Entrepreneurship includes individual’s active objective of attaining social and material success. This success can be attained in different methods and have different sources. Nevertheless, the common function is that the private, likely to optimize social and material success, enters into active competition to gain benefits in attaining such success with other members of the neighborhood. In the procedure of competing, the person is forced to develop and use creative, cognitive, and organizational capabilities to the maximum degree possible.
Such specific attributes differentiate the most proactive social members of any group of social chordates. The battle for overall management or specific niche dominance needs remarkable capabilities to complete. This is specifically evident in the social processes of greater primates, where cognitive capabilities lead to a greater series of strategies and methods, in addition to ones that are more complex and of a multicomponent nature.
Financial experts have until recently disregarded data from biology, neurobiology, cognitive science, anthropology, and psychology in their ramifications and assessments, making their designs and conclusions “allegedly” original. However, other social and biological sciences have considerably supplemented economic concepts with proof, verifying and simultaneously stabilizing many economic theories and models. What financial theory needs is a proper analysis of the behavioral patterns described by the biological and other sciences in the context of economics, sociology, and government.
Entrepreneurial intention, as the pursuit of the best social and material success, is particular of any neighborhood and society, and is recognized through getting the greatest quantity of items or social influence or, as a guideline, both. There are always more enterprising members of a community than others. They set more enthusiastic social and material goals, they are more willing to take threats, and they have the most reasonable thinking to much better evaluate the possible dangers and benefits of attaining their goals. As an outcome, their success impacts the life and prospects of the whole community in one way or another, because the social and material exchanges between these proactive people and other community members are more substantial and extreme than those between other people. However, the outcomes of such exchanges gradually proliferate, and the life of the whole neighborhood, in one way or another, changes.
In general, entrepreneurial intentions are established in productive economic entrepreneurship and nonproductive entrepreneurship. Productive financial entrepreneurship is expressed in 2 main functions. The first is proactive involvement in the exchange of product and other items at the level of intermediation in between changemakers; i.e., trade.
The second one is the development of innovation or the copying of an existing excellent and money making through the production and circulation of a customer item. This line of entrepreneurial activity is characterized by the development of value and, accordingly, is a driver for financial growth and the advancement of society.
Both instructions of innovative financial entrepreneurship involve the production and distribution of durable goods. This suggests that if items are exchanged according to the requirements of subjective (personal evaluation of requirement) and goal (basic level of availability) energy value is included relation to production value. It is added value that is the multiplier of economic development; i.e., the development of requirements and chances for society as a whole.
Nonproductive entrepreneurship is revealed in political competition and the struggle for control over lease sources. The proactive person, by picking this instructions of entrepreneurship, recognizes his aspirations through the actual organized racketeering of other members of society, primarily active worth creators, i.e. economic efficient business owners, as the main developers of public items.
This unproductive application of entrepreneurial effort is possible due to the fact that there is a need for social order, rules of social relations, and control over execution. In animal social groups, this function lies with the group leader and the dominant people closest to him. In human society, these functions are performed to a higher or lesser extent by the state; i.e., political elites. In both cases – in animal social groups and in human societies – authority have competitive benefits over the rest of society. These consist in access to the social resources generated by productive economic entrepreneurs, in addition to in the right to violence. Both benefits, voluntarily or unwillingly, are accepted by society and are legitimate until the elite group or domain is replaced by others.
This kind of competitive benefit to take full advantage of product and social success is a point of nonproductive rent-seeking entrepreneurship. It does not involve active worth development. Its primary result is to lock the exchange of benefits to one person or a minimal group without more reproduction and social penetration of advantages. In reality, this is one of the illustrations of the disequilibrium design; i.e., in fact, utilize “money-commodity,” when there is no commodity before money.
The dominance of each of the above directions of entrepreneurship is conditioned by the institutional and mestizo environment and the dominating social rhetoric. In “natural states” (Douglas North, Violence and Social Orders) – autocracies and autarkies – entrepreneurial efforts are concentrated on political and rent-seeking entrepreneurship; i.e., nonproductive entrepreneurship, entrepreneurship the fruits of which do not suggest value production and economic growth. In such societies, the state-society-business triangle always has the state at the top, and society and business are the source of benefits for powerful political elites – effective rent-seeking business owners. They maximize their energy through virtually unrestricted control of public resources and their usage for personal functions.
Hence, autocratic and autarkic institutional frames maximally motivate unproductive rent-seeking entrepreneurship as a way to get the greatest potential socio-material benefits. Niskanen’s theory of administration, Parkinson’s laws, in addition to the classical ideas of Mises, Rothbard, Schumpeter, Hayek, Buchanan, Baumol, McCloskey, and so on when again receive practical verification in our world today. Once once again, we can see for ourselves that bureaucrats are just rational representatives looking for to make the most of the energy of their resources and opportunities and to minimize the threats included.
In states with a free enterprise and liberal-democratic organizations, the competitive advantages of rent-seeking entrepreneurship are considerably restricted, and agents’ choices are conditioned by much higher chances for maximizing benefits through efficient financial entrepreneurship and worth creation. The exchange of advantages does not mainly occur through their preliminary centralization in the hands of the state and redistribution by rent-seeking political entrepreneurs – power elites. Benefit exchange occurs horizontally, straight from agent to representative, the state’s participation indirect and restricted. Nonproductive entrepreneurial orientation has much less tourist attraction for possible business owners. Organizations, mestizos, and social rhetoric encourage specific socio-material success through innovative economic activity and value addition. There is no inherent take advantage of and distortion of balance in this system, where goods are obtained just through offering (producing) other products in return, and where the commodity-money-good model works, in contrast to “natural states,” where the credit distortion of money-good controls.
Therefore, it can be argued that an institutional and ethical environment that indoctrinates private effort, duty, and imaginative enrichment as premium values implies the dominance of productive financial entrepreneurship. On the other hand, an institutional environment that suggests the dominance of public interests over individual interests and a broadened state mandate in the redistribution of resources promotes rent-seeking nonproductive entrepreneurship.
In other words, the little state and individualistic social doctrine condition economic development and social development. The big state and the doctrine of the occurrence of the social over the individual indicate slower financial development and socioeconomic degradation.
In conclusion, the modern-day world is in the harmful zone of maximizing the worths of ineffective political entrepreneurship. This shift in autocratic states has caused a tightening of their programs and their observed transformation into dictatorships. In market democracies, this shift has resulted in economic imbalances, state expansion, and the decrease of civil liberties.
It is a great time to reflect.