Entrepreneurs are not a large part of the 1%

I just heard Nobel economics laureate Joseph Stiglitz interviewed on NPR, and noted a fascinating fact: in his estimation, only a tiny share of the so-called “1%” are entrepreneurs.  He said that the large majority of 1-percenters are people who have inherited wealth, investors, and other sorts of finance jocks (i-bankers, hedge fund managers, traders, venture capitalists, etc.).

What does that say about where America’s incentives lie, in this land where 400 people own more than the poorest 150 million?

Do the the rewards accrue to the inventors, the innovators, the skunk-workers?  To the people who have truly improved our lives?  Or does money simply make money?

When the revolutionaries raise capital gains taxes and carried interest taxes to the earned income tax rate, perhaps they can also figure out a way to eliminate taxation completely from truly value-creating entrepreneurship in technology and other vital areas…

Social entrepreneurs are “psychopaths”?!

Leastwise, that’s what blogger Sandy Krolick leveled at OccupyMBA.com in this recent fit of  kulturcriticism, here.

No way I’m standing for this flak!  Here’s my first response:

Sandy, thanks for honoring http://OccupyMBA.com with your challenging (and well-trafficked) post.  I asked for it, and I got it.  I’m going to have to write a longer article to respond to everything, but this is a start…

So, ok, ok, yes, basically you’re saying that the businessperson who harbors any aspirations, imagines anything new, convinces and guides any other human being, wields any power, is stirred by any ego, seeks any private reward from achievements accomplished with the help of others, etc. – all typical of an entrepreneur – is a “psychopath,” PNG around the Pleistocene campfire, where only the “non-binding guidance of tribal elders and the quiet pleadings of the earth” hold sway.  That’s pretty harsh.  It’s also a completely illogical and useless argument to pursue in the context of present-day management education.  We know that, today, the corporate form of organization and the skills of professional managers are utilized by the rich and unscrupulous to defile the planet and abuse people and communities in the pursuit of wealth and power.  This has been endlessly refined and elaborated in the past century, especially, and the MBA degree is one manifestation.  But to call all entrepreneurs – social or otherwise – “psychopaths” is to throw out the baby with the bathwater, in my opinion.

A psychopath is someone who is mentally ill, exhibiting abnormal, dangerous, violent behavior.

What entrepreneurs do in modern society is quite “normal”.  Few people consider their behavior insane.  With allowances for your flight of pseudo-nostalgia for some ancient “fully embodied” time when our ancestors lived in “small and relatively egalitarian pre-civilized bands,” we can imagine that the behavior of a (transported) Steve Jobs, Elon Musk, or Henry Ford would have been viewed as quite ill and threatening by people bound by strict collectivist taboos, and by an entire species that experienced even the slightest technological changes (such as new ways to chip arrowheads) over tens and scores of generations.  Sure, viewed through their eyes, everything we’re up to is crazy.  And, indeed, it probably is.  But it’s the society that’s crazy, not the entrepreneurs.  They aren’t psychopaths.  They are well-adjusted, and most of the successful ones (in business, not all the other walks of power you rope in) provide people with things they consider useful.

It’s here we need to begin, not back in some imagined hunter-gatherer camp.  There is so much going on in modern business that is obviously unethical and illegal  – hurting people, damaging health, manipulating politics, polluting, destroying habitat, depleting resources.  This is the low-hanging fruit.  As only a modest step toward addressing this, management education and practice can seek to honor human dignity, build inclusive and respectful communities, see the Earth in ecological systems terms, give new importance to the local and the human-scale, and embody many things that are definitely alien to Wall Street and mainstream large corporate cultures, but present in activity we can still recognize as business.  Good management skills are just as necessary on farms, in farmer’s markets, in co-operative organizations, in small-scale manufacturing, and in public enterprises delivering education, health care, and other services, as they are in the industries commanded by the ruthless and the greedy.  You can say, All is lost, look to the Pleistocene, all reform is futile, but I’m not ready to do that, and neither are many others.  Reveling ironically as the shit hits the fan seems irresponsible to me.  Even the most disgusted cynic will have to be a little thankful to those whose energy and resourcefulness provide them with life’s necessities if and when times are trying.

Finally, sure, OccupyMBA may shed favorable light on our MBA program in the eyes of some – and by the way, Sandy, it’s definitely NOT a for-profit graduate school, I MUST emphasize – but this blog is my own, and I am doing it because I am thoroughly sick of what the wealthy and the powerful and the corporate and the conservative are doing to roundly f*ck up this beautiful world we find ourselves living in, and lending momentum to a radical debate about how managers are educated, trained, and indoctrinated is a small way I can contribute to changing the pattern, even if it comes into its own too late to significantly redirect the present juggernaut.

Your servant,

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