Looking at Entrepreneurship From a Theoretical Perspective

6631Peter Klein is interviewed by Steve Mariotti in today’s Mises Daily: 

SM: Are there particular government policies that are hurting entrepreneurship?

PK: Our current monetary regime, with hyperactive central banks that create booms and busts, creates a terrible climate for entrepreneurs. Artificially low interest rates distort market incentives, leading to what Mises and Hayek called “malinvestment.” Taxes and regulations make it harder to start and to run companies, favor some companies at the expense of others, and hamper bargaining between firms, financiers, employees, and customers. Think of the uncertainty caused by the Affordable Care Act or the heavy reporting burdens imposed by Dodd-Frank. Mises once wrote that in an economy such as ours where the state plays a huge role in all aspects of business, entrepreneurship degenerates into “bribery and diplomacy.” Instead of focusing on creating value for customers, entrepreneurs spend their time lobbying for favors or to avoid penalties, trying to discern the government’s next move, anticipating or adapting to the newest regulations.

SM: Have you experienced any obstacles in your career related to these challenges?

PK: Business entrepreneurrship is the kind that drives the market economy but, in a sense, we are all entrepreneurs — life is uncertain, and we are always investing our time, energy, and reputation in search of one outcome or another. I’ve been entrepreneurial in that my perspective on entrepreneurship is not the “mainstream” one, in economics or management, and that my work blends insights from Oliver Williamson’s transaction cost economics, the “Austrian” School of Mises,F. A. HayekMurray Rothbard, and Israel Kirzner, and other scholars. It’s sometimes been a tough sell — despite the popular image of the university as an open, tolerant, and innovative place, academia is actually very conservative, and ideas that don’t fit within the dominant paradigm — as Thomas Kuhn famously explained — are often marginalized.

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