One of the most harmful of Barack Obama’s public-private partnerships (PPPs) has to do with his support of entrepreneurship in an attempt to “spur job growth.” I would like to show why this is not only a particularly bad idea but also a destructive one, leading to exactly the opposite of the result sought by the program. Contrary to popular myth, startup companies do not generate many new jobs, and actually create net job losses after their first year. FULL ARTICLE
Source link: http://archive.mises.org/9539/obama-is-wrong-about-entrepreneurship/
Obama is Wrong About Entrepreneurship
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Better yet:
The governments at all levels should reduce taxes and regulations on all businesses big and small. The government should drop the two biggest requirements that hurt small business: 1. Licensing rules and 2. Forced contribution to the largest wealth destruction machine ever created: Anti-Social In-Security.
Look at the exact folks these jerks are trying to help? They are inner city and rural folks. Those in the cities face a daunting array of city, county, state and federal regulators, taxes and licensing requirements. Those in the country have to compete with subsidized agriculture, subsidized and licensed communication firms, regulated suppliers of energy and regulated suppliers of transportation.
This article is misleading and I am surprised that Mises would post it. Entrepreneurs are an extremely important part of an economy. The problem is that Obama is going about it the wrong way. Instead of providing government funding for startups, he should be removing barriers to starting up a business, like taxes, regulations, and licensing. This article should explore the reasons for the losses and provide solutions.
I think the first two posters are right. Many libertarians, including myself, think the reason there aren’t more companies in a given industry and the reason more small companies don’t thrive is because of State regulations to begin with. The high costs of legal/regulatory compliance and government-subsidized loans or contracts for large companies are a major part of this.
This looks like another example of government interference begetting the desire for more government interference to solve the problems it caused in the first place. Removing barriers and advantages would probably help small companies and entrepreneurs more than any proposed government “solutions” are likely to.
Wow orthodoxy ftw, and I agree with the three posters before me. Bigger companies have bigger ‘competitive’ advantage for government regulation (administrative burden, rules and regulations). And SME and entrepreneurship policy is often proposed as a counterbalance for these advantages big bad companies have.
As with any govt. intervention, the SME/entrepreneurship policy interventions are just aimed at the symptoms of earlier govt. interventions caused problems.
And then there are policies that address the (from an neo-classical perspective) articifial barriers small companies an start-ups face, such as access to funds.
Both strands of policy and misguided and/or just part of the ordinary progressive govt. scheme.
What kills businesses big and small is labor overhead from high payroll taxes, healthcare insurance, workmans comp and liability insurance. And it is these cost that has led large businesses to downsize their labor force and hire private contractors to perform many task. Many times the employee that was downsized was hired back as a private contractor.
Most small businesses survive until they try to expand and fail due to the high overhead expense of adding employees exceed gross profits.
Another way of looking at the data ih the table is that it merely reflects the fact that small businesses fail and so the people that were ‘employed’ in the startup phase beome ‘unemployed’ when the company fails. This as opposed to some sort of systemic effect on employment.
So then does government funding encourage lousy startups? I don’t know, but would be interested in looking at some firgures which compare success rates (however that might be defined) between government-funded and nongovernment-funded startups.
I’m in total agreement that government should not subsidize new entrepreneurs. It should lower the taxes and take out almost all the regulations. However, the numbers given in the chart ranging from 1998 to 2002 leaves me thinking… We’ve experienced the dot.com bust and the small recession following 911 during those years. There was obviously some jobs lost in lots businesses during those years. Would the numbers have followed the same trend if we would of made the comparison for let’s say for 2002 to 2006?
I’m in total agreement that government should not subsidize new entrepreneurs. It should lower the taxes and take out almost all the regulations. However, the numbers given in the chart ranging from 1998 to 2002 leaves me thinking… We’ve experienced the dot.com bust and the small recession following 911 during those years. There was obviously some jobs lost in lots businesses during those years. Would the numbers have followed the same trend if we would of made the comparison for let’s say for 2002 to 2006?
Government intervention means the government is making people do something they choose not to do. If people chose it, the government would not have to force people to do it, which means there would be no government program of force.
Therefore, we can always know when the government is doing the wrong thing. Of course, that is all the time. The government is always wrong when it uses force to make people do something.
Even for those who accept the idea that the government should protect us at some modest level, we surely have to admit we are not dealing with a government protecting us. We are dealing with a government that wants to make us do things we would not choose to do of our own free will.
That is kind of like saying we do not live in a free country because the government will not tolerate our free choices. But let us not delude ourselves into considering the government a monolithic entity. It is the agents of people implementing the will of people who want to control other people. It is tolerated by The People and The People seem to believe that it is their government and so it stands.
It is amusing that a nation that no longer understands freedom still mouths the words and celebrates the lost forms of freedom. We can pretend to be free so long as we follow the prescribed rules for pretending to be free. Cross the line into liberty, and pay the penalties.
My first impression was the same as that of many posters. Onerous taxes and heavy regulations make it difficult for any start up to become profitable. An entrepreneur has to hire a laywer or several lawyers to make sure that she is in compliance with the mountains of paper laws on the federal, state, and city level. Clearly established firms can afford these lawyers which is why they have no problem with additional regulations and even advocate more regulation.
I think that in a purely free market without a State, an established firm would still have a first-mover advantage, but it would not be nearly as big as the advantage that an established firm has today. Without such large and artificial barriers to entry, smaller firms could find their niche and be competitive and profitable relatively quickly.
I suspect that the purpose of this program is not to create new small businesses, anyway. It is most likely just propaganda: “…see, we’re not socialists! Look at all we are doing for the small businesses of this country! blahblahblah!”
Thus the program doesn’t need to work (at least not as we normal people define the word).
The word “incubator” is giving me creeps, and conjures the sci-fi images of babies being engineered in petri dishes… brrr… Scary stuff…
I have seen “Barak Obama”, “Obama” and Mr. Obama mentioned in this and other articles out there in the field. Whatever happened to “President Obama”? Why this irreverance? If we could address Bush as “President Bush” even after his abysmal lies for attacking Iraq and his almost single-handed decimation of the economy and blatant practice of cornyism, I think we owe it to the man currently in office to address him by his elected title.
EnEm,
It was written before he became President.
Chris
I was never particularly deferential to Bush, either. Or Clinton. Or the other Bush. Or Reagan. I don’t owe Obama or any of those other “ruling class” tyrants a damn thing.
I have seen “Barak Obama”, “Obama” and Mr. Obama mentioned in this and other articles out there in the field. Whatever happened to “President Obama”? Why this irreverance?
Perhaps due to the irrelevance of these criminal titles to a free society? So a bunch of delusional people got together and decided to empower a criminal over them? Other than the fact that this physical empowerment of him over others (as in enslavement of them) gives him the ability to lie, murder and steal without accountability, it is an illegitimate empowerment I refuse to recognize.
Mob rule, no matter how dressed up, is still mob rule. No man has ever set foot on the Earth that rightfully has a claim to my life. No man ever will. Guess what, Obama is just a man, and like all who seek power over others, inherently evil.
Meanwhile though, the insanity known as voting seemingly causes the most destructive people to question the ethics of the least destructive, as they can only see our disrespect for their destruction of society as being the cause of all of its problems.
As if it were ever that simple. Collectivism, like all other herd movements, is designed to benefit the shepherds. The sheep? All is good, right up until slaughter day, but then it is too late to avoid the price of their apathy.
@ Lawrence Young’s “So then does government funding encourage lousy startups? I don’t know, but would be interested in looking at some firgures which compare success rates (however that might be defined) between government-funded and nongovernment-funded startups.”
Then the problem would be that of selection bias. The startups that are subject of govt. policy are likely those which would benefit most from it, which alternatively would be more likely to not have starten up without the ‘help’. The counter argument for that would be that the govt. can select startup to get out of this bias, but then the question will become how the govt. can select this average group of startups, this would imply the govt. gaining/having knowledge which is in some sense at the very root of entrepreneurship itself. I think this argument is valid for both the selection problem to compare policy startup groups with non-policy startup groups as well as the effects of policy in general with regard to entrepreneurship: if the govt. can know these things, private investors or so-called business angels can too. If these latter won’t invest, why should the govt.. We know holding public money makes one more risk taking, but would this constitute a sound policy basis with regard to something that would supposedly cause economic growth? I would argue in the negative.
“the empirical evidence on the average startup company reveals a record of loss rather than gain.” – I find the evidence given to support this is rather weak – does he mean only in terms of number of jobs?
also, why are they showing Kirzner here? doesn’t he believe that entrepreneurs are incredibly important to the free market system as they correct mistakes in pricing and through ‘alterness’ correct ‘sheer error’?
ya- no government support for entrepreneurial development
nay- the rest of the article?
I was somewhat loose with the terminology in the article, but I would argue that government funding to encourage start-ups is not entrepreneurship, and the individuals who receive funding from government are not entrepreneurs. To paraphrase Rothbard, without supplying their own capital–and thus diminishing the risk associated with entrepreneurship–they are engaged in mere “parlor games.” (The title of the article is different from the one I chose, which did not have the word “entrepreneurship” in it.)
Now that Lucas pointed this out, I found the following claim “the empirical evidence on the average startup company reveals a record of loss rather than gain” also somewhat weak. I mean we don;t have to have all the data to deduce that the entire empirical evidence of all the startups (divide by the number and you’ll have the average) in all history reveals the status quo. Which by the fact we’re not all starving (yet) isn’t a record loss but a (record?) gain.
The net gain of startups will on average be positive, and if not we’ll be retrogressing which could happen but not without a falling population, serious allocation barriers or omnipotent incumbent businesses (which would defy the existence of uncertainty I think).
I think govt. in entrepreneurship policy can be rightly called “planned entrepreneurship”, and we know that govt. cannot plan.
I’m an entrepreneur on the right side of the statistics, in that I’m in year 10 and have positive cash flow and employ a number of people. I am in a heavily regulated business with high barriers to entry and can tell you that regulations are a massive impediment to success. My competitors, mostly multi-national companies, support regulation. I’m fully convinced that in a world without regulation, the average size business would be considerably smaller and the market much more diverse. I don’t have a source, but have seen it quoted that SBA loan recipients are like the Who’s Who of failed businesses. I’m personally opposed, because I feel it is immoral to take money that was extracted by force, and have not. Government is anathema to entrepreneurship. What is really needed to be successful is basically incomprehensible to those in government. How could they possibly make good choices about who/what to fund?
Lucas said
“also, why are they showing Kirzner here? doesn’t he believe that entrepreneurs are incredibly important to the free market system as they correct mistakes in pricing and through ‘alterness’ correct ‘sheer error’?
“ya- no government support for entrepreneurial development
nay- the rest of the article?”
Of course, Austrians in general (myself included) see entrepreneurs as important, as those who more correctly forecast the future, spot opportunities to “buy low and sell high,” make more productive use of existing resources, etc. Over time those entrepreneurs who fail repeatedly are “weeded out.” I am not saying entrepreneurs are not beneficial, just that the average start-up fails rather than succeeds. (Start-ups are not necessarily entrepreneurs.) In fact, given the other empirical evidence that most start-ups occur in the same industry the founder was previously employed in, one could argue that their previous employer was the entrepreneur not weeded out, due to making a profit. This would mean companies in business longer were the better entrepreneurs in terms of consistency in making a profit.
My argument is that Pres. Obama should not do anything to encourage start-ups for a few reasons.
First, opportunity costs are not taken into account, the unseen, etc. This would apply to any govt. intervention.
Second, it involves taxation, robbing Peter to subsidize Paul and, therefore, theft.
Finally (the point of the article), is that the empirical evidence on start-ups is (a) they do not create jobs (Obama’s goal) and (b) the jobs are typically worse than those companies with more employees.
It is not an argument that entrepreneurship is bad (again, start-ups don’t necessarily equate to entrepreneurship, especially when using others’ money). It is that most start-ups fail.
We could even assume that the data showed that government efforts to increase entrepreneurship resulted in more and better jobs. What then? I would revert back to the first reason given above: seeing the unseen effects of government intervention, regardless of the empirical data.
I was trying to use both the theory and history (a la Mises; see Rothbard’s America’s Great Depression) to make my argument. The history (empirical evidence) must match the (Austrian) theory, or else a mistake was made in the historical examination. I am aware of the dangers of empiricism in trying to “generate” theory.
Regarding the first few posts above–Obviously, govt. should take away all licensing, legal, taxation, etc. requirements, for businesses of any size. But that wasn’t the focus of the article. There would no doubt be a change in start-ups and number of companies and employee size if all regulations were removed. However, I don’t necessarily see the idea as the more start-ups, the better. In a world where everyone owned a business selling a product or service (excluding the idea that everyone does own a business–their labor–and can “sell” it to others), it seems close to a mercantilist arrangement. For example, Microsoft would only be Bill Gates, because all existing employees would have their own businesses. Correct me if I am error.
cheers,
Chris
… correct me if I am in error.
“He also centrally plans the Austro-libertarian blog.”
Is the irony / joke in this wording intended, or it’s just my imagination playing with me?
@ Miklos,
Intended, of course.
Chris
I was surprised at the direction of the article also because it seemed to come at the issue from the same direction as Obama, then it hit me. Obama’s plan does not even work under his theory. The article is good because it demonstrates that Obama’s idea fails under all scenerios, even the fantasy ones.
Chris, I think we can all agree on these two points of yours why government should not fund start-ups:
I think the problem people are having with your article is this assertion:
The problem is that this statement, by itself, is tantamount to stating that no one should fund start-ups because most of them fail, which is nonsensical.
I think what you are really trying to express is that funding a start-up is an activity that is actually economically harmful (which flies in the face of conventional wisdom), and only provides an economic benefit if in fact the start-up is one of the rare few that grows and thrives. That argument makes sense, and leads directly to the conclusion that the funding of start-ups should be left to the only entity that has a prayer of a chance of doing a good job of picking winners instead of losers: the free market.
James R,
I am wondering where the confusion is coming from. I am assuming the article is either (a) not well-written or argued or (b) not well-read, or some combination of the two.
Dick Fox seems to understand (see his post above): I am arguing that Obama’s goal, even on the face of it, and on his own terms, is empirically a dumb idea. James, you have quoted me above (in bold italics) on the first two points I wrote. However, the third point you use bold and italics for I did not write. Why did you do this? This makes it look like I am arguing the third point, which I am not, but I understand how you might get that from the nature of the article. Why the straw-man? This is why I am wondering how well you read it. I was very careful to argue that the average (emphasis on average) start-up–since start-ups are not some homogeneous lump–fails.
You wrote the following:
“The problem is that this statement, by itself, is tantamount to stating that no one should fund start-ups because most of them fail, which is nonsensical.”
Of course it is nonsensical; it is just the knocking down of a straw-man, which was created by your false assertion, which I did not write. While I say nonsensical things all the time no doubt, I try to be more careful when writing. I don’t think you are accurate here. Consider the careful wording of “average”–have I drilled that point enough? Also consider this paragraph, which was an attempt to preempt your type of criticism:
“While the average new business is a waste of resources, what about other startups that have generated millions of jobs, billions of dollars in revenue, and grown into multinational corporations? We can think of Google, FedEx, Dell, Microsoft, eBay, and many other startup companies that have benefitted many people’s lives. The common link between all of these companies, however, is the market solution of venture-capital funding, not government intervention.”
Again, does this not go against your criticism? Did you read this? I mean I pointed out that average start-ups fail, answered the question of what about other well-known start-ups that people could think of, and said that venture capital–the market solution–is the reason they succeeded. Venture capitalists do not fund the average start-up company.
Or consider my penultimate paragraph:
“Austrolibertarians will no doubt agree with Professor Shane’s conclusion: ‘So perhaps we would be better off letting the market work and not provide extra incentives for people to start businesses.’”
James, please clarify if I am still writing nonsense.
I’m just going out on a limb here but I’m going to say this business incubator idea probably came from Julius Genachowski, the head of the FCC and a board member of the Washington based startup incubator LaunchBox digital. It’d be interesting to see if they receive any of this money to invest in companies.
This article is wrongly thought out from beginning to end. The instinct against government intervention is a good one. But the reasoning is completely unsound. All economic growth, by definition, springs from entrepreneurship, broadly defined. In the real world, most entrepreneurship in the economy is generated by small companies. That these start-ups provide jobs with fewer benefits is not at all a drawback – this demonstrates the higher risk appetite of those involved, an attitude which grows the economy. As the vast majority of start-ups fail, most of the statistics quoted are irrelevant to their benefits to the economy. Moreover, the few start-ups that succeed are the ones that drive growth, and they rapidly become big companies themselves, so the statistics show nothing.
This is a regrettable example of a penchant for statistics taking leave of analytical rigor. Small companies are the only way new big companies are born, and without them entrepreneurship, as well as technological progress and thus the returns on capital outlays, collapse. The reasons against government funding of start-ups are legion. But they are not to be found here.
It’s surprising that an un-Austrian principle is used to defend Austrian principles. It’s very short sighted to say that start up companies don’t generate new jobs. First of all; It’s like saying that children are useless and therefore only adults should be allowed to live. The writer totally ignores the fact that only very few innovative companies start as large corporations like all adults start as children. It would conform to Austrian thought if the articles tenure was against government support for small companies but instead it turns to an anti-Obama political rant. Secondly; even though a large part of startups fail, it is not a waste of resources. Even entrepreneurs who decide to go back to working for a larger company are highly valued because of their experience and entrepreneurial qualities. Most large companies are actyually conglomerates of smaller units and it’s an empirical fact that self-entrepreneurship generates far better results than top down, iron fist governing. Thirdly; most new ideas and concepts fail in the design stage so established companies are far more conservative then most startups. If no-one dares to venture out in the unknown we would still be living in the middle ages where guilds decide what is manufactured instead of the market. The whole principle of free market is based on the fact that someone will meet demand. Without startups there would be more monopolies and free markets wouldn’t exist.
F.A. Hayek warned us about Carl Schramm’s Tyranny: Mises Warned us of Carl Shramm’s/Dane Stangler’s Post Office
By entrepreneurshipeconomist
“[Socialists] promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office.â€â€ –Ludwig Von Mises predicting what the Kauffman Foundation would become after seven years of tryannical, corporate-CEO, personal-profiteering, anti-intellectual, anti-entrepreneurial Schrammenomics.
“Those fighting for free enterprise and free competition do not defend the interests of those rich today. They want a free hand left to unknown men who will be the entrepreneurs of tomorrow…†–Ludwig Von Mises talking about why Carm Schramm goes to the $ 3,995.00/head Milken Institute to address his fellow corporate-statists on Kauffman’s dime, instead of funding innovators, true academics, entrepreneurs, entrepreneurship, and inventors who are losing their homes and businesses as the eocnomy withers after seven lonmg years of Schrammenomics and Schramm funnels himself and his growthology buzzword-bloggers millions from the Kauffman endowment (which was meant to go to entrepreneurs, true academics who are not afraid to quote Hayek and Mises, and innovators), while pretending to serve the innovators and entrepreneurs Schramm opposes in his characterless actions and by saying one thing while doing another.
I sit on a man’s back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back. –Tolstoy Writings on Civil Disobedience and Nonviolence (1886)
F.A. Hayek/Mises warned us about Carl Schramm et al.’s Temporal Tyranny, where he hires thug deputies such as Dane Stangler to backdate research and make it look like Schrammenomics embraces the Austrains, when, in fact, he compeletly ignores them in word, deeed, spirit, and action.
Because Schramm has hijacked the $2.5 billion Kauffman foundation, he runs it as a top-down dictarorial CEO would, with every action motivated by self-preservation as the Nobel in economics slips further and further beyond his intellectually-inept reach. Sycophantic lockstepping lawyers such as Dane Stangler will never call Schramm out, as thier salary depends on supporting Statist Schrammenomics above truth, beauty, and reason, and they will go so far as to backdate Kauffman research to serve their master.
Carl Schramm did not build Kauffman, and it is time for him to step down.
Carl Schramm is not Kauffman, and it is time to step down.
Carl Schramm does not own Kauffman, and it is time to step down.
Kauffman did not will for his vast welath to become a Schrammenomics vanity press, and it is time for Schramm to step down.
Kauffman did not will for Schramm to use a $2.5 billion warchest to pen and promote insipid, self-serving books lauding Schrammenomics while completely ignoring intellectual diants such as L.V. Mises and F.A. Hayek, and it is time for Carl Schramm to setp down.
Nowhere in the foundation’s charter did it stipulate that Carl Schramm was to lord over the Kauffman Foundation for all of entirety as the economy withered, crashed, and died; and the netrprnuerial spirit was replaced with Schrammenomics
The most important elements in entrepreneurship are character and integrity. The most important elements for Statists/Schrammeconomist are the lack of character and integrity and the ability to use words to mislead and deceive while laying claim to a dead entrepreneur’s estate. While Hayek and Mises used words for truth, Schramm uses words for mere personal profit, and then when his lackluster, anti-intellectual, unscholarly works fall short, he has to try and put all better economists out of business by leveraging his $2.5 billion warchest. Imagine if Hayek and Mises had used a $2.5 billion warchest to put their competitors out of business. They would never do this. For they had character and integrity, which Schramm the self-serving tyrant/Statist completely lacks.
“Reason is the main resource of man in his struggle for survival.†–Mises. Again we see why Schramm never quotes Mises, as Reason is the groupthink statists’ prime enemy.
“Whenever lesser men and groupthink, central-planning intellects begin with the idea that they are the best and the brightest, they will advance that notion by any means necessary. All superior competitors will be put out of business by the central planners, and as the groupthinkers congregate to discuss entrepreneurship, they wil inevitably criminalize the individual, innovator, and entrepreneur and seek to persecute and bankrupt him while promoting their own soulless, spirtualless works. They will go so far as to ignore entire bodies of work and Nobel Laureates, replaicing the Greats with a sycophantic corproate groupthink structre which enriches the insiders while preaching the virtues of entrepreneurship, even as the groupthink corporation/buzzword blogfest kills it. They take great pride in their failure to define terms, as their generic “growthology†buzzwords come to mean but one thing–the flow of capital into their own personal pockets.â€
Whenever those with a fundamentally socialist, central-planning, bureaucratic mindset approach entrepreneurship, they generally end up creating a groupthink tyranny which kills the spirit of entrepreneurship, while simultaneouly profiting off the fruits of entrepreneurship and free markets, even as such exalted entities wither and die under the Schrammeconomists’ reign of corporate terror, whence a Foundation’s resources are leveraged to put competitors out of business so that the Schrammeconomist’s inferior work might prevail in the dumbed-down market, thusly exlating Schramm as teh eocnomy and academia decline. The study and teaching of entrepreneurship requires a great character and intellect, and an even greater humility. Over the past seven years Carl Schramm has demonstrated that he lacks character, intellect, and humility; and the economy and academy have suffered immensely under is reign.
1) Carl Schramm lacks character: Schramm has beocme famous for syaing one thing while doing another and making promises he never keeps. This has been pointed out elsewhere on the internet, and it is also manifested in that he runs the Kauffman Foundation like a tyrant, pocketing millions of dollars for his inspidid treatises on Capitalism which compeletly ignore the towering giants of the field including Ludwig Von Mises and F.A. Hayek. Not referencing the Greats who have walked before you is a serious sign of unscholarly egomania, ineptitude, and a withered character. Rather than funding true economists and entrepreurs, Schramm actually uses the Kauffman foundation’s funds to oppose them while campaigning for the Nobel in economics, wiring hundreds of millions to Statists and intellectually-indifferent University administrators. Schramm runs the Kauffman Foundation not as a charitable foundation, but as a corrupt corporation which enriches Schramm in a massive manner with millions, while also allowing him to try and put his competitors out of business, funding groupthink growthology bloggers to dumb down the internet. Should a foundation be run by those with lackluster, unscholarly books to promote and a track record for academic irresponsibility? Will they not by and by use the foundation’s resources to try and put their superior competitors out of business in cloaked, obfuscating, unmanly manners, all the while preaching fair markets and free markets? Because Schramm lacks character, integrity, and intellect, he profits not by serving entrepreneurship’s ideals, but by saying one thing while doing another and hiring Dane Stangler to backdate research trying to claim that Schramm was the first to discover/rediscover Austrian economics. Actually the Austrian economists discovered Austrian economics. And Schramm destests them because they call his failed Statist bluff with every word.
http://dealbreaker.com/2007/05/the-unsurprising-failure-of-et.php
Posted by John Bunch, Ph.D., May 03, 2007 8:50AM
It is interesting that Dealbreaker references Carl Shram of the Kauffman Foundation as an authority on ethics. Those of us who live in the Kansas City region know that Carl Schram and been a controversial figure since he was appointed to his post a number of years ago. Board members have resigned in protest of his leadership style and strategic choices. His controversial leadership led to the Missouri Attorney General reviewing the Kauffman Foundation for not staying true to the intent of Ewing Kauffman. The purpose of this review was stated as:
“In light of the public allegations of a departure from Mr. Kauffman’s intent, lack of appropriate oversight by the Board of Directors, and certain instances of conflicts of interest. †(http://www.ago.mo.gov/newsreleases/2004/kauffmanreport030404.htm#conclusion)
See also this editorial from the Kansas City Business Journal (http://www.bizjournals.com/kansascity/stories/2003/09/15/editorial1.html)
Ewing Kauffman was famous as an ethical leader. Carl Schramm is not.
–http://dealbreaker.com/2007/05/the-unsurprising-failure-of-et.php
2. Carl Schramm lacks Intellect: Suppose you were to write a treatise on philosophy and leave out Aristotle, Plato, and Socrates. Suppose you were to write a treatise on physics and leave out Einstein and Newton. Schramm wrote a treatise on kapitalism and he left out Nobel Laureate F.A. Hayek and his teacher Ludwig Von Mises.
Conduct a search in GOOD CPITALISM: BAD CAPITALISM.
0 results for ‘hayek’
0 results for ‘mises’
Now Schramm has hired Dane Stangler to backdate Kauffman research to show that really Schramm was thinking about the Austrians all along; and again this ties into Schramm’s complete lack of character and corrupt nature.
3) Carl Schramm Lacks Humility: When one has no achievements other than commandeering a foundation for one’s own personal profit and intellectually-indifferent, vapid, Statist vanity press, one has nothing to be humble about. If Schramm had any humility he would apoligize for what he and his Statist, doublespeaking philosophies have done to academia and the economy, and he would step down.
Hayek reminds us that economics is about values, ethics, and character–not about doublespeaking Schrammenomics:
“I have arrived at the conviction that the neglect by economists to discuss seriously what is really the crucial problem of our time is due to a certain timidity about soiling their hands by going from purely scientific questions into value questions. This is a belief deliberately maintained by the other side because if they admitted that the issue is not a scientific question, they would have to admit that their science is antiquated and that, in academic circles, it occupies the position of astrology and not one that has any justification for serious consideration in scientific discussion. It seems to me that socialists today can preserve their position in academic economics merely by the pretense that the differences are entirely moral questions about which science cannot decide.
Conversation at the American Enterprise Institute for Public Policy Research, Washington, D.C. (9 February 1978); published in A Conversation with Friedrich A. Von Hayek: Science and Socialism (1979) –Hayek
“If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.†Schramm has done more harm than good by placing his campaign for the Nobel Economics and hiring/funding growthology groupthink bloggers, over supporting entrepreneurs, innovators, and entrepreneurship. After seven years of Schrammenomics, look at the economy where millions ar elosing their jobs an dhomes. Look at the academy and the skyrocketing tuitions at the Kauffman campuses which place studnets in massive, unprecedented debt, with Kauffman campuses such as Oberlin and Keynon oft leading the way.
http://www.newsnet5.com/education/19073605/detail.html
How many more years of Schramenomics will the Kauffman board allow? When Schramm steps down, a thousand flowers will bloom, and the greats such as Ludwig Von Mises and F.A. Hayek will be given theior rightful place in the academy, as opposed to Schramm’s MBA/lawyer groupthink thugs who Schramm handpicked to serve the Schrammenomics tyranny over truth and reason.
Entrepreneurs do not need credit, as the debt-pushing Stangler and Schramm contend in their attempt to shackle entrepreneurs with fiat debt.
Rather it is the intrinsically-worthless fiat debt, created from thin air, that needs entrepreneurs. For fiat paper has no worth, and the moment the entreprnuer signs his soul to that which other men such as Schramm created out of thin air, he has lost the entrepreneuiral battle. As a natural-born Statist, Schramm and his Schrammenomics disciples naturally supports the fiat bankers while belittling entrepreneurs and innobators, hitting them over the head and intimidating them with Bo Fishback’s Harvard MBA while trying to corrale them into Fishback’s incubator and conservatory, transfer tehir creations to the Statists, and shackle them with fiat debt.
Fiat debt is the only way for Schramm et al to shackle entrepreneurs and tether them to their corporate-state.
“What counts alone is the innovator, the dissenter, the harbinger of things unheard of, the man who rejects the traditional standards and aims at substituting new values and ideas for old ones.” –Ludwig Von Mises
Schramm/Fishback and Stangler never quote Mises nor Hayek, as they see themselves vastly superior to the innovator and creator and true entrepreneur.
The Entrepreneurship Economist’s Interview With Leading Schrammenomics Disciples Bo Fishback, Dane Stangler, and Carl Schramm: The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year.
April 29, 2009 by entrepreneurshipeconomist
The Entrepreneurship Economist’s Interview With Leading Schrammenomics Disciples Bo Fishback and Dane Stangler: The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year.
Welcome Bo Fishback and Dane Stangler of growthology and the Schrammonomic school of economics/schrammenomic incubators/ as we celebrate seven years of schrammenomics! Let us begin by reflecting on today’s news:
http://finance.yahoo.com/news/Economy-shrinks-at-apf-15067036.html?.v=12
EE’s question: Over the past seven years, how has Schrammenomics helped the economy?
Dane Stangler’s answer:
Bo Fishback’s answer:
EE: Cool! I see Carl Chramm has joined us. He can join it at any time!
EE’s question: Why do Schrammeconomists ignore the Austrian economists? In Schramm’s recent masterwork, GOOD CAPITALISM, BAD CAPITALISM, why is there no mention of Nobel Laureate F.A. Hayek nor Ludwig Von Mises?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Me too.
EE’s question: Dane and Bo. Bo and Dane. Danebo and Bodane. If you were running the Kauffman Foundation, would you accept a George Eastman Kodak Medal from Rochester Univeristy, even though Kauffman wired millions of dollars to Rochestser, like Carl Schramm did? Is this not a conflict of interest?
Carl Schramm’s answer: I’ll take this question! I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Me too.
EE’s question: Why do you link to freakanomics and other entertainment lite sites at growthology as the economy crashes and burns in massive scandals and why do you never link to mises.org nor dailyreckoning.com nor patrick.net, who offer solutions and commentary from an Austrian standpoint, and who also pass judgment on the ocrruption? Are you afraid your doublespeaking, anti-entrepreneurship Harvard MBA friends and bailed out fiat bankers who never worked a real day in their life won’t talk to you and recommend you for cash prizes and honorary medals for your campaign against the taxpayer and true entrepreneur via “growthology†Harvard-MBA buzzwords?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Me too.
EE: What does the MBA-inspired buzzword “growthology†mean and has chanting it in unision every day over th last year helped or hurt the economy?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: In a recent WSJ article, Carl Schramm took great pride in the fact that under his leadership, nobody really knows what it is that the Kauffman Foundation is or does. Is it not a leader’s responsibility to be more definitive, expecially in the entrepreneurial realm? For example, Steven Jobs lets defines his company and mission with a clear, articulated vision. Is Schramm hiding something, such as, well, a lack of vision? Or is it just strategically easier to take credit for others’ successes by never committing nor signifying nor string oneself?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: Recently Bo Fishback has been emphasizing the fact that entrepreneurial success lies not with the individual, but with the bureuacratic model. He is basing an incubator/conservatory on this this postulate which must discount reality, emprical observations, and exalted economic theory form F.A. Hayek and Ludwig Von Mises. Have you read Hayek’s Road to Serfdom?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: For instance, the following companies did not begin in a bo fishbackian conservatory/incubator lorded over by a Harvard MBA: Microsoft, Google, Facebook, Starbucks, Walmart, Myspace, Twitter, Blogger, and Yahoo. Microsoft and Facebook were started by Harvard dropouts, and Google and Yahoo were started by Stanford grad-school dropouts. Thewre were no MBAs involved, nor incubators, nor schrammenomic models which have been killing the eocnomy for teh past seven years. In fact, tehc/entrepreneur incubators have a vast record of general failure, because they neglect Hayek and the reality of innoavtion–that the MBA’s first instinct is to ignore the innovator and their innovations while serving himself with his pretentious modles that never work. Do you think that past failures is a great way of predicting future success?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: Kauffman had meant his funding to go to entrepreneurs and innovators–not to the secondhander “Masterminds†who exalt themselves over true innovators and entrepreneurs, thuslky killing the spirit of entreprneurship which has lead to the epic failure of the Kauffman campuses to produce more wealth than was wired to the administrators under the rule of Schrammenomics. Have you read Hayek’s Road to Serfdom?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: In the following passage, F.A. Hayek describes why the Kauffman Foundation is failing. Calling Harvard MBA incubators “Conservatories†will not change this. Do you not think that the Kauffman Foundation should fund entrepreneurs and innovators and true academics (who quote Mises and Hayek) directly, as opposed to funding bureaucratic buzzword bloggers and innovation-free, technology-free “incubators†and models whose sole purpose is not to serve the entrepreneur and innovator, but line Bo Fishback’s pockets, in the same way that the goal of Schrammenomics is not to illuminate, but to darken the world while dismissing exalted economists Hayek and Mises so as to heiten Schramm’s chances for a nobel prize, just as Fishback dismisses the actual, exalted entrepreneur in all his MBA “models,†while allowing Schramm to spend Kauffman’s funds in purchasing George Eastman Kodak Medals, and transforming the Kauffman Foundation into a Schrammenomics vanity press/ATM for those who support his campaign for the Nobel Prize, while neglecting to fund rugged entrepreneurs, academics, and innovators?
Hayek wrote: The tragedy of collectivist thought is that, while it starts out to make reason supreme, it ends by destroying reason because it misconceives the process on which the growth of reason depends. It may indeed be said that it is the paradox of all collectivist doctrine and its demands for “conscious†control or “conscious†planning that they necessarily lead to the demand that the mind of some individual should rule supreme—while only the individualist approach to social phenomena makes us recognize the superindividual forces which guide the growth of reason. Individualism is thus an attitude of humility before this social process and of tolerance to other opinions and is the exact opposite of that intellectual hubris which is at the root of the demand for comprehensive direction of social purpose. –F.A. Hayek, The End of Truth, The Road to Serfdom
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
In light of the following article and conflicts of interest, how might you–Bo or Dane–lead the Kauffman Foundation differently? Do you feel that character and integrity are important in the entrepreneurial realm?
http://dealbreaker.com/2007/05/the-unsurprising-failure-of-et.php
Posted by John Bunch, Ph.D., May 03, 2007 8:50AM
It is interesting that Dealbreaker references Carl Shram of the Kauffman Foundation as an authority on ethics. Those of us who live in the Kansas City region know that Carl Schram and been a controversial figure since he was appointed to his post a number of years ago. Board members have resigned in protest of his leadership style and strategic choices. His controversial leadership led to the Missouri Attorney General reviewing the Kauffman Foundation for not staying true to the intent of Ewing Kauffman. The purpose of this review was stated as:
“In light of the public allegations of a departure from Mr. Kauffman’s intent, lack of appropriate oversight by the Board of Directors, and certain instances of conflicts of interest. †(http://www.ago.mo.gov/newsreleases/2004/kauffmanreport030404.htm#conclusion)
See also this editorial from the Kansas City Business Journal (http://www.bizjournals.com/kansascity/stories/2003/09/15/editorial1.html)
Ewing Kauffman was famous as an ethical leader. Carl Schramm is not.
–http://dealbreaker.com/2007/05/the-unsurprising-failure-of-et.php
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: I’m with them.
EE: Is it important to match word and deed as a leader? Is it not important to behave in a moral manner, and turn down awards from Rochester when one’s commandeered foundations wired cash to said institution? Is it not wise to avoid confilicts of interest while one is receiving millions of dollars from a foundation that was left to benefit the public, and not a private vanity press/campaign for the Nobel prize?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: does not Carl Schramm lack intellect? Suppose you were to write a treatise on philosophy and leave out Aristotle, Plato, and Socrates. Suppose you were to write a treatise on physics and leave out Einstein and Newton. Schramm wrote a treatise on kapitalism and he left out Nobel Laureate F.A. Hayek and his teacher Ludwig Von Mises. Conduct a search in GOOD CPITALISM: BAD CAPITALISM. 0 results for ‘hayek’ 0 results for ‘mises.’ Dane and Bo. If you were to write a treatise on economics, would you also completely neglect the Austrians and sound money–the entrepreneur’s money?
Carl Schramm’s answer: I’m a schrammeconomist and so are they.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: Successful entrepreneurs are never afraid to hire people smarter than themselves. Carl–would you consider yourself a successful entrepreneur?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: Over the past seven years, have Harvard MBAs created more wealth, or transferred and destroyed more welath?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: In reading the following article, do you consider yourselves to be a part of the “best and brightest?â€
http://www.alternet.org/story/111376/?page=entire “The Best and the Brightest Have Led America Off a Cliff
By Chris Hedges, Truthdig. Posted December 9, 2008.
The multiple failures that beset the country, from our mismanaged economy to our shredded constitutional rights to our lack of universal health care to our imperial debacles in the Middle East, can be laid at the feet of our elite universities. Harvard, Yale, Princeton and Stanford, along with most other elite schools, do a poor job educating students to think. They focus instead, through the filter of standardized tests, enrichment activities, advanced-placement classes, high-priced tutors, swanky private schools and blind deference to all authority, on creating hordes of competent systems managers. The collapse of the country runs in a direct line from the manicured quadrangles and halls in places like Cambridge, Mass., Princeton, N.J., and New Haven, Conn., to the financial and political centers of power.
The nation’s elite universities disdain honest intellectual inquiry, which is by its nature distrustful of authority, fiercely independent and often subversive. They organize learning around minutely specialized disciplines, narrow answers and rigid structures that are designed to produce certain answers. The established corporate hierarchies these institutions service — economic, political and social — come with clear parameters, such as the primacy of an unfettered free market, and with a highly specialized vocabulary. This vocabulary, a sign of the “specialist†and of course the elitist, thwarts universal understanding. It keeps the uninitiated from asking unpleasant questions. It destroys the search for the common good. It dices disciplines, faculty, students and, finally, experts into tiny, specialized fragments. It allows students and faculty to retreat into these self-imposed fiefdoms and neglect the most-pressing moral, political and cultural questions. Those who defy the system — people like Ralph Nader — are branded as irrational and irrelevant. These elite universities have banished self-criticism. They refuse to question a self-justifying system. Organization, technology, self-advancement and information systems are the only things that matter. †–http://www.alternet.org/story/111376/?page=entire
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: As millions of entreprneurs lose their businesses and credit lines, as millions of people lose their homes and jobs, how do you feel about the Kauffman endowment and the financial industry benefiting in a massive mnner from the TARP bailouts–from the taxpayers–from those very same entreprneurs losing their lines of credit as Bo, Carl, and Dane fly overhead in first class, barking “growthology†and mastermindning new business models?
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: Do you ever read Tolstoy? “I sit on a man’s back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back.†–Tolstoy Writings on Civil Disobedience and Nonviolence
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
EE: Finally let’s finish with a joke I recently heard. A Harvard MBA and two lawyers walk into a bar during a massive depression to discuss their plans for inspiring entrepreneurship. One of the lawyers says, “Three scotch and gins–put it on Kauffman’s tab.â€
Carl Schramm’s answer: I’m a schrammeconomist.
Dane Stangler’s answer: Me too.
Bo Fishback’s answer: Word up.
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