Dan McLaughlin

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To Home Page Latest Newsletter Column Archives Click to get these columns for your local paper	© 2006 Daniel J. McLaughlin Entrepreneurs Of Different Stripes The term “entrepreneur” has been around for centuries and describes someone who takes personal, professional and financial risks to pursue an opportunity that he or she believes is potentially profitable. In America, it is typically a respectable term, recognizing the benefits that entrepreneurs confer on the capitalist economy. The above can be described more accurately as a market entrepreneur. There is another kind of entrepreneur that is vastly different, though often not recognized as a separate class. The political entrepreneur is someone who, rather than seeking market opportunities, seeks political opportunities. Influence with government officials reaps laws and regulations that favor or protect certain businesses or industries or economic groups. Market entrepreneurs drive the process of innovation, the reduction of prices and the improvement of quality and service that is the characteristic of capitalist societies. A clear example of this is the high tech industry from the 1980’s to the present. Prices drop even as capacity, reliability and features blossom. Market entrepreneurs succeed through their ability to please the consumer. Political entrepreneurs, on the other hand, are responsible for higher prices, status quo and economic stagnation. They succeed by stifling competition, limiting innovation and milking the consumer. To the extent that they use government for their own benefit, they do considerable damage to the benefits of capitalism. Political entrepreneurs compete, but rather than trying to be better than their competitors, they try to cut off their legs or to abuse the consumer to maintain profits. The tools that the political entrepreneur uses to gain advantage are government subsidies, price controls, tariffs, import quotas, regulation of competitors, government sponsored monopoly and so on. They are the same tools used by mercantilists for centuries. The term “corporate welfare” has various meanings, but the general idea is of corporations profiting from favorable treatment by the government. It may be a well connected business that lands a juicy contract without competition or a more general industry protection measure. The concept can be extended to any organization that seeks to use the coercive power of government to gain a favored status. Those organizations include labor unions, “non-profit” groups and professional organizations, such as medical and bar associations. Lobbying groups and political action committees comprise a major growth sector. As the widely publicized Jack Abramoff scandal amply illustrates, political power brokerage is a very profitable business. When the stakes are billions of dollars, the temptation to use political entrepreneurship becomes very powerful. When your competitors are using political power against you, political entrepreneurship becomes a necessary tactic and buying political power becomes a necessary business expense. The problem is partly an issue of business ethics, the unethical buying of political influence for personal gain. The other side of the coin is political ethics, politicians using their position of power for personal or political gain. One could not exist without the other. While it is wrong, it is both predictable and expected. It has long been known that people with political power will abuse that power. The writers of the United States Constitution recognized that and had the foresight to build strict limitations on government power into that document. Unfortunately, the representatives of all branches of government have forsaken their oath to uphold the constitution and protect the rights of citizens. They each abuse and allow abuse of the limitations by the other branches. In doing so, they have unleashed the monster of big government and it’s inherent evils pondered by the founders. For now, the voters still hold the key to good government. Abusers of the constitution and of individual rights can and should be replaced. Those who “bring home the bacon” to constituents show they have no idea of the purpose of government. Politicians who don’t protect you and me from the abuses of power and from plunder by government are forsaking their most important role as protectors of our rights. Freedom is the bedrock principle of America. Those who don’t protect our freedoms should be replaced with people of principle who will. Voting season is upon us. Take time to look at the language of candidates. Goodies and benefits come with strings attached. A very significant price will be paid in taxes and in freedom. As the size and influence of the government expands, the opportunities for earning profit using political clout become more lucrative and abundant. We can choose to stand by and let political entrepreneurship flourish or we can let our leaders know that we have had enough. Choose wisely in November.
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Daniel Mclaughlin Copyright © 2006 [Daniel McLaughlin]. All rights reserved. Revised: 03/18/08

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Entrepreneurs Of Different Stripes

The term “entrepreneur” has been around for centuries and describes someone who takes personal, professional and financial risks to pursue an opportunity that he or she believes is potentially profitable. In America, it is typically a respectable term, recognizing the benefits that entrepreneurs confer on the capitalist economy.

The above can be described more accurately as a market entrepreneur. There is another kind of entrepreneur that is vastly different, though often not recognized as a separate class. The political entrepreneur is someone who, rather than seeking market opportunities, seeks political opportunities. Influence with government officials reaps laws and regulations that favor or protect certain businesses or industries or economic groups.

Market entrepreneurs drive the process of innovation, the reduction of prices and the improvement of quality and service that is the characteristic of capitalist societies. A clear example of this is the high tech industry from the 1980’s to the present. Prices drop even as capacity, reliability and features blossom. Market entrepreneurs succeed through their ability to please the consumer.

Political entrepreneurs, on the other hand, are responsible for higher prices, status quo and economic stagnation. They succeed by stifling competition, limiting innovation and milking the consumer. To the extent that they use government for their own benefit, they do considerable damage to the benefits of capitalism.

Political entrepreneurs compete, but rather than trying to be better than their competitors, they try to cut off their legs or to abuse the consumer to maintain profits. The tools that the political entrepreneur uses to gain advantage are government subsidies, price controls, tariffs, import quotas, regulation of competitors, government sponsored monopoly and so on. They are the same tools used by mercantilists for centuries.

The term “corporate welfare” has various meanings, but the general idea is of corporations profiting from favorable treatment by the government. It may be a well connected business that lands a juicy contract without competition or a more general industry protection measure. The concept can be extended to any organization that seeks to use the coercive power of government to gain a favored status. Those organizations include labor unions, “non-profit” groups and professional organizations, such as medical and bar associations.

Lobbying groups and political action committees comprise a major growth sector. As the widely publicized Jack Abramoff scandal amply illustrates, political power brokerage is a very profitable business. When the stakes are billions of dollars, the temptation to use political entrepreneurship becomes very powerful. When your competitors are using political power against you, political entrepreneurship becomes a necessary tactic and buying political power becomes a necessary business expense.

The problem is partly an issue of business ethics, the unethical buying of political influence for personal gain. The other side of the coin is political ethics, politicians using their position of power for personal or political gain. One could not exist without the other. While it is wrong, it is both predictable and expected.

It has long been known that people with political power will abuse that power. The writers of the United States Constitution recognized that and had the foresight to build strict limitations on government power into that document. Unfortunately, the representatives of all branches of government have forsaken their oath to uphold the constitution and protect the rights of citizens. They each abuse and allow abuse of the limitations by the other branches. In doing so, they have unleashed the monster of big government and it’s inherent evils pondered by the founders.

For now, the voters still hold the key to good government. Abusers of the constitution and of individual rights can and should be replaced. Those who “bring home the bacon” to constituents show they have no idea of the purpose of government. Politicians who don’t protect you and me from the abuses of power and from plunder by government are forsaking their most important role as protectors of our rights. Freedom is the bedrock principle of America. Those who don’t protect our freedoms should be replaced with people of principle who will.

Voting season is upon us. Take time to look at the language of candidates. Goodies and benefits come with strings attached. A very significant price will be paid in taxes and in freedom.

As the size and influence of the government expands, the opportunities for earning profit using political clout become more lucrative and abundant. We can choose to stand by and let political entrepreneurship flourish or we can let our leaders know that we have had enough. Choose wisely in November.

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