Institutional Destruction of Entrepreneurship through Capitalist Transformation

Emerging out of the beginning of the Industrial Revolution was a different kind of individual who later became known as the entrepreneur. The entrepreneur has been a driving force for change and has been responsible for shaping the material lifestyle for different socioeconomic institutions ever since (McDaniel 2002, 4-11). The position here is that not all entrepreneurial efforts have had results that are beneficial to society but rather much benefit has been derived from the efforts of many of the entrepreneurs. However, the entrepreneur has been given little credit for those beneficial contributions over the past three centuries. While entrepreneurs exist in all economic institutions, they are most visible in capitalism. Part of the reason for this visibility is the economic free. dom given to the entrepreneur to innovate within a capitalistic structure, and this economic freedom is not present in other socioeconomic systems. Moreover, in market capitalism it is the capitalist who receives kudos for the success of the economic structure, and the entrepreneur is often overlooked and undervalued. The distinction must first be clearly made between the entrepreneur and the capitalist in order to better understand the role and contributions of the entrepreneur in a modern capitalist economy. If it is the entrepreneur and not the capitalist who has been responsible for the industrial and technological advancements of the past 300 years, then a clearer distinction needs to be made between them. Further, if the capitalist receives undue credit for these advancements and this undeserved credit diminishes the importance and value of the entrepreneur, then the social economy is in danger of losing the creative innovations brought about by the entrepreneur (Schumpeter 1947, 134). Once this dichotomy between the entrepreneur and the capitalist is understood, then the transition from entrepreneur to capitalist can be seen as it erodes the creative nature of the entrepreneur.