Healthcare and Banking are not the Only Thing being Socialized

Professor Scott Shane of Case Western University is at it yet again.  He made waves last year for assailing entrepreneurship education, particularly if they have anything to do with small business, or what he calls “marginal businesses” that he asserts actually hurt employment in the economy.  I refuted his analysis here and here at this site. 

Now he is questioning if we really have an entrepreneurial culture in the US in a column at US News.  The same Scott Shane who previously trivialized the importance of small business is now using self-employment statistics to make his point that the US culture is becoming less entrepreneurial.  He looks at self-employment rates over the past ten years.

First, always question those who shift definitions to suit their agendas.  He wants us to only focus on high growth ventures and R and D as the relevant forms of entrepreneurship, but now is using self-employment as his definition of entrepreneurship in our culture.  Why doesn’t he look at LLC and S-corp formation over time, employment in entrepreneurial ventures over time, and the percent of innovation in small ventures over time?  All of these are readily available, and all show the entrepreneurial nature of our culture and our economy.

Second, to look at cultural trends we need to look at more than a ten year snap shot. 

Third, if we are looking at the behavioral part of entrepreneurial cultures, we need to look at comparative rates of business formation across economies.

Finally, a true measure of culture must look at both behaviors and shared values, as pointed out by Dawn Rivers Baker in her counter point to Prof. Scott also published at US News:

Compared to other places on the planet, the United States is very forgiving, culturally, of risk and even of failure.

That is what makes us entrepreneurial…. 

In looking at Prof. Shane’s writings it is clear to me that what he wants is more government directed economic policies toward business formation giving preference only to high growth, high potential entrepreneurship and innovation.  

This is what I call socialized entrepreneurship, which sadly seems to be where the US is headed at the same time that we are socializing healthcare and banking. 

The movement toward socialized entrepreneurship is the one trend that may squash our entrepreneurial culture in this country and it will ruin any hope that entrepreneurship will be the spark to create a new age of economic growth.