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15 November 2005



Great post, Ben. People often note that entrepreneurs would be entrepreneurs even without the kind of strong profit motive we have in the United States, and they are correct that most of the folks who start businesses do so for more than just a calculated monetary return (they love the fun of it, the autonomy, and the risk). But it takes more than just an entrepreneur to start a business. It takes financing, the attention of coworkers, and the patience of family and friends--all more likely in a system that promises high risk premiums for those who shoulder the burden of uncertainty.

Our mammoth economic system was built on the profit motive, and it has demolished every other system in its path (European bureaucracy, communism, et al). Sometimes I think the only thing strong enough to stop it is a penchant for Tocqueville's "debased taste for equality" in the populace at large coupled with an ever-increasing relegation of the powers to enforce this equality to the state (oh yeah, and politicians who, in true Hayekian form, are more than willing to use force to ususrp the money, lives and energies of others).


Thanks John - appreciate your kind words. Not sure I got your "Hayekian" comment (he was a lover of markets and freedom, not political profit and coercion) -- but maybe I misunderstand your point.




Sorry...muddled. Acting as Hayek would expect, not prescribe.


This was such a great post on Profit is good, that I sent it to my daughter at college. A great analogy for her to relate the businees as "college" and the profits as an "education". As a dad you have to try anything to motivate the younger generation...jon


John, I don't think that capitalism has yet 'demolished' European bureaucracy and socialism. Although it's apparent to many that the old European social and business model is collapsing under the weight of its untenable welfare programs. Although there are many characteristics of the free-market capitalist system still in place in Europe, most notably in Anglosphere countries like Ireland and England (especially Ireland), and quite vigorously in the 'new Europe' republics like Slovenia and Estonia, other 'old Europe' countries like Germany, France, Italy, Sweden, and others, seem to be content to keep living with an interventionist nanny state. Most Europeans are glad to take their guaranteed their six-week holidays, enjoy a 35 hour work week, “free” child care, generous unemployment, etc. So people work less, produce less, and the pie keeps getting smaller.

In France in particular, the government's dirigiste approach to maintaining an unfree market looks like it's going to survive the current unrest, at least in the short term. There is a lot of talk about government solutions (more programs) to appease the rioters, but little or no talk about creating a bigger free-market pie for all to share. I think these Euros systems will gasp and muddle along for a short while, longer if they make the new Baltic and Slavic Republics toe the line with more regulation and higher taxes.

(Ben, great post, by the way!)

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