Belmont University

Socialized Entrepreneurship on Democrat's Agenda

Socialized entrepreneurship is high on the Democrat's agenda now that they have taken power, according to the latest edition of the National Dialogue on Entrepreneurship. Socialized entrepreneurship is a public policy agenda that has increased government direction and control of the process of entrepreneurship and the actions of entrepreneurs in an economy.

In Congress, we'll likely see some interesting proposals, and new initiatives to support America's entrepreneurs. Earlier this year, House Democrats announced an Innovation Agenda that would double spending on R&D, expand broadband access, train more scientists and engineers, and provide more support for small businesses. While Senate Democrats have not produced a similar proposal of their own, Senate Majority Leader-elect Harry Reid (D-NV) has supported similar proposals in the past. In fact, Reid is the chief sponsor, along with current Majority Leader Bill Frist (R-TN), of the National Competitiveness Investment Act of 2006 (S. 3936). This bipartisan bill has a strong chance of being enacted this year, but, if it fails to pass, it should have strong momentum in 2007.

The most effective action in an entrepreneurial economy is, as the evidence clearly shows, no action. Governments have a dismal record of picking economic winners when compared to free markets. With more government programs, comes increases in regulatory requirements and a more complex tax system. Both of these have been shown to inhibit entrepreneurial activity in economies around the globe. And as the government uses the redistribution income and wealth to "help" entrepreneurs, they only encourage more political mischief. Just click here look at the myriad of definitions of small business to see what politicians doing favors can create.

Is this a change in direction for the US? Not really, but it may signal an acceleration of the expansive reach of government into more and more aspects of our entrepreneurial economy.


Posted by Jeff Cornwall on November 27, 2006 06:09 AM |

Comments

I don't see how these general forms of government action, like increasing investment in R&D and providing support for small businesses, are bad. I don't see the government trying to pick winners here, but rather, trying to create an environment where more people can become winners. The free markets will still pick the winners, and these types of general support will help provide more choices for the markets. This isn't socialized entrepreneurship, it's just pro research and pro small business, which is a lot better than the current pro big business, pro quarterly results that make it harder for businesses to look at the long-term, which is much needed in today's world.

Birdied by: Lyell Haynes | November 27, 2006 09:33 AM

I think that there is a place for government to incentivize research into those fields which while are not immediately profitiable, do hold the potential to be profitable in the future. Alternative fuels is one area I think the government should really be promoting hot and heavy.

I'd be happy if government stopped subsidizing already well-established industries, such as agriculture and oil production.

Birdied by: Anne | November 27, 2006 02:58 PM

History has shown time and time again that government is bad at picking winners, and that getting government into economic policy at this level leads to playing politics with funding. Again, just click on the link I give to the SBA site's definition of "small business." Each of those dozens and dozens of categories comes from some politician doing a political favor for a local constituent so they can specifically tap into federal funds.

Birdied by: Jeff | November 28, 2006 06:06 AM

Tap it in and Comment, Please

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)