Entrepreneurship in Socialism
Entrepreneurship is the act of being an entrepreneur, which can be defined as “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods”. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses (referred as Startup Company); however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.[1]
Is this the case? Or, as Orrin Woodward says “When you destroy the gain for the entrepreneur to take risk, by definition: the entrepreneur will not take risk. If the entrepreneur doesn’t take risk, by definition: the economy stagnates.”
If I am reading him right – the only thing that the entrepreneur can do is look for the risk, go for that risk as long as it is worth it in a financial sense, and either fail or not fail. What about the greater needs of a society? What, then, about the greater needs of the failed entrepreneur? Is financial risk the only thing needed to motivate the entrepreneur? Is the financial reward the be all and end-all that he/she is looking for? Do we look at those who have the initial financial clout as those who are able to “Startup” new companies? What about those who don’t have the assets to risk their entrepreneurship against?
We see that it is those who have the money/power that, again, is standing in the way of those who can make a difference to society as a whole. They are telling people, en masse, that if they are not prepared to take whatever risk is needed then they should not have any of the rewards.
In socialism there are entrepreneurs believe it or not. Yet, although there are, they do not enter into the world of business simply for the financial rewards that most capitalists do. They do have a wider view.
In fact, some of Europe’s most famous business leaders have espoused socialism, and some of its greatest companies have roots in organisations which were founded on socialist principles. Two of the ‘founding fathers’ of European socialism, Robert Owen and Friedrich Engels, were also successful businessmen, while in Spain the Mondragon Cooperatives Corporation has risen to be one of Spain’s largest companies while still retaining its original co-operative structure. It can be argued that these figures and companies are exceptional, and doubtless they are: but their existence, and their successes, shows that the relationship between socialism and business may not be quite so black and white as has been assumed.
Add, then, to your argument about socialism, especially if you are in the USA, that socialism does, in fact, work on the business level. If those who are espousing that this is an impossibility due to the heart-attack inducing risk-factor, they are simply wrong and are, as we mostly know, in the capitalist club to make as much money for themselves by exploiting what and whom they can.
To the true capitalist, competition is an anathema. The true capitalist wants all for him/herself whether that is a detriment to ones society or not. Competition, within and without socialism is welcomed.
Especially true in this global economy.
Socialism only functions in any sense as a predatory system, whether at the individual, government-societal, or international level. This is more than hyperbole; by parallel, socialism in its modern form is ideologically parasitical on political economy. It is a critique of what Marx referred to as “capitalism,” and not a self-sustaining system. If there are states in Europe with supposedly socialistic regimes, and with supposedly sated citizens, let us see them subsist without export revenue, or without the U.S. subsidizing their defense expenditures.
Of course, this isn’t enough to persuade a socialist of his misplaced face in totalitarian ideology. One can always rationalize with numbers all manner of hypotheticals without recognizing the flawed nature of the underlying reality. For a more vigorous argument directed at your appeal to entrepreneurship for “the greater good,” you might enjoy “The Road to Hell, and The Way Back”: http://wp.me/p1a0cT-pM
Really? “Socialism functions in any sense as a predatory system…” I feel capitalism only functions in a predatory system. Do you believe, as Adam Smith and most libertarians/classical/neo-classical economist, in the Labor Theory of Value? If so then you believe that labor creates all value and exploited labor (buying labor power then paying less for it then it produces) creates surplus value (profits) for the capitalist. If you don’t steal from workers, the true producers of all wealth, then you don’t have capitalism. Socialism, by the simplest definition is the workers control over the means of production. Can you tell me how cooperatives are parasitic? No, the simple truth is the Mondragon Cooperatives Corporation is much more egalitarian then Walmart.
Ricardo was the one who developed, in very mild form, the Labor Theory of Value. It appears to me that you believe people voluntarily selling their labor in an open market for capital, and trading that capital for goods and services, is somehow repression. But is there any way to live without work? Shouldn’t work be evaluated in terms of what it contributes to society, as esteemed by demand and measured in some unit, such as capital? This is a less preferable arrangement than people being utterly dependent on, and thus vulnerable to, the collective; which in modern manifestation, is dominated by the state?
Aristotle explains in The Politics, with reference to Plato’s Republic, why having property in common is a recipe for disaster. The arrangement breeds idleness, insecurity, and resentment. His analysis has borne out to be the case, with such historical cases as Plymouth Plantation and the Paris Commune being illustrative.
It’s funny that you told me to “come back from nineteenth century Germany.” when speaking of the Labor Theory of Value but you refer to Plato’s Republic that is literally thousands of years old.
You are correct though that it was Ricardo that put forth this theory. It was a divergence from the previously dominate Physiocracy theories of value that was based around agriculture. Ricardo (and Smith) did not distinguish between fixed and circulating capital with that of constant and variable capital. But then again, I’m not an economic historian and really don’t care about people who died over a hundred years ago.
I don’t believe that there is anything wrong with people selling their labor (better put: it’s their ability to do labor. selling labor means selling oneself, the laborer, which would be slavery). I have a problem with how this is done. Here is an expert from my blog:
“Say you buy a burger for $4.00. What went into that price? The meat, buns, and other raw goods were purchased for $1.50; the electricity, water, rental, and other miscellaneous costs another $1.50; and the workers who produced the burger were paid $0.50 to an average of $7.00/hr each. This leaves $0.50 of profit for the burger going somewhere (Marx calls them the capitalist class). How was that $0.50 made?
Because the costs of machines, electricity, rent, etc. are at a relatively fixed price (constant capital) they cannot create this value. Also, because investment in start up capital only fronts the set-up costs it too cannot create value. The surplus vale (amount the burger is sold at minus the amount need to produce it) can only come from paying the worker less than s/he produced.” http://moreleftthanthou.wordpress.com/2011/05/24/in-search-of-a-concise-explanation-of-capitalism/
The problem with capitalism isn’t that it uses labor sold to it but that it profits from paying workers less then they produce. You seem hostile to the ideal of LTV, but where do you think value comes from? Are you a marginalist? That theory has been chalenged by many people but most definativly by Nikolai Bukharin in the book “Economic Theory of the Leisure Class”.
As for Plato, he had a lot of beliefs. He also believed that you cannot learn things from empirical measurements and must rely on reason alone to understand nature. This is why the Austrian School of Economics (where a lot of marganalist came from) rejects the ideal that you can measure the economy and instead need to stick to ideological principles. This is what Ron Paul and many of the other gold standard crew believe.
There’s nothing inherently wrong with collective ownership. Indeed, most highways and public buildings are collectively owned. Many factories are collectively owned by the workers. There’s a grocery store, sandwich, shop, and newspaper in my town that are all collectively owned and they’re doing just fine.
Capitalism’s main tenet is the extraction of surplus value from exploited labor. This surplus value will always be there but if profit is the only motif we have a major problem. I think it was David Harvey that predicted that capitalism needs to grow at 3-5% a year to function. With this insistent need for growth and more profit the capitalist not only destroys the worker through more and more exploitative condition (sweat shops, disposing of land, etc.); but they are come into conflict with nature. The destruction of our environment is written within the laws of capitalism.
Great post. Keep it up!
Marx’s Labor Theory of Value has been debunked six ways from Sunday. Come on. Come back from nineteenth century Germany.
I would not have put “socialism” and “entrepreneurship” in the same sentence, having come from an entrepreneural family, I know that profit is not the the primary, or even a large motive (other than the fact one wants to keep ones family fed.) Interesting perspective, thanks.