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Entrepreneurship: Productive, Unproductive, and Destructive (1990)
| Venue: | JOURNAL OF POLITICAL ECONOMY |
| Citations: | 641 - 2 self |
BibTeX
@ARTICLE{Baumol90entrepreneurship:productive,,
author = {William J. Baumol},
title = {Entrepreneurship: Productive, Unproductive, and Destructive},
journal = {JOURNAL OF POLITICAL ECONOMY},
year = {1990},
pages = {893--919}
}
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Abstract
The basic hypothesis is that, while the total supply of entrepreneurs varies anlong societies, the productive contribution of the society's entrepreneurial activities varies much more because of their allocation between productive activities such as innovation and largely unproductive activities such as rent seeking or organized crime. This allocation is heavily influenced by the relative payoffs society offers to such activities. This implies that policy can influence the allocation of entrepreneurship more effectively than it can influence its supply. Historical evidence from ancient Rome. early China, and the Middle Ages and Renaissance in Europe is used to investigate the hypotheses. It is often assumed that an economy of private enterprise has an automatic bias towards innovation, but this is not so. It has a bias only towards profit. [HOBSBAWM 1969, p. 401 When conjectures are offered to explain historic slowdowns or great leaps in economic growth, there is the group of usual suspects that is I am very grateful for the generous support of the research underlying this paper
Keyphrases
private enterprise basic hypothesis productive activity automatic bias towards innovation great leap entrepreneur varies anlong society relative payoff society offer towards profit entrepreneurial activity varies economic growth middle age unproductive activity generous support usual suspect productive contribution ancient rome historical evidence total supply early china historic slowdown
