Just as we all need air, food, water and shelter to survive, so do we need the fruits of capitalism to live free and prosperous lives. And we need as many entrepreneurs as we can get to keep our special socioeconomic system operating near peak-performance.