America has had an entrepreneurial spirit from the beginning

The authors of the new book LAUNCHPAD REPUBLIC: America’s Entrepreneurial Edge and Why It Matters argue that the United States encouraged entrepreneurship even before it was named America, and that this particular national trait has never faded.

Co-author Howard Wolk is a seasoned entrepreneur, company builder, investor and former Senior Fellow of the Mossavar Ramani Center for Business and Government at the Harvard Kennedy School. John Landry is a business historian, writer, and former Harvard editor. Business Review claims America is truly a second chance country. That is why, like in most other countries, failing in business is not a shame here. From the beginning, we have favored a government that gives business almost free hands and protects established wealth less than the monarchies we have rebelled against.

We sent the author some skeptical questions and got these patient answers from John Landry.

Grit Daily: Your book begs the question, is entrepreneurship an act of rebellion? Is it…? As far as I can see, it is an act of masochism and a vow to poverty.

Yes, that’s all of them. A recent study found that if entrepreneurs calculated the rate of return on labor strictly on a material basis by the hour, they would be better off risk-averse and taking a mid-level job in a large company. But many people choose to create their own destinies and serve themselves or small groups rather than follow a hierarchy, even if it means living masochistically in poverty for years. It turned out that I wanted to be

Entrepreneurs become rebellious when they dare to do something different. Many, if not most of us, already live fairly comfortable lives with only a few material annoyances. Resist the status quo and seek new paths.

One of our favorite stories in the book is about entrepreneur Marc Lore. He quit his comfortable job at investment banking to launch a series of startups. He eventually found great success with his 1-800-DIAPERS, and later Diapers.com and Quidsi.com with a different approach than Amazon. Amazon began to bankrupt him in a price war, so Lore gave up and sold Quidsi to the e-commerce giant for $545 million. He became a senior executive at his Amazon, but soon joined another startup, Jet.com. Two years later, Walmart acquired Jet for his $3.3 billion, leaving Lore in charge of the entire e-commerce division. But after merging Jet, he quit again and is now building Wonder.com, an online meal preparation service. He hasn’t lived in poverty for long, but money isn’t enough.

Grit Daily: You argue that America has been uniquely welcoming to entrepreneurs since its inception. What have other societies been doing since the 18th century to discourage entrepreneurship, but aren’t we?

The point is, most of the time they don’t. Most countries have had government interventions to maintain social structures and discourage entrepreneurship in every possible way. Most obviously, there is a pervasive culture that sees business failure as something to be ashamed of, whereas we Americans see failure as a learning experience and are willing to give people another chance. Another problem is that governments in other countries are far more powerful and tempted to impose heavy taxes or extort wealth from successful entrepreneurs. As part of the revolutions of the 1770s and 80s, we developed a cultural and political distrust of government and elite power. We like weak governments.

Grit Daily: You acknowledge that the U.S. allows for high levels of wealth inequality, but people who have become very wealthy here find it harder to sustain it across generations. The Ford and Rockefeller families have been wealthy for generations and now have $11 million. A person can leave it to their children without inheritance tax. Aside from raising reckless children, what are these challenges to intergenerational wealth you mention?

Building a company that remains profitable for generations is much more difficult. Most wealthy families have maintained their wealth by investing wisely in the capital markets rather than the original company. In other countries, when you become wealthy, your descendants are more likely to be wealthy as well. Because those countries are more static and less competitive. They also have a strict class structure. Another example from the book is Uber. Here, Uber has become so popular because it favors consumers, even though it hurts taxi companies. Other countries are shutting down Uber in favor of producers. Wealthy families and their businesses often have strong political ties and enjoy protection that lasts for generations.

Grit Daily: You are warning against government resorting to aggressive antitrust, wealth redistribution and strict regulation. Let’s break this down into three parts. How can weak antitrust enforcement help startups? For example, the FTC is trying to block Meta from acquiring a virtual reality company called Within. Would you argue that it would be better for American entrepreneurship if the government pulled out and allowed takeovers?

Generally yes. We are content with a certain amount of antitrust to clip the wings of unfairly competing large corporations. It’s starting to resemble a European approach. Antitrust laws also tend to anchor technology and markets in ways that benefit many incumbents. Therefore, it is necessary to pay close attention to intervening in the government’s powerful modus operandi. As seen in the meta right now, the market generally does a pretty good job of undermining the supposedly dominant tech giants over time.

Grit Daily: For about a year during the pandemic, families with children were receiving $300 per child per month, a clear redistribution of wealth. How did it hurt American entrepreneurship? And how did it help entrepreneurship when it ended?

The temporary child credit itself probably had little impact on entrepreneurship. The bigger problem is that once we start relying on the government to solve social problems, the bureaucracy sprawls and concentrates power. Instead of starting businesses to address problems, talented and energetic people work for or try to reach out to government. Instead of economic dynamism we get a lot of nepotism and creeping socialism – as is generally seen in socialist countries it kills entrepreneurship. source of wealth. My co-authors and I are centrists, not libertarians, happy with some government intervention and a limited welfare state. I think some of the current proposals go too far towards protecting big government and incumbents.

Grit Daily: What tough regulations are you worried about? Minimum wage hike? workplace safety?

Economy-wide regulation is far less worrisome than regulation for specific industries, such as ethanol boondoggles for agricultural giants. Much of what governments do involves favoring particular interests through regulation or subsidies to protect incumbents from entrepreneurs.

Grit Daily: You argue that instead of antitrust laws, wealth redistribution and heavy regulation, we should “encourage the blossoming of post-pandemic entrepreneurship.” What is stopping this flowering? What should I do?

Nothing can stop this flowering. Entrepreneurs must be trusted to work with big companies to deliver the astonishing improvement in living standards seen in the last few centuries. We don’t want to kill entrepreneur geese with well-intentioned but dangerous policies. Entrepreneurs can help us on major challenges like climate change and inequality if we let them.