Entrepreneurship is love. Entrepreneurs love their customers. It’s a genuine love; the complex combination of human values in the hearts and minds of customers mesh with the similarly complex combination of human values in the hearts and minds of entrepreneurs, and that’s what makes markets.
This is the scope of Austrian economics, and why it is different from economics in all its other forms. Austrian economics is a science of personal and interpersonal meaning, of how people think and feel, of subjective phenomena. Entrepreneurship is cultural. To thrive, entrepreneurs must be particularly well-embedded in and connected with the culture, to identify which customers seek their love and the forms in which they would most prefer to receive it. That’s one of the reasons why economist Ludwig von Mises declared that
Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man’s human existence.Ludwig von Mises, Human Action Scholars Edition, Kindle location 17005
Central to Mises’ concept of civilization was the function of entrepreneurship and the entrepreneurial individual. They are the ones, he wrote, who
will make the life of coming generations more agreeable …they are the spokesmen of progress.Ludwig von Mises, Human Action Scholars Edition, Kindle location 2216
Economist Jesus Huerta De Soto builds on these concepts and defines entrepreneurship as the
“set of co-ordinating abilities which spontaneously permit the emergence, preservation and development of civilization”.Jesus Huerta De Soto, Socialism, Economic Calculation and Entrepreneurship, Ch 2 p215, Edward Elgar 2010
De Soto sees the influence of this entrepreneurial coordination function in the emergence of all social institutions, including law, money, and democracy. These are “an evolutionary product of the exercise of entrepreneurship itself” (Ibid). They arise from a vast number of people individually contributing throughout history their own small bit of practical information and entrepreneurial creativity. De Soto’s entrepreneurial society has identifiable characteristics.
- It’s a process, defined by its dynamism, ever-changing.
- It’s spontaneous, not designed by anyone, and not subject to legislation or top-down imposed rules.
- Highly complex: billions of people with an infinite range of goals, tastes, values, and knowledge.
- Composed of interaction – exchanges based on rules and standards (no violence, no fraud, etc)
- All interactions are driven by the energy of entrepreneurship – creating, discovering, and transmitting information.
- Consequently, the plans of individuals are adjusted and coordinated through competition – the most successful entrepreneurial plans become the most popular.
- Individuals are thereby enabled to live in an increasingly rich and complex environment. Everything keeps getting better.
Any restriction on the free action of entrepreneurial creativity is unethical, in this view. Ethics emerge from the pursuit of creative entrepreneurship – by billions of people over hundreds of years – as moral guides that make human coordination and cooperation possible. Ethics are not to be imposed.
The political society we live in today drives us in the opposite direction. It seeks to divide: haves and have nots, winners and losers, red party versus blue party. It replaces the entrepreneurial ethic with redistribution, freezing “what exists today” and dividing it up irrespective of who created it. It wants to judge the social process irrespective of the individual behavior of those who participated in it. This is termed social justice. But in fact, it is an immoral violation of justice. It tramples on the property rights of those individuals who are producers, it prevents the free practice of entrepreneurship that makes the dynamic development of civilization possible, and it violates the entrepreneur’s right to the results of their own entrepreneurship.
In an entrepreneurial society, individuals will strive creatively and energetically to improve others’ lives. They’ll seek, discover and alleviate any situations of urgent need into which other human beings may have fallen, because entrepreneurship is love. The entrepreneurial society will be just, mutually empathetic, and beneficial for all. The best society promotes and rewards the entrepreneurial creativity of everyone in it.